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Operator: Good morning and welcome to the Healthpeak Properties, Inc. First Quarter 2026 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Andrew Johns, Senior Vice President of Investor Relations. Please go ahead.

Andrew Johns: Welcome. Today’s conference call contains certain forward-looking statements. Although we believe expectations reflected in any forward-looking statements are based on reasonable assumptions, these 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 update any forward-looking statements. Certain non-GAAP financial measures will be discussed on this call. In an exhibit to the 8-K we furnished to the SEC yesterday, we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. The exhibit is also available on our website at healthpeak.com. I’ll now turn the call over to our President, Chief Executive Officer, Scott Brinker.

Scott Brinker: Thanks, Aj and welcome to Healthpeak’s first quarter earnings call. Grateful for our team who delivered a first quarter with excellence in execution, one of our WE CARE core values. In early January, we completed the once-in-a-decade buying opportunity at the Gateway campus in South San Francisco for a small fraction of replacement cost. We’re already driving leasing momentum at the campus with 62,000 square feet of signed leases and letters of intent. We also have 113,000 square feet of active proposals and tours at the campus. In March, we completed the IPO of our senior housing business in a unique and creative transaction. The $240 million of current year FFO from that portfolio is now being valued at a multiple that’s roughly 20 turns higher than Healthpeak.

That differential highlights the growth potential in Janus Living but also the incredible opportunity in Healthpeak at the current stock price. Despite selling about 18% of the business in the IPO, our exposure to senior housing is essentially unchanged from December 31 because we closed more than $700 million of acquisitions on our balance sheet prior to the IPO. The timing of the acquisitions was very intentional to capture the multiple arbitrage for our shareholders. Janus Living already has the cost of capital to do accretive acquisitions. As the 82% owner of the company, those acquisitions will benefit Healthpeak earnings. As an example, we expect the IPO proceeds to be accretive to Healthpeak by roughly $0.04 per share once fully invested and stabilized.

The value of our best-in-class outpatient platform is being rewarded in the private market by world-class institutions. In March, we closed a joint venture recap with Blackstone on a fully occupied outpatient portfolio at a 6.1% cash cap rate. The transaction raised $170 million in proceeds and we now have a template for future recaps and acquisitions with Blackstone. We’re progressing additional transactions that would generate proceeds of $700 million or more at cap rates about 200 basis points inside what’s implied in our current stock price. We bought back $100 million of stock in April at a 10-plus percent FFO yield. The buyback was accretive and allowed us to increase our 2026 earnings guidance. Our stock price is clearly mispriced versus intrinsic value, so we’ll continue to evaluate leverage-neutral stock buybacks to drive earnings and value accretion.

We also paid more than $200 million in dividends to shareholders in the first quarter, which equates to an outrageously high 7.5% annualized dividend yield, especially in light of the solid payout ratio. Turning to operating results. The strong fundamentals in Outpatient Medical that we spoke to with the merger announcement 3 years ago continue to be validated. Since closing the merger, we signed more than 10 million square feet of renewals at cash re-leasing spreads of positive 5.8%. Last quarter, the spreads were positive 5.4% and once again, with very modest TIs. Half of our renewals were done in-house, saving $5 million in leasing commissions last quarter alone. Our leasing costs continue to be substantially below the peer group, resulting in strong net effective rents, which drives superior cash flow and ultimately earnings growth.

We’ve been successfully getting 3% escalators in the outpatient business on both new leases and renewals for about 5 years now. Over those 5 years, our same-store NOI growth has averaged positive 3.5%, which is 30% higher than the previous 5-year average. So definitely an improvement in that business. We’re advancing a number of strategic and highly pre-leased outpatient developments with our health system partners but not yet far enough along to announce publicly. In Senior Housing, our 1Q results were phenomenal across the board. Entry fees set an all-time high for the first quarter, incredible work by our team and operating partners and we’ll provide all the details on the Janus Living call. Turning to life science. M&A activity, biopharma stock prices and capital raising are all trending positively.

