Healthpeak Properties Enters into a New $236 Million Joint Venture with Breakthrough Properties on the Callan Ridge Lab Campus in Torrey Pines

By: Healthpeak Properties, Inc. via Business Wire

January 10, 2024 at 16:15 PM EST

Healthpeak Properties, Inc. (NYSE: PEAK) (“Healthpeak”), a leading owner, operator, and developer of real estate for healthcare discovery and delivery, today announced that it has formed a new strategic joint venture with Breakthrough Properties (“Breakthrough”) through a sale of a 65% interest in Healthpeak’s fully leased Callan Ridge lab campus in the Torrey Pines submarket of San Diego.

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Callan Ridge Campus - Torrey Pines, California (Photo: Business Wire)

The formation of the 65% Breakthrough / 35% Healthpeak joint venture values Callan Ridge at $236 million, or $1,275 per square foot, and represents a stabilized cash capitalization rate of 5.3% based on the initial annual rental rate of approximately $67 per square foot.

“This strategic recapitalization was a unique opportunity to partner with Breakthrough, crystallize significant development value creation, and accretively recycle capital back into our business,” said Scott Brinker, President and Chief Executive Officer of Healthpeak. “The strong pricing highlights the underlying demand for our lab assets and allows us to recapture our initial invested capital, while still retaining a 35% interest in the trophy campus. We are excited about the partnership with Breakthrough and look forward to growing the relationship over time.”

Estimated net proceeds to Healthpeak are approximately $130 million after factoring in the company’s share of remaining tenant improvements.

Healthpeak began construction on the 185,000 square foot Callan Ridge campus in 2021. The two-building campus is fully leased to Turning Point Therapeutics, Inc., a subsidiary of Bristol-Myers Squibb Company (NYSE: BMY), through April 2035. The lease on 105,000 square feet commenced in July 2023 and the lease on the remaining 80,000 square feet will commence in July 2024. Callan Ridge has numerous sustainable building features, including a photovoltaic canopy, electrochromic windows, recycled steel and concrete, and drought-tolerant landscaping. The joint venture will pursue LEED Gold certification upon completion of development.

ABOUT HEALTHPEAK PROPERTIES

Healthpeak Properties, Inc. is a fully integrated real estate investment trust (REIT) and S&P 500 company. Healthpeak owns, operates, and develops high-quality real estate for healthcare discovery and delivery. For more information regarding Healthpeak, visit www.healthpeak.com.

FORWARD-LOOKING STATEMENTS

Statements in this release that are not historical factual statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include those regarding the development of Callan Ridge and the related joint venture. All forward-looking statements are made as of the date hereof, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions and other factors — many of which are out of Healthpeak's and its management's control and difficult to forecast — that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. These risks and uncertainties include but are not limited to: Healthpeak's ability to complete the development within expected cost projections; the risk that Healthpeak may not be able to achieve the benefits of the development or the joint venture within expected timeframes or at all; and other risks and uncertainties described from time to time in Healthpeak's Securities and Exchange Commission filings. You should not place undue reliance on any forward-looking statements. Healthpeak assumes no, and hereby disclaims any, obligation to update any forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.