Healthpeak Properties (DOC) risk factors, FY2024 10-K

Other

1. 01The section below discusses the risk factors that may materially adversely affect our business, results of operations, and financial condition. Additional risks not presently known to us or that we currently deem immaterial may also adversely affect our business

Risks Related to Our Business and Operations

1. 02We may be negatively impacted by macroeconomic trends that may increase construction, labor, and other operating costs for us and our tenants, operators, and borrowers
2. 03Life science industry changes could have a material adverse effect on our business, results of operations, and financial condition
3. 04Our lab tenants face significant regulation, funding requirements, and uncertainty
4. 05Decreases in our tenants’, operators’, or borrowers’ revenues, or increases in their expenses, or other factors adversely affecting their ability to borrow money, could affect their ability to meet their financial and other contractual obligations to us
5. 06We may be negatively impacted by the insolvency or bankruptcy of, or the inability to obtain funding by, one or more of our major tenants, operators, or borrowers
6. 07We depend on real estate investments, particularly in the healthcare property sector, making us more vulnerable to a downturn or slowdown in that specific sector than if we were investing across multiple sectors
7. 08The illiquidity of our real estate investments may prevent us from timely responding to economic or investment performance changes
8. 09Identifying and securing new or replacement tenants or operators can be time consuming and costly
9. 10Property development, redevelopment, and tenant improvement risks can render a project less profitable or unprofitable and delay or prevent its undertaking or completion
10. 11Delays in project completion also delay the commencement of related rental payments, including increases in rental payments following tenant improvement projects, and may provide tenants the right to terminate leases or cause us to incur additional costs, including through rent abatement
11. 12The foregoing risks could result in not achieving anticipated returns on investment and could have a material adverse effect on our business, results of operations, and financial condition
12. 13We may be unable to develop, maintain, or expand hospital and health system client relationships
13. 14We assume operational risks with respect to our senior housing properties managed in RIDEA structures that could have a material adverse effect on our business, results of operations, and financial condition
14. 15Economic conditions, natural disasters, weather, and other events or conditions that negatively affect geographic areas where we have concentrated investments could have a material adverse effect on our business, results of operations, and financial condition
15. 16Uninsured or underinsured losses could result in a significant loss of capital invested in a property, lower than expected future revenues, and unanticipated expenses
16. 17Our use of joint ventures may limit our returns on and our flexibility with jointly owned investments
17. 18Under certain leases, a portion of the tenant’s rental payment to us is based on the property’s revenues (i.e., contingent rent). If a tenant’s revenue at a rental property with contingent rent declines, our rental revenues would decrease
18. 19Competition may make it difficult to identify and purchase, or develop, suitable healthcare properties to grow our investment portfolio, to finance acquisitions on favorable terms, or to retain or attract tenants and operators
19. 20We may be unable to successfully exercise rights on the collateral securing our real estate-related loans and, even if we are successful in exercising those rights, we may be unable to successfully operate, occupy, or reposition the underlying real estate
20. 21We may be required to recognize reserves, allowances, credit losses, or impairment charges
21. 22We may invest substantial resources and time in transactions that are not consummated
22. 23We may not be able to successfully integrate or operate acquisitions and/or internalize property management, or may incur unanticipated liabilities
23. 24We may be affected by unfavorable resolution of litigation or disputes and rising liability and insurance costs as a result thereof or other market factors
24. 25Environmental compliance costs and liabilities associated with our real estate-related investments may be substantial and may materially impair the value of those investments
25. 26Corporate impact and sustainability commitments and requirements, as well as stakeholder expectations, may impose additional costs and expose us to new risks
26. 27We may be impacted by epidemics, pandemics, or other infectious diseases, including Covid, and health and safety measures intended to reduce their spread
27. 28Human capital risks, including the loss or limited availability of our key personnel, could disrupt or impair our operations
28. 29We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of that technology could harm our business