In fact, April was the most active month for biotech equity issuance since early 2021. Healthpeak total occupancy in life science increased sequentially and we still expect our year-end 2026 total occupancy to increase versus the prior year. Our leasing pipeline is broad-based from venture-backed biotech to large-cap pharma. Traditional wet lab accounts for the vast majority of the pipeline but we do have flexibility. Our robust well-located buildings allow us to capture alternative users when it makes economic sense. To summarize, senior housing performance was outstanding and we created enormous value with the IPO. Our outpatient portfolio and platform is being rewarded and richly valued in the private market and our lab business has massive upside as the pendulum starts to swing in our favor.

I’ll turn it to Kelvin to review our first quarter results and our improved 2026 outlook.

Kelvin Moses: Thank you, Scott. We started the year strong and continue to execute our stated plans to position each business to deliver long-term earnings growth. We are very pleased with the success of the Janus Living IPO, which strengthens our investment management capabilities and expands our reach to a broader base of investors. We are translating this momentum into our operating platform by adding key talent in asset management, investor relations and acquisitions, advancing our technology initiatives and delivering our platform to our senior housing operating partners to achieve excellence in execution across the portfolio. We continue to attract interest from institutional capital across the enterprise, including our recently announced outpatient medical joint venture with Blackstone.

These partnerships further validate our platform, relationships and capital allocation philosophy as investors look at Healthpeak as a platform aligned for growth. Turning to the results for the first quarter. We reported FFO as adjusted of $0.45 per share and net debt-to-EBITDA of 5.4x. In Outpatient Medical, fundamentals continue to show strength and our team is translating this into leasing opportunities with key relationships. During the quarter, we executed nearly 1.1 million square feet of leases, including several large renewals with leading health system partners, including Baylor Scott & White, Norton Health and HCA. Across our leasing activity, we achieved 5.4% cash re-leasing spreads on renewals, 79% tenant retention and ended the quarter at 91% total occupancy.

Average annual escalators were 3%, consistent with what we have achieved on average since the Physicians merger. And leasing costs this quarter were modest at just 10% of annual rents, producing strong cash return. A good example of this execution is the Baylor cancer center in Dallas, where we completed 10-year lease renewals across the entire 458,000 square foot campus during the last 2 quarters. Leasing costs were minimal at just over $1 per square foot per year, reflecting strong second-generation returns that drive earnings growth. And most importantly, this outcome was achieved through direct negotiations with Baylor and McKesson, leveraging decades-long relationships and in-house operating platform that can deliver tangible outcomes for our clients.

Finally, we ended the first quarter with a very active leasing pipeline, including 318,000 square feet of leases executed since April and approximately 700,000 square feet under LOI. Turning to Lab. During the first quarter, we executed 141,000 square feet of leases, 92% of which was new leasing. We also have approximately 355,000 square feet under LOI, of which approximately 80% was new leasing and approximately 75% on currently vacant space. We saw a range of deal sizes in those commitments, including 4 deals greater than 50,000 square feet and South San Francisco continues to see the strongest active demand of each of our markets. We ended the quarter with total occupancy up to 77.7%. And for the balance of the year, we expect to continue to capture occupancy from the benefit of new leasing commencements, which will support occupancy growth of at least 100 basis points versus year-end 2025.

And finally, Senior Housing. We will continue to provide a brief update on senior housing with detailed commentary on the Janus Living earnings call to follow. For the quarter, Janus Living delivered total revenue growth of 35% and adjusted EBITDA growth of 42%. Healthpeak’s ownership totaled 81.6% of the outstanding shares of Janus Living, which represents roughly a $5.7 billion market value. Shifting to the balance sheet and guidance. In January, we repaid $103 million of secured mortgages on 2 of our senior housing properties. And in March, we closed on a new senior unsecured delayed draw term loan totaling $400 million, which remains undrawn. We will have through December 2026 to draw down the term loan. And ending with guidance. Following the IPO, Janus Living is consolidated into Healthpeak’s financial statements with a deduction to earnings for the noncontrolling minority interest.

