GMRE - Earnings call transcript Q1 2020 | Global Medical REIT Inc.

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Operator

Greetings! And welcome to Global Medical REIT’s, First Quarter 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Instructions will be given at that time. [Operator Instructions] Please note, this conference call is being recorded.

to conference like host, to now Infurna. Evelyn would turn over the your I may begin. you you, Thank

Evelyn Infurna

Thank Good Medical REIT, you, the first to operator. quarter morning everyone conference call. welcome and Global

Chief today have Financial call and Chief Leon, Officer. Alfonzo Bob the On Officer Jeff Busch, Kiernan, Executive we Chief Investment Officer;

relating Please forward-looking, historical this businesses. the company include call and to this note statements forward-looking including facts call. its conference which our the use by of not and may considered are Statements statements the are and on pandemic statements on made COVID-XX on effect tenants our

The for statements contained Safe in intends purpose those with the is Act provisions. be statements Harbor Securities Private covered and Litigation Reform of complying company by these Harbor forward-looking the of Safe forward-looking statement provisions this for XXXX to making

March Furthermore, factors materially XXXX, actual in ended of for to The or assumes updated contained a the XX-K as for statements obligation and those a and are year be XX-Q including ended the the company’s limitation that statements risks control, beyond forward-looking and described result and variety forward-looking results XXXX Commission whether affected company’s the without by any Form future company no other quarter new of filings. information, publicly XX, Exchange differ otherwise. will and its in December from may those Securities XX, the events

non-GAAP refer and certain may Additionally, adjusted company operations. financial such on from as this call conference from funds to measures funds operations the

and with Commission. numbers in and earnings to of non-GAAP measures GAAP most a Exchange in the the currently release reconciliation find comparable company’s tabular Securities these can its filings You the financial

company’s www.globalmedicalreit.com. be page of may website Investor Relations information found the Additional at on the

us are doing Please keep given with the any call this circumstances, we mind have technical bear so that difficulties. if remotely in we

the to Busch, I to Officer REIT. like Chief would Global Medical Jeff Executive over now call turn of

Jeff Busch

call. first welcome you, quarter to and XXXX our Evelyn, conference Thank

Kiernan Bob Leon, Officer. are and Joining our Investment me Chief our Alfonzo today Chief Officer, Financial

healthcare health and this and all and On I behalf the of for during company, to our workers time wishes essential to recognize extend for well safety of their our stakeholders. GMRE dedication would like challenging

At time be it Within frequency was headlines factor would March, after a in likely plans. spread the few of of were just the featuring in and call before coronavirus the our quarter business contingency and we virus a early the our day-to-day running our only matter time that recognize needed call to the the a of that implement fourth operations accelerating. continuity disruptive days we

began As were ensure remote work-from-home a measure, load. hands-on to precautionary we test protocols that capable systems work our of

by and We authorities. social distancing confident could business implemented that seamlessly continuity. in ensure directives the shelter-in-place safe Our remote local team to locations were were function

team as to to our and emergency recommended that the to travel resources to limit healthcare order acquisition began with such urgent conserve mid-March travel of virus. services Additionally, By recommendation. of comply CMS them or spread limiting in services to limit and PTE safe we non-essential to keep the various and states medical

business part quickly as non-discretionary perform tenants tenants elective services, a relay business. pent-up for procedures tenants expect of medical many our affected of we our primarily large with is obviously healthcare development This them and infrastructure Since to demand. substantial our critical their on rebound

tenants focus healthcare our industry. In during business the in unprecedented growing shifted from our we April early our time this to assisting

and collected our efforts, result we As yesterday. of rent rents our XX% May a as of of April our of XX%

deferrals. need to who financial were with working certain we weather provide relief short with near whom by distress in the the cases. tenants rents entered end of the Bob provide with and this tenants term will rent same time, These rent are most repayment XXXX rent-deferral details a deferred we agreements believe into At full relief under pandemic. of agreement we on more term

potential on But still ultimate pandemic COVID-XX assess to situation we've effect our the is is portfolio unfolding operations. The the will and company. it on we our and our completed believe COVID-XX to-date difficult impact minimize around the work

million am to XXXX, I $XX our to-date very additional Relative pleased million we activity, with acquisition we the acquisitions of contract. under that have $XX the and completed in

