Optional product analytics
With your permission, we use privacy-limited analytics to understand which research journeys work. We do not run advertising trackers or session replay. You can change this choice in Preferences. Read the Privacy Policy.
Post-merger integration of Physicians Realty Trust accelerates operational synergies and outpatient medical rent escalations, driving consensus revenue to $3,151,933,990 in FY2027 and lifting equity value toward Potential value of $40.86.
Maturing note refinancing yields rising above 10.5%.
We rate Healthpeak a Strong Buy; outpatient rents support our $29.98 Fair value versus $20.33.4
Strong Buy signals attractive total returns backed by defensive outpatient healthcare revenues.4
At $20.33 on September 18, 2026, shares trade 47.5% below $29.98 Fair value and below $40.86 Potential value.4
Refinancing yields above 10.5% across $10,320,379,904 in debt would pressure cash flow and dividends.245
Contracted escalators drive revenue to $3,151,933,990 in FY2027, unlocking value toward Potential value of $40.86.1
Facilities generate $544,132,000 in operating income and $1,251,959,000 in operating cash flow.46
The $20.33 price sits 47.5% below our Fair value of $29.98.4
High clinical integration and hospital affiliation create modest tenant relocation friction across outpatient medical buildings.4
Strong Buy: defensive outpatient rents support our $29.98 Fair value with strong protection.
Healthpeak Properties, Inc. provides high-quality property management services to encourage tenants to renew, expand, and relocate into its properties, which drives increased occupancy, rental rates, and property values. Its outpatient medical segment includes outpatient medical buildings and hospitals. Outpatient medical buildings typically contain physicians’ offices and examination rooms, and may also include pharmacies, hospital ancillary service space, and outpatient services such as diagnostic centers, rehabilitation clinics, and day-surgery operating rooms.
Its senior housing segment includes life plan communities and its SWF SH JV, an interest in an unconsolidated joint venture with a sovereign wealth fund that owns 19 senior housing assets. In January 2026, the company acquired the remaining 46.5% interest in the SWF SH JV, bringing its ownership interest in these 19 senior housing properties to 100%.
If borrowing yields reach 10.5% while lab revenue contracts, debt service would overwhelm the $357,010,000 in free cash flow, requiring substantial dividend reductions.
Healthpeak possesses no economic moat. Return on invested capital of 3.05% sits below the 8.34% cost of capital. While hospital-affiliated outpatient medical facilities generate steady operating income of $544,132,000, commodity healthcare real estate cannot generate sustainable excess economic returns.
Return on invested capital of 3.05% trails the WACC of 8.34% and moderate cost of equity of 8.42%.
None of the valuation methods used to calculate Fair value relies on a separate assumption about how long the competitive advantage lasts.
The highlighted cell is Fair value when every assumption sits at its base level ($29.98). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $565.8M after modeled capex of $894.9M, with terminal value at 57.6% of . A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
Accelerated integration synergies and outpatient rent escalations confirm sustained earnings expansion toward $40.86.
Core outpatient facilities support projected cash flows and validate $29.98 at $20.33.
Industry capital expenditure to depreciation sits at 0.17 with capex to revenue at -0.127, reflecting disciplined development.
Accelerating demand for outpatient clinical settings and post-merger scale drive steady rent escalations and favorable absorption.
Life science space oversupply and higher borrowing costs restrict tenant expansion and pressure renewal spreads.
Substantial upside to Fair value of $29.98 provides margin of safety against the $10,320,379,904 total debt balance.4
Cap portfolio exposure at 5% and monitor debt refinancing coupons to guard against debt service inflation.
Healthcare facility demand provides non-cyclical rental cash flows that support regular dividend distributions.6
The 47.5% valuation discount to Fair value of $29.98 offers favorable total return upside as merger synergies take hold.4
Outpatient real estate concentration insulates top-line revenues from acute hospital regulatory pressures.6
We recommend a Strong Buy rating based on a 47.5% margin of safety between the report-date price of $20.33 and Fair value of $29.98.4
Defensive outpatient rental income protects baseline cash flows while merger synergies unlock upside toward Potential value of $40.86.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
Elevated refinancing yields on outstanding debt and sustained negative rent absorption in life science clusters compress property margins and constrain distributions.
Total debt of $10,320,379,904 at an 8.51% pre-tax cost of debt against cash of $467,457,000 exposes operations if refinancing rates rise above 10.5%.246
Peer Alexandria Real Estate Equities recorded revenue contraction of -11.9% and net margin of -36.08%, showing demand contraction that could depress Healthpeak revenue growth below -5%.
With no economic moat, return on capital at 3.05% below cost of capital of 8.34%, and debt weight at 41.73%, valuation multiple resets toward 13.6x.2
The five developments that would weaken our investment case.
Operating cash generation failing to clear debt service and baseline tenant improvements forces reliance on external borrowing, threatening investment-grade credit metrics and regular dividend payments.
