Welcome to the 1:30 P.M. session at Citi's 2025 Global Property CEO conference. I'm Michael Griffin with Citi Research, and we're pleased to have with us Healthpeak CEO Scott Brinker. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC25 to submit questions. Brinker, we'll turn it over to you to introduce Healthpeak and the team, provide any opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we'll get into Q&A.
Okay, thanks for having us, Griff. So to my left is John Thomas, our Vice Chairman. To my right, Pete Scott, CFO, and to his right is Andrew Johns, SVP of Investor Relations. So thanks for joining us. Okay, three reasons to buy this stock. First would be we think we have the leading portfolio and platform in the outpatient business, where there's really a relentless push to move healthcare delivery given convenience and lower cost. And we think that platform will generate superior internal and external growth over time. Reason number two is the huge upside we see in the life science business. It inevitably will bounce back. Today, we have 1.3 million sq ft of high-quality space that's available for lease. It will grow earnings, and we're seeing significant external growth opportunities from distress.
We were pretty conservative in the business the last three years in terms of capital allocation, but others were not. And we have the opportunity to take advantage of their distress. And then reason number three would be $200 million of NOI from the senior housing business in our portfolio that we're not getting much, if any, credit for in our stock price.
Thank you for that. So let's start with the kind of external growth opportunities and things you've executed on recently. You highlighted in your recent investor deck, you know, two more opportunities sort of on the debt side and the loan availability to get into a building that really makes sense and is close in one of your core cluster biotech markets. Maybe talk about the opportunity set there and how you can find that way to pivot to offense.
Yeah, well, last year we sold $1.3 billion of assets at a 6.4% cap rate. Those were lower quality in comparison to the balance of our portfolio at a time when we were trading at closer to an 8% cap rate. So really strong execution to take advantage of a dislocation in our stock price. And we did buy back some stock last year, but we also paid down debt pretty dramatically so that our leverage today is well below our long-term target. So we have at least $500 million-$1 billion of buying power just using our balance sheet. And we're taking advantage of that primarily through life science distress. So when we published a deck on Friday in advance of this conference, our most recent investment is a preferred equity investment instrument, Sorrento Mesa, which is a market we've been in for more than two decades.
It's a newly built property. It's a campus, 250,000 sq ft, two buildings. It's essentially right in the middle of our existing footprint, which is 1 million sq ft in Sorrento Mesa. We've had good success there. It fits the profile of what we're trying to accomplish. It's a core sub-market that we want to be in long-term. We're coming in at 70% loan to cost, so a really attractive basis, dramatically below today's replacement cost. If it doesn't go well, we're in an awfully good position in terms of our cost basis relative to rents in a market that we like. It's brand new construction, so it sort of checks all the boxes of what we're looking to accomplish with these opportunities. It's a 12% return, so immediately accretive.
Things go well, we earn a nice return for four years and get repaid and hopefully buy the asset at that point, and if things don't go well, we have a really low cost basis and the opportunity to lease it up on our own at a nice return on cost, so we're looking at a lot of opportunities like that, and that's just the most recent that we announced on Friday.
Thanks for that. Maybe just starting off then with kind of the lab leasing and expectations there. I mean, you guys had some good wins, particularly in the development pipeline last year in markets that, frankly, I think the market thinks might be oversupplied or facing challenges. So can you kind of tell us what's been the differentiator for DOC's strategy in terms of being able to win on leasing, whether it's your existing tenant base, fostering new relationships? Maybe talk about the opportunity sets on there.
Yeah, it's a good question, Griff. Hope they can hear me. It's Pete here. You know, we've got, we think, best of class teams in the local markets and those that have been to San Francisco, San Diego, and Boston and met those teams tend to agree with us. And we've got a ton of tenant relationships, and we're located in the best sub-markets. At least that's our view. And that has certainly allowed us to, I think, capture market share over the course of the last year. We did 2 million sq ft of leases last year, which was pretty close to a record year for us. I'd say our pipeline today has improved since the fourth quarter call.
We didn't put any additional leasing activity in the deck that was focused more on capital allocation, but we're certainly pleased that it's improved since where we were a couple of weeks ago, and really the upside for us within the stock, as Scott has mentioned a couple of times as well, is in really leasing up some of the vacant space that we have within the lab portfolio, and we think that that's something we can do over the next year or two.
