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Healthpeak Properties, Inc. (NYSE:PEAK)
Q3 2020 Earnings Call
Nov 3, 2020, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the Healthpeak Properties, Inc. Third Quarter 2020 Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Barbat Rodgers, Senior Director, Investor Relations. Please go ahead.

Barbat Rodgers -- Senior Director-Investor Relations

Thank you and welcome to Healthpeak's third quarter financial results conference call. Today's conference call will contain certain forward-looking statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, our forward-looking 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 of the 8-K we furnished with the SEC yesterday, we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. The exhibit is also available on our website at www.healthpeak.com.

I will now turn the call over to our Chief Executive Officer, Tom Herzog.

Thomas M. Herzog -- Chief Executive Officer

Thank you, Barbat, and good morning, everyone. On the call with me today are Scott Brinker, our President and CIO; and Pete Scott, our CFO. Also on the line and available for the Q&A portion of the call are Tom Klaritch, our Chief Development and Operating Officer, and Troy McHenry our Chief Legal Officer and General Counsel.

Starting with our Q3 results. Three quarters of our business represented primarily by life science and MOBs, is performing on-track or ahead of our pre-COVID expectations. We are seeing leasing executions in life science and MOBs that are in line with or ahead of our original annual plan, and we have increased our same-store outlook in both segments. In life science, our development activity remains on-track with very strong pre-leasing.

The industry continues to set records in VC funding, IPOs, and secondary equity offerings, which is adding to the already strong demand for space. And in medical office, we are on-track with our development program with HCA and have or expect to deliver four development projects this year. The other one quarter of our business represented by SHOP, triple-net and CCRCs continues to experience pressure from occupancy and expense trends related to COVID, partially offset by Cares Act stimulus.

However, our results have been quite favorable relative to the outlook framework we provided last quarter. Improvements to PPE, testing, staffing, quarantines and other protocols have allowed our senior housing operators to better contain outbreaks of the virus and to function more effectively and profitably.

And as we look forward, we are encouraged that health-care workers and seniors are prioritized to receive a vaccine when available in Phases 1A and 1B.

Over the past four years, we have taken deliberate actions to exit non-core senior housing and SNF assets, or reinvesting the proceeds in our growing life science, MOBs and CCRCs businesses. Each of which consists of irreplaceable and high barrier to entry portfolios, and each with significant embedded upside.

In our Life Science business, we have critical mass and a strong competitive position in each of the three major hotbeds of innovation: South San Francisco, Boston and San Diego.

In the Boston life science market, during the past three years, we have built a 2.4 million square foot portfolio inclusive of our latest acquisition and development announcements, with Boston now been roughly equivalent in size to our San Diego life science portfolio.

We have grown and strengthened our medical office business with a renewed focus on new developments with HCA and other top hospitals. Included in our acquisitions and development completions announced last night, we have added almost 800,000 square feet of on-campus medical office space year-to-date.

And earlier this year, we increased our ownership interest in our CCRC portfolio to 100% and transitioned to operation LCS, who is -- in our view -- the top operator in this important segment of Senior Housing.

We currently have a $1.2 billion active development pipeline that is fully funded in our plan and 63% pre-leased. Additionally, we have an enormous shadow pipeline of development and densification opportunities in our life science, MOBs and CCRC businesses, with significant value creation potential over the next 10 to 15 years. And our company remains in great financial shape with strong liquidity and a fortress balance sheet, which we continue to manage carefully.

And finally, during 2020, we continue to invest heavily in people and systems, and have built what we believe is one of the top platforms in our industry.

As to the status of our SHOP and triple-net portfolio transactions -- first, over the last four years, we have dramatically reduced the size of both our SHOP and triple-net portfolios with aggregate sales of over $5 billion. As I noted during our last quarterly earnings call and on our recent webcast at industry conference presentation, there has been strong interest in our SHOP and triple-net portfolios from a number of potential buyers that have considerable dry powder. These buyers include PE firms, whose investment time horizon fits well to capture the future recovery and potential upside of the senior housing market. Accordingly, we believe there could be an opportunity to accelerate the exit of our SHOP and triple-net portfolios, which we now consider non-core.

We are in various stages on a number of transactions, representing the majority of our roughly $4.5 billion, plus or minus, of SHOP and triple-net assets, which Scott will discuss further in a few minutes.

We believe senior housing will remain a vital asset class in our society and we'll continue to serve the demand of the rapidly growing baby boomer demographic. So, we will be a seller at the right price, but we are also fully prepared to play through and sell these assets over time, if needed.

Regardless, our focus going forward will be on growing in our three core businesses of life science, MOBs and CCRCs.

Moving on to our dividend. Our year-to-date dividend currently exceeds our AFFO by $0.01, implying a year-to-date payout ratio of 101%. As we mentioned on prior calls, we are comfortable if our dividend modestly exceeds our AFFO for a short period of time and we'll continue to assess our dividend based on our earnings results, the path of the virus and outcomes of our various potential transaction.

Last night, we announced we are relocating our corporate headquarters to Denver, and we'll be moving 20 to 25 people from Irvine to Denver during 2021. We chose Denver as it provides a centralized location relative to our nationwide portfolio, equal travel time to our two offices in Irvine and Nashville, which will continue to house the majority of our talented employee base; and quicker travel and meeting with our analysts, investors and rating agencies around the country. Denver also provided a favorable location to attract and retain top talent.

And finally, we also announced that we are replacing our age-75 Mandatory Director Retirement Policy for the 15-year term limit. Given the current makeup of our board, we believe the new policy will provide a more orderly and consistent board refreshment over time and will maintain a favorable mix of experience and diversity. And frankly, I could not be happier with the breadth and depth of our current Board.

With that, I'll turn it over to Pete, to discuss our financial results. Pete?

Peter A. Scott -- Executive Vice President and Chief Financial Officer

Thanks, Tom. I'll start today with a review of our third quarter results, provide an update on our balance sheet and finish with a discussion on our 2020 outlook.

Starting with our third quarter results. We reported FFO as adjusted of $0.40 per share and same-store cash NOI growth of 2.8%. Same-store growth for the quarter was driven primarily by our two office platforms, which represent 85% of the same-store pool and grew a combined 4.3%. As Tom mentioned, both segments continued to benefit from favorable operating trends and tenant demand.

Starting with life science. The impressive 5.5% same-store growth for the quarter was driven by strong leasing, contractual rent escalators and positive mark-to-market. In medical office, 3.3% growth was driven by positive mark-to-market, contractual rent escalators and higher ad rents, partially offset by a decline in parking income.

As expected, year-over-year performance in our senior housing portfolio, which represents 12% of the same-store pool, was challenged. Triple-net growth of 4% was offset by a 16% decline in-SHOP.

As Tom mentioned, we are in various stages of selling the majority of our SHOP and triple-net assets. In accordance with our policy and Generally Accepted Accounting Principles, 111 stabilized senior housing assets were classified as held-for-sale at quarter-end. These assets are excluded from same-store, which significantly impact our reported results.

In order to provide additional transparency, we added a pro forma senior housing page or supplemental this quarter on Page 36. Had these assets been included in the same-store pool, reported senior housing and SHOP same-store would have been negative 27% and negative 44%, respectively.

Two other items I would like to mention regarding our third quarter results. First, we experienced a total of approximately $10 million or $0.02 per share of elevated COVID expenses in our SHOP and CCRC portfolios combined. This compares favorably to the $20 million in elevated COVID expenses we incurred in the second quarter.

Second, we received approximately $2 million or a little less than $0.005 per share in CARES Act grant. When looking at our sequential revenue and NOI performance, particularly for CCRCs, it is important to note we received approximately $15 million of CARES Act grant in the second quarter compared to only $2 million during the third quarter.

Turning to our balance sheet. Our liquidity and balance sheet remained strong and provide us tremendous flexibility. We reported a net debt-to-EBITDA of 5.7 times. We ended October with $2.6 billion of total liquidity and we have no bonds maturing until November 2023, when a modest $300 million comes due.

Moving on to our earnings outlook. We have updated our 2020 outlook and earnings framework, which can be found on Pages 45 to 47 of our supplemental.

