Healthpeak Properties: A Strategic Buy Opportunity Amid Sector-Wide Challenges

Healthpeak Properties (NYSE: DOC) has long been a cornerstone of the healthcare real estate sector, but recent market turbulence has created a rare opportunity for value investors to acquire shares at a compelling discount. Despite macroeconomic headwinds and a temporary slump in its life science segment, the company's robust liquidity, disciplined capital structure, and alignment with demographic megatrends make it a compelling long-term play. Let's break down why Healthpeak is positioned to outperform in the coming years.

1. Liquidity and Balance Sheet Strength: A Fortress to Rely On

Healthpeak's balance sheet is a masterclass in REIT resilience. As of July 24, 2025, the company reported $2.3 billion in available liquidity, a mix of unrestricted cash and revolver capacity. This financial flexibility allows Healthpeak to weather near-term volatility while funding strategic initiatives. For context, its net debt-to-EBITDAre ratio remains at a conservative 5.2x, well within safe thresholds for a REIT with a AAA credit rating.

The company's proactive approach to debt management further strengthens its position. In June 2025, Healthpeak repaid $452 million of 4.0% senior notes at maturity, reducing leverage and improving interest cost efficiency. Meanwhile, its share repurchase program—$72 million spent in April 2025 alone—signals management's confidence in the stock's intrinsic value. With $406 million remaining in its $500 million buyback authorization, Healthpeak has ample room to continue rewarding shareholders at current price levels.

2. Demographic Tailwinds: Aging Population Fuels Healthcare Demand

The U.S. healthcare real estate market is being reshaped by an undeniable demographic shift: the aging of the baby boomer generation. By 2030, 20% of the U.S. population will be over 65, driving a surge in demand for outpatient services, senior living, and specialized medical facilities.

Healthpeak is uniquely positioned to capitalize on this trend. Its portfolio of Medical Outpatient Buildings (MOBs)—which now command record asking rents of $24.86 per square foot—has seen occupancy rates climb to 92.8% in Q4 2024. These facilities, often located near residential areas, offer cost-effective solutions for seniors seeking convenient care. For example, a gallbladder operation costs $12,000 in a hospital but just $2,200 in an ambulatory surgical center, a dynamic that insurance providers and patients alike are embracing.

Moreover, the shift from inpatient to outpatient care is accelerating. Outpatient visitation has grown from 1.8 visits per person in 2000 to 2.4 visits in 2022, and this trend is expected to continue. Healthpeak's focus on MOBs and its recent $148 million investment in Atlanta-based outpatient developments position it to benefit from this structural shift.

3. Life Science Segment: Navigating Short-Term Pain for Long-Term Gain

The life science sector has faced near-term challenges, with Healthpeak's lab segment experiencing a 1.5% occupancy decline in Q2 2025. Much of this pain stems from small-cap biotech tenants struggling to secure capital, but the company's exposure to these underperformers is limited—just 10% of its portfolio. Meanwhile, its core tenant base includes major health systems and global biopharma giants, providing a buffer against systemic risk.

However, the life science sector is showing early signs of recovery. M&A activity (e.g., Merck and Sanofi deals) and regulatory reforms like the FDA's modernization efforts are reducing R&D costs and timelines, making lab space more attractive. Additionally, speculative construction has slowed, with 4 million square feet of inventory removed from the pipeline, easing oversupply concerns. Healthpeak is also leveraging AI tools to optimize operations, a strategic move to enhance asset performance as the sector rebounds.

4. Dividend Safety and Strategic Repurchases: A Win for Shareholders

Healthpeak's commitment to shareholder returns remains unwavering. The company has maintained a $1.22 annualized dividend since 2021, with consistent monthly payouts of $0.10167 per share. While the dividend yield of ~5% may appear modest, it's backed by a fortress balance sheet and a conservative payout ratio (under 40% of FFO).

Meanwhile, the stock's recent valuation offers a compelling entry point. At a current price-to-FFO multiple of 8.5x, Healthpeak trades at a 25% discount to its 5-year average and well below peers like Ventas and Welltower. This undervaluation is partly due to near-term sector jitters, but for investors with a multi-year horizon, it represents a chance to buy a high-quality REIT at a bargain.

5. A Clear Path to Recovery: Why This Is a Buy

Healthpeak's combination of strong liquidity, demographic-driven demand, and a disciplined capital structure makes it a standout in the healthcare REIT space. The company's life science segment, while temporarily challenged, is poised to rebound as capital markets stabilize and M&A activity accelerates. Meanwhile, its MOB portfolio is riding a tailwind from the aging population, with occupancy and rents expected to remain resilient.

For value investors, the key is patience. Healthpeak's share repurchase program and dividend consistency provide downside protection, while its long-term growth levers—outpatient care expansion, AI-driven efficiency, and life science recovery—offer upside. The stock's current valuation reflects a worst-case scenario for the sector, not its intrinsic value.

Takeaway for Investors: Healthpeak Properties is a rare blend of defensive strength and offensive potential. With $2.3 billion in liquidity, a 5.2x debt-to-EBITDAre ratio, and a portfolio aligned with the $1.87 trillion healthcare real estate market by 2030, this is a strategic buy for those willing to ignore the noise and focus on fundamentals. The market is pricing in short-term pain, but the long-term story is one of resilience and growth.

Final Call: Buy DOC at current levels. Hold for 3–5 years. Target price: $22–$24.