Have you started to see bigger tenants coming back into the market? Is the leasing pipeline mainly that 20,000 sq ft- 40,000 sq ft tenant? Again, I know some of those development leases were on the bigger side, and those were new wins. But maybe just talk about the composition of the pipeline today, new versus renewal, stuff like that.
Yeah, I think the pipeline today is probably split 50/50, new versus renewal. But to do 2 million sq ft of leases like we did last year, you have to have some pretty large lease deals get done. So we did a 200,000 sq ft deal at the Portside. We did some other sizable deals within the portfolio. I'd still say that the sweet spot tends to be more in the 20,000 sq ft-40,000 sq ft range. And I think the array of product, which I probably should have mentioned before within each one of our markets, I mean, we're not just class A+ development. We've got good class B assets as well, where the real estate costs are a lot lower, even though the rental rate might not be dramatically different between A and B. The actual expense load is much, much less in the class B product.
And you're seeing a lot of those tenants in that 20,000 sq ft-40,000 sq ft range have real interest in that. So the array of product certainly helps. And a lot of our leasing gets done with biotech tenants, which have been more active in the market than maybe the large cap biopharmas, although they're starting to sniff around a little bit more as well, which would be good for the entire industry.
And then just as it relates to sort of the concessions environment that you're seeing, have you seen any decrease or change in concessions? I imagine, just given the supply overall, TIs, free rent probably remain elevated compared to history, but maybe what you're seeing on that front.
Yeah, concessions have certainly gone up over the last couple of years, but importantly, over the last year, they've flatlined. So whether it be rental rates or TI packages or free rent, I wouldn't say that you've seen a dramatic shift in those over the last year. I think the impact of new supply worked its way into the market last year, and we haven't seen much of an impact right now.
And then I think a good forward indicator of demand in the lab space is both the M&A market and venture capital funding. It seems like the expectation for both of those is continued improvement in the year ahead. So how do you view that as a forward indicator for your business? And can you remind us, typically after a capital raising event, how long will it take for a company to look to lease new lab space?
Yeah. I mean, there's a diverse source of funding for the sector. I mean, it's $400 billion a year roughly in the aggregate. And the primary components are off the balance sheet of Big Pharma, and that's a consistently growing number. They have no choice but to try to replace their current pipeline due to patent expirations. So that's the majority, and it's pretty consistent in growing. The IPO market is important. That's been slower. Now, it did increase significantly in 2024 versus 2023, but still below historical levels. And that's important for a couple of reasons. One is it's new capital for a company to grow. Hiring people need more space, but it also allows venture capital firms to recycle capital. So it has a double benefit, and we'd really like to see that market come back stronger than it has to date.
The venture capital side is hugely important, and the fundraising has been exceptionally strong, really for two straight years, record-setting levels of fundraising. The deployment has been a little bit slower, and I think part of that is the slowdown in the IPO market and then the last source that I would point to is the secondary market, so companies that are already public looking to raise money, and for them, it's highly dependent on data, and if they have good data, they can raise money easily, really in any market, so it's a diverse set of funding sources, and it's probably the IPO market that is the one that we're most focused on. Once that opens up more dramatically, I think that will really benefit our business in multiple ways, but as you've seen, we've continued to sort of outperform and capture market share even in the current market.
Any bounce back would only improve the results that you've already seen from us over the past few years.
We had a question come in on live QA, and this is pretty topical, although I realize the environment's still pretty in flux. But just as it relates to the potential for NIH funding cuts and how that might impact your business, again, I know it's kind of a politically sensitive issue at times, so feel free to, if you have any comment on that.
Yeah, I mean, we don't lease any space to the NIH. Really, none of our tenants receive NIH funding. That's primarily going to research universities and academic medical centers for their R&D. So there's no direct impact at all. There was a potential cut for indirect costs. The government wouldn't touch the actual research dollars. It would be kind of the overhead component that's being challenged in a number of states. We'll see if it actually proceeds. But the impact of that would be five, 10, 15 years into the future in terms of just fewer new discoveries that can turn into commercial opportunities. So it'd be a step backwards for the U.S., but certainly no direct impact on us anytime soon.
Another interesting one came in. Have you seen any demand for traditional office tenants to take lab space on the market, just given the supply environment currently?