Starting with medical office and life science. First, we have increased our medical office same-store outlook by 50 basis points at the midpoint to 1.75% to 2.25%. Second, we have increased our life science same-store outlook by 100 basis points at the midpoint, to 5.25% to 5.75%, which is also 100 basis points above our original 2020 guidance range.

In addition, depending on how collections progressed through year-end, our full year same-store could surpass the top end of our range and speaks to the strength of the life science sector. As a result of our improved outlook for medical office and life science, we see a $0.01 to $0.02 pickup in FFO per share for 2020.

Now, our fourth quarter outlook for SHOP and CCRCs. As Tom mentioned, our SHOP and CCRC performance exceeded our August outlook framework. For SHOP, we expect occupancy to decline 100 to 200 basis points relative to the third quarter. For CCRCs, we expect occupancy to be flat at the midpoint relative to the third quarter. With regard to expenses, we expect both SHOP and CCRC fourth quarter incremental COVID expenses to be in line with the third quarter run rate.

Important to note that the SHOP occupancy and expense outlook is inclusive of the entire stabilized SHOP portfolio owned as of November 1 and does not adjust for potential disposition.

While Scott will provide more detail on the specific transaction, let me provide a quick update on the sources and uses. Starting with acquisition. During the third quarter and through October, we closed on approximately $200 million of acquisition, inclusive of the Midwest MOB portfolio. We have also entered into binding contract on $792 million of life science acquisition.

Moving to disposition. During the third quarter and through October, we completed $115 million of non-core disposition, which includes approximately $100 million of senior housing and the balance in medical office.

We currently have a number of senior housing disposition in various stages, including approximately $1.5 billion under purchase agreement and approximately $2 billion under Letters of Intent, which, if successful, are expected to close late 2020 or early 2021. The net proceeds from our senior housing disposition could be used for future strategic acquisition, debt repayments or potentially some amount of seller financing.

On a run rate basis, our leverage will remain in the mid- to- high-five times net debt-to-EBITDA. However, our spot leverage metric for the fourth quarter may temporarily go above or below our long target depending on one transaction.

As a reminder, the earnings outlook and framework in the supplemental is based on our best available information as of the current date. Finally, along with our earnings release, we published our October preliminary results and I wanted to touch on a few highlights.

In life science, the strong momentum continues with 99% of contractual rents received and occupancy increasing 40 basis points. In medical office, sector continues to show consistent, favorable results with 98% of contractual rents received and occupancy unchanged from September.

In SHOP, 98% of our properties are now accepting move-ins and occupancy declined only 10 basis points, which is the lowest monthly decline experienced during COVID. In CCRCs, 100% of our properties are now accepting move-in and occupancy declined 20 basis point. Notably, our IL, AL and memory care occupancy was flat, which is the first month during COVID when occupancy did not decline.

Additionally, in October, we received $5.5 million of CARES Act grant, and we expect to receive an additional $7.5 million during the balance of the quarter.

Two last comment on the October preliminary results deck before turning the call over to Scott. First, we now include certain historical senior housing data by month, going back to March. We felt it was important for the Street to have all of this information in one place to assess COVID trends.

Second, we modified our presentation to show operating metrics for the combined same-store and stabilized held-for-sale portfolio. Our previous disclosures had only been for the same-store portfolio. But given the magnitude of assets that went into held-for-sale this quarter, we felt it was appropriate to change our methodology.

With that, let me turn the call over to Scott.

Scott M. Brinker -- President and Chief Investment Officer

Thank you, Pete. I'll speak to operating results in each business segment and finish with the transaction update. In life science, the 5.5% growth was driven by contractual escalators in the low 3% range, augmented once again by strong leasing and mark-to-market. In addition, rent collections have exceeded our expectations at 99 plus percent, and bad debt has been below historical averages, year-to-date.

We're benefiting from our concentration in the core markets of San Francisco, Boston, and San Diego, which together represent 97% of our portfolio. These three markets continued to dominate the capital raising in the sector. We're also capitalizing on our two decades of institutional experience and relationships.

PEAK portfolio is unique in that about 70% of our tenants are bio-techs, with the balance split between pharma, medical device, R&D, university. That's important, because bio-techs are capturing the vast majority of the capital inflows and therefore driving demand for space. Only 3% of our life science rent is from tech and office, significant because the lab environment can't be replicated at home.

Two-thirds of our year-to-date leasing was done with existing tenants, highlighting the importance in life science of both relationships and scale in a local market. We have direct dialog with our tenants about their growth and a huge competitive advantage when they need more space.

Year-to-date, we've executed more than 150% of our original full year leasing budget, driven by faster lease-up at our new developments as well as renewals and expansions. In 3Q, we executed 80,000 square feet of renewals at a 14% cash mark-to-market. New leasing was also strong and included 118,000 square feet lease at The Boardwalk in Torrey Pines. That project deliveries in 4Q '21 and is now 100% pre-leased with a weighted average lease term of 13 plus years and a return on cost in the low 7% range. So, another huge development success by our team and platform.

Subsequent to quarter-end, we signed an additional 96,000 square feet of leases in October, and the pipeline is solid as well with 227,000 square feet under Letters Of Intent.

Our new development deliveries over the next 15 months are 88% leased with very good activity on the remaining 12%. Based on a favorable supply and demand outlook, we began construction at 101 Cambridge Park Drive in West Cambridge, a 159,000 square foot lab building that we expect to deliver in 3Q '22. The project is next door to our existing holdings in that sub-market, creating a 450,000 square feet Class A campus.

Turning to medical office. Leasing continues to be strong and we're tracking in line with our original full year leasing budget. Nearly 700,000 square feet of leases commenced in 3Q, including more than 400,000 square feet of renewals at a 4.3% cash mark-to-market. We ended the quarter with 90.7% occupancy, down 40 basis points from the prior quarter, driven by the placement of two development projects into the operating portfolio.

Third quarter rent collections were above 99% and repayment of COVID-related rent deferrals were also above 99%. Year-to-date, bad debt is actually below historical averages, reflecting operational excellence and the resiliency of on-campus medical office.

We delivered nearly 200,000 square feet of medical office development in the quarter. This includes a 119,000 square foot building in Brentwood, Tennessee. Upon delivery, it was 49% leased to HCA with another 13% under signed Letters Of Intent. We also delivered a 70,000 square foot medical office building located at the Ogden Regional Medical Center in Utah. That project was 69% leased at delivery and is 78% leased today.

Turning to our CCRC portfolio. Cash NOI was better than expected, driven by occupancy, COVID expenses being lower than anticipated and $2 million of CARES Act funding.

Entrance fee sales improved 30% versus last quarter, but it's still about 50% below historical averages. We are seeing steady improvement in demand as LCS was able to begin phased reopenings. Also, the strong housing market in Florida is a clear positive, looking forward, given our concentration there.

Skilled nursing occupancy within our CCRCs improved more than 1,000 basis points since the low point in May, as elective surgeries have resumed.

Turning to SHOP. Occupancy declined 220 basis points when comparing ADC in June to the ADC in September, much better than we experienced in 2Q; and COVID expenses were just under $5 million for the quarter, an improvement of 60% from 2Q. The improvement carried through into October with occupancy down only 10 basis points from September.

Our operators have begun implementing phased reopening plans. Currently, 98% of our properties are allowing move-ins, more than half are allowing in-person tours, and between 75% and 80% are now offering at least some level of family visitation and group activities, including dining. This gradual reopening drove a 70% increase in -- over the prior [Technical Issues].

For our triple-net portfolio, we collected 97% of contractual rents in 3Q, with the other 3% deferred with Capital Senior Living. Rent coverage after management fee for the same-store pool was 0.89 times on an as reported basis, which uses the industry standard of trailing 12 months and one quarter in arrears. On a real-time basis, rent coverage after management fee for the three-month period ended September was 0.62 times. In both cases, the results were negatively impacted by moving the Aegis portfolio to held-for-sale, as that portfolio has strong rent cover.

