HCP 3.0 NAREIT Presentation Senior Housing Life Science Medical - PowerPoint PPT Presentation

HCP 3.0 NAREIT Presentation Senior Housing Life Science Medical Office NAREIT November 15-16, 2016

HCP Delivered on Near-Term Goals Completed on Oct 31, 2016 Execute the Spin-off of the HCR ManorCare Portfolio Will be reduced from 35% immediately post-spin to 27% via Reduce and Improve Brookdale Concentration announced transactions (1) Executing and refining financing plan announced in May 2016, 1 Improve Balance Sheet Metrics resulting in better credit metrics than initially anticipated Revamped and enhanced Become a Leader in Transparency and Clarity Supplemental disclosures in 3Q16 Deep team with diverse and Establish the Next Generation of Leadership for HCP 3.0 complimentary experience (1) Concentration is based on cash NOI plus interest income. Reflects the announced RIDEA II transaction, sale of 64 Brookdale triple-net assets, sale or transfer of 25 Brookdale triple-net assets and transfer of 4 Brookdale communities to another operator. HCP 3.0

What Differentiates HCP 3.0  High quality portfolio reinforcing stability and organic growth , with 94% private-pay revenue sources and improved tenant concentration  Strong and improving investment grade balance sheet with ample liquidity and no significant debt maturities through end of 2018  Diversified senior housing portfolio with strong triple-net lease coverage  Premier Life Science platform featuring The Cove development  Stable on-campus MOB portfolio well-known for its consistent performance 2  Global leader in sust sustainability ainability  Smaller investment base to grow off of Senior Housing - The Solana Preserve Houston, TX We Will Strive to be Recognized in Our Industry for Our:  Investment plan emphasizing prudent capital allocation and accretive growth objectives  Improvement in credit metrics over time to regain Baa1/BBB+ ratings  Best-in-class disclosures and transparency Evergreen Medical Office Lone Tree, CO HCP 3.0

HCP is a Platform for Growth  Growth will come from all three of our major business lines: senior housing, life science, and MOB Grow existing relationships by generating “tuck-in” acquisitions and developments Capitalize on development and redevelopment opportunities across all segments Enhance business development to target operators and health systems Manage the balance sheet and be prepared for opportunistic acquisitions 3 Advance research and analytics capabilities to capitalize on segment-specific cycles Recycle non-core assets into quality properties with strong local-market fundamentals Well-positioned to grow off a smaller base and revitalized portfolio HCP 3.0

Experienced Senior Leadership Team Michael McKee Michael McKee Executive Chairman, Executive Chairman, Interim President and Interim President and Chief Executive Officer Chief Executive Officer Tom Herzog Tom Herzog Chief Executive Officer Chief Executive Officer (Effective 1/1/17) (Effective 1/1/17) 4 Justin Hutchens Justin Hutchens Troy McHenry Troy McHenry OPEN OPEN President President General Counsel and General Counsel and Chief Financial Officer Chief Financial Officer Corporate Secretary Corporate Secretary (Effective 1/1/17) (Effective 1/1/17) Jon Bergschneider Jon Bergschneider Kai Hsiao Kai Hsiao Tom Klaritch Tom Klaritch EVP – Life Science Estates EVP – Life Science Estates EVP – Senior Housing EVP – Senior Housing EVP – Medical Office EVP – Medical Office HCP 3.0

Best-in-Class Portfolio  Large, diversified healthcare REIT with high-quality cash flows from needs-based private pay sources  Complementary triple-net leases and operating business platforms across multiple healthcare sectors 43 % Senior Housing Other 87 MSAs 14% (2) Senior 800 94 % 43 States Housing NNN Properties (3) Private Pay (4)(5) $1.3B Geographically 24% Diversified Medical 5 Office Cash NOI 22% 39 % 6 % plus Interest Senior 77 % Housing Income (1) (vs. 4% national avg) Top 3 Tenants Operating Strong Population Concentrated Portfolio Diversified Growth over Next in Top 50 MSAs (6) “SHOP” 5 Years (7) Life Science Tenants (5) 19% 21% Post-Spin, HCP has a Younger, Higher Quality Portfolio of Private Pay Assets in Top 50 MSAs with Above Average Population Growth (1) Represents HCP’s preliminary 2017 Outlook provided on 11/1/16 for cash NOI plus interest income from debt investments. (2) Other segment primarily consists of hospitals, U.K. real estate, and all debt investments. (3) After giving effect to the QCP spin and announced BKD transactions. (4) Self-pay and private insurance (including managed care); medical office properties are considered 100% private-pay. (5) Percentage based on cash NOI plus interest income. (6) Percentage based on cash NOI. (7) Source: Environmental Systems Research Institute (ESRI). HCP 3.0

