Good morning, and welcome to the Healthpeak Properties, Inc first quarter conference call. I would now like to turn the conference over to Andrew Johns, Vice President, Corporate Finance and Investor Relations. Please go ahead. Thank you, welcome to Healthpeak's first quarter 2021 financial results conference call. Today's conference call will contain certain forward-looking statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations. A discussion of risks and risk factors is included in our press release and detailed in our filings with the SEC. We do not undertake a duty to updating forward-looking statements. Certain non-GAAP financial measures will be discussed on this call. In an exhibit to the 8-K we filed with the SEC yesterday, we've reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with regulatory requirements. The exhibit is also available on our website on healthpeak.com. I will now turn the call over to our Chief Executive Officer, Tom Herzog. Thank you, Andrew. Good morning, everyone. On the call with me today are Scott Brinker, our President and CIO, and Pete Scott, our CFO. Also on the line and available for the Q&A portion of the call are Tom Klaritch, our COO, and Troy McHenry, our Chief Legal Officer and General Counsel. We had a strong start to the year and continued executing on all aspects of the plan we communicated over the past few quarters. Let me hit the high points. Our operations across all three of our core businesses were ahead of expectations. We closed on an additional $1 billion of rental senior housing sales and have over $400 million of additional sales under hard or soft contract. We completed proprietary acquisitions of $422 million of on-campus or affiliated MOBs with another $150 million under fixed price purchase option. Also, we have a strong pipeline for additional off-market acquisitions. Our development pipeline progress and projected deliveries and pre-leasing remain favorable. As we previously announced, we added one new development start from our land bank in South San Francisco and a densification development start in Torrey Pines, San Diego, and are already seeing strong leasing and interest in both. As we alluded to last quarter, yesterday we announced an additional tender for $550 million of bonds. Our decade-long ESG commitment continues to produce notable achievements. Later this month, we look forward to publishing our 10th annual ESG report. Given our operational progress, transaction timing, and stronger than expected trends, we raised our FFO as adjusted guidance by a couple of pennies at the midpoint and same-store guidance by 25 basis points at the midpoint. Everything is progressing very well. Brinker and Pete will provide the details. With that, I'll turn it over to Scott Brinker. Thank you, Tom. I'll start with operating results, then provide an update on senior housing sales and finish with investments. In Life Science, we're very well positioned with our footprint, relationships, and strong industry fundamentals. We reported 8.5% same-store cash NOI growth in the first quarter, driven by rent escalators, higher occupancy, and mark-to-market on renewals. The results were above our internal expectations as we saw an acceleration of leasing activity and rental rates across the Bay Area, San Diego and Boston, which comprise 97% of our Life Science NOI. Our momentum continued into April as we signed 290,000 sq ft of leases, with another 310,000 currently under LOI. Turning to Medical Office. Same-store cash NOI grew 2.1% in the first quarter, driven by rent escalators, 2% cash mark-to-market on renewals, and favorable expenses. The results exceeded our internal forecast for the quarter. Leasing demand remains robust. Over 615,000 sq ft of leases commenced in the first quarter, including more than 500,000 sq ft on renewals, contributing to a trailing 12-month retention rate of 80%. We're seeing the benefit of our digital marketing initiatives as MOB virtual tours have increased dramatically. Our digital tour technology in all three business segments will benefit the platform long after COVID is behind us. Turning to CCRCs, the inflection point occurred sooner than we expected, as occupancy across the portfolio increased 10 basis points from December to March and an additional 40 basis points in April. The trends are encouraging, especially at LCS, where leads in the first quarter exceeded 2019 levels and tours increased by nearly 70%, driven in part by our digital marketing initiative. Entry fee sales are up 80% from the low point in 2Q 2020. The effective vaccine rollout and a strong housing market support continued improvement. Same-store cash NOI growth was -16.5% for the quarter, driven by year-over-year occupancy declines from COVID. The first quarter pool consists of just two properties, which limits the usefulness of the metric. As the LCS properties enter the pool starting in 2Q, the quarterly same-store result will become more representative. The fiscal year pool will remain just the two Sunrise properties in 2021. Moving to senior housing dispositions. We closed on an additional $1 billion since our last earnings call. We signed purchase agreements or letters of intent on all of our remaining SHOP and triple-net properties, with the closing timelines driven by licensure and debt assumption. The majority are under hard contracts with money at risk. We continue to evaluate our sovereign wealth joint venture alongside our partner. Overall pricing remained in line with previous disclosures. The most recent $1 billion of SHOP assets were sold at a 2.6% cap rate on annualized trailing three-month NOI, excluding CARES Act revenue, and a 4.9% cap rate on pre-COVID NOI. With the vast majority of the asset sales now behind us, we're able to shift nearly 100% of our transaction focus to strategic investments in our three core business segments and advancing our densification opportunities. For example, with our life science occupancy in the high 90s, we announced in March the commencement of the $159 million Nexus development in South San Francisco and the $135 million Callan Ridge densification in Torrey Pines. Both projects have generated significant interest from tenants before we started to dig foundations. We also completed development at 75 Hayden in Lexington. The campus sits strategically at the intersection of Route 128 and Route 2 and now totals more than 600,000 sq ft across three buildings that are 100% leased. We continue to advance our shadow development and densification pipeline. In April, we closed on the first phase of the previously announced acquisition of land on Forbes Boulevard in the heart of South San Francisco. The remaining parcels in that acquisition should close later this year. Combined with our existing holdings, we've branded the 20-acre site under the new name of Vantage. The project will become a highly prominent phased development totaling 1 million sq ft or more. Demand in South San Francisco remains robust, and we hold a dominant position in the sub-market, controlling nearly 50% of the landlord-owned lab inventory. We have the ability to double our footprint in the sub-market over time through our existing land bank and densification opportunities. Moving to acquisitions. We've been active in medical office, finding attractive opportunities to redeploy senior housing sale proceeds. All of the acquisitions I'll