Turning to transactions. We're moving forward on a number of senior housing asset sales that will further rebalance our portfolio toward life science and medical office. We continue to see strong interest from buyers, and we are in various stages on roughly $4.5 billion of senior housing dispositions and loan repayments, which we've put into four buckets.

First, since July 1, we closed on the sale of 14 assets for roughly $100 million. Second, we have signed purchase agreements -- some binding and some non-binding -- on eight transactions for approximately $1.5 billion, subject to closing conditions. Third, we have signed Letters of Intent on six transactions for approximately $2 billion. And fourth, the majority of the remaining senior housing portfolio is actively being marketed for sale.

If successful, we expect the aggregate SHOP sales to represent cash cap rates in the high 5s on a pre-COVID basis and about 3% on a third quarter annualized basis. We expect the triple-net sales to represent cap rates in the high 7s, based on rents, and in the high 5s based on property level EBITDAre.

The price per unit for the senior housing sales range from nearly $600,000 to less than $50,000 given dramatic differences in age, location and competitive position. In all cases, we have contractual obligations to not disclose the name of the operator or the buyer. We'll be able to comment about which assets were sold after the applicable closing. It's also important to note that COVID remains unpredictable, so there is no assurance on the completion of the asset sales. Also, in specific cases, we may choose to provide short-term financing to speed up the closing.

Seller financing, if any, would be in the 65% loan-to-value range with escalating rates to incentivize repayment, as we have no intention of being a long-term lender.

Moving to acquisitions. We've had great success finding opportunities to recycle proceeds from the asset sales, the vast majority of which were sourced off market and represent locations and relationships that we specifically targeted.

In October, we closed on a 439,000 square feet medical office portfolio for $169 million. Price represents a 5.5% cash cap rate in year one. Portfolio is 92% occupied, six of the seven buildings are located on-campus, and the other building is heavily anchored by a leading health system.

We'd like to have scale of at least 200,000 square feet in any local market, and this acquisition allowed us to enter Indianapolis with scale, and to do so with the number-one health system in North Indy, as well as the number-one health system in South Indy.

We are also under contract to acquire the Cambridge Discovery Park, a Class A life science and research campus in West Cambridge. The campus is adjacent to Route 2, and within easy walking distance to our existing holdings next to Alewife Station. The purchase price represents a 5% cash cap rate and a 6.5% GAAP cap rate, inclusive of the mark-to-market. The 607,000 square foot campus expands our footprint in Boston and provides Healthpeak with number-one market share in West Cambridge. We also have the potential with existing entitlements to densify the Discovery Park with an additional 100,000 square feet.

We're excited to do this acquisition in partnership with Bulfinch, a family owned company with decades of expertise and relationships in Boston. And finally, we're under contract to acquire a 12 acre land site, located between our existing Forbes and Modular Labs III development sites. This site gives us additional runway to expand our number-one market share in South San Francisco.

We now control the most prominent sites on all three major roads in this important sub-market, which is the birthplace of biotech. Combined, these three contiguous sites allow Healthpeak to build an amenity-rich campus with 1 million square feet or more to be built in phases based upon our assessment of supply and demand.

In summary, we're making excellent progress transforming our portfolio with solid pricing on the senior housing sales and compelling off market acquisitions and new development in life science and medical office.

With these transactions along with our strong balance sheet and talented team, we're confident in our ability to deliver value to our stakeholders into the future. And now, back to the operator for Q&A.

Questions and Answers:

Operator

We will now begin the question-and-answer session. [Operator Instructions] Your first question today will come from Nick Yulico with Scotiabank.

Nick Yulico -- Scotiabank -- Analyst

Thanks, everyone. So, I guess, first question on the senior housing asset sales. If you could just talk a little bit more about why you're doing this now? And you did say that you'll sell at the right price. So, I guess you do think that you are getting a good price here. Maybe you could talk a little bit more about why the pricing is attractive and why you're willing to get out of this portfolio right now when others see growth in senior housing over the next couple of years? What -- why are you confident that you're going to sell at the right price and reinvest into something that's better growth than senior housing?

Thomas M. Herzog -- Chief Executive Officer

Yes, hey, Nick. It's Tom. So, when I think about our decision to make these sales, I think I had mentioned that we had received interest from a number of parties. And as we assessed it, the movement forward was not a knee-jerk reaction to COVID. Rather, it was a strategic long-range decision, where we want our portfolio mix and future growth to reside.

So, we've been selling senior housing for about four years, as I mentioned in my script and I think as you know. But we do see COVID as providing a potential catalyst to fully exit the business. As we think about the reinvestment of the proceeds, we see lots of opportunities to reinvest in both internal and external opportunities in our life science businesses, and we do think both of those businesses have a natural competitive advantage for us given our life science clusters in the three major markets and the on-campus HCA-anchored MOB platform.

So as to -- I think you mentioned pricing. The bottom line is this, is there -- certainly, senior housing is down some right now. It's going to be a valid business going forward in the future, but at the same time it's going to be a bumpy ride. And if we can capture pricing in the ranges that we just spoke of, call it, high 5s on SHOP, on a pre-COVID basis and call it a 3% and Q3 annualized, that's a pretty solid yield at that pricing. And with that, we're able to capture quite a strong price without having to go through the bumpy uncertain ride that certainly senior housing is going to have.

So, our view at that point is that there may be other players outside of Healthpeak, given our strategy, that are better positioned to take advantage of that opportunity and let us move on to reinvest in these other businesses that we're interested in.

Nick Yulico -- Scotiabank -- Analyst

Okay, that's helpful. I guess the other question relates to acquisitions. You have gotten a lot done here, some of which is income producing, majority of income producing, also some land. How should we think about if you're selling $4.5 billion of senior housing in your acquisitions, you just announced sort of just under $1 billion, still three-plus billion to invest. How much of that is going to be an income producing properties? Are you seeing -- there is at least, I know one large life science portfolio right now where the reports are of $3 billion sale price. Is that -- should we think about something like that, you're gearing up for an acquisition like that?

And I guess I'm wondering, in terms of the dividend, you did mention you're comfortable with the dividend for some short time being not fully covered by AFFO. But how confident you guys are in being able to reinvest all this capital, so it's not going to create a significant amount of dilution that would have to cut your dividend?

Thomas M. Herzog -- Chief Executive Officer

Okay. There is a lot in that question. It's a great question. That covers a lot. Let me try to sequence in a way that will help make sense of it. So, we have acquisitions that we've announced of, call it, $1 billion. Some of that in life science -- most of it in life science, some of it in MOB. MOB accepted a 5.5% cap on campus. So, we feel very good about that, very strategic. In the life science side, a very strategic asset for us in West Cambridge that has been a market that we have had interest in having significant market share. And then the Gelo [Phonetic] asset, which is contiguous to our BML-III and Forbes land sites that are entitled and could create a mega campus for us in the future.

So, those were very strategic acquisitions for us that we took off on off-market deals and we feel really good about them.

When we think about the sales proceeds as to how much of this makes we'll end up seeing, but we have $1.5 billion under some form of hard or soft contract and a couple of billion under LOI. We would expect that there's some or fair amount or maybe all of it that gets done. We'll see how it plays out.

But one has to remember that when orchestrating this big of a transaction, that tax planning becomes important. And a couple of these big portfolios were 1031 capable, which eliminates any tax risk that we would have with our investors that we consider to be very important.

And so then, when we look at -- if we do the acquisitions, could we end up utilizing some of our liquidity if a number of the sales don't make. And so, we've put some information into our stuff that I think you can back into quite easily to see that we will still have lots of liquidity and a great balance sheet. Even if some of the sales don't make, we're going to be totally fine on that front.

To your question about use of proceeds, you're referencing a major, we'll call it, $3 billion Life Science deal in Boston. I know which one you're talking about. That probably is not for us. A nice portfolio. We have not chosen to compete in East Cambridge. We will leave that to some of our competitors. So, for us, that's not one that we will pursue.

And as to our dividend, the other leg of this whole thing, really at 101% payout ratio, it's pretty much just a fully covered dividend up to this point. We've got a strong portfolio. Our balance sheet and liquidity are great. We're going to be comfortable, and I mentioned this a quarter ago, I mentioned at a recent conference, if our dividend modestly exceeds our AFFO for a short period, the impact on NAV is almost nothing.