Not really in the core sub-markets that we're in. That'd be a great thing if office tenants wanted to take lab space. But I think the rent we get within our core sub-markets is a lot pricier than office rents. So we have not seen a lot of office demand within the core sub-markets, but that's not to say that existing vacancy couldn't get leased up from office tenants.
Where you'd see more of that is in these kind of secondary and tertiary markets where life science developers tried to go, especially some of the new entrants. I think in the core sub-markets, Cambridge, South San Francisco, you can lease up to lab tenants at higher rents. I think some of these kind of groundbreaking or pathbreaking new markets, maybe there's more of an opportunity or desire to chase office tenants.
To that end, Brinker, how important is it to have those existing relationships within the lab ecosystem? Obviously, we've seen a number of newer capital partners try to enter the space, but it feels like existing relationships really drive leasing success, and the newer players seem to be the ones that are having the issues.
Yeah, in any given year, 70%-80% of our leasing is done with existing tenants, whether it's renewals or expansions or just recycling through management teams and venture capital. I mean, it's huge. It's not the only silver bullet. I mean, I think our leasing success is really due to a number of components, but the relationships are big. Our scale and multiple price points is huge, really high building quality, right sub-markets, great capitalization. So tenants don't have to worry about whether we have the funding to finish their TIs or the longevity to own the business or the building long-term and great credibility, 20 years in the business. So I think there's a lot of boxes we check that allows us to outcompete, but the relationships are high on that list.
And just on transaction activity, obviously, you guys were pretty active last year in terms of selling non-core assets and repurchasing shares. But as it just relates to kind of the buyer pool and interest for lab space, have you seen any change or compression or expansion in cap rates? And what does the buyer opportunity set look like in lab today?
There's not much transaction activity in the life science space. I mean, there's a fair number of conversion buildings or that were supposed to be conversion buildings being transacted on. But in terms of core multi-tenant life science properties, I mean, it's few and far between in terms of transaction activity. There is more transactions in the outpatient business, and I might ask JT to comment on that. That's more liquid.
Yeah, Griff, on the outpatient side, it's starting to pick up a little bit more activity. Still not a lot at the right price that's attractive to us, but there are some transactions, and financing has become much more freely available for that. Where we see opportunities, particularly with our portfolio, is repeat business development financing with existing health systems. If you look at our top 10 tenant base, they're all expanding through new development, and we have the opportunity in some of those places to provide either mezzanine financing or some other form of financing with the view of a long-term ownership of those properties. So, a few acquisitions, the market's picking up, but it's still not quite priced where we would want to see it.
JT, what does the development opportunity look like on MOBs now? Obviously, y'all have a number of very highly pre-leased properties in the development pipeline for MOBs, but maybe just talk about that a little bit.
Yeah, I think Scott mentioned at the last earnings call, our development pipeline right now and just what we're working on, either under construction or at least in early stages of discussions, is kind of $200 million-$300 million gross value of those projects. Again, sometimes we're just providing mezzanine financing to a health system or a developer working with a health system to deliver those. But there's more in the pipeline, more in the works, the better healthcare systems, which again, I think if you look at our top 10 list, are the best healthcare systems in the country, the largest, HCA and CommonSpirit. And they're looking to grow market share and grow opportunity and doing that through new locations, new flags, and good demographic locations.
We had one question come in on labs. I'll ask this and then we'll go over to MOBs after. But can you talk about inventory and expected supply in your lab markets? So I guess briefly, maybe high level, South San Fran, Boston, and then San Diego.
Yeah, maybe I'll start with that, Griff. I mean, if you look at our latest investor deck and you talk about new deliveries, they're peaking right now where they have peaked. And as we look out to 2026 and beyond, I mean, we think that number goes to zero, and we don't expect to see new starts pop up anytime soon. I mean, the landlords that would be the first ones to start new development would be ourselves and some of the other larger lab landlords. And I just don't see that happening anytime soon. I think you need to see rental rates increase from where they are today too to make the math pencil.
So we feel like we're heading into a window in the not too distant future where you'll see demand start to outstrip these new supply deliveries, and you'll start to see absorption happening in each one of the markets, especially happening in the core sub-markets first. So I know I didn't go market by market, but that's just kind of the big picture macro way that we're looking at it now.
Appreciate that, Pete. Switching over to MOBs, and obviously you had the big merger about 12 months-18 months ago. We're able to realize some strong synergies as a result ahead of your expectations. As you look ahead for the opportunity within MOBs for 2025, is it continued synergies from the integration? Are you able to push more on renewals given the higher retention? Maybe talk about that a little bit.