describe today were done on a proprietary basis through relationships. In some cases, we effectively executed asset swaps with the same counterparty, trading senior housing assets for life science and medical office, which eliminated our risk around execution, timing, and tax on more than $2 billion of transactions. In April, we acquired a 14-property MOB portfolio with 833,000 sq ft for $371 million. The portfolio is 100% on-campus or affiliated with a seven-year weighted average lease term. The acquisition expands and/or creates relationships with leading regional health systems, including Bon Secours in Virginia, Inova in Washington, D.C., NorthShore in Chicago, HCA in Los Angeles, and Fairview in Minneapolis. The year one cash cap rate is 5.2%. There is occupancy upside at several of the properties, so the stabilized cap rate is in the high fives. Stepping back, one unique aspect of Healthpeak across all three business segments is our campus model, where we have significant scale in a single location, and we are strategically adding to three of our most important MOB campuses. You will recall that we recently acquired a 5.4 acre parcel at Medical City Dallas that will support up to 1 million sq f t of expansion, which is on top of the existing 2.1 million sq f t that we already own. In February, we acquired, for a 6% stabilized cap rate, a 48,000 sq ft MOB on the Centennial Campus in Nashville. Including our development that delivers in the fourth quarter, Healthpeak owned 830,000 sq ft across nine MOBs on this market-leading campus. Most recently, in April, we acquired for a 5.5% stabilized cap rate, a recently developed 80,000 sq ft MOB located on the market-leading Sky Ridge Hospital campus in Denver. This brings our ownership at the campus to 420,000 sq ft. Our acquisition pipeline is sizable as well, including an option agreement for $150 million of MOBs with strong health system affiliation. We're in a good position to capitalize on these opportunities, which is a good segue to Pete to cover financial results and the balance sheet. Thanks, Scott. I'll start today with a review of our financial results, provide an update on our recent balance sheet activity, and finish with a discussion of our 2021 guidance. Starting with our financial results. For the first quarter, we reported FFO adjusted of $0.40 per share and blended same-store growth of 4.3%. In addition, on April 29, our board declared a dividend of $0.30 per share, representing a payout ratio of approximately 88% for the first quarter. Turning to our balance sheet. We ended the quarter with net debt to adjusted EBITDA of 5.4 times, in line with our expectations. As previously announced, we intended to use a portion of our senior housing disposition proceeds to repay near-term debt. As such, during the first quarter, we completed the repayment of $1.45 billion of bonds maturing in 2023 and 2024. Yesterday, we announced a tender offer to purchase up to $550 million of 2025 bonds, allowing us to minimize dilution from sitting on dead cash and further improve our balance sheet. Pro forma for the $550 million repayment, our weighted average maturity improves to 6.5 years. With our senior housing dispositions now largely complete, we are not planning any further bond repayments beyond the $2 billion that has been completed or announced. Turning to our guidance. As Tom and Scott mentioned, we have started the year on a strong note with all of our segments performing above our initial expectations. As a result, we have made the decision to increase our guidance as follows. FFO as adjusted revised from $1.50- $1.60 per share to $1.53- $1.61 per share, an increase of $0.02 at the midpoint. Blended same-store NOI growth revised from 1.5%-3% to 1.75%-3.25%, an increase of 25 basis points at the midpoint. Let me spend a minute level setting all the major components of our revised guidance. First, we see an increase in FFO of roughly $0.01-$0.02 from improved performance across all three of our segments, which impacts both the low and high end of our guidance range. In life science, as Scott mentioned, we had a very strong first quarter. As a result, we have increased our full-year same store range to 4.5%-5.5%, an increase of 50 basis points. We do expect some modest deceleration as the year progresses, plus we proactively terminated an 80,000 sq ft lease at our Redwood City campus to allow an existing tenant to grow within our portfolio. The positive rent mark to market is over 40%, but as a result of downtime, it will negatively impact 2021 same store results by 75 basis points. It provides a significant earning and same store benefit to 2022 and beyond. In medical office, we have started the year with stronger than expected leasing, with demand for outpatient elective procedures continuing to improve. We had originally expected a more challenging first quarter due to a difficult year-over-year comp. Based on the first quarter performance exceeding our forecast, we have increased our full-year same store range to 1.75%-2.75%, an increase of 25 basis points. In CCRCs, with the success of the vaccine rollout and 100% of our properties open to new admissions, we are beginning to see improved performance. Recent occupancy trends are favorable, expenses have moderated, and we are seeing an uptick in entrance fees. As a result, we have increased the midpoint of our LCS portfolio guidance range by $7.5 million and tightened the range. While there are still a lot of moving pieces, if the trends we are seeing continue to ramp at the current pace, perhaps we are still a bit conservative with our forecast, and we will assess as the year progresses. Second, we see an increase in FFO of roughly $0.01-$0.02 from the timing and amount of acquisition activity from the reinvestment of sale proceeds. We have increased the lower end of our acquisition guidance to $700 million, an increase of $550 million. As a reminder, our plan assumed funding all acquisition activity with newly issued debt, bringing net debt to EBITDA back to our target of 5.5 times at the high end. For now, we have kept the high end of our acquisition assumptions unchanged, although our pipeline has been building, so stay tuned. Third, interest rates have ticked up a bit, so we have increased our expected issuance rate to 2.75%, an increase of 25 basis points from our prior assumption. One last item before Q&A. With our portfolio repositioning winding down, we completed a comprehensive review of our supplemental and realigned our disclosures to the current portfolio. On page 40 of the supplemental, we have provided a table summarizing the key additions. With that, operator, let's open the line for Q&A. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, pick up your handset before pressing the keys. To withdraw your question, please press star then two. So that everyone may have a chance to participate, we ask the participants to limit their questions to one and a related follow up. If you have additional questions, please requeue. At this time, we will pause momentarily to assemble our roster. The first question will be from Nick Yulico of Scotiabank. Thanks. Hi, everyone. First question is on the development, particularly the lab space development. Hoping to get a bit of an update on what you're seeing in your markets, and then also how you're thinking about in terms of achieving a stabilized yield on the life science lab projects underway. Hey, Nick. Scott here. Yeah, I'll cover that, and Tom may have something to add. The two most recent additions to our development pipeline from the land bank Callan Ridge, which is really a densification as well. We're underwriting an 8%+ yield on that. Now, that's helped by the fact that we've owned the land for a long time and are able to significantly densify that site. At current market value for the land, the return on cost is probably four in the 6% range, just realistically from trades we've seen recently. That project will start probably in the third quarter of this year. We still have a couple of tenants in the existing building through June The second project that we recently announced is Nexus, in South San Francisco. The underwritten yield there is a little bit lower, although certainly still higher than what we would achieve if we had to pay current market value for the land. In that project, we had to scrape an existing outmoded building. That's now complete. We'll start the construction soon. It's obviously a shovel-ready site now, and should deliver probably early first or second quarter of 2023. We feel really good about both projects, given the supply-demand dynamics, and if anything, there's probably some upside in the yields versus what we've disclosed to date. We're getting a lot of interest on both sites. In terms of what could come next, the land bank intensification opportunity exceeds 5 million sq f t on land that we already control. The two highest priorities are probably the two shovel-ready land sites, one in South San Francisco, one in Sorrento Mesa in San Diego. That totals about 500,000 sq ft. Both of those sites are essentially shovel-ready. We could start those really at our discretion, and if we start seeing significant momentum on the other projects that we just commenced, it may be that we go ahead and start those as well. We haven't made any final decisions. Tom, anything you'd add? Scott, yeah, a couple things, though. Nick, assuming that land is at market, we would say that spreads probably are in that 150 or probably closer to 200 basis point range relative to cap rates in those markets. That's with land at market, which has become very competitive, as I think everybody knows. Regardless how we think about it is, we can certainly make money at 150 basis point plus spread. It produces a couple hundred basis points spread to our year one funding costs. It's probably 25%-30% accretive to NAV when you think about the yields versus the cap rates in those markets. You really need that to compensate for the drag and the risk that's encountered with development. The significant advantage that we have is we've got a good-sized land bank and even a much bigger densification pipeline that will create really strong land in very well-positioned locations in the three core markets over the next decade. Okay. Thanks, guys. That's helpful. Just one other question is on the balance sheet, maybe for Pete. I just want to make sure we're understanding this correctly in terms of the second quarter activity. The bond tender, the dispositions that you planned, the acquisitions, we get to that and netting to about $225 million of cash. You're also, I think, expecting to get some of your seller financing paid off later this year. Just trying to understand kind of where you guys are at right now based on everything that was announced, in terms of a cash position to go and do more acquisition and development funding. I know you also mentioned taking up your debt as well. Thanks. Thanks, Nick. Yeah, there's a few items in there. I think what I would say with regards to getting back to our five and a half times net-to-EBITDA, there's still call it about $800 million of acquisitions, which is built into the high end of our guidance. When you think about our current revolver balance, we ended the quarter at about $1 billion. That's actually come down today. That's at around $775 million. We've got some other transactions that will close. Plus, we've got the bond tenders you just mentioned. I would say from a revolver perspective, we feel quite good about where we are from a floating rate debt and the amount that's outstanding on the revolver. Like I said, we have some dry powder built in with our leverage because that tender will take us down into the low fives, around five times. About $800 million of capacity from an acquisition perspective. Hopefully that's helpful, and happy to take it offline if you have any additional questions on that. Thank you. Thanks, Nick. The next question will be from Jordan Sadler of KeyBanc Capital Markets. Thanks. Good morning. I wanted to touch base on the acquisition pipeline. You guys got off to a pretty good start early in the year. Looks like MOBs seem to be a pretty good opportunity. I'm just curious what the rest of this pipeline looks like. You, Tom, flagged in your prepared remarks. Yeah, Jordan, a few thoughts on that. We're currently seeing transaction opportunities in both of the major sectors of life science and MOBs. The market for purpose-built lab and well-located land in the core markets for life science has been driving very strong pricing, as I'm sure you've all seen, which has caused us to stand down on a lot of the auction deals, or maybe all the auction deals that we've looked at. However, this is, in our view, a plus for us as we have the embedded densification opportunities given our premium land location. That just really increases the value of those opportunities in that land, given we've got about a decade run on that side. If I flip to MOBs, for the high-quality MOBs, it's also been quite competitive and challenging, especially in the auction markets. All the completed deals that we have done have been off-market as of the past several months. Our acquisition pipeline is entirely relationship-driven, so we feel quite good on that front. Yeah, there's a lot of competition out there, Jordan. I think we've got a position where when we think about build versus buy in each of our three major segments, with life science being primarily build, given our land bank, and the value-add opportunities that we have. MOBs, it's a blend of buy and build. As long as they're relationship-based deals where the health service companies value our partnership to help them achieve their objectives, which Klaritch has been building on that for 30 years. The CCRCs, it's more generally buy versus build, given the typical 8 to 10-year from inception development and stabilization period. We're a natural counterparty for those that are capital constrained and want to find a capital partner, and it creates a great yield for us. We've also got some densification in our CCRC campuses that sum up to about a half a billion dollars over time, where the delivery's reduced to probably about three years, and the land is free. If I was to just summarize all those components in one remark, that would probably be it. Okay. As it relates to the LCS guidance tweak for the year, Pete, or maybe Scott, your thoughts on sort of what you're assuming in the upward revision to sort of the NOI expectation in terms of maybe occupancy from here. What's embedded in it? I can start with that. Pete, you may have something to add, but if you look at the first quarter, Jordan, and just annualize the NOI that we reported, you come out to about $82 million. Our new