So, as we proceed over the coming months, we'll be able to continue to assess the dividend based on our projected AFFO, the path and duration of the virus, which is still uncertain, the outcomes of the sales, our preferred payout ratio as we reposition the portfolio and where we'd like to see that fall. And given all these facts, I just see little benefit in prematurely making an adjustment to our dividend before we see how these things play out.

So, the bottom line is, when it comes down to a protracted dividend with shortfall of size, is something we would not do because we will seek to continue to protect our liquidity and ultimately our credit ratings.

So, we're not worried about the dividend. We will end up in the right place on that when the right time comes and make the right decision on it.

Nick Yulico -- Scotiabank -- Analyst

I appreciate, Tom. Very helpful.

Thomas M. Herzog -- Chief Executive Officer

You bet, Nick. Thank you.

Operator

Our next question will come from Steve Sakwa with Evercore ISI.

Steve Sakwa -- Evercore ISI -- Analyst

Thanks. Maybe just following up on Nick's line of questioning that may be kind of take it at the higher level. And I realize there's a lot of moving pieces here both on the disposition side and the acquisition side. But if you are successful in executing all of the sales in the, call it, $4 billion, $4.5 billion range, and you sort of look out, is it your expectation that you can effectively achieve the same blended yield on the investments that you make on a stabilized basis? I realize there is some timing differences of when the money goes out and when the money kind of comes back in, but was it your expectation longer-term that this would be sort of FFO neutral, and maybe some dilution in the short-term? Is that how you're thinking about it?

Peter A. Scott -- Executive Vice President and Chief Financial Officer

Yes, it's a very interesting question. And you almost have to be in the inside of the company to be able to model these types of things. The bottom line is, when one looks at the timing of transactions and could that create some dilution that could affect payout ratio, I saw a couple of notes for that effect, it's a fair question. I think in terms of -- if these assets do sell at the right price, and again, we said we'll only liquidate these assets at the right price or we'll play through. We've got a great platform.

But if they do sell at the current yield in the third quarter, and you can project forward what it looks like for us or any of our competitors as we go forward in COVID, is it really dilutive to sell assets now? The answer is no, if not dilutive at all, not for the time being as we roll forward into the recovery. Whether that's six months or nine months or 24 months, we don't know. That could be a different answer, but that's a bumpy ride with a lot of uncertainty.

So, the answer is no, it's not more dilutive by taking these actions. Because when you think about what would we use the proceeds for? We just showed that we had a $1 billion of transactions that we could do at solid cap rates. We have more off-market things that we're looking at and that we will be able to do and decide if those make sense.

To the extent that we have excess cash, that's not hard. We will look at our 2024 and 2025 maturities and take debt out in the 4% range, bring our net debt-to-EBITDA down into the low 4s for a short period of time, and then identify other opportunities when the timing is right, reinvest, put new longer-dated bonds in place, and we're in great shape in that respect.

So, things I've read about where people validly wondered would we have a special dividend or have to do some things that make it more painful? We're just not in that position at all.

So, Steve, to your question on yield, we spoke to the current quarter, annualized it roughly a 3% across on a blended basis, just compare that to the types of investments that we would make that would obviously have a yield. They will be much higher than that. Even paying down debt temporarily has a higher yield on that.

And if there's a hockey stick recovery in senior housing, and I hope there is, then it would -- we have a recovery quicker than we had expected and that would all be good. It would not change our decision strategically in where we're trying to bring this company. So, I think that -- I think those are all great questions, and that's how we think about all those items.

Steve Sakwa -- Evercore ISI -- Analyst

Okay. Just as a follow-up on development, I realize you guys are looking to expand the development on life sciences and MOBs. A lot of people are expanding their life science endeavors in the markets in which you're operating in. Just maybe talk about some of the competitive supply issues and is there any risk or worry on your part that the market gets a bit overheated, whether it'd be in Boston or in South San Francisco?

Scott M. Brinker -- President and Chief Investment Officer

Hey, Steve. Scott here. I mean, certainly, any real estate business has the potential for supply and demand to get out of balance for a short period of time. Longer-term, we think the fundamentals in most sites are as good as any real estate sector. But even looking over a shorter period of time, there is between 2.5 million square feet and 3 million square feet of new supply in each of the three core markets today, but it's substantially pre-leased, about two-thirds on average. Now, some submarkets are higher or lower than that, but that's a two-year delivery time frame, the 67% pre-leased.

Our portfolio is similar, 88% is leased, that's delivering over the next 15 months; 68%, that's delivering through the year-end 2022. So, we do a very, very careful supply and demand analysis before we pull the trigger on any new development. And the most recent was 101 Cambridge Park Drive in West Cambridge, where we feel very good about the window that we would open in mid-2022 given the amount of demand in that sector relative to the unleased new supply that's coming.

So, we'll continue to watch it quarter-to-quarter as we make new decisions. We also think about our densification opportunities in that business, which is different than sitting on a bunch of vacant land and we feel like we've got up to 3 million square feet of net additional space that we could add on existing campuses. And obviously, those are all in A plus type locations that we could do those tomorrow, we could do those 10 years from now or 20 years from now. So, we don't feel like there's any urgency to those particular opportunities, which is a great place to be strategically that we can pull the trigger when we think supply and demand is favorable.

Steve Sakwa -- Evercore ISI -- Analyst

Okay. Thanks.

Thomas M. Herzog -- Chief Executive Officer

Thanks, Steve.

Operator

Our next question comes from Michael Carroll with RBC

Michael Carroll -- RBC -- Analyst

Great. Thanks. Can you provide some details on how far along these seniors housing sales are right now? I'm assuming the transactions are fairly far along, given comfortable quoting sales prices and valuation. So, I guess should we assume that the $3.5 billion that you kind of quoted and highlighted in your press release, it could be disclosed over the next few quarters?

Scott M. Brinker -- President and Chief Investment Officer

Hey, Michael. Scott here. No, we'll hold off on quoting specific closing dates. I think we're better off talking about specific portfolios once they, in fact, do close. But you're right, I mean, we felt comfortable disclosing that we have a $1.5 billion under signed purchase agreements with known counter parties that we have strong relationships with. They certainly have strong brand names, and we think a high likelihood of execution. But it's unusual environment. So, until they are closed, we won't -- we'll disclose the names of the buyers and more importantly, operators, at that time.

And then in the letters of intent, it's another $2 billion. Those are in various stages. Some were more recently signed and then some are substantially far along. So, it really is a mix. We talked about having 14 different transactions in those three buckets alone in addition to all the assets that are marketed for sale but not yet exclusive.

So, we're making great progress, and yet it's a pretty dynamic environment that changes by the day. So, the feedback could be different in two weeks or two months. But from where we sit today, we feel like we're making great progress and have good counterparties that will execute.

Michael Carroll -- RBC -- Analyst

And then Scott, can you talk a little bit about, I guess, roughly $800 million that was not in that $3.5 billion type number? I mean, are those mostly triple-net or SHOP assets, is it a mix of both? Can you kind of give us some color on what's the progress on those specific assets?

Scott M. Brinker -- President and Chief Investment Officer

Yes, I'm happy to do that. It's a mix of triple-net and SHOP. The stage of marketing those is somewhere close to signing Letters of Intent and some are just now being marketed for sale. And then we have some that are in joint ventures, where we don't have unilateral authority to go ahead and make that decision. So, the timing of those going for sale is more uncertain, Mike.

Michael Carroll -- RBC -- Analyst

Okay, great. Thank you.

Operator

Our next question will come from Juan Sanabria with BMO Capital Markets.

Juan Sanabria -- BMO Capital Markets -- Analyst

Hi, thanks for the time. I just wanted to shift to the corporate headquarter announcement and just see or confirm if all the senior executives that we know are staying with PEAK and making the move, and what the potential cost could be of opening that new office? And kind of related to that, are there any offsets in the G&A that we should expect if you do, in fact, exit seniors housing with all the asset management people etc., tied to that line of business?