I can start with that. We do feel like we outperformed on the merger across the board, even against our own expectations, and it wasn't an exercise of just cutting overhead. I mean, there was some of that, some duplication, but a lot of it was strategic and property level. Really increasing our capabilities, internalizing property management, in some cases internalizing leasing was at least half of the synergy number, which flows through to our property level NOI, so economically, it's a huge win for the company. There is more to capture this year. We got to $50 million last year, got at least $10 million this year, maybe $15 million, and the internalization of property management has just been a huge success, even more so than we thought. Economically, it's been very accretive, but strategically, it is, to me, equally important.
We doubled our headcount, but all of those people are on the ground, interacting with their tenants, interacting with their buildings, eliminating the duplication that was needed when we had a third party. And now Healthpeak employees can interact directly with our tenants. As we improve our technology, we can do rollouts quickly across the entire portfolio because we own and control not only the building, but the day-to-day operations. So we see huge upside. There as well, we've got 8 million sq ft that we plan to internalize this year. And within the next two to three years, I think we can get to at least 75% of our portfolio being internally managed, which is financially and strategically a huge win for the company.
On the leasing front for MOBs, just given the pretty strong supply-demand backdrop, have you noticed an ability to push greater releasing spreads on renewals? Maybe it's the lease escalators kind of above that historical 2%-3% range, or is it still more in that ballpark?
Yeah, Griff, historically, outpatient medical was a 2%-3%, 2.5% kind of annual growth market. That has moved to 3% as a minimum on the annual bumps. And then the mark-to-market, it's market dependent, but we routinely are seeing at least 3%-5% kind of annual renewal mark-to-market in those leases that are expiring. In our development pipelines I discussed, those rents, what it costs to pencil a new construction with the current interest rate environment or capital cost environment, there's a significant gap between those rents and our in-place rents with those same exact tenants. So we can't move them all the way there in one year in a renewal, but we can move, again, at higher rates, 5%-10% as those renewals occur in this environment.
So work through our WAL to move the whole portfolio consistently toward 3% or more in the annual bumps, and then again, capturing that mark-to-market where we can in those markets where we have that gap.
JT, y'all did a good job last year of the CommonSpirit renewal and realizing the mark-to-market there. As you look ahead, are there any larger known expiries that we should just kind of keep in mind, whether it's 2025 or 2026 sometime in the near term?
Yeah, there's nothing like the CommonSpirit, which was a big renewal kind of cliff coming in 2026. What we see this year, later in the year, we see some expirations that we're working hard to continue to get those renewals. But our team has integrated so well and on the leasing front, really pushing forward for good absorption this year. And then when those new developments come online next year, we'll have even a greater percentage of absorption with the new coming in with the old to continue to advance the total occupancy and total net absorption of the portfolio.
Are there any things from maybe a health system tenant watch perspective that we should just be kind of cognizant of within your portfolio? Obviously, there's been larger players in the industry, not specific to DOC's portfolio, but maybe talk about any potential for tenant issues within your portfolio.
Yeah, we didn't have exposure to Steward. We didn't have any real exposure to Steward. We had a couple of locations that were hospitals that we had outpatient medical buildings where the Steward-owned hospital leased some space from us. We never had a default issue there. Our bad debt in outpatient medical is less than 50 basis points, 20 basis points. So don't really have a credit watch issue there in any material tenant or even really any tenant to speak of. And as I mentioned before, our investments are going to be in the higher quality investment-grade health systems, the A player, the B player in the markets that want to be the A player and avoid that in the high occupancy of health systems on our leases, providing outpatient services in our building really avoids the credit issues you see in other portfolios.
And then maybe just the same question on the lab side as well.
Yeah, look, our lab bad debt has obviously improved a couple of years ago. We had a large tenant down in San Diego that went bankrupt, and that certainly had a pretty big impact, but we're a couple of years removed from that. I'd say we're getting back to more normal course from a bad debt perspective. I mean, it's not a riskless business. You will have tenants from time to time where the science doesn't pan out. I mean, obviously, the capital markets improving have helped, but I'd say, Griff, we're getting back to more normal course, and then importantly, when you look at our tenant profile across the entire company, we only have a couple of tenants in their health systems above 1% of NOI. Every other tenant is below 1%. So when we merge with Physicians, I mean, it obviously helped diversify our tenant exposure as well.