We now incur incremental public company costs and temporary earnings drag from the cash proceeds on the balance sheet. These impacts are expected to be offset by the senior housing portfolio outperformance and deployment of $750 million of cash into acquisitions through year-end. As a result, we expect the IPO to be earnings neutral to Healthpeak in 2026 and it will be accretive in 2027 and beyond as the capital deployment into acquisitions flows through to Healthpeak’s earnings. In April, we repurchased $100 million of our stock at an implied FFO yield of over 10%. The repurchase is accretive to earnings and supports raising our FFO as adjusted guidance to a range of $1.71 to $1.75 per share. With that, operator, please open the line for Q&A.

Operator: [Operator Instructions] Your first question comes from Nick Yulico with Scotiabank.

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Scott Brinker: Nick, are you there? I’m going to say your perfect record’s intact, you’re always first, but I’m not sure. Operator, I’m not sure, maybe he’s having a connection problem. Let’s go to the next question.

Operator: Perfect. Your next question will be from Farrell Granath with Bank of America.

Farrell Granath: This is Farrell. My question is on your life science portfolio. And when thinking about the commentary, it’s seemingly much more positive in how you’re thinking about your pipeline and increased interest. And I’m curious how that maybe has influenced or even changed your thinking and timing on opportunistic life science investments going forward? If that has actually moved up the time line or if there is a line of sight of when you think that would be a strategic use of capital?

Scott Brinker: Well, the one we acquired in late December, early January, Gateway, is doing really well. So that’s a positive. That was a unique opportunity. It’s our biggest market. We have a dominant footprint there. I think the best team and the best footprint. We dominated there for years and I think that will be even more true with this purchase. And it had a lot of yield in addition to upside. So that was a unique opportunity. I’m glad we did it. We’re already getting the benefit of that. I think that will fall into ’27 and beyond as well. So congrats to Scott and the team. We’re looking at some other things in our core markets but our threshold is pretty high for using capital. Obviously, we did the buybacks in April.

That was a very accretive use of capital. We have a number of transactions underway. Our sources and uses this year was $1 billion of recaps and sales and $1 billion of acquisitions. We’ve essentially done the $1 billion of acquisitions and buybacks and we have a number of transactions underway. So we need to make sure we get that done before we would consider anything opportunistic in life science. But there’s no shortage of opportunity. There’s — that is for sure. I mean, a lot of these private buyers are just totally upside down. At this point, we’re mostly having conversations with lenders. So there is opportunity but we’re going to be really careful and disciplined about which markets, which buildings and obviously, pricing valuation.

Operator: Your next question is from Seth Bergey with Citi.

Seth Bergey: Just given kind of the pipeline and the leasing activity you’ve been able to accomplish, how does the kind of Gateway acquisition kind of compare to your initial underwriting expectations? And just given kind of the positive comments on the pipeline, is there anything kind of changing in terms of the lease economics that you’re discussing with life science tenants?

Scott Brinker: Well, we didn’t put much lease-up into our Gateway underwriting in year 1. So I’d say we’re already ahead of schedule. Certainly, the pipeline is strong and I would have guessed and the rents that we’re signing are at or above underwriting. So that’s all positive. I don’t think there’s much contribution to 2026. But definitely, as we look into ’27, ’28, the upside from that portfolio should start to materialize in our earnings. So the momentum is definitely positive in the Bay Area. I mean San Francisco had a red x on it in real estate 5 years ago, now it’s the hottest market in the country and we’re certainly getting some benefit of that.

Operator: Your next question is from Austin Wurschmidt with KeyBanc Capital Markets.

Austin Wurschmidt: Kelvin, I believe you said that you expect lab occupancy to increase 100 basis points by the end of the year, year-on-year. Can you just walk through some of the components that’s driving that between commencements and known move-outs? And does the team have any visibility into any known move-outs in 2027 at this point?