guidance is $70 million-$90 million, we do expect occupancy to increase fairly materially through year-end. The range we gave is 79%-87%. Today, we're just above 79%. We are expecting that the improvement that we saw in the first quarter, but then in particular in April, will continue. That might lead you to believe that there's a lot of upside in the NOI, and maybe there is. In the first quarter, we did have some expenses that were quite a bit lower than we thought, including bad debt and insurance and even labor. We wanted to maintain a little bit of conservatism just to make sure we understood exactly how expenses would shake out the balance of the year. The other thing is that the merit increases for the workers tends to be on April 1st. That number's obviously meaningful, and that will impact the balance of the year in 2021. Hopefully that helps. Yeah, that's great. Thank you. Thanks, Jordan. The next question is from Amanda Sweitzer of Baird. Thanks. Good morning. On your life science segment and thinking about your outlook beyond the voluntary termination, where are the biggest areas of uncertainty that remain in that outlook today? Are there any aspects of your underwriting that you think could prove conservative? I can start with that. Yeah, we always underwrite some level of bad debt, and there could be some upside in that number that would allow us to exceed our guidance. We've achieved a good portion of the speculative leasing in the 2021 budget, so anything we do from here on out should be upside, as we've pretty close to achieved our full-year leasing already, especially if we can convert those existing LOIs into signed leases. On the credit quality of the tenant side, there's a lot less risk today than there would've been a couple of years ago, for sure, given how much money has been raised in the sector. We have a number of watchlist tenants from the past that are no longer on the watchlist, which is great. It's a very small number today. It doesn't mean we're not actively managing the portfolio, of course, but just very few tenants that we're actually concerned about. Those are probably the biggest variables. For sure, we feel really good about the environment. The bigger challenge when you look at the reported same-store growth over the next three quarters this year is that we're just coming up against a very strong comp. We were up on average 7% in 2020 from 2Q to 4Q, that's a very difficult comparable quarter that we'll be up against. Tom, anything to add in addition? No, I don't. We do have Scott Bohn and Mike Dorris on the line for questions. I think you know that they are two co-leaders of life science and have been for the last quarter plus. Any color, Scott, for San Francisco, Boston, just briefly, and then Mike for San Diego on things that you're seeing that would add color. Go ahead, Mike. Sure. I'm happy to go first for San Diego. For San Diego, we're certainly seeing even increased velocity from a market standpoint, in terms of market rent. All those leading indicators that we talk about a lot in terms of venture capital raises, net absorption. Based on the first quarter that we just hit, we had records last year and are on track to potentially do so again if the trend holds. We feel really good about the fundamentals down here in San Diego. Scott, I'll let you talk about San Fran and Boston. No, I would agree. I would just follow on that, those same comments for San Francisco and Boston. I think the tenant demand continues to be at record levels, and you're seeing significant fundraising as well to go along with it. I think we do have some upside certainly in the numbers we're showing today. Thanks for all the color. That's helpful. Then finally, seller financing was a bit slower to be repaid than I think you guys initially expected. Is there any change in your view of collectibility of those seller financing amounts that are still outstanding? No, I can cover that. We had one big prepayment that's still in process, and we still expect to receive it. There are two properties in that pool that got held up for licensure purposes. They still haven't closed. Once that gets done, we do expect a pretty material repayment or prepayment of a lot of that seller financing. The current balance today is in the just under $800 million. It wouldn't surprise us if about half of that got repaid by year-end based on current discussions. Great. Appreciate the time. Thanks, Amanda. The next question is from Rich Anderson with SMBC. Hey, thanks. Good morning out there. On life science, can you talk a little bit about the early renewal process in your leasing activity? How much of the total is coming to you early because tenants perhaps feel nervous about the growth in rents and want to lock in before it gets worse for them? Yeah. Hey, Rich, it's Scott. Most of the renewals in 1Q were in fact early renewals. It wasn't driven as much by what you just described, and more so by two tenants that wanted more space. We did an expansion plus a renewal at mark-to-markets on both of those. That's really more what's driving early renewals. We don't have as many come to us for just a standalone early renewal. Okay. The second question from me is on the kind of the lingering SHOP exposure through the JV. Is that probably something you just keep for a long time, or is there an opportunity to come to some sort of terms with your partner to sell that as well? Rich, it's something that is currently under assessment. It's a very good partner. We're working with them to identify a solution that works for both them and for us. We're happy to hold that long term if that's what makes the most sense, but also happy to do something different. Probably not a whole lot more I can say on that right at this moment. Okay, fair enough. Thanks, sir, very much. Thanks, Rich. The next question is from Juan Sanabria of BMO Capital Markets. Hi, good morning. Just hoping to talk a little bit more about the life science acquisition opportunity set and just your appetite to either explore new markets, whether it's Research Triangle, New York City, and/or look at the university-based business, just given how tight cap rates are in kind of the three markets you're in from an acquisition perspective. Hey, Juan. Scott speaking, Tom and the team may have more. We have done almost $2 billion of acquisitions over the past two years in life science, we feel particularly good about those. Those types of transactions really aren't available today, and certainly not at the pricing that we pay. Now, we hope we can find more of those. They tended to be relationship driven, and we're active on a couple of fronts. For sure, the auction market has gotten pretty pricey. Not a surprise. The fundamentals in the business are really strong, there aren't that many areas or partners to play in life science. It's not a surprise to see the valuations increase so dramatically. We are spending more of our time in life science thinking about development, intensification, but we're certainly active in looking for acquisitions too, because we may find one that makes sense. Tom, is there anything you'd add to that? Actually, there probably is. When we think, Juan, about looking at some of these secondary markets outside of our three core markets, we're always looking at various new supply, heavy competition coming in, and whether we have competitive advantage. We clearly