Thomas M. Herzog -- Chief Executive Officer

Hey, Juan. It's Tom. First of all, we're relocating 20 to 25 people in total. The Irvine and Nashville offices will remain in place. Nobody's losing their job as a result of these relocations. It puts us in a central life position, which I think is going to be much more efficient for the senior executives.

We'll have some senior executive talent that will be in Nashville as our main headquarters or their main location, and the same with Irvine. But our C-Suite and EVPs will also have offices in Denver. So, I think it's -- I think that is going to work out very nicely. We always had difficulty with the travel back and forth between Nashville and Irvine, because the connector flight made it very difficult for a large portion of our team that is now in charge of a bigger and bigger part of our business. And I can tell you, being in the very southwest corner of the country when we had to head to Boston to oversee our 2.4 million square feet of life science and other properties and interact with Wall Street, those were long flights. So, we think this is going to be a better outcome.

As far as cost savings -- so, as far as concerns; no, wouldn't have any concerns on that. As far as cost savings; there might be a little bit of that. Early on, I would say it's a push over time. Denver's a much cheaper place to do business, so it will probably have some cost savings over time. But that wasn't the real reason that we did it.

So, as far as offsets in G&A, there's a little bit of that that will occur over time, but not a big deal. This was more about getting our executive office in the right location and Denver is a better place to recruit and retain talent over time as well. So, that entered our slots as we made this move.

Juan Sanabria -- BMO Capital Markets -- Analyst

My question, sorry, with regards to the G&A was more -- is there a benefit to shareholders from exiting seniors housing in terms of reducing that G&A load, since you'd effectively be exiting a third of your business outside of what you've maintained in CCRCs?

Thomas M. Herzog -- Chief Executive Officer

Well, we'll keep the CCRCs. If we looked at it from an NOI perspective, SHOP and triple-net are about 17% of our total NOI. And as far as G&A savings, that's not the motivation behind the move. So, no, I wouldn't model a lot in. There might be a little bit, but we will reallocate our skilled personnel as we can, to other parts of the business that we are growing. So, I do see some savings over time, but I would not model anything dramatic into your numbers for them.

Juan Sanabria -- BMO Capital Markets -- Analyst

Okay. And just my final question. Could you just provide a little bit more on the vendor financing, like how much potentially are you willing to provide? And do you see that as a bridge, maybe from an earnings perspective, to alleviate any pressures in the mismatch of reallocating that capital, recycling that capital? May be if you could just help us a little bit there on quantum and how you're thinking about that?

Scott M. Brinker -- President and Chief Investment Officer

Hey, Juan, it's Scott. I'd say the answer is to be determined. We mentioned it because it's possible that for specific portfolios we would provide that, as a way to get to the closing quicker. Obviously, the buyers buying at a blended 3% cap are underwriting a pretty dramatic improvement in NOI over time, which makes sense.

The lenders are not always quite as willing to take that risk. So, it's -- at least for some of the portfolios it's not an ideal time to source debt. As the NOI bounces back, chances are the debt markets would become more favorable.

So, if we do provide seller financing, it'd likely be in the 60% to 65% range of the purchase price, and we've set it up with relatively short terms and escalating rates, so that there's mutual incentive to pay us back sooner than later.

Tom or Pete, anything you'd want to add?

Thomas M. Herzog -- Chief Executive Officer

Pete, can you?

Peter A. Scott -- Executive Vice President and Chief Financial Officer

Yes, I can add some color to that. Hey, Juan, nice to have you on these calls again.

As you think about the use of proceeds here, I think it's important to point out, we won't sit on debt cash, right? We have the ability to repay up to $1.05 billion of bonds when you look at what we have maturing in '23 and '24. And so then when you think about the $1 billion of acquisitions we announced today, we've got a pipeline building as well. There may be a little bit of seller financing within that as well as we pointed out.

So, I wouldn't look at this as we're going to be sitting on a whole bunch of cash that we've got to put to work. We've got a plan for all that. And as Tom mentioned, our leverage may dip into the high-4s, to the extent that we don't put that capital to work into acquisitions right away, but it will get back into the run rate, mid-5s, over a period of time as we do find the right acquisitions.

Juan Sanabria -- BMO Capital Markets -- Analyst

Thank you.

Thomas M. Herzog -- Chief Executive Officer

Thanks, Juan.

Operator

Our next question comes from Jordan Sadler with KeyBanc.

Jordan Sadler -- KeyBanc -- Analyst

Thanks, and good morning. I wanted to just dig in a little bit in terms of redeploying the capital once it comes in. It's been touched on a little that you guys ready to $1 billion, as you say, to work. But talk to us a little bit about mix going forward. I mean, is this going to be 40:40:20 or what do you see in terms of the landscape over the next few quarters in terms of being able to deploy into life science, MOB and CCRCs.

Thomas M. Herzog -- Chief Executive Officer

Jordan, next few quarters is a relatively short period of time, so let me address the exact question. You can expand it if you want. First, it depends on how much of the sales we're successful in executing and the timing, because they could be Q4, a bunch of it could be. It could get into Q1.

So, it depends. It depends on how much seller financing and a short-term bridge might be required to get the sales done in certain cases. It depends on whether we've identified additional strategic acquisitions in our core businesses during that period of time. We have the option of paying down some 4% debt in '24 and '25. That's be kind of nice to shape the top off of those debt maturity stack. So, that would not bother us at all. And that could all happen over the next few quarters, and those will be decisions made based on what plays on all those different factors I just mentioned.

As far as the mix, It's probably realistically easiest to invest in life science right now, because we've got so many densification opportunities and development opportunities. But we also have strong opportunities in MOBs. Tom Klaritch with his decades long relationship with HCA and the things that we're doing with them, have created some nice opportunity. We've got Justin Hill, who's out working his hospital relationships and identifying other off marketplaces to invest money favorably. We had some densification opportunities in our CCRCs on those average 50-acre land parcels, that could create some upside.

So, it could be a whole variety of different things. I don't think we're going to be hurting for opportunities. We're going to be underwriting carefully to make sure that the mix is right and we're engaging in those funds in the highest risk-reward opportunities that we have in front of us in these three businesses.

Jordan Sadler -- KeyBanc -- Analyst

And maybe as a follow-up, Tom. I heard, sort of, a commentary on the life side portfolio exposure, you guys are pretty bunched up in South San Fran, San Diego and Boston, obviously. Any appetite for additional markets or you think you'll stay focused?

Thomas M. Herzog -- Chief Executive Officer

Well, I think we will stay pretty focused because we've got irreplaceable clusters in each of those three markets and that's a very important thing when you're dealing with biotech tenants that are rapidly growing. It's one of the most critical things, frankly, is to have purpose-built biotech space in clusters.

So, we're going to want to continue to capture share in those three markets. But that doesn't preclude us from going to some of the higher yielding cap rate markets outside of the three major hotbed innovation centers. And it is something we will be looking at. But at this point, I wouldn't put it on the list as something that we're doing near term, but we are going to be looking at it.

Scott, anything that you would add on that?

Scott M. Brinker -- President and Chief Investment Officer

Yes, the only thing I would add, Tom, is that in that business, it's so important to have scale in a local market. And we mentioned that in the last -- well, in 2020, two-thirds of our leasing has been done with existing tenants. So, if we do enter a market, we would want to be able to do so in scale, unlike my comments about medical office, but even more critical in life science. So, that would be just a fundamental thing that we have to work through.

Jordan Sadler -- KeyBanc -- Analyst

Hey, Scott, I had one more -- well, I had a -- which is just, you've been active participant in the seniors housing landscape for well over a decade. How would you characterize buyer demand versus assets available for sale today? Is it buyers market or sellers market?

Scott M. Brinker -- President and Chief Investment Officer

Yes, we're not a very specific group of counterparties. So generally speaking, we went direct. We didn't run a bunch of broad auctions to get the temperature of the entire marketplace. It was quite targeted, and it was a mix, maybe as you might expect some were highly interested, and others were much less interested.