Kelvin Moses: Yes. Thanks for the question, Austin. We have about 400,000 square feet of expirations in 2026. And behind that, we have just over 0.5 million square feet of commencements that will fully offset those expirations. So we expect net absorption into year-end. We’re sitting here in May. So still ample amount of time for the team to try to convert some of our pipeline into occupancy in the fourth quarter as well that may trickle into 2027 but certainly still a window here to try to capture some incremental occupancy by year-end. There is about 50,000 square feet that we expect to exit the portfolio in the second and third quarter. So we do know about the potential vacate of 2 tenants in particular, midyear. But generally speaking, our focus is on total occupancy, driving net absorption throughout the year and seeing occupancy grow and subsequently produce earnings growth.

So we’re on track for that and the pipeline is certainly giving us promise that we’ll be able to achieve net absorption this year.

Operator: Your next question is from Ronald Kamdem with Morgan Stanley.

Ronald Kamdem: Just wanted to stay on the life science portfolio for a second. I think you talked a little bit about sort of San Francisco and the activity there. Maybe commentary on some of the other markets. And if I could just ask about the 2027 expirations again, in terms of known vacates, just any sort of early color there because it would seem like there’s a potential that same-store could be up next year if occupancy is rising this year. So I think we’re all just trying to figure that out.

Scott Brinker: Quickly on ’27, it’s still early. But as we look through that list and the conversations we’re having, I think the renewal rate will be a lot higher in ’27 than it has been in ’26. So I don’t know, plus or minus 50% or better but it’s still early. So we’ll update throughout the year as we get more clarity. But the leasing pipeline, the signed but not occupied leases is all positive. So we do feel like the trajectory on occupancy is definitely positive. And if we look at M&A and capital raising, that’s extremely positive. It feels like that’s always a leading indicator to the pipeline, which obviously leads into the actual leasing. So definitely, the trajectory is as good as it’s been in a number of years, which feels good and we’re well positioned.

We’ve got the right team and footprint and the credibility and capital as a landlord to win deals. So definitely feeling a lot better about the momentum in that business. In San Diego and then I’ll ask Scott Bohn to comment on Boston but we’ve got activity on virtually every vacancy in the portfolio. It doesn’t mean we’ll sign all those leases but there’s activity. We brought in Denis Sullivan 6 months ago, former CIO and CFO of BioMed. He’s just doing a fantastic job. So we’ve really got a great team on the ground to drive that activity as well. Scott, do you want to comment on Boston?

Scott Bohn: Yes. Sure. Boston, I mean, Boston is still working through the biggest supply-demand imbalance of the 3 markets. But you really have to dig into what is competitive to our portfolio and how our portfolio is performing specifically. If you look at West Cambridge where the bulk of our opportunity is, from a space perspective, we’ve had some great success, a great win with the lease we executed with a large cap pharma in the quarter. There’s also been some nice absorption in and around our portfolio in West Cambridge. So we’re really happy with what’s going on in that particular submarket in Greater Boston. And Claire and team are doing a great job out there capturing the demand that is available. If you look back 6 months versus today, it’s markedly different feel in that market from a demand perspective.

Operator: Your next question is from Rich Anderson with Cantor Fitzgerald.

Richard Anderson: Nice quarter, nice set up here. It reminds me of the paired share REIT structure but I know it’s not that. So don’t get me wrong but very, very unique indeed. So congratulations. I wanted to talk about life science leasing a little bit more detail. Kelvin and Scott, you mentioned up 100 basis points at least by the end of this year versus 2025. I’m wondering if — what do you think about how that will look? Will that be, I’m guessing not a straight linear line from today till the end of the year but more like an EKG? And I’m just curious how the pace of occupancy will go from here? Do you think you have a step down next quarter or step up? Like I just want to sort of prepare people for what it could look like even if the end game is up 100 basis points.

