North America Real Estate - Capital Offerings
HCP details Q3 transaction activity
November 03, 2009 3:12 PM ET
By Tushar Prabhune
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HCP Inc. detailed its third-quarter transaction activity in its earnings release issued Nov. 3. During the three months ended Sept. 30, HCP funded $31 million for construction and other capital projects, primarily in its life science segment. The company also sold marketable debt securities for $115 million, recognizing aggregate gains of $6 million, and two medical office buildings for $6 million, recognizing gain on sales of real estate of $2.5 million. On Oct. 1, HCP completed the transition of management agreements on 15 communities operated by Sunrise Senior Living Inc. and its subsidiaries that were previously terminated for Sunrise's failure to achieve certain performance thresholds. The transition of the facilities to new operators decreased the company's Sunrise-managed properties in its portfolio to 75 communities from the original 101 communities it acquired in the 2006 CNL Retirement Properties Inc. transaction. The termination of the agreements did not require the payment of a termination fee to Sunrise by HCP or its tenants. On Aug. 20, the company entered into two interest-rate swap contracts with an aggregate notional amount of $500 million that terminate in 2011. The interest rate swap contracts reduced its net floating-rate asset exposure, which had increased as a result of HCP's additional investment in HCR ManorCare and third-quarter repayments of floating-rate debt, which were both funded with proceeds from its August public equity offering. On Aug. 27, the company prepaid $100 million of variable-rate mortgage debt. The mortgage debt, with an original maturity of January 2010, was repaid with proceeds from the equity offering and third-quarter asset sales. | 
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