HCP Inc. (NYSE: HCP) may have lost out on purchasing Duke Realty’s (NYSE: DRE) $2.75 billion medical office building portfolio earlier this week—but that doesn’t mean the California-based health care real estate investment trust (REIT) is losing faith in its medical office building business.

In fact, HCP probably has “one of the more mature [medical office] portfolios in the industry,” HCP Senior Managing Director — Medical Office Properties Thomas Klaritch said Tuesday on an earnings call with analysts.

“We’ve been around for if not the longest, close to the longest time and we have a higher percentage of multi-tenant buildings in our portfolio,” Klaritch explained. “If you look at the some of the newer MOB portfolios out there, they have more single-tenant with built-in escalator… so, a single-tenant building is either full or empty. So, as time goes on, you might see some degradation in that.”

HCP did look into acquiring the Duke portfolio, however.

“Of course we looked, as others did, and participated in the process on Duke,” HCP Executive Chairman Mike McKee said during the earnings call. The ultimate outcome, he believes, is “bold.”

“In terms of just validating the value of these portfolios that are at scale, yesterday was a very interesting day,” McKee concluded.

The $2.75 billion purchase did not price HCP out of the MOB market—or any market, executives insisted.

“We’re definitely not priced out of MOBs or life science, and certainly not senior housing,” HCP CEO Thomas Herzog said on the call. “So, we’re still wide open for business in all three of those segments on an accretive basis.”

Additionally, HCP has MOB redevelopment opportunities of $75 million to $100 million per year for the next several years, Herzog said.

The company’s first-quarter 2017 FFO of 51 cents beat analysts’ expectations by 3 cents; the company’s first-quarter revenue of $492.17 million missed analysts’ expectations by $32.2 million.

By the time the market closed on Tuesday, the price of HCP’s stock had fallen 19 cents to $31.26.

Kai Hsaio to leave HCP

HCP is also on the hunt, once again, for new executives.

Last year, the Irvine, California-based health care real estate investment trust (REIT) had planned to launch ‘HCP 3.0’ with a series of promising new hires—but achieving that has involved HCP going “3 or 4 steps forward, 1 step back,” McKee said.

That’s because a slice of HCP’s “new generation of leadership” is leaving the company.

In April, HCP President Justin Hutchens, who joined HCP in August 2015, announced his plans to leave the REIT to become CEO of UK-based care home operator HC-One. Kai Hsaio, the company’s Executive Vice President-Senior Housing Properties, is departing as well, HCP announced during the company’s first-quarter 2017 earnings call on May 2. Hsaio joined HCP in May 2016.

“[Hutchens and Hsaio] both had a desire to get back toward their operating roots, and we’re in full support of Kai,” Herzog said. “He’s made us aware of his plans for a while.”

The two departures are “completely unrelated,” Herzog noted.

Hutchen’s and Hsaio’s skill sets are in high demand, McKee added.

“These are two of the best known operators at scale that are living today,” he said. “They have been quite attractively approached for a number of months now.”

Hsaio has “many offers” and HCP does not yet know where he will end up, McKee added. The company does expect to continue to work with both Hutchens and Hsaio in their new roles moving forward, however.

“It’s highly likely given the personal relationship we’ve built with these folks,” McKee said.

Addressing this ‘failure’

With the future of company leadership up in the air, there are plenty of questions that remain unanswered.

Citi Research Analyst Michael Bilerman, for instance, questioned the REIT’s ability to hold on to high-end talent and asked why it “failed” in retaining Hutchens and Hsaio, specifically.

That didn’t sit well with HCP.

“I don’t feel that we have failed at all,” McKee said. He declined to comment on the matter further with Senior Housing News.

Still, McKee admitted the process of turning HCP around following the departure of former CEO Lauralee Martin and the spin-off of the company’s skilled nursing assets into a new REIT has been more difficult than anticipated.

“The recovery of this company, the turnaround of this company, the respositioning of this company is well-known and well-documented,” McKee said. “We are building a new team. You don’t build a world champion in just six months, or three decisions.”

McKee did stress that HCP has accomplished plenty so far, though.

“We have gone through a hell of a lot,” McKee said.

Written by Mary Kate Nelson