Kelvin Moses: Yes. Thanks for that, Rich. I’ll start. This is Kelvin. I think most importantly, we ended the year at 77% total occupancy. We ended the quarter at 77.7% total occupancy. So already making progress towards the 100 basis point goal of total occupancy improvement this year. Very difficult to give you precision around the quarter-over-quarter cadence of occupancy but just really want to focus you on year-end, given we have net absorption embedded in our portfolio with the execution that Scott and team were able to get completed starting last year that are flowing into this year. The 2 million square foot pipeline is probably worth giving a little bit more context on because there are opportunities to get new prospective tenants into more move-in-ready space.

And if we are successful, that could lead to incremental occupancy capture in the fourth quarter, again, into 2027. So no perfect cadence that we can give you from an occupancy standpoint but total occupancy captured by year-end is our focus and the entire organization is working towards that goal.

Operator: Your next question is from Michael Goldsmith with UBS.

Michael Goldsmith: Just on the guidance, you raised the full year outlook by $0.01. Same-store NOI guidance is flat. Now we expect interest expense to be $20 million higher and G&A to be $5 million higher. So can you just walk through kind of what’s driving the $0.01 raise? Is it the first quarter beat? Or maybe said another way, if you annualize your first quarter core FFO of $0.45, you get to a number well higher than your guidance. So can you just kind of walk us through the model and how we should be thinking about the cadence of earnings through the balance of the year?

Kelvin Moses: Yes. No, thank you for asking the question. This is Kelvin again. But I’ll give a little bit of context as it’s important to get this right. But the Janus Living IPO has certainly proven to be extremely successful for Healthpeak. I think first, the outperformance in the senior housing business fully offsets the impact of the transaction, making the IPO neutral to Healthpeak’s earnings in 2026. And then the second point would be, as Scott mentioned in his prepared remarks, we anticipate capturing about $0.04 of accretion on a run rate basis as the cash on balance sheet is deployed and the senior housing acquisitions stabilize and contribute to earnings. So some of that benefit will start to come into 2026, offsetting the IPO dilution and we could generate plus or minus $0.03 of earnings in 2027.

So really important to highlight the earnings contribution from Janus Living. Through the first quarter, we mentioned earlier that we’ve already invested $1 billion of capital, $714 million in senior housing and we are making progress towards our capital recycling target of $1 billion. So $270 million of proceeds already received. I think we made the right decision to invest the $714 million in senior housing acquisitions in Q1 on balance sheet prior to the IPO and contributing those assets to Janus Living to own the largest share in the platform. And going forward, that will result in earnings growth, as I mentioned before. But I think the first quarter is a little bit elevated because of those on-balance sheet acquisitions that we made in Q1 but we do anticipate that the subsequent quarters will come down.

And if you look at our kind of run rate average based on the midpoint of our guidance, that’s about $0.43 per share of FFO, plus or minus $0.01 each quarter. But as we get proceeds back from our recapitalizations and seller financing repayment, that will have an impact on the earnings trajectory in the back half of the year. So a number of moving parts, wanted to make sure we walked through that. But we are certainly pleased with the opportunity to raise guidance $0.01 here and the success of the Janus Living IPO.

Scott Brinker: And Michael, just one addition, the debt, $650 million of senior notes that we — we’ll have to refinance in June. Those are like 3.5%. So that’s an additional headwind in the second half of the year versus the first half, just the final piece of that puzzle.

Operator: Your next question is from Michael Carroll with RBC Capital Markets.

Michael Carroll: Just wanted to see if you guys can provide additional color on the life science setup? I know that the pipeline appears solid and is growing. But how has tenant activity changed? I mean are they making decisions any quicker than before? I think the focus for them previously was really on the prebuilt space but have any larger customers willing to make longer-dated decisions on some of the space that maybe requires longer build-outs yet?

Scott Brinker: I’ll give a few comments on the background — backdrop and I’ll let Scott comment on specific activity. But if you think about the real drivers of supply and demand, M&A, capital raising, new supply, all those things are moving in our favor in a very dramatic way. It’s just the downturn is so severe that it’s taking some time to climb out of it. It’s a long pendulum for this particular cycle but it is swinging in our favor. I mean all of those things really do move the needle on supply and demand over time and that’s what drives the business. It’s as simple as that. And we’re out competing in the marketplace. There’s a few really strong competitors, obviously. But those 2 or 3 groups are capturing the vast, vast majority of the tenant demand.