I think maybe the more interesting thing from our standpoint would be that most of the buyers seem to fall in the category of more sort of operationally intensive real estate investors as opposed to pure real estate investors. And I think that aligns with the direction that senior housing has been moving. So, that's probably the only kind of very unique thing that I've noticed over the past six to nine months. Tom, anything to that?

Thomas M. Herzog -- Chief Executive Officer

No, I think that's right, Scott.

Jordan Sadler -- KeyBanc -- Analyst

Thanks, guys.

Thomas M. Herzog -- Chief Executive Officer

Hey, thanks. Hey, if I could ask the analysts on the phone, we do have another 10 people in the queue. We'll start to speed along, if we could, the questions and even our answers. But let's continue to proceed, we'll get to everybody. So, let's go to the next analyst, operator, please.

Operator

Our next question comes from Nick Joseph with Citi.

Nick Joseph -- Citi -- Analyst

Thanks, gentlemen. I was going to ask a parter, like everyone else, but I'll keep it short.

Thomas M. Herzog -- Chief Executive Officer

Thanks.

Nick Joseph -- Citi -- Analyst

And I recognize in senior housing, this exit has sort of evolved over the last three to six months, so it's not necessarily massive new news, and I think you sort of earmarked it a little bit. But I'm thinking about what's leftover and how you think about the synergies of the life science and MOB business as well as the CCRCs, with the framework of when you came into the role, you spent a lot of time talking about having a balanced portfolio, three private pay businesses with different drivers and having that diversity was going to be good for shareholders, so that at if one part wasn't doing as well, the other one would pick up and you create this very stable portfolio that you eventually wanted to get to be a third, a third, a third, right? Clearly, things have changed. You've decided now to exit senior housing and you're left with predominantly an attractive life science and an attractive MOB business, where I understand you have the capabilities and strength in both in the marketplace, but do they really have synergies, right? And you have pure play MOB players that are listed. You have a pure play life science player that's listed, as well as a number of private life science players, so why keep these businesses together in addition to holding the CCRCs? What's the point?

Thomas M. Herzog -- Chief Executive Officer

In other words, your point is that we spoke to a balanced portfolio of Life Science, MOB, Senior Housing, we're retaining the CCRCs and what is our investment thesis as to why to have the three businesses together with CCRCs remaining? Is that the main point?

Nick Joseph -- Citi -- Analyst

Yes, I mean, the question is, yes, can you have -- what's the benefit of owning people when there are more low, sharp shooters within each asset class, separately capitalize. How do you view the synergies of the business going forward?

Thomas M. Herzog -- Chief Executive Officer

Well, the way we've thought about it is that we've got three businesses that all take advantage of the same baby boomer growth demographic. They're all private pay; and in all three cases, these three businesses have irreplaceable portfolios and high barrier to entry.

And that's true, of course, in life science with these clusters. There is no way to reassemble that now. One could not reassemble an 84% on-campus HCA-anchored MOB business with -- on an affiliated basis at the 97% range.

And in CCRCs, there is no way that you could accumulate a portfolio of CCRCs given that they rarely change hands, being they're controlled by non-profits. The CCRCs only represent 8% of our company, but they price at an 8% to 10% cap rate. And that is a very, very strong return given the lower risk profile for this asset class. It attracts more affluent senior. The non-refundable entrance fees bring stability to the tenant base. We've got the eight to 10-year average length of stay versus two year for SHOP. And these things set on 50-acre parcels of land each, 500-unit properties. We haven't had one new CCRC asset in 10 years within 10 miles of any of our properties. Then we have LCS. That's a very well capitalized operator for the five-decade, a track record for operating CCRCs.

So, when we look at each of these three businesses, they do all benefit from the first three things that I spoke to and do create some degree of diversification, but all feeding off of the same aspects of benefiting from the baby boomer demographic< the high barrier to entry, the irreplaceable portfolios. And so, we do like all three of them and think that that's a better plan.

Your other question, I think, really alluded to what changed your mind on SHOP and triple-net? Because you're right, we did talk a third, a third, a third. And it wasn't so long ago that we had 65% of our business that was SNF and senior housing. We spun our SNF, we sold off billions and billions of dollars of senior housing and those are good businesses for other companies.

And then further into we got at some point, we looked up and realized at 17% remaining SHOP and triple-net we have a decision to make. It is distracting, it's a more volatile business and would we be better as a REIT to allow some of our competitors to compete in that business? And we bring it down to the three businesses that we chose, especially with COVID coming on, driving that current yield and cap rate down for at least some period of time with the bumpy road to follow, what an opportunity to be able to choose to exit those businesses, if that's what we preferred, and do so on a non-dilutive basis for some period of time. And that's the decision we came to, if we're successful with the sale.

Nick Joseph -- Citi -- Analyst

And just as a follow-up, how much does managing the managers and senior housing play into how you feel about the lack of control over those assets and being able to adapt to things, whereas in the MOB and life science portfolios, it's you and your own staff that are making management decisions?

Thomas M. Herzog -- Chief Executive Officer

Scott, you want to take that one?

Scott M. Brinker -- President and Chief Investment Officer

Yes, I'm happy to Tom. I mean, there's certainly a lot of friction in that structure, particularly for a REIT. We cannot own more than a small percentage of one of the operating company. So, that has been a source of friction throughout the life of the RIDEA structure. It seems to have intensified as the acuity within the business has increased.

So, it certainly is part of our view and our decision around whether to exit the business, stay in the business or grow the business. That has been a source of tension that feels like it's growing, not decreasing, Michael.

Nick Joseph -- Citi -- Analyst

Yes. All right, thanks.

Thomas M. Herzog -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Rich Anderson with SMBC

Rich Anderson -- SMBC -- Analyst

Hey, thanks. Good morning out there. So, on the topic of this is a better business for someone else to do, how did you kind of come to that conclusion? I know you said what you've said. But to the extent you just don't have the heart to kind of put into the business with all the moving parts and the bumpiness, but how much did quality play into this? In other words, do you -- did you look at your portfolio and say -- I don't know, I don't know, if that can really compete with some of the portfolios that are out there. Were there any consideration specific to your portfolio that drove this decision or was this more of a holistic senior housing call, just generally?

Thomas M. Herzog -- Chief Executive Officer

Scott, why don't you go ahead and start.

Scott M. Brinker -- President and Chief Investment Officer

Yes, Rich, it was a holistic decision. Now, there are certainly some assets that in order to capture any NOI growth, the new owner will have to invest a pretty material amount of capital back into the building. And for a private equity firm with a five to seven-year time horizon, that is a perfectly fine outcome. That's not something that we were particularly excited to do.

So, yes, that plays a role, but the decision to sell $4.5 billion, plus or minus, was 100% driven by just our view about whether the business fits inside of our healthcare REIT that otherwise has scale, critical mass and a great platform into businesses that are pure real estate businesses with, we think, very solid supply and demand in the short term, in the intermediate term, in the long term. And we think that's a company that's going to be very attractive to investors as a pure real estate company.

Senior housing could be a great business. It's not really a real estate business going forward is our view. It feels much more like an operating business. And to my point earlier, that's the buyer pool of who we're talking to. They understand that and that's what they're interested in. That's just different, very different than a real estate company, especially for a public REIT is our view.

Rich Anderson -- SMBC -- Analyst

Okay. And then my second question -- sorry, you're popular. So, again, stick around for bit I guess. The topic that Michael Bilerman brought up about competing with your peers, you're reallocating probably some very smart people and that are focused on senior housing into these other asset classes. Do you think that there'll be some sort of time to kind of catch-up to the Alexandria's and the healthcare realities and the healthcare trust folks who spend all their time in medical office and life science respectively? Or do you think it'll be a fairly easy kind of turnaround to get that debt level of IP redirected and functional to the extent that you'll be able to be as competitive as smart in this space as those two asset classes?

Thomas M. Herzog -- Chief Executive Officer

Rich, the bottom line is, yes, we've grown the two businesses of life science and MOBs. I think we'd be hard-pressed to find an MOB team that has more experience than what we have with Tom Klaritch having been one of the co-founders of Medcap, has been in the business for a long, long time with deep relationships.

