Healthpeak Properties Announces $600M Life Science Campus Acquisition in South San Francisco

Healthpeak, Inc. announced the completion of a $600 million real estate acquisition of the Gateway Crossing campus in South San Francisco, a 1.4 million square foot life science facility spanning 29 acres. The transaction, completed in December 2025 and January 2026, represents a strategic shift in the company's portfolio allocation toward life science real estate.

The seven-building campus on Gateway Boulevard is currently 60-63% occupied and includes a 15,000-square-foot amenity building. The acquisition was structured at a low-6% going-in yield and positions Healthpeak with 6.5 million square feet across 210 acres in South San Francisco.

Capital Recycling Strategy

The Gateway Crossing acquisition is part of a $925 million capital recycling program executed in the fourth quarter of 2025. Healthpeak sold 834,000 square feet of fully stabilized outpatient medical assets for $325 million at low-6% cap rates, capitalizing on strong private market demand for outpatient medical real estate.

The company is advancing a $1 billion capital recycling plan for 2026, including asset sales, recapitalizations, and loan repayments. According to the company's strategic initiatives update, these transactions would provide flexibility to recycle capital into highly pre-leased outpatient medical developments at higher returns, acquire assets with significant upside, and potentially repurchase shares.

Life Science Market Positioning

The acquisition comes as the Northern Peninsula life science market faces elevated vacancy rates of 39.8% as of the third quarter of 2025, with negative 26,000 square feet of net absorption. However, tenant demand signals show recovery, with Bay Area requirements up 73% quarter-over-quarter and 62% year-over-year.

The Gateway Crossing campus offers density potential for lab, office real estate, or mixed-use development. Healthpeak's strategy targets assets at discounts to replacement cost with lease-up upside potential in established biotech submarkets.

Senior Housing Spin-Off and Portfolio Restructuring

Concurrent with its life science expansion, Healthpeak announced the formation and planned initial public offering of Janus Living, Inc., a real estate investment trust dedicated to senior housing. The company stated that given the relative scale of senior housing within Healthpeak, the public markets have had difficulty properly valuing the portfolio and platform.

The IPO is intended to enable Healthpeak to unlock value immediately and leverage industry expertise and relationships. Healthpeak will maintain alignment through stock ownership of Janus Living. The company also completed a $314 million joint venture buyout of 19 senior housing communities comprising 3,355 units at 81.7% occupancy.

Financial Performance and Market Outlook

Healthpeak reported fourth quarter 2025 net income of $0.16 per share. The company's Life Plan portfolio demonstrated strong performance with same-store cash adjusted net operating income growth of 16.7% year-over-year and 15.4% sequentially.

In its strategic commentary, Healthpeak acknowledged that its earnings guidance for 2026 reflects the life science environment over the past several years, which peaked in intensity in the first half of 2025. The company stated that improvement in biopharma mergers and acquisitions and capital markets activity that started in fall 2025 has continued into early 2026, with minimal new deliveries and certain life science buildings pivoting to alternative uses.

Healthpeak indicated its view that life science real estate fundamentals are at or near an inflection point, while acknowledging that a full recovery will take time. The company also announced technology innovation initiatives focused on automation and decision-making, recently welcoming Omkar Joshi as Head of Enterprise Innovation to lead technology, automation, and data initiatives.

Market Implications

The transaction demonstrates continued institutional capital deployment in life science real estate despite elevated vacancy rates in key markets. By acquiring assets at low-6% yields with lease-up potential and development density, Healthpeak is positioning for long-term value creation as life science fundamentals stabilize.

The simultaneous disposition of stabilized outpatient medical assets at similar cap rates reflects divergent investor preferences. The $1 billion capital recycling program signals Healthpeak's commitment to portfolio optimization and strategic repositioning within the healthcare real estate sector.

Sources

Healthpeak Properties Investor Relations