And I think that, that will continue. And in fact, it’s an opportunity for us. A lot of the new supply is going to alternative use. We’re simply just not leasable in this marketplace. So the backdrop is clearly moving in a positive direction from both supply and demand standpoint. Scott, do you want to comment on the…

Scott Bohn: Sure. Michael, I mean there are some larger tenants in the market who would be more apt to take more of a shell type space. But broadly speaking, the bulk of the pipeline and activity is still looking for maybe more move-in ready space or space that takes more minimal TI. Part of that is kind of the speed to getting into space, kind of shortening that decision window post funding. But also that type of transaction is less risky for the tenant, right? If you’re going into a new build of a shell space where it’s a full build-out, even if it’s a turnkey TI, there’s still inherent risk to the tenant. It’s just a more complex build for them. So if they have the option today to go into a space that’s a very nice second generation space that’s well built out, that fits what they need with minor modifications, they’re opting to do that.

And so I think one thing that is an advantage to our portfolio that we talk about all the time is having a wide variety of spaces at different price points to accommodate all of the demand within the market. We look at the tenant list, the broker sheets and really try to focus on having an option for every tenant on there versus just focusing on a selected group of tenants who are looking for Class A trophy space.

Operator: Your next question is from Juan Sanabria with BMO.

Robin Haneland: This is Robin Haneland sitting in for Juan. I was just curious on the Blackstone JV. What’s the opportunity set to grow here going forward? Would you be more interested in additional recaps or acquisitions?

Scott Brinker: Yes, it could be both. It’s a great group to partner with, obviously, extremely knowledgeable, enormous balance sheet with different pockets of capital to do different things. And we’ve got a great platform for them to participate in what we think is a really compelling business, with stable but growing cash flows and great relationships and footprint to really drive activity. And we would co-invest but as a minority share, we did a 20% interest in this recap, probably fair to say anywhere between 10% and 20% going forward. And we could do recaps and/or acquisitions and we’re already looking at a number of things with them.

Operator: Your next question is from Michael Stroyeck with Green Street.

Michael Stroyeck: Can you provide some thoughts on lab re-leasing spreads? Obviously, there’s still plenty of vacancy at the market level, likely will be for some time and your biggest peer is guiding to some pretty ugly re-leasing spreads. So I guess are you concerned that there could still be downward pressure on rents over the near term?

Scott Bohn: Sure. This is Scott. I mean, I think overall lab rents in our portfolio around $60 a foot, right? And I think that you’re going to have some rents that are above that, some rents that are below that. But overall, I think we’re generally in line with that. But I think we focus on the total all-in economic package versus the face rent. I think in — the better read overall, in my opinion, is what we’re seeing in demand in the pipeline and those all-in economics that we’re capturing across deals over time, they’re going to drive both occupancy and earnings.

Operator: Your next question is from Wes Golladay with Baird.

Wesley Golladay: You seem to be getting a little bit of traction on the permitting at the mixed-use Alewife project. Can you give us an update on what’s going on there and a time line for that project? Has that changed at all?

Kelvin Moses: Yes. No, happy to give an update. In fact, a week ago, we received our preliminary planning Board initial approval. It’s not the final approval for the entitlements but certainly a step towards that objective. It’s been a long process, as you know, working through the entitlement effort there but a very rewarding project that we now have Hines partnering with us on the multifamily opportunity. The mixed-use project is plus or minus 5 million square feet, half of which will be multifamily residential that Hines will be leading. So we have the opportunity to complete entitlements this year towards Q4 of 2026 and could see a groundbreaking of a residential building by Hines at some point in 2027 or 12 to 18 months after receiving entitlements. So working towards that objective and certainly making great progress with the city of Cambridge.