have competitive advantage in the three markets. If we break into a new market, we don't. We get to slug it out with everybody else. I think an interesting fact is that the majority of our new leasing as we develop new properties are our existing tenants. Brinker, I think I had seen something that you had written up that it is in the 80s, or maybe it was Bohn and Dorris that wrote it up, that somewhere in the 80%-plus range is the amount of new space that is leased from growing biotech tenants within our space. Is that accurate? Did I have that stat right? Yeah, it's in the mid-80s, Tom. Yeah. Juan, you can at that point probably appreciate that when we've got a good-sized land bank that'll keep us busy for a while, and then the densification will keep us busy for a lot longer. In these markets where we have huge scale, it's a pretty competitive advantage for others that are trying to break in. We're highly focused there. Great. Second question is just on the MOB portfolio. If I look at the geographic footprint, there's a bunch of markets where you have one or two assets. Would the long-term goal be to increase local scale, and how are you thinking about approaching that? Because most of the markets are not quite as dense as some of your top three or four markets. Just curious on your long-term vision there. Yeah. We'll turn it to Klaritch, but the bottom line is, Tom, for decades, as he formed MedCap and carried it forward, was to be with number one or number two hospital systems in each market. They need to be strong markets, but that has a massive impact on how we think about it strategically. Tom, maybe you could give some color. Yeah, sure. Hi, Juan. Typically, our markets are driven by our relationships with the health systems and how we've acquired buildings over the years. Normally, if you look at our portfolio, we're at 97% either on campus or affiliated, and we maintain those relationships on those markets, so we typically are not going to sell those. We would love to expand in them, and we do look for opportunities on a market-type basis. Probably, I could see us expanding in some of those as we move forward over the next year or two. If they're good markets and with a good system, we're likely not going to exit them. Thank you. Thanks, Juan. The next question is from Nick Joseph, of Citi. Thanks. You talked about the MOB deals that you've done and having the pipeline being mostly off-market. I'm wondering, what sort of yield premium do you get off off-market versus if those assets had hit the open market? Yeah, it's hard to say, Nick, because they end up not going to an auction. I think it's reasonable to say that we're buying from sophisticated sellers who aren't going to accept a big discount. I know we wouldn't if we were on the opposite side of the table. I don't know that the valuation is some material discount to fair market value. The way we think about it more is that you're able to create a transaction and customize it in a way that really makes sense for both parties. You're able to ensure that there's a relationship going forward with the particular health system in the case of medical office buildings. Maybe at the margin, there's a slight valuation difference between an auction and an off-market transaction. I think it's more all the softer points that ultimately are probably more important than the hard points on an acquisition that really drive, in our view, the differences between doing things on a proprietary basis versus an auction. Thanks. Just on densification, you talked about the opportunity at the CCRCs. As we look at the recovery there, how do you think about actually executing on that opportunity? Yeah. Nick, it's Scott again. We have more than 700 acres across those 15 properties. There's at least 100 acres on those campuses that could be densified. Five or six occasions or campuses, we've done some level of planning around what could actually be done. We've done at least that first level of underwriting. I would view that more as an opportunity over the next decade, some of which could be in the next year or two, that we would look to densify particularly successful campuses. In some cases, it's building more independent cottages or high rise. In some cases, it's actually building out a full continuum of care if a particular campus happens to lack assisted living or lack memory care. It's a combination of things across, it's probably eight to 10 campuses that are good candidates over time. Thanks. Thanks, Nick. The next question is from Steven Valiquette of Barclays. Yeah. Hello, everyone. Thanks for taking the question. A couple things here. First, congrats on the results and the strength in life science and MOBs. Just a question on CCRCs, recognizing it's only a small part of the overall NOI. I guess I was curious, with that guidance and the supplement for the inflection point in occupancy to occur in either 2Q or 3Q this year, it does seem to be a quarter or so behind some of the peers who saw the inflection point already late in the first quarter. Just curious maybe what the drivers are for that slightly longer timeline within CCRCs, whether it's just a longer closing time for move-ins because of a larger upfront payment, maybe some other factors with the SNF component. Just curious to hear your quick thoughts around that. Yeah. Hey, Steven, it's Scott. There probably is some conservatism in the outlook because in the December to March timeframe, our CCRC occupancy was actually up 10 basis points. The inflection point was actually well ahead of rental senior housing, and then we were up another 40 basis points in April. Hopefully that trajectory continues. Pete. Okay. Hey, Scott. Maybe you could just take a moment as you were looking at guidance and how you were thinking about CCRCs. Yeah. Steve, just to touch on what Scott just mentioned. If you annualize our first quarter results, we're actually performing quite well relative to guidance. Perhaps there's some CFO conservatism in those numbers. When you think about the occupancy, we didn't touch the occupancy that's in our supplemental on page 42, just because it's a little. Hard to predict, although I would say we're tracking on the inflection in the high end is this upcoming quarter. As Brinker just said, we're doing a bit better than that. Again, a lot of that big beat as well in the first quarter was expenses moderating. That actually is a big driver as we look at the rest of the year, seeing expenses moderate. Again, maybe some CFO conservatism in there, but we feel quite good about what's in the guidance right now. Okay. One other real quick question, potentially a final question around the senior housing asset sales before the entire process moves into the rear view mirror. I guess I was curious whether there was ever any consideration on your part to negotiate any earn-outs that would come back to you from these assets to at least have some participation in the potential recovery of senior housing occupancy, or was there just more of a mindset just to completely wash your hands of this and just move on other than your CCRCs, of course? We talked about it for a fleeting moment, and we recognized that if we were going to have an exit, to have a clean exit so that we could move forward with our business plan in the three core businesses and grow those, manage the balance sheet, and change the rhetoric on the company