We don't have any real big lumpy tenants out there in the portfolio.
Brinker, I know you mentioned it in your prepared remarks, but just the benefit and the strength you're seeing in your CCRC portfolio. Obviously, Healthpeak decreased their exposure to senior housing a number of years ago, but you guys have held on to the CCRCs, which seems like a differentiator there. So maybe just talk about the growth profile and opportunity there. I know in the past, if the right opportunity came along, could be looked to recycle out of that portfolio, but maybe just some updated thoughts there and how you view it in the context of the DOC enterprise as a whole.
Yeah, I mean, this team hasn't sold any senior housing together, and the majority of that portfolio today is the CCRCs. It's 15 huge campuses, mostly in Florida. They're like 500 units apiece. They're literally impossible to replicate. I think our basis is probably 20% of the replacement cost or something close to it. And they performed well for 15 years and performed especially well the last three years as we've taken occupancy from 78%-86%. We think we can get back into the 90s. Our margins are in the low 20s, maybe mid-20s, depending on the quarter. So there's some real upside there as well. We still got reasonable pricing power. So there's a positive gap between rent growth and growth in OpEx, and all that's obviously benefiting the bottom line. We were up 21% last year.
I think that slows down a little bit this year, but still very attractive. So we have no near-term intention of selling it. In particular, today, the public market seems to like that senior housing business more than the private market. That's not always the case. Sometimes it's the reverse, and if at any point the private market liked it better than the public markets, I mean, we're open to selling that portfolio, but that's not on our to-do list right now.
And I know this probably doesn't impact the CCRC platform as much, just given more of a skew toward independent living and assisted living. But for the SNF components, are there any worries around potential changes in government payer sources and how that might impact that business?
Yeah, I mean, Medicaid is certainly at risk. I mean, the D.C. is trying to find $2 trillion of savings, and Medicaid's a big number. What in fact gets cut, I have no idea. I mean, there's a lot of uncertainty. But our portfolio importantly has almost no Medicaid. I mean, it's almost zero. It's all Medicare and private pay. I mean, just a very, very small percentage of Medicaid by design, by the way. Yeah.
Maybe stepping back and just talking about debt capital availability. Obviously, we've seen it improve, I think, for commercial real estate broadly over the past year. But I think as it relates to your three segments, where are you seeing the most opportunities from a lender perspective? Are lenders more willing to lend on your types of products? And talk about just the debt markets there.
Yeah, I mean, we're seeing some opportunity in outpatient really driven by our health system and developer relationships, and that's driving a pipeline that's quite attractive, pre-leased, good yields, but by far, the opportunity set is in life science. I mean, the best place to invest is where no one else is, and that's life science. Both equity and lenders have lost a lot of money. They're looking to reduce exposure. That's a great backdrop for us because the segment will come back. We already know that new starts are down near zero for the past two years and probably near zero for the next two to three years as well. That's a favorable building block for a dramatic turnaround in fundamentals, so we feel like this is a pretty attractive time to be deploying capital. When we look at the last three years, we were doing the exact opposite.
I mean, we haven't started a new development in that segment in more than three years. Haven't done acquisitions. We were a net seller in life science for the past three years, and now we're going to be a dramatic net buyer.
So maybe on the development pipeline, obviously essentially fully funded, you have good pre-leasing there. When would an opportunity make sense from a cost of capital perspective to start a new development, particularly on the lab side? Is it this year? Is it a couple of years from now? What would justify, I guess, a new development to start?
Yeah, I think you're two to three years out, best case, from development making sense in life science. Development costs are not going down. The primary component is labor. Labor is not going down, at least on the construction side. Maybe materials at the margin, but tariffs could actually make it the reverse. They could go back up. So I don't expect any material declines in construction costs. So now you're talking about rental rates and cost of capital. And there would have to be a pretty dramatic change in one or both for new development to pencil. And you'd have to be satisfied that you're going to lease it up in terms of the supply-demand backdrop. So we think it's a couple of years before anyone starts anything new, and that will be very favorable for incumbents.
And what about on the redevelopment side? Obviously, you've got a number of initiatives in your portfolio as well, but it seems like there could be some opportunity once those properties get redeveloped to push rents and attract greater tenant demand.