Operator: Your next question is from Vikram Malhotra with Mizuho.

Vikram Malhotra: I guess just maybe, Scott, if I can step back, you’re calling for the bottom, you’re saying there’s more activity. A bunch of your peers are still seeing occupancy falling and maybe pointing out much more challenging, I guess, conditions. So maybe if you could dig in a bit more sort of what are some of the differences, maybe geography, maybe product type and maybe it’s the tenant type as well. I’m just sort of trying to square kind of how divergent the trajectory and commentaries have been from your peers on that side.

Scott Brinker: Yes, Vikram, even when the sector was going bananas in 2020 and 2021, I mean we stayed really disciplined. In terms of what we bought or what we developed, we shut off capital allocation way before anybody else, public or private. It turned out to be the right decision and now we’re buying when nobody else can. It’s actually a pretty good opportunity. We’re already getting great results from that capital allocation decision with the Gateway purchase and potentially more to come. But we’ve always had a philosophy of concentration as a way to reduce risk. I know that sounds odd, use of diversification to reduce risk. But in life science, it’s really the opposite. Concentration in dominating local markets is really the way to go.

Creating flexibility and pathways to growth for tenants, really dominating the broker networks just given our footprint. We’ve got a great team in all 3 markets. So I think all of that plays a factor. We do like having multiple price points, right? It’s not all A+ even though maybe you’d like to be in that office, not everybody wants to or can afford it. So we like to have multiple options at different price points and suite sizes as long as it’s in the right submarket. That philosophy, I think, has paid off in terms of how we’re approaching the market. But we’re not in a lot of these kind of secondary, tertiary markets. I won’t name them. But we’ve really — you could — our entire footprint is in 5 submarkets in the entire country. I mean, you could probably tour it in 1 day if you could — if you could figure out the travel to Boston, which is a long flight.

Otherwise, I mean, you literally can see the entire portfolio in 1 day, it’s so concentrated. But that’s proven to be the right decision. So I think it’s all of those things together that are driving our view of the outlook maybe versus some others but I can’t obviously speak for them.

Operator: Your next question is from Jim Kammert with Evercore.

James Kammert: Is it reasonable to assume that the vacancy in the lab portfolio has, on average, basically the same NOI per square foot contribution or rent per square foot as the occupied portfolio? Just trying to think about that latent earnings potential as it leases up over time.

Kelvin Moses: Yes. Maybe I’ll start. Over the last 12 months, we’ve been able to achieve 5% cash re-leasing spreads on average. This quarter, we did 3.5%. Scott had just mentioned our portfolio average rent per square foot is around $60 triple net. Each market is different. Each lease in each space is different. So we’re able to exceed those in-place rates but we also might have some leases that come in a little bit lighter. So what I would suggest is, looking back at our cash re-leasing spreads, which we continue to get in excess of our existing kind of in-place leases, that should contribute to earnings growth over time. Most importantly, it’s a total occupancy story. As we gain occupancy, these are spaces that are currently not producing income and there’s even a drag associated with those spaces.

The occupancy capture is really going to drive earnings. So I think that should be the focus. That’s how we look at the earnings opportunity and we have 2.5 million square feet of opportunity in the lab portfolio to really drive earnings growth.

Operator: Your next question is from Mike Mueller with JPMorgan.

Michael Mueller: I apologize for trying to squeak a second one in here but it’s a clarification. On the supplemental development and redevelopment page, what does active versus total mean in the capacity and percent lease columns? And then the real question was, with the seemingly better view on lab occupancy, why didn’t you update that same-store outlook?

Scott Brinker: Yes, active redev in development, I mean, a lot of these projects are substantial. So as we lease certain floors or portions of the building and deliver them and the tenant starts to pay rents, we take those particular suites or floors out of the active development pipeline. They’re obviously no longer under active development. So that’s the differential or explanation between active versus total, Mike. Kelvin, do you want to take the other?