and the growth trajectory. No, we did not want to hang on or modify pricing, complicate deals, potentially they don't get done in order to try to hang on to some kind of an upside. Okay, perfect. Okay. Thanks. Thanks, Steve. The next question is from Vikram Malhotra of Morgan Stanley. Thanks for taking the questions. Good morning. Maybe two bigger picture ones. First, on the MOB side. Some of your peers who've also focused on campus have recently started dabbling more on what I'd call quasi off-campus or off-campus. Some have done it through more JVs or looking at them more selectively. Wanting to get your sense about potential to grow the MOB base even further, and specifically looking more at off-campus, why or why not? Second, just on life science, the results just seem to improve every quarter and given kind of tight demand supply, I would envision the near term remains strong. Could you give us some color on how you're thinking kind of three years out? What's the sustainable kind of trajectory for this business on a same store NOI basis? Okay, let's start with MOBs. Klaritch, why don't you start on that one, your view on that? Sure. Yeah, thinking about on-campus has obviously been our strategy over the years. We had that when we started our predecessor company, MedCap, back in the 2000 time period. We always wanted to focus on on-campus with the top number one or two hospital in the country. Obviously, as part of that, as you develop relationships, you also end up with adjacent and affiliated off-campus, which quite frankly, we like. We want to make sure when we look at those that they have a heavy hospital presence in them, either certainly employed physicians, but also hospital outpatient departments such as imaging or cancer treatment or whatever might fit into the building and the surrounding service area. Then if you look, quite frankly, on-campus has always outperformed off-campus in a number of our key growth metrics. We did a study recently, looked at over 300 of our properties over a 10-year period, and it was pretty consistent that on-campus outperformed. Off-campus adjacent, which are fairly close to the hospital, also did quite well. Off-campus affiliated, while not as good as on-campus, they certainly perform better than just unaffiliated off-campus. We certainly look at that classification of assets, and we'll continue to do that as we move forward. I would add to that we do intend to go to Nareit, and we're going to provide some summary of some studies that we've done over a very prolonged period of time with a group of clean assets of call it 300 assets in the portfolio on-campus, off-campus, affiliated, unaffiliated, and show you some real results in a very strict structure in how these were measured. So you don't get the biases of assets that go vacant and are pulled out of the pools and whatnot. And I think you're going to find that the results are just what you would think. The on-campus has been much more steady, has produced better results. Off-campus affiliated is second and unaffiliated is third. But we'll bring those results to Nareit, so stay tuned on that one. The second question you had was around life science, that as we look forward for the next couple of years, the demand supply looks quite strong, Vikram, as I think you're pointing out. How do we think about it three years out, if I captured your question correctly? If so, I'll turn that one to Brinker. That's right. Yeah. Hey, Vikram. Yeah, I mean, our occupancy today is in the high 90s, so arguably there's not a ton of upside there. Although with the leases being so big with an average size of 50,000 ft, it's certainly easier to run a high occupancy. There's just less frictional vacancy than, say, in a medical office business. The rent escalator is the primary, most consistent source of growth. We're in the low threes today. That should continue. The mark-to-market in the portfolio is somewhere in the 15% range. That's probably a bit conservative given how much rents have continued to run. With current vacancy across all three markets being so low, it's certainly possible that rents will continue growing much faster than our escalator, which they have for, I don't know, at least five years in a row. That's probably the building blocks. Most of the leases are triple-net. We don't have a ton of exposure to operating expenses anyway. Great. Thanks. That was helpful. Thanks, Vikram. The next question is from Michael Carroll of RBC Capital Markets. Yeah, thanks. I want to talk a little bit about the life science developments that you have going on. How many are you willing to start in any one particular market? I know you have about one spec project in each of your three main clusters. Are you willing to break ground on a second one in either of those clusters? Do you have to have some leasing activity done at some of those new projects, or do you just need to see an uptake in overall activity? Michael, we've done some of both. Sometimes we come out with something spec after Bohn and Dorris do their heavy-duty work on demand and supply and all the touch points they have in the market, and feel quite convinced that they can get these things leased. We find when we come out spec, at least in the current market, that before we can put a shovel in the ground, that the pre-leasing begins. We have a couple more projects and probably even a third one that would have a little bit longer lead time, one up in Boston, or really Waltham, where we could pick up build-to-suits or heavy pre-leasing, and we could be ready to go anytime on what was previously called Forbes and now Vantage. Directors Place, we're all set to go as soon as we feel that the leasing looks strong, and that's actually quite a good outcome for us. Yeah, we would pull the trigger on a couple more because the dilution from it, or the drag from it, would be quite small as long as they're pre-leased. That produces a great outcome for us. Okay, great. Thanks, Tom. I guess last one for me. Can we talk a little bit about the $150 million of MOBs that are subject to a purchase option? Is that a big risk that those health systems are going to exercise that option and you might lose those deals, or how should we think about that? There's always a risk that something could happen. It's more contingent upon leases being signed with the health system. Until there's 100% clarity there, I guess we can't count on it. We're certainly expecting that we're going to have the opportunity to purchase those assets. Okay, great. Thank you. Thanks, Michael. The next question is from Steve Sakwa of Evercore ISI. Thanks. Good morning. I guess two quick questions. One on sort of the conversion of traditional office into life science. What sort of concerns do you have in any of your markets around the growing discussions we're hearing, both from public companies and private office owners about the life science conversion? Why don't we start with Brinker, and then we'll go to Dorris and Bohn, who have done a fair amount of this in the past. Scott, why don't you go ahead and kick that off? Hey, Steve. We certainly study new supply carefully across all three markets. We do include any conversions or major redevelopments in those numbers, so we don't ignore the projects, and yet some are more competitive than others. In any event, you're going to end up with a somewhat compromised product for the most