Healthpeak Properties, Inc. (NYSE:DOC) Q1 2024 Earnings Call Transcript

Vikram Malhotra: Thank you.

Operator: Your next question comes from the line of Tayo Okusanya with Deutsche Bank. Please go ahead.

Omotayo Okusanya: Yes, good morning. Congrats on a solid quarter and solid improving outlook. I want to get some clarification on the MOBs and the synergies. When you do the next round of internalization — the targeted internalization, is that additional synergies beyond the $45 million that’s been identified, like was that going to the additional $20 million bucket that you’ve kind of talked about? And could you also talk to us a little bit about just the revenue synergies and how that hits also into maybe the $20 million additional revenue target you talked — additional synergy target you’ve talked about.

Thomas Klaritch: Yes, Tayo, it’s additional, and it’s actual net cash revenue that comes in. So we’re really ahead of schedule on kind of internalizing markets across the portfolio, and there’s more to come. So I think we’ve assumed kind of a couple of year plan to internalize most of the markets that we — where we had scale and where it makes sense. But it’s net cash continuously year after year after year net cash to the bottom line.

Peter Scott: Yes. And then on revenue synergies, we’ve been pretty clear that, that $60 million run rate does not include revenue synergies, so that could be some upside, whether that’s through better lease execution, better retention, better lease rates, so on and so forth, that would be upside. I think it’s a little challenging to our articulator to go through what we think that is, but we certainly think that there are revenue synergies out there for us to get.

Omotayo Okusanya: Got you. So the $60 million run rate is just from more G&A type operating expense type synergies that gets you from the $40 million to $60 million and then revenues are anything on top?

Peter Scott: Yes, that’s the right way to describe that.

Omotayo Okusanya: Thanks. That’s very helpful. Thank you.

Operator: I will now turn the call back over to Scott Brinker for closing remarks. Please go ahead.

Scott Brinker: Yes. Thanks for joining us, everyone. Good momentum here. Happy to talk about it today and look forward to seeing you in the coming weeks and months. Take care.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining, and you may now disconnect.