Kelvin Moses: Yes. And Mike, for your second question, I think over the course of the year, we’ll have an opportunity to reevaluate same-store amongst all of the segments. This quarter, the focus was certainly on the senior housing outperformance in the first quarter that really drove the guidance modification for the senior housing segment. But as we make progress over the course of the year, we’ll certainly evaluate the updates that will have a total same-store impact. So for this quarter, we thought it was appropriate to provide the update on senior housing.

Scott Brinker: I want to add, ordinarily, we don’t even update the segments, which I think is appropriate here. We felt like we didn’t have a choice because Janus Living is now providing its own guidance, obviously, on same-store and it’s substantially higher than the original healthy guidance. So we didn’t — we really didn’t have a choice but to update the segments. But we really focus on the total portfolio. Same-store is really a terrible metric. They ignore so many things. So it’s not how we run our business. Frankly, we’d prefer to just ignore it entirely.

Operator: Your next question is from Omotayo Okusanya with Deutsche Bank.

Omotayo Okusanya: Yes. Solid execution. So congratulations, both DOC and Janus. Post the quarter, there’s kind of significant leasing activity both on the MOB and Lab side. Again, curious if we just kind of conceptualize what’s happening in terms of that kind of people activity. And also, if you could just talk a little bit about kind of economics, whether it’s kind of changed materially in any way versus leasing activity in 1Q and realizing that there may also be some mix changes as well in regards to the April activity versus the 1Q activity?

Scott Brinker: 1Q is just always slow, Tayo. You can go back as many years as you want. It’s just always the lowest quarter of the year but the pipeline in both businesses is tremendous. We expect occupancy to grow in both outpatient and life science through year-end. So the trajectory in both businesses is very positive. I wouldn’t focus too much on quarter-to-quarter. It’s just 1Q is always light on both leasing, execution as well as capital — CapEx and this year was no different.

Omotayo Okusanya: Can you talk a little about economics?

Scott Brinker: Economics, well, yes, look, I’ll do one at a time. In outpatient, they continue to be really strong. I mean we’re getting 5%, 6% re-leasing spreads on several million square feet of renewals every year. We’re pushing 3% escalators almost across the board with very, very modest leasing costs, which is a critical distinction in terms of TI and LC. I mean it’s very modest. So the net effectives are really strong in that business. Mark and team have really built a nice pipeline. And we’re optimistic about the trajectory in that business. As we were 3 years ago when we announced the merger, it’s actually exceeded our high expectations. So that’s all good. And in life science, obviously, I think Scott has given you a lot of color on, the pipeline is building.

It’s broad-based from biotech to pharma and wet lab and everything in between with continued strong leasing economics. And again, the total focus is not just the face rate but TIs and LCs and all the concessions that come with it. So positive momentum on pipeline and leasing economics in both of the segments, Tayo.

Operator: Your last question is from Farrell Granath with Bank of America.

Farrell Granath: Just coming back in with a secondary question. Just digging in a little bit more on the life science occupancy. I was wondering if you could bridge between the offsetting of the vacancies with your new leasing potential dispositions and also your redevelopment that you saw? What were the benefiting factors from those 3 buckets?

Kelvin Moses: Yes. Farrell, this is Kelvin. I think for the quarter, we saw total occupancy uplift from net absorption. And over the course of the year, as I described earlier on the call, we have the potential of continuing that trajectory to end — to year-end with total occupancy ahead of where we ended 2025. We sold a 100% leased campus through a contractual purchase option in the first quarter in Salt Lake. So it obviously had an impact on occupancy. We articulated that, I think, on the last quarter call. We don’t have the intention of additional dispositions in the lab portfolio right now. But as we get more leasing traction on our development and redevelopment, that will obviously benefit total occupancy. And then we have the same-store operating portfolio that we are focused on driving total occupancy capture there as well. So making progress in all categories but no intention of disposing of life science assets right now.

Operator: There are no further questions at this time. The conference has now concluded. Thank you for attending today’s presentation and you may now disconnect.

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