part. It's just a matter of how compromised. Some of the sub-locations aren't great. They end up being a bit isolated and not in the core sub-markets. In other cases, the physical plant ends up being pretty severely compromised. Some are better than others, and some landlords are going to be better at it than others as well. It's harder to make a black-and-white comment on conversions and the risk. Certainly, the market commentary seems to be weighted towards maybe overemphasizing just how much those are competitive with the Class A locations and products that we end up bringing to the market. I'll ask the guys to comment on their specific markets. Yeah. Thanks, Scott. This is Scott Bohn. In San Francisco and Boston, I think Boston, we've frankly seen more conversions actually being started. Still not as many as I think you may read about out there. In the Bay Area, there's been a lot of talk of conversions. Not a lot of action, frankly. I think there's been a lot of office flyers that have contained the words "or Life Science," so to speak. Not a lot of actual buildings being truly converted and being put on the market today. This is Mike. Yeah, I would say for San Diego, we've probably seen a little bit more down here than up in the Bay Area, as Scott mentioned. We've done a couple hundred thousand sq ft ourselves. In that Sorrento Mesa market, has had a lot of sort of fuel for that. In general, I think, Scott Brinker, you kind of hit all the points. You got to have the stars align in terms of a facility that sort of checks the boxes from a physical standpoint, the floor-to-floor heights, the structural integrity, being configured in such a way that you can get shipping and receiving in there. If you can get all those things to align and buy it at a price where you can get appropriate yields, it can make a lot of sense, and they represent opportunities for us. You really have to have those stars aligned. It's certainly something that we're monitoring very closely. Okay. Second question, I guess, is really around inflation and rising material costs and how that might impact future development yields. What are you seeing on things that you're currently underwriting and what's the risk to IRR yields going forward? Yeah. Sorry, Sorry, Tom. This is Tom Klaritch. It's been kind of an odd year with construction pricing due to the pandemic. Things were rolling along, and then the pandemic hit, and construction kind of ground to a halt, created an abundance of construction supplies out there. Production ramped down. Pricing was actually relatively flat to down a little bit during the pandemic, and then at year-end, just as quickly, things ramped back up. Production had been shut down. What we're seeing is pretty high demand for certain of the basic materials out there. Steel, lumber, all have had significant increases because of that. We've had other cost categories that, quite frankly, have been relatively flat. Cement is around 1% increases. Lighting fixtures, 1.4%. It's kind of been a mixed bag. If you look at our construction projects, probably the two biggest supply areas are steel, which obviously makes up the structure of the building. That's about 9%. Steel's seen a fairly significant increase of about 40% since last March to this March, and that's actually up pretty significantly from February. On the flip side, you've got cement products, which make up, again, about 9% of the cost of a building, and those have been relatively flat. We're also seeing labor at this point only at about 2.5%, although that may tick up as construction has been picking up. For both the MOB side and the life science side, it's been only about 2.5%. We really think a lot of this surge pricing, once production starts ramping up again and the kind of the supplies get in balance, we'll see that kind of normalize. We don't see it as a major impact to our yields. We're still on our projects forecasting the same yields we did about a year ago. Quite frankly, in Life Science, the rate increases have kind of more than matched any increase in construction. We're pretty comfortable right now where those yields sit. Great. That's it for me. Thanks. Thanks, Steve. The next question is from Joshua Dennerlein of Bank of America. Hey, everyone. Curious, how do you guys think about the governor on pulling forward some of the development projects in your pipeline, or your tenure pipeline rather? I'm sorry. Can you repeat that? Yeah. How do you guys think about the governor on pulling forward some of the life science development projects you have over the next 10 years as you work to densify your campus? Well, we think- On the densification. movements in densification, where they're offering the opportunity to pretty dramatically expand the densification of some of the older properties. If that's what you're referring to, how we feel about it is fantastic because it's a huge opportunity for us. We haven't had pressure to move forward more quickly than what we think makes economic sense. Certainly, by creating this opportunity to further densify some of the best located land in South San Francisco, certain parts of Boston and San Diego, obviously that's a windfall for us. Brinker, anything you'd add on that? I mean, if the conversation is about the governor on doing more, in the last two months, we did announce 300,000 sq ft of additional development with Callan Ridge and Nexus. Another 500,000 that's shovel-ready between Vantage and Director's Place. Those are probably up next. On the densification, it really is probably 2023 is the soonest that that could start in earnest, just because we have existing leases. There's a timing element that's also a bit outside of our control and driven by tenants and meeting their space. In the interim, that gives us plenty of time to seek entitlements and approvals. Okay. Yeah, I was curious on that. You made a comment on the leasing. People would potentially have to move out before you could start any of these projects to knock the building down. Thanks for the color. Scott, I wanted to follow up on something you mentioned in your prepared remarks. You mentioned how all three asset classes you're invested in have kind of a campus cluster model. I understand the life science side, how does a cluster campus model help on the MOB side? Yeah, I'll ask T.K. to add his thoughts as well. When we look at the performance over time of the 300-plus assets we've owned for, in some cases, two decades or more, retention, mark to market, all the things that drive NOI and cash flow, having a presence on particularly a strong hospital campus, like a Medical City Dallas or a Sky Ridge or a Centennial, those assets just outperform. If you are the only landlord in town, you certainly have greater flexibility around moving tenants around and certainly driving tenant satisfaction as well as rental rates when you're not competing against third parties. T.K., can you add? Yeah. To give an example, for example, on our Centennial campus in Nashville, we own, now with the addition of the new building we just announced, 661,000 sq ft on that campus, and we're adding another 170,000 in a brand-new development. We have a major tenant in one of our buildings that needed additional space on the campus. They are moving into about 70,000 sq ft in that new building, and that's allowed two tenants in several other buildings on the campus to expand into