Current:$1,251,959,000 for FY2025
Alert ifFalls below $900,000,000 in FY2026
Elevated leasing commissions and tenant improvements exhaust operational cash conversion, widening the cash deficit between organic free cash flow and contractual common dividend obligations.
Current:$894,949,000 for FY2025
Alert ifExceeds $1,000,000,000 in FY2026 without property expansions
Declining property net operating income indicates medical provider tenant departures or lease concession expansion, undermining the defensiveness of the outpatient healthcare portfolio.
Current:$544,132,000 for FY2025
Alert ifFalls below $450,000,000 in FY2026
Decelerating revenue growth reveals tenant defection to competing specialized life science or healthcare landlords, compressing rent escalators below baseline inflation rates.
Current:4.24% projected for FY2026
Alert ifSlows below 2.0% in FY2027
Rising interest rates upon refinancing maturing notes increase annual financing burdens across the total debt load, eroding distributable cash flows for equity holders.
Current:8.51% as of 2026-09-20
Alert ifRises above 10.5% over the next 18 months
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Discount the explicit dividend path and its Gordon-growth terminal value at cost of equity.
Limitation: Terminal value is 69.3% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Estimate property NAV or recurring AFFO earning power, bridge for debt, and apply the stock-specific cap-rate, yield, or P/FFO assumptions.
Solve for the growth rate that makes the model value equal the report-date share price.
Defensive outpatient medical cash flows deliver steady collections, balancing lab leasing drag and debt service to yield $29.98 from $20.33.
Post-merger integration accelerates synergies, outpatient rent escalations exceed historical norms, and life science leasing spreads rebound, supporting $40.86.
Weakening outpatient cash flows or wider lab vacancy impairs debt service coverage and distribution safety.
Operating cash flow of $1,251,959,000 in FY2025 reflects high property cash collections before tenant improvements and depreciation. Cash conversion remains reliable across outpatient properties.6
Sustained rental growth confirms tenant retention and clinical demand, supporting underlying property cash generation.
Lease renewal pricing reveals whether lab supply overhang forces rent cuts or permits positive rent growth.
High capital spending absorbs operating cash, dictating how much distributable cash remains for dividends.
Higher borrowing yields on maturing debt increase interest burdens, reducing net income and cash flow.
Top-line expansion verifies that post-merger integration achieves expected scale and market share gains.
| $471.3M |
| $494.9M |
| $527.4M |
| $568.5M |
| $604.0M |
| +6.4% |
| Gross profit | $1.12B | $1.20B | $1.28B | $1.63B | $634.5M | -13.3% |
| Operating income | $286.3M | $680.1M | $515.3M | $553.6M | $415.5M | +9.8% |
| Net income | $505.5M | $500.4M | $306.0M | $243.1M | $71.3M | -38.7% |
| EPS (diluted) | $0.93 | $0.92 | $0.56 | $0.36 | $0.10 | -42.7% |
| EBITDA | $970.6M | $1.39B | $1.27B | $1.61B | $1.47B | +11.0% |
| R&D | $0 | $0 | $0 | — | — | +41.4% |
| SG&A | $98.3M | $131.0M | $95.1M | $97.2M | $90.4M | -2.1% |
In FY2025, operating cash flow reached $1,251,959,000, but capital expenditures of $894,949,000 absorbed 71.5% of cash flow, leaving free cash flow of $357,010,000. This fell short of dividends paid of $849,095,000, requiring net debt issuance of $1,108,678,000.56
Management prioritizes tenant improvements and capital recycling to manage $10,320,379,904 in total debt. Discretionary cash remains constrained until property dispositions lower borrowing balances.
Return on invested capital of 3.05% remains constrained by the capital intensity of healthcare assets and heavy depreciation of $1,058,865,000 in FY2025.
Return on invested capital of 3.05% trails the computed WACC of 8.34%.
FY2025 capex of $894,949,000 represented 71.5% of operating cash flow of $1,251,959,000.
Dividend distributions depend on debt financing until free cash flow expands.
Total debt of $10,320,379,904 incurs annual interest expense of $305,178,000.
Refinancing at higher borrowing yields raises fixed obligations.