Premier Portfolio in Attractive Healthcare Markets Senior Housing  Improved lease coverage with announced Brookdale transactions (2) 43% (1)  Added 6 new operators, diversifying our relationships  74% located in Top 50 MSAs (3) Medical Office  83% located on-campus; 7% adjacent; 87% in Top 50 MSAs (3) 22% (1)  95% affiliated with 200+ hospitals and healthcare 6 systems (3)  Steady occupancy consistently above 90% Amgen Amgen  93% located in 2 of the top 3 core markets (3) Life Science  Largest owner and developer on the West Coast 21% (1)  The Cove development represents a 1.0M sq. ft., LEED Silver waterfront campus in S. San Francisco  87% of revenues from public or well-established private companies Represents recently sourced new relationships (1) Percentages by segment are based on 2017 Outlook for cash NOI plus interest income from debt investments. Excludes the Other segment, which primarily consists of hospitals, U.K. real estate, and all debt investments. (2) After giving effect to the announced BKD transactions, EBITDAR-to-Rent coverage for the retained 78 triple-net properties increases to 1.21x for the trailing 12 months ended 9/30/16. (3) Percentage based on cash NOI for senior housing and square footage for medical office and life science. HCP 3.0

Senior Housing 7 7 HCP | The Solana Germantown Operated by Brookdale Germantown, TN

Diversified Senior Housing Portfolio 24% 46% SHOP 54% Triple-net a Investments Leased Portfolio $573M 40% a a a a b Cash b b 8 NOI (1) 16% c c b 6% 14% b c (1) Based on HCP’s preliminary 2017 Outlook provided on 11/1/16. Note that following the completion of the announced Brookdale transactions, Brookdale will operate 204 communities for HCP generating approximately $350 million of expected annualized cash NOI, of which one third will be under triple-net leases and two thirds in RIDEA joint ventures. SENIOR HOUSING

Triple-Net Leases Anchor Recurring Internal Growth  $312M cash NOI (1) from 200+ triple-net leased senior housing properties managed by 20+ operators  Brookdale property EBITDAR-to-rent coverage improves to 1.21x and HCP’s triple-net senior housing portfolio coverage up to 1.13x upon completing the Brookdale asset sales (2)  2% to 3% average annual escalators Independent  5-mile median income and net worth above the national average Living Assisted  Limited expirations – weighted average remaining term of 10 years Living 9 Memory Care Senior Housing – Oakmont of Roseville Senior Housing – The Fairfax, operated by Sunrise Roseville, CA Ft. Belvoir, VA (1) Based on HCP’s preliminary 2017 Outlook provided on 11/1/16 for cash NOI. (2) Trailing twelve months ending 9/30/16, after giving effect to the announced Brookdale transactions. SENIOR HOUSING

SHOP Portfolio is Well-Positioned  $262M cash NOI from over 100 properties (1)  High mix of independent living, which has been less impacted by new supply in our markets 15+ years Only 3.2% 6 Management team with national operating Avg. affordability for New relationships of Cash NOI exposed experience portfolio (2) added past year to new supply (3) Annual Inventory Growth (4) SHOP Portfolio Mix by Cash NOI 10 5% Assisted Living 4% Independent 3% Living 64% 2% Assisted Independent Living Living 1% 36% 0% 2010 2011 2012 2013 2014 2015 2016 2017E 63 63% of supply coming online o % of supply coming online over ne r next xt 24 mont months hs will will be AL - be AL - HCP HCP’s por portfolio lio is 6 is 64% IL % IL (1) Based on HCP’s preliminary 2017 Outlook provided on 11/1/16 for cash NOI. (2) Affordability represents the number of years an individual can support the cost of residing in a senior housing facility. Affordability is calculated using the median net worth for individuals ages 75 and older, divided by the annualized revenue per occupied room (REVPOR) less the median income for individuals ages 75 and older. Markets with median income in excess of REVPOR reflect an Affordability metric of greater than (>) 15 years. (3) Represents the percentage of company Cash NOI and Interest income exposed to new senior housing construction and expansion. As reported on 9/30/16. (4) Supply data from NIC. SENIOR HOUSING