So, no, we do not feel like we're coming from behind in that respect and we have a bigger balance sheet, the ability to put out more funds, do bigger deals. So, we think we've got great competitive edge there. And when we look at life science, we've been doing that for many decades because you have to grow all the way back to slow -- before it was acquired by HCP in 2007, which is still quite a while ago and we have some very deep experienced people in that business as well along with relationships development expertise, portfolios that were purpose structured in clusters as pure lab, not the office tech combination type properties that you're seeing spring up more often now.

So, we feel that we're already in an outstanding position to compete in both of those businesses and along with some very, very large densification opportunities that we've alluded to a couple of times, and we will be bringing out more fully over the coming months to help investors understand the magnitude of those opportunities over the next period of years. So, we feel like we're in catch up mode.

Rich Anderson -- SMBC -- Analyst

Yes, I wasn't suggesting that the people that are there now they're doing that job or probably -- I'm certain are very good at the job. I'm just talking about as you grow and you're redeploying senior housing folks into these other asset classes, will it take some time for them to get sort of up to speed. But I get your point and it was perfectly well answered, so thank you.

Thomas M. Herzog -- Chief Executive Officer

No, no I get that, as far as the senior housing folks being disbursed into some of the other businesses. The businesses are already well staffed with experienced people and we have been able to bring some of the senior housing people into some of these other businesses, skilled people that bring other talents and I think is a positive. And then realistically, I mean, let me make the statement is that within senior housing, if we do exit this business, there are a number of senior housing people on the platform. Some will remain with the CCRCs and if there is some senior housing that remains behind, it will also be downsized, the platform. And -- but there is the reality of attrition that occurs. So, some of that is taken care of naturally as well. So, these are all things that we've been working through and considering, but I think we'll end up in a good place and all that.

Rich Anderson -- SMBC -- Analyst

Okay, thanks very much. Appreciate it.

Thomas M. Herzog -- Chief Executive Officer

Thanks, Rich.

Operator

Our next question comes from Steven Valiquette with Barclays.

Steven Valiquette -- Barclays -- Analyst

Great, thanks. Hello, Tom and Pete and Scott. Thanks for taking the questions.

Thomas M. Herzog -- Chief Executive Officer

Hey, Steve.

Steven Valiquette -- Barclays -- Analyst

So, one of the pieces of good news from divesting most of your senior housing assets is that this will eliminate a lot of the additional operational uncertainty for the company in '21 related to COVID-19. I guess in light of that, are you planning to give official full-year 2021 guidance when the time is right and you have more visibility on the divestitures and redeployment maybe on the fourth quarter conference call?

And also, just based on your comments earlier on this call about not much dilution anticipated from the senior housing asset sales, is it your directional goal at least for now to try to grow FFO per share next year from whatever the final jump up point will be in 2020? Thanks.

Thomas M. Herzog -- Chief Executive Officer

Yes, Pete?

Peter A. Scott -- Executive Vice President and Chief Financial Officer

Yes. Hey, Steve. It's Pete here. Nice to hear from you. I think on the guidance question, it's a little soon to talk about '21 guidance. We're in the middle of our budgeting right now. For this year, we wanted to provide the outlook framework that we put out. And I think it's been affected to at least help educate the Street on the way we're looking at things right now. And obviously, there is still some uncertainty on the timing of the closing of transactions as well as -- at least for this year, some of these CARES Act grants and other things like that.

I'd like to be able to issue formal guidance, but it's a little soon for me to talk about that on the call today. We will talk about it more when we get to our next quarterly update call.

I think as you think about your other question and what our earnings growth looks like as we head into next year to the extent that we're successful and disposing of these senior housing assets. Without SHOP and triple-net, I can say unequivocally that we should have much more stable earnings going forward. As Tom mentioned, our portfolio will be comprised of the three stable high barrier to entry businesses.

And when you look at medical office, we've grown same-store by 2% to 3% the last 15 plus years, life sciences escalators are above 3% in that business and we're in a great backdrop from a positive rent mark-to-market. And the CCRCs have a longer length of stay and a stable unwrap model.

So, as we look at those businesses, we do think they should generate 2% to 3% consistent same-store growth. In fact, in the near term, it might actually be better than that given the backdrop in life sciences. We also have this well-established development and redevelopment platform and we've got future densification opportunities across our portfolio.

So as we look forward, I don't want to give a specific timeline on this, but when you factor in all the things that I just said, that is basically 4% to 5% FFO growth and you put a dividend on top of that. I know Tom has talked about in the past and we see ourselves as a very stable 8% to 10% annual total shareholder return REIT. And I think that's something that we're really appeal to the market out there, because to-date in the healthcare REIT sector, you haven't really been able to find a lot of those companies.

Steven Valiquette -- Barclays -- Analyst

That's extremely helpful. Yes, you're right, in the last five years you've had FFO going down mainly because of divestitures and that occurs, as you talked about, the CAGARs for growth going forward again. So, appreciate the color. Thanks.

Thomas M. Herzog -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Joshua Dennerlein with Bank of America.

Joshua Dennerlein -- Bank of America -- Analyst

Yes. Hey, everyone. Most of mine have already been answered, but one question for you on that $4.5 billion of the potential sales. How does that split between the net lease valuation and SHOP valuation? I know you gave the cap rates, but it's kind of hard to back into it.

Scott M. Brinker -- President and Chief Investment Officer

Yes, hey, Josh, it's Scott. We can't quite comment on that level of detail. I think the best thing we can point you to is just the disclosures that we have that show the amount of triple-net rents in the portfolio as well as the amount of SHOP NOI, both historically but in obviously 3Q as well and try to use the cap rates that we've provided separately. And I think you'll at least get into the same or the right ballpark. But we're not going to say much more than that at this point.

Joshua Dennerlein -- Bank of America -- Analyst

Okay, that's fair. I'll let you move forward. Thanks, guys.

Thomas M. Herzog -- Chief Executive Officer

Thanks.

Operator

Our next question comes from Daniel Bernstein with Capital One.

Daniel Bernstein -- Capital One -- Analyst

Hi. Since almost everything has been asked, I'm probably tempted just to ask you who is going to win the election. But I'll try to stay away from that. Actually, I mean, I do have a somewhat political question which is, if you do have a vile presidency and you get some pharmaceutical price controls; do you have any concern about the demand side of the business for life science? You've signed a lot of leases in the last quarter or two. Doesn't seem like there's not much concern from your tenants, but how do you think about the risk there from a regulatory side on demand for life science?

Thomas M. Herzog -- Chief Executive Officer

Dan, really from life science, there's been attempts made at drug pricing controls for a lot of years. That doesn't mean that they can't occur. But both parties are making statements at this point during the elections. We'll see how it plays out. There's been discussion of time reimbursements to an international index or giving Medicare direct negotiating power. But we have attempted to look at it more holistically. We don't see a huge risk that the baby boomer generation is demanding lots of drug innovation. The development of biology-based drugs has accelerated massively. The FDA approval process is faster, the patent cliffs with pharma's looking to replenish their growth, taking out these biotechs when they come to proven drugs. And then COVID-19 has been a stark reminder of the importance of continuing to develop new drugs and treatments.

So, when you put all this together, I just can't see the government ultimately wanting to stifle innovation. It could be that there is some kind of the reforms that are made, we do think that most pharmas and big biopharmas have some of that factored into their future economics from what we believe, what we have understood. But we don't see that being a deterrent to growth and demand for this type of real estate.

Daniel Bernstein -- Capital One -- Analyst

Okay. I appreciate it. I'll hop off. Maybe we'll chat later. Thanks.

Thomas M. Herzog -- Chief Executive Officer

You bet. Thanks, Dan.

Operator

Our next question comes from Lukas Hartwich with Green Street.

Lukas Hartwich -- Green Street -- Analyst

Thanks, good morning. So, by getting out of senior housing, how would you weigh giving up an attractive avenue of external growth looking forward?

Scott M. Brinker -- President and Chief Investment Officer

It's one of these things where when one looks at it strategically. As I mentioned in my prepared remarks, we're believers that society is going to need senior housing in the future, both from a social perspective and from a need perspective.