Risks Related to Our Capital Structure and Market Conditions

1. 30Volatility, disruption, or uncertainty in the financial markets may impair our ability to raise capital, obtain new financing or refinance existing obligations, and fund acquisition and development activities
2. 31Increased borrowing costs could materially adversely impact our ability to refinance existing debt, sell properties, and conduct investment activities
3. 32Higher borrowing costs could limit our ability to refinance existing debt when it matures, or cause us to pay higher interest rates upon refinancing and increased interest expense on refinanced indebtedness
4. 33Cash available for distribution to stockholders may be insufficient to make dividend distributions at expected levels and are made at the discretion of our Board of Directors
5. 34If access to external capital is unavailable on acceptable terms or at all, it could have a material adverse effect on our ability to meet commitments as they become due or make investments necessary to grow our business
6. 35Our level of indebtedness may increase and materially adversely affect our future operations
7. 36Covenants in our debt instruments limit our operational flexibility, and breaches of these covenants could result in adverse actions by our creditors
8. 37The market price and trading volume of our common stock may be volatile
9. 38Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms

Risks Related to the Regulatory Environment

1. 39Required regulatory approvals can delay or prohibit transfers of our senior housing properties
2. 40Compliance with the Americans with Disabilities Act and fire, safety, and other regulations may require us to make expenditures that adversely affect our cash flows
3. 41Laws or regulations prohibiting eviction of our tenants, even on a temporary basis, could have a material adverse effect on our revenues if our tenants fail to make their contractual rent payments to us
4. 42The requirements of, or changes to, governmental reimbursement programs such as Medicare or Medicaid may adversely affect our tenants’, operators’, and borrowers’ ability to meet their financial and other contractual obligations to us
5. 43We could be negatively impacted by legislation to address federal government operations and administrative decisions affecting the Centers for Medicare and Medicaid Services or other legislative or regulatory changes affecting REITs or the industries in which we operate
6. 44Our participation in the CARES Act Provider Relief Fund and other Covid-related stimulus and relief programs could subject us or our operators to disruptive government and financial audits, enforcement actions, and recovery activity
7. 45Changes in federal, state, or local laws or regulations may limit our opportunities to participate in the ownership of, or investment in, healthcare real estate

Risks Relating to Integration and Property Management Internalization Following the Merger

1. 46We may be unable to fully integrate the operations of the Company and Physicians Realty Trust successfully and realize the anticipated synergies of the Merger and benefits of property management internalization or do so within the anticipated time frame
2. 47Loss of our tax status as a REIT would substantially reduce our available funds and would have materially adverse consequences for us and the value of our common stock
3. 48Our taxable REIT subsidiaries (TRSs) may be subject to corporate level tax
4. 49The tax imposed on any net income from “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes
5. 50Further changes to U.S. federal income tax laws could materially and adversely affect us and our stockholders
6. 51Potential deferred and contingent tax liabilities from corporate acquisitions could limit or delay future property sales
7. 52There are uncertainties relating to the calculation of non-REIT tax earnings and profits (“E&P”) in certain acquisitions, which may require us to distribute E&P
8. 53Tax protection agreements may limit our ability to sell or otherwise dispose of certain properties and may require us to maintain certain debt levels that otherwise would not be required to operate our business
9. 54Our charter contains ownership limits with respect to our common stock and other classes of capital stock
10. 55We are subject to certain provisions of Maryland law and our charter relating to business combinations that may prevent a transaction that may otherwise be in the interest of our stockholders
11. 56Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of Healthpeak OP common units, which may impede business decisions that could benefit our stockholders
12. 57Certain provisions in the operating agreement of Healthpeak OP or other agreements may delay or prevent unsolicited acquisitions of us or certain other transactions
13. 58We are a holding company with no direct operations and, as such, we will rely on funds received from Healthpeak OP to pay liabilities, and the interests of our stockholders will be structurally subordinated to all liabilities and obligations of Healthpeak OP and its subsidiaries