Yeah, we've got a pretty sizable redevelopment pipeline. I mean, the largest project we're doing is the Portside project in South San Francisco, and that was the Amgen expansion that we dealt with the last couple of years. But the good news is we've released a lot of those or pre-leased them. So they're heavily pre-leased redevelopments, and typically, these are assets where we've gotten really good cash flow from them the last 10 to 20 years and older product that just needs some capital reinvested into them. But we believe we can get a nice return. We've talked about it as being the 9%-12% cash-on-cash return, which we think is a good use of capital. So that number has obviously gone up, the redevelopment number this year, and then it will start to taper off the next couple of years.
So I'd say it's a little bit higher this year because of the Portside project, but it will start to normalize the next couple of years. But we think it's a good place to put capital right now. So while we might not do as much ground-up development, we'll do more redevelopments within our existing portfolio.
We had a question come in on MOB cap rates. Where are MOB cap rates broadly today, and how are off-campus versus on-campus cap rates differentiated?
You know, I love the second half of that question. It's 6.25%-7% kind of range, depending upon quality and kind of where the bigger players are and how big of acquisition or portfolio might be. There's not a lot of portfolios trading, but it's in that range. I would say the tide has kind of flipped to the outpatient off-campus buildings being more valuable than on-campus. As more and more care is being moved to better demographic locations, our development pipeline is really a split 50/50, but that's because of where the health system client that wants us to finance their buildings are expanding their hospitals and are doing both, so.
JT, if you are seeing transaction activity out there on the MOB side, are the buyers and sellers usually health systems? Is it private capital? Is it physicians' groups? Who's out there transacting?
Yeah, it's physician groups, and there's a little bit of hospital monetization, but not really. It's rare that you see too much activity there. We obviously did the largest deal and the second largest deal in the last five or last 10 years in the direct hospital monetization. That's few and far between. So it's private owners flipping to other private owners or REITs.
We had another question come in and kind of relates to cost of capital. How do you view the opportunity to continue share repurchases versus finding external growth via acquisitions or debt opportunities? How do you weigh those two against each other?
Yeah, I mean, they don't have to be mutually exclusive. We can do both. And we said in our deck that we have done both in the last couple of weeks. So if our stock gets to a certain level that we find it to be too attractive to pass up, buying it back, we will certainly do that. But we'd also like to continue to do some of these lab deals as well as the outpatient medical developments too. So there is a finite amount of capital we can put to work with regards to our balance sheet and the dry powder. We're not there yet, so we can continue to do all those initiatives. But to the extent we got there, then we'd look to monetize more non-core assets if we didn't have a cost of capital at that point in time to look to issue equity.
So that's the way that we look at it, and it can change from quarter to quarter depending upon where Treasury rates are as to what our view is to buy back stock at. But the last tranche we did was in the mid-19s.
Just one more question before the rapid fire. I think broadly we've started to see some of the healthcare REITs focus on more pure play opportunities or really invest in one sector. I guess, what is the benefit from DOC's perspective of having diversified lab, MOBs, and CCRCs? Why should investors look to put capital there?
I mean, we've said all along the CCRC business doesn't really have any strategic overlap. So if we got a great price, we'd sell it. We see significant overlap with our lab and outpatient businesses. They're essentially run off the same platform, same process procedure, same internalization, the property management level, same CapEx team, same finance team, same platforms from a technology standpoint. Now, we have different specialists on the ground, right? Scott Bohn or Mark Theine or as the case may be in terms of interacting with the tenants. They have a very specific skill set. But the actual running of that business is very similar. So we get a lot of synergies at the back office. I mean, you look at our G&A, it's quite competitive for the size of the company that we are. And we took on the physicians merger, increased our company by $5 billion.
We actually cut our G&A versus 2022. I mean, that's a pretty dramatic statement in terms of running the business efficiently as it's currently set up with both outpatient and lab. But if at some point it just made overwhelming sense to separate them, obviously we'd make the right economic decision. But we're not seeing that today.
Real quick, two rapid fires to end. First one, what will same-store growth for the MOB and Life Science sector be overall, so not Healthpeak, in 2026?
I would say 3.5%.
3.5%. And will there be more, fewer, or the same number of publicly traded healthcare REITs a year from now?
If Corporate SALT passes, there will be dramatically more REITs. That's my answer.
All right. Thank you, guys.