HCP raised $900 million in the third quarter alone from acombination of a $481 million stock offering, $116 million fromproperty sales and $312 million in refinancings. Flaherty pointedout that the Long Beach-based REIT enjoys a "low level of secureddebt" and that the "crown jewels" among its properties—includingits Genentech and the Amgen campuses—are "completely unencumberedby secured debt." In that respect, HCP stands in contrast to themany property owners whose balance sheets are encumbered byburdensome levels of debt.

One reason for HCP's low level of debt is that the company hasbeen using the $2.4 billion it has raised this year to pay downdebt and secure favorable terms on new debt, Flaherty explained inthe conference call. Mark Wallace, the company's CFO and treasurer,detailed how HCP has applied the $2.4 billion it has raised thisyear to pay down its line of credit, retire $300 million of otherdebt that matured in September and reduce the outstanding balanceon its bridge loan. The company now has sufficient funding to payits debt obligations until the third quarter of 2011.

HCP is "glad to be in the healthcare space," especially duringan economic downturn, Flaherty said. He noted that during economicdownturns, sales of prescription drugs and medical devices tend tohold up better than nonessential goods. The country's agingpopulation and the ongoing need for healthcare in general bode wellfor the medical office sector, which represents 21% of HCP'sportfolio, Flaherty added.