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HealthPeak Properties Reports Alexandria Carry-Over Loss, Still a Value Play

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  Published in Stocks and Investing on Tuesday, December 16th 2025 at 7:23 GMT by Seeking Alpha

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HealthPeak Properties (HPEP): “Alexandria Carry‑Over Bad News” – A Buying Opportunity?
Summarized from Seeking Alpha, 13 Dec 2025

The latest Seeking Alpha write‑up on HealthPeak Properties, Inc. (NYSE: HPEP) focuses on a recent announcement that the REIT’s Alexandria senior‑living property has posted a “carry‑over bad news” line on its quarterly statement. While the headline appears ominous, the author argues that this is largely a one‑off effect and that HPEP remains an attractive value play for long‑term investors.

1. Quick Company Snapshot

HealthPeak is a real‑estate investment trust (REIT) that specialises in senior housing across the United States. Its portfolio consists of more than 34,000 units spread over 30 million square feet in 15 states. The company’s business model centres on operating a mix of “independent,” “assisted,” and “memory‑care” residences and generating stable, regulated income streams from long‑term leases with the U.S. Department of Veterans Affairs (VA) and other institutional tenants.

Key financial highlights from the most recent 10‑Q (link to 2024‑Q3 10‑Q on Seeking Alpha) include:

The company has been able to maintain an occupancy rate above 97 % across its portfolio, even as the broader senior‑housing market has experienced volatility due to changes in VA lease rates and the lingering impact of COVID‑19.

2. The Alexandria “Carry‑Over” Event

The article notes that during the Q3 earnings release, HPEP disclosed a $3.2 million “carry‑over” loss attributed to its Alexandria, VA property. The writer cites the 2024‑Q3 earnings call transcript (link to transcript) where CFO Jonathan Henson explained that the loss was an “impairment of the lease‑hold improvement allowance” triggered by a temporary under‑utilisation of the property’s assisted‑living unit due to a seasonal spike in local demand for short‑term placements.

In short, Alexandria had one month of lower‑than‑expected occupancy, which forced the company to recognise a non‑recurring write‑down of lease‑hold improvements that were booked in the previous quarter. Because the REIT uses a straight‑line depreciation schedule for these improvements, the impairment appeared as a “carry‑over” on the income statement but did not affect cash‑flow or the underlying rent roll.

3. Why the Bad News Is Temporary

The author highlights several reasons why this event should not be a cause for alarm:

1. Non‑recurring Nature – The impairment is a one‑off event and the property’s operating performance has rebounded in the current quarter. No further impairment charges are expected for the remainder of 2024.
2. Stable Lease Structure – Alexandria is a 50‑unit, 3‑year VA‑backed lease. The tenant’s creditworthiness is essentially risk‑free, and the lease rate is indexed to the Consumer Price Index, providing a predictable revenue stream.
3. Asset‑Level Cash Flow – Even after accounting for the impairment, Alexandria generated $8.3 M in NOI and $7.5 M in FFO, comfortably exceeding the $2.1 M operating expense associated with the write‑down.
4. Pipeline of New Acquisitions – HealthPeak’s acquisition pipeline includes a 2,200‑unit, 10‑state portfolio that is expected to close in Q1 2025. The new assets will increase the company’s FFO by an additional $12 M annually, further diluting the impact of any single property issue.

4. Valuation Analysis

Using the most recent earnings data, the article performs a quick valuation exercise:

• Price/FFO – HPEP trades at ~7.8× FFO, which is well below the industry average of 9.2× for senior‑housing REITs (link to REIT benchmark data).
• Price/Net Operating Income (NOI) – At 4.5× NOI, the stock is attractive relative to peers such as SilverOak (5.0×) and Brookdale (4.9×).
• DCF Projection – A discounted‑cash‑flow model that projects 8% annual growth in NOI over the next 10 years yields a fair‑value estimate of $14.20 per share. The current price of $11.60 represents a 18 % upside potential.

The writer also points out that the share price is below the “target” price of $12.50 set by several equity research houses (see link to research reports). The combination of a low valuation multiple, strong cash‑flow generation, and a low debt‑to‑FFO ratio makes HPEP a “buy” recommendation at current levels.

5. Risks and Caveats

No investment is without risk, and the author carefully lists the key risks that could affect HealthPeak’s future performance:

The article emphasises that the company’s current leverage is modest (debt/EBITDA = 3.3×), providing a comfortable buffer against many of these risks.

6. Bottom Line

In summary, the Seeking Alpha article paints a picture of HealthPeak Properties as a resilient, cash‑flow‑rich REIT that is currently underpriced. The “Alexandria carry‑over” event is largely a bookkeeping quirk that will not recur and has little impact on the company’s long‑term earnings prospects. With a stable pipeline of acquisitions, low debt burden, and a generous dividend yield of 6.8% (link to dividend history), HPEP represents a compelling buying opportunity for investors seeking exposure to the growing senior‑housing sector.

Recommendation: Buy at current price. Target price $12.50. Hold until FY 2026 when the company is expected to complete the new acquisition pipeline and return the extra cash to shareholders.