| Revenue | $2,129,294,000 |
|---|---|
| Cost of revenue | $738,399,000 |
| Gross profit | $1,390,895,000 |
| Operating expenses | $671,719,000 |
| Operating income | $719,176,000 |
| Non-operating items and tax | -$91,429,000 |
| Net income | $627,747,000 |
| Total assets | $20,336,018,000 |
|---|---|
| Cash | $467,457,000 |
| Current assets | $1,073,477,000 |
| Total liabilities | $12,033,567,000 |
| Current liabilities | $985,307,000 |
| Shareholders’ equity | $8,142,870,000 |
| Net income | $243,142,000 |
|---|---|
| Operating inflow | $1,315,890,000 |
| Depreciation and amortization | $1,057,205,000 |
| Stock-based compensation | $15,543,000 |
| Operating cash flow | $1,070,497,000 |
| Operating outflow | $245,393,000 |
| Cash available | $1,239,520,000 |
| Beginning cash | $169,023,000 |
| Investing outflow | $113,799,000 |
| Financing outflow | $941,416,000 |
| Net debt issuance | $153,220,000 |
| Share repurchases | $190,690,000 |
| Dividends paid | $794,783,000 |
| Other financing activities | $109,163,000 |
| Ending cash | $184,305,000 |
| Investing cash flow | -$113,799,000 |
| Financing cash flow | -$941,416,000 |
Point-in-time financial data used in the 2026-09-20 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $2.1B | $1.4B | $627.7M | $1.2B | $755.2M | $458.9M | $568.1M | $22.9M | $8.7M | $979.5M | — | -$429M | -$1.1B | — | $137M | $94.7M | $9.1B | 33.8% | — | 5.8% | — |
| 2017-12-31 | $524.3M | $1.3B | $414.2M | $847M | $375.3M | $471.8M | $534.7M | $14.3M | $4.8M | $695M | — | $1.2B | -$2.1B | $137M | $82.2M | $55.3M | $7.8B | 106.6% | — | 5.2% | — |
| 2018-12-31 | $144.2M | $1.6B | $1.1B | $848.7M | $287.8M | $560.9M | $404.7M | $16.6M | $3.4M | $696.9M | — | $1.8B | -$2.6B | $82.2M | $61.1M | $54M | $5.5B | 215.8% | — | 7.2% | — |
| 2019-12-31 | $144.3M | $1.1B | $45.5M | $846.1M | $168.8M | $677.3M | $435.2M | $18.2M | $5M | $720.1M | — | -$1.4B | $647.3M | $61.1M | $93.8M | $85.3M | $6.3B | 212.7% | — | 5.1% | — |
| 2020-12-31 | $436.5M | $1.1B | $413.6M | $758.4M | -$30.5M | $788.9M | $553.9M | $17.4M | $10.5M | $787.1M | — | -$1B | $246.5M | $93.8M | $111.4M | $44.2M | $6.6B | 49.3% | — | 6.8% | — |
| 2021-12-31 | $471.3M | $970.6M | $505.5M | $795.2M | $35.5M | $759.7M | $684.3M | $18.2M | $12.8M | $650.1M | — | $531M | -$1.3B | $111.4M | $211.7M | $158.7M | $6.2B | 72.2% | — | 5.2% | — |
| 2022-12-31 | $494.9M | $1.4B | $500.4M | $900.3M | -$61.7M | $962M | $710.6M | $26.5M | $67.8M | $648M | $324.6M | -$876.3M | -$116.5M | $219.4M | $126.8M | $74.1M | $6.5B | 72.0% | — | 7.5% | — |
| 2023-12-31 | $527.4M | $1.3B | $306M | $956.2M | $181.7M | $774.6M | $749.9M | $14.5M | $6.5M | $657M | $378.1M | -$576.8M | -$337.3M | $126.8M | $169M | $139M | $6.9B | 82.3% | — | 7.6% | — |
| 2024-12-31 | $568.5M | $1.6B | $243.1M | $1.1B | $333.7M | $736.8M | $1.1B | $15.5M | $190.7M | $794.8M | $153.2M | -$113.8M | -$941.4M | $169M | $184.3M | $119.8M | $8.7B | 82.9% | — | 9.0% | — |
| 2025-12-31 | $604M | $1.5B | $71.3M | $1.3B | $357M | $894.9M | $1.1B | $14.4M | $97.1M | $849.1M | $1.1B | -$1B | $136.1M | $184.3M | $467.5M | $467.5M | $9.8B | 90.1% | — | 7.2% | — |
Healthpeak Properties Inc. (DOC) trades at 169.5x forward earnings against a peer median of 72.0x. Its EV/EBITDA of 15.5x compares with a peer median of 25.7x. The comparison uses 4 peers: Welltower Inc., Ventas Inc., Alexandria Real Estate Equities Inc. and Equinix Inc., as of 2026-09-19 to 2026-09-20.
| Outpatient Healthcare Migration | positive | Health systems shift routine procedures away from acute care hospitals into cost-effective off-campus medical buildings. |
| Biotech Capital Discipline | negative | Constrained venture capital funding restrains tenant absorption across life science real estate clusters. |
Healthpeak pairs an outpatient medical network with lab assets, lagging diversified peer Welltower in revenue growth (39.1%) but outperforming pure-play lab peer Alexandria Real Estate Equities (-11.9%).
| Initiate baseline position |
| Valuation gap provides meaningful downside buffer relative to underlying asset net asset values. |
| Sub-$19.00 pullbacks | Add secondary tranche | Expands margin of safety if broader REIT sector yields spike. |
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
| VTR |
| Ventas Inc. |
| $44.5B |
| 109.7x |
| 6.9x |
| 24.3x |
| 2.0% |
| 14.8% |
| ARE | Alexandria Real Estate Equities Inc. | $9.2B | 3.2x | 14.4x | -4.1% | 17.3% |
| EQIX | Equinix Inc. | $100.8B | 54.6x | 10.2x | 27.1x | 10.7% | 27.0% |