the space that they're vacating. It's similar to life science in that campus model. You have the ability to move tenants around and let them expand and, in some cases, contract, but for the most part, they're expanding and moving into other buildings on campus. Similar type model. The next question will be from Daniel Bernstein of Capital One. Hey. I guess good morning to you. I just wanted to follow up on inflation costs and development, and just better understand how much the land is as a part of development costs. It seems to me that the land you have on the books is kind of a natural hedge. Maybe would you consider hedging other costs on the commodity side, like steel, cement, everything else there? Right. Again, on the first question of land. Plus or minus, it's 20% of the development budget. That will vary, and it's probably the biggest variable because land prices tend to match up pretty well with what's happening with market rents and construction costs. Developers are targeting a specific return, and land tends to move around pretty dramatically based upon where those return parameters are. It is the biggest variable. It's the line item that we've seen the most fluctuation in over the last year, moving higher for sure. 20% is probably a reasonable estimate for just a normal course environment. Okay. Would you consider hedging other costs on the commodity side that are involved in development? No. Not that I want you to be commodity traders, but just you have a lot of development on the line, so. Yeah. Dan, we're entering into GMP, guaranteed maximum price contracts- Okay on all of these projects, so we don't have a ton of exposure. In some cases, we've gone ahead and pre-ordered steel when we were highly likely to proceed, like we did at the Nexus project. Otherwise, it's not really our business to hedge commodities. We don't have that much construction activity. Okay. One quick question if I could. Oh, go ahead. Sorry. I was going to say, we actually did look into that several years ago, and it wasn't feasible. Things like steel, the type of steel we buy really wasn't one that you could hedge against, which is more of the rolled steel is what you can hedge against. It really wasn't available to us in our construction. Interesting. Thank you. If I could just one kind of a related question there as well is it looked to me like TI per square foot was up. Is that just a function of the length of the leases increasing? Looked like it was increasing both in MOBs and life science. Is there some inflation pushing into the CapEx side as well? Yeah. Dan, I'll speak to life science and ask T.K. to comment on medical office. This quarter really was a bit of an outlier. The TIs were higher than normal. We did sign some long leases on new leasing, but it was more driven by a couple of spaces that were currently more office that we're go ahead and convert to life science lab use. That's more what drove the life science number this quarter. Tom, do you want to comment on medical office? Sure. Medical office, we typically offer TI on a per square foot per year basis, usually in the $2-$2.50 range for renewals and $4-$5 range for new. This quarter, for renewals, we're a little higher than typical at $2.34. That was really because of three items. One, we had two large renewals that the tenant had to reconfigure space, they did pay a little more in rent. We gave them a little bit more TI. We had a renewal that was coupled with an expansion, that drove the price of the TI, even though it was a combination of new and renewal. We called it renewal. If you take those two items out, we would've been in line with historical numbers. The new leasing at $5.08 is pretty much where we've been for the past year or so. We averaged right around $5 in 2020, so we really weren't too far off there. Okay. All right. I appreciate the color. Thank you. Thanks, Dan. The next question is from Mike Mueller of JPMorgan. Yeah. Hi. If you look at the development/redevelopment pipeline, it's about $1.1 billion, $1.2 billion right now. Do you think that in-process number changes materially, either up or down, say, over the next five years? Mike, it's one of those questions where we have to see what plays out over the next. Four to five years. I would think as the company continues to grow, probably you see the development increase some, although carefully, due to the densification opportunities. Re-dev, I don't think so. I think that's probably, call it maybe a $75 million a year expenditure. We've got a lot of off-campus irreplaceable assets on these campuses, and these have, on average, it's 22, 23-year redevelopment lives, so they get a real IRR in the spend. It's actually quite economical for us to time it when there are proper leases turning, we've coordinated it with the hospitals and have a really successful re-dev effort in MOBs. I think you'll see that every year. Yeah, I think we'll probably see development grow slowly over time, but we're not going to double down and surprise you with all at once a monstrous development program because we're always looking at demand and supply. We like to make sure we know where the funding is coming from in advance and that there's plenty of pre-leasing. We think we can grow it over time carefully that way. Got it. That was it. Thank you. Thanks, Mike. The next question is from Lukas Hartwich of Green Street. Thanks. On the acquisition front, would you consider adding to your CCRC portfolio, or is that off the table? I'll start, and then Brinker can pick it up. No, it's not off the table at all, Mike. Excuse me, Lukas, apologize. It's not off the table at all. We have a competitive edge in that business in that it's so hard to start a CCRC business because it requires real scale, real infrastructure, real expertise, and you really can't build it by development. What that means is that growth in that business really needs to occur through acquisition, and it can be fully stabilized properties or those that have some form of value add. There are plenty of not-for-profits that are mission-driven that might turn up short on funds but want to retain their mission. We're the ideal candidate to be the capital partner with them, and we've got the best operator in the business in LCS to join forces with us on that. We do see some annual activity that we're working toward that we'd like to see some growth. We're not going to make that an outsized business, probably no bigger on a percentage basis than it is today. Every time we do a deal, it comes with a yield that is quite strong, stronger than what really would typically be the case other than the barrier to entry to enter that business is just so darn difficult. Great. Thank you. Thanks, Lukas. This concludes our question and answer session. I would now like to turn the conference back over to Tom Herzog for any closing remarks. Well, everyone, thank you. First, thank you, Carrie, and thank you for joining us on the call today. We, as always, appreciate your continued interest in Healthpeak and do look forward to seeing many, if not all of you, at Nareit, virtually again on this particular Nareit and some of the other industry events that are coming up in the coming months. We'll talk to you all soon. Thank you so much. Thank you. The conference is now concluded. Thank you all for attending today's presentation. You may now disconnect your lines. Have a great day.