So, that business is here to stay. But it is a higher acuity different business today than it was a decade ago and it's subject to a lot of new supply. So, it is going to be a bumpy ride, but yet there is -- with the fast growing demographics, there is plenty of upside, which is good for us because it means we can capture good pricing as we seek to exit.

So, as far as the loss, growth opportunity, I'm not troubled by that. I'm not troubled that if we exit a business that has more volatility, in our view doesn't fit as neatly into a REIT to focus on our other growth opportunities that I've already outlined, it doesn't bother me to create an opportunity for investors that's more focused and lead the senior housing to some others in the industry, both REIT to non-REIT that will compete on that front.

And the same thing -- we felt the same thing about SNFs and the triple-net side of SNF. That's not necessarily a bad business. It's just one that we chose not to compete in. So, we've just tightened it up further where we think that there is a great place for a REIT that specializes in the businesses that we've talked about; life science, on-campus MOBs and CCRCs.

So, we're not necessarily making a statement we think senior housing is a bad business. It's just one that we've chosen to shift away from in our strategic position. And if we weren't down at 17% of our business spend, SHOP and triple-net, we probably would need to be thinking off hard about whether an exit made sense. It's only because it's down at that level that we're able to take this action.

Lukas Hartwich -- Green Street -- Analyst

Thanks.

Scott M. Brinker -- President and Chief Investment Officer

Thanks, Lukas.

Operator

Our next question comes from Mike Mueller with JPMorgan.

Mike Mueller -- JPMorgan -- Analyst

Yes, hi. Just given the comments about senior housing being an operating business and not a real estate business per se, why did you stop short of selling CCRCs then?

Scott M. Brinker -- President and Chief Investment Officer

Well, Mike, for the reasons that I mentioned earlier, so I won't repeat them all, but CCRCs, we do view more as being real estate. Like, seniors come in, it's a more affluent senior. They have a tenancy to sell their single family home. They invest in a sizable non-refundable entrance fee. They have an eight to 10-year length of stay. And so, it's not -- and then there's a much lower level of acuity. They come in, the vast majority of them, through the independent side of the business. And so, it's completely a lifestyle choice where they are effectively going in and investing for the balance of their lives into the asset that they will be occupying. And for us, that creates a much more stable asset from an investment perspective or from a real estate investment perspective. And so, a different play than what would be SHOP portfolio.

Mike Mueller -- JPMorgan -- Analyst

Okay. That was it. Thank you.

Scott M. Brinker -- President and Chief Investment Officer

Thanks, Mike.

Operator

Our next question comes from Vikram Malhotra with Morgan Stanley.

Vikram Malhotra -- Morgan Stanley -- Analyst

Hi. Thanks for taking all the questions. Just two quick ones. Maybe just first, you've talked a lot about sort of the growth opportunity in life science and MOB. And I'm just wondering whether part of your decision was clearly driven by kind of your view of seniors housing over the next few years and maybe longer term, but as you alluded to, perhaps not. But how much of it was sort of your view that maybe life science and MOB portfolios were not sort of being valued correctly by the market or potentially maybe more value will be ascribed once it's simpler and there is more focus? Or could you maybe just talk about -- living growth aside -- kind of how you thought about the kind of inherent value that investors will be rewarded for?

Thomas M. Herzog -- Chief Executive Officer

There's no question, Vikram. I'm glad you asked that question. When you think about a company that's got senior housing, life science, MOBs and SHOP and triple-net that has been so volatile with so much new supply, at least over the last several years, and we recognize that there could be a recovery coming. The vast majority of our time visiting with investors and analysts is spent talking about SHOP. And it seems that a lot of the think time is around that topic.

We've been told by some big investors that until we downsized even further, we will not get the full multiple rerating that our portfolio and our strategy and perhaps our team deserve. But as we downsized that further that there will be a rerating that will likely take place in the future, and that is absolutely one of the things that we looked at when we came to this decision.

Vikram Malhotra -- Morgan Stanley -- Analyst

Okay. And then just the other quick one -- sorry, there are just two quick ones. One is, I know you can't talk about the dividend yet. But given the business is ultimately going to be perhaps more capex intensive combined. Can you at least sort of talk about a payout range you're going to be comfortable with going forward once the debt settles? And then just second, the changes in the Board eligibility requirements, kind of, did they and how did they, if at all related to the strategic decision just timing wise then just more broadly? Thank you.

Thomas M. Herzog -- Chief Executive Officer

Sure. As far as the capex part of what you just described, we have more capex by far on the senior housing, SHOP, triple-net side. Those assets, as they age and new supply comes on to compete, they take up -- they take on an awful lot of capex.

So, as you know, you don't get to spend NOI at the end of the day or dividend NOI, your dividend cash flow. And so, that was definitely a part of our decision as we looked at the equation. And then as I think about payout ratios, one of the things that you mentioned, which I think again is a very fair question, it depends on what our business ends up looking like after we complete the sales. Having a strong development and densification pipeline, when you look at high quality REITs across the industry, they'll have a little bit lower payout to keep more retained earnings, so that can be recycled accretively into development. And I'm not telling you that we've made a determination with our board as to where exactly we'll fall out. And it depends on what we look like. But those are all the exact kind of things that come into consideration when we make those important decisions. And we want to get it right. We would hate to have a knee-jerk reaction in the middle of COVID and adjust dividend too far or not enough, so -- if it's required at all. So, we're going to be going through that exercise and I believe we'll come to the right place.

The second part of your question was our board -- how did -- I think you're looking for a little bit more color on how we looked at it. Bottom line is that we put that age 75 requirement in place 2.5 years ago. We refreshed half of our Board during that time. We had an older age board, very, very good Board members, but they were of older age. And we knew that refreshment and -- they had been in place a long time. We knew refreshment was important.

So, we utilized an age 75 retirement age for a period of time. We've refreshed half of our Board at this point and we have a number of younger Board members that have joined our Board, in the early '50s as far as age. And so, as we started looking out as to what our Board will look like over time, we recognized that an age 75 policy just didn't make a lot of sense. And we thought more progressive to have a 15-year term limit, it would result in really strong experience, diversity and expertise, breadth and depth in our Board. We felt very good about the way it looked with that 15-year term limit and thought that that would be an excellent Board refreshment over the long term. So, that's how we came to the decision. Nothing more than that.

Vikram Malhotra -- Morgan Stanley -- Analyst

Great, thank you.

Thomas M. Herzog -- Chief Executive Officer

Thanks, Vikram. Any more questions?

Operator

This concludes our question-and-answer session. I'd like to turn the call back over to Tom Herzog for any closing remarks.

Thomas M. Herzog -- Chief Executive Officer

Okay, thank you, and thanks everybody for joining our call. Again, a long call, but a lot going on. I got to tell you, when choosing our call today, we had the option of the morning of the elections or the morning after the elections. We obviously chose the morning of. It's going to be an exciting evening, everyone.

So, we'll talk to you all soon. We'll see you no some NDRs next week and NAREIT the week following. So, look forward to talking to you then. Bye-bye.

Operator

[Operator Closing Remarks]

Duration: 93 minutes

Call participants:

Barbat Rodgers -- Senior Director-Investor Relations

Thomas M. Herzog -- Chief Executive Officer

Peter A. Scott -- Executive Vice President and Chief Financial Officer

Scott M. Brinker -- President and Chief Investment Officer

Nick Yulico -- Scotiabank -- Analyst

Steve Sakwa -- Evercore ISI -- Analyst

Michael Carroll -- RBC -- Analyst

Juan Sanabria -- BMO Capital Markets -- Analyst

Jordan Sadler -- KeyBanc -- Analyst

Nick Joseph -- Citi -- Analyst

Rich Anderson -- SMBC -- Analyst

Steven Valiquette -- Barclays -- Analyst

Joshua Dennerlein -- Bank of America -- Analyst

Daniel Bernstein -- Capital One -- Analyst

Lukas Hartwich -- Green Street -- Analyst

Mike Mueller -- JPMorgan -- Analyst

Vikram Malhotra -- Morgan Stanley -- Analyst

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