HCP Inc. HCP – a healthcare real estate investment trust (“REIT”) – reported first-quarter 2016 adjusted funds from operations (“FFO”) per share of 69 cents, in-line with the Zacks Consensus Estimate and down 10 cents year over year.Total revenue came in at around $640.8 million, missing the Zacks Consensus Estimate of $642.3 million. However, reported revenues compared favorably with the year-ago tally of $610.8 million.Behind the HeadlinesDuring the reported quarter, HCP closed and announced investments worth $554 million. This includes acquisition of 12 private pay senior housing communities and the beginning of the Phase II development of The Cove.The company executed the leasing of 689,000 square feet of its life science and medical office portfolios during the quarter. This comprised 150,000 square feet of new leases and 539,000 square feet of renewals. Moreover, HCP pre-leased around 50% in the first phase of The Cove life science development, which is estimated to be completed in the third quarter of 2016.Concurrent with the earnings announcement, HCP’s board of directors gave green signal to the spin off of the HCRMC portfolio into an independent and publicly-traded REIT. Also, the company has taken some steps to expand its leadership team.During the first quarter, HCP raised $1.3 billion from its capital recycling and financing activities. The company utilized a major part of the proceeds to repay its debt and to fund acquisitions.HCP exited the first quarter of 2016 with cash and cash equivalents of $946.7 million, up from $346.5 million at 2015-end.2016 OutlookHCP expects full-year adjusted FFO guidance for 2016 in a range of $2.77–$2.83. The company anticipates 2016 same property performance cash net operating growth, excluding HCRMC, in a range of 2.3–3.3% and same property performance cash NOI growth rate within 1.5–2.5%.ConclusionWe believe that HCP stands to benefit from its diversified portfolio, increases in healthcare spending and an aging population in the long run. Strategic investments, tie-ups and opportunistic acquisitions are expected to drive decent cash flow. Yet, cut-throat competition and any rise in interest rate continue to pose challenges before the company.HCP currently has a Zacks Rank #5 (Strong Sell). Better ranked stocks in the REIT space include Brookfield Canada Office Properties BOXC, Gaming and Leisure Properties, Inc GLPI and Whitestone REIT WSR. While both Brookfield Canada Office Properties and Gaming and Leisure Properties sport a Zacks Rank #1 (Strong Buy), Whitestone REIT carries a Zacks Rank #2 (Buy).Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BROOKFLD CDA OP (BOXC): Free Stock Analysis Report HCP INC (HCP): Free Stock Analysis Report WHITESTONE REIT (WSR): Free Stock Analysis Report GAMING AND LEIS (GLPI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research