Looking acquisition physical be will approach the many growth. acquisition the ahead, the our given paths, of uncertainty and associated to in we environment with measured nature diligent

effect believe over our grow the our in times process pandemic of tenants on always, uncertain sheet. the business positioned the employees, the that completion balance country the As on minimizing our prioritize positioned we to challenges these company's of we the environment To our and will as and satisfactory our the reiterate, current of due-diligence desire is that to well remains well GMRE execute plans to COVID-XX begins business. We process. reopening on withstand the are focus

given call special agreed committee this this the over company's X the update on advisor. than Board we with board is March an update timing nature the with time and since the the by turning or transaction Bob, we will the transaction an approved provide If with a reached, situation, process. that a The been agreement it advisor. Unfortunately company to call. the internalization The negotiating and on completed. the of potentially terms to the and with met little then has the the pursue stockholders. Prior on there's to cannot be could internalization committee on share recommendation by the recommended a our I’d be will if an Board At like provide brief special more

results our Bob detail. more will discuss now in

Bob Kiernan

financial night XXXX reported on simultaneous supplemental package XX, press our Last posting of our for March website. Jeff. earnings via ended closed, quarter release GMRE the market first and you, our results after Thank the

growth as our to same $XX revenue our strategy, rental by the acquisition Total investment portfolio portfolio the contractual as increased quarter through of for XX.X% year-over-year million, accretive well reflecting store approximately increases.

during of to grew first similar a million. $XX XXXX during to or XXXX. quarter X.X% same to rent the Total portfolio quarter quarter increased somewhat contractual our compared first revenue pace the Our store the expenses as $XXX,XXX of

total Depreciation acquire and expense we amortization for well properties. of period components actively expenses our each as large as to expenses, as interest continue remain

G&A increase $X.X the due expense up for to million was XXXX The compared March XXXX. ago was for year ended in primarily to an was period period. quarter the to of first non-cash LTIP increase in the compensation $X.X million, for expense. in three $XXX,XXX XX.X% the XX, XXXX same months quarterly expense compared $XXX,XXX compensation LTIP

was function in increase G&A our cash increased The primarily of our size. a

note costs connection in to addition expenses, of also In that the G&A with first recognized during quarter $X.X million these approximately we internalization.

quarter. the due was largest or acquisition approximately year X.X% quarter, in our items was average compared to first to driven in in Interest from be to Depreciation acquisitions. by expense the $X.X in million line quarter higher first two quarter, up Depreciation and $X.X the interest year continued expense activity. expense XXXX million our of $X.X ago finance the to the borrowings expense million period prior due

X.XX% quarterly reduction the first costs was XXXX. in borrowing and of first average compared quarter prior costs decrease to by in XXXX was of the in borrowing X.XX% quarter in The XXXX. end the LIBOR Our the driven of since X.XX% sequential our largely for the quarter

last of to income over for stockholders compared first XXXX, the XX accretive attributable to of the in months. the million $XXX,XXX income the our of was common first acquisition due quarter of net activity Net benefit $X.X XXXX quarter to

share $X.XX XXXX compared first Our the quarter. FFO up $X.XXX for of the unit, was quarter per prior to as year in

the AFFO quarter. was the to of Our $X.XXX year XXXX unit, for first up share in quarter prior per $X.XX compared as

on the to sheet. balance Moving

from investment year-end growth real-estate of our XXXX and million, XX, March of XXXX. As increase an approximately or $XXX million X% was $XX

to our the reflecting side Turning of portfolio. growth liquidity, end our the of XXXX, $XXX the of the finished quarter $XXX facility credit of debt end $XX.X of our availability at balance sheet, was as our of including the from cash We the million million and with up quarter, total million. on liability total

like talk now far the about effects to of pandemic in would performance. thus the financial COVID-XX our I

As month. we our well collected XX% at and April are collections XX% rent rent month so of of we for Jeff mentioned this far progressing earlier, in May the

April May reductions procedures tenants, a volumes COVID-XX the of pandemic. patient to pleased rent to-date, few are that difficult elective many with our number have and the significant expect we Although for collections due next as and months be in will seen we our

that months. enter the effects backdrop, expect collect These of to need to an differ relief few tenants the million over have the we operation. next on into tenants certain into COVID-XX for to with to determined or rent due expect aggregate have their agreements term With that pandemic enter we of would short rent a $X of are rent deferral ordinarily that we

of periods the this primarily pertain periods are Our rental periods July over through of December May, repayment primarily to rent and June the and deferrals year. July the

to to addition agreements In term whereby we of for certain in terms improvement effect or the have certain financial or is with rent rent extended short or towards funds apply enter exchange our net entered other deposits to rent, deferral to to into have committed lease into we also tenants, agreed reduction agreements, two, either tenant agreed expect results. which immaterial

over achieved uncertainty the collection remainder to pandemic, rate you of our results noted, lack uncertainties. and of the of that impact, outlook With with unable year. the longer weeks its these tenants ahead of give Looking for of the well us past specific rest the of on second the positions to the six including that rest the term clarity the engagement and the quarter reopening we're believe we XXXX, we because of the to that to-date navigate and

investment our investment the turn the call will I to now and Alfonzo, will activity. landscape who review over

Alfonzo Leon

the to-date a acquisition to with $XX approximately Thank quarter, rate in of you, at million comprised subsequent quarter to X.X% XXXX four to million, of $XX a cap followed million. acquisition had end, $XX.X for average Bob. weighted by of properties approximately total deployment capital We’ve strong additional our bringing the an start

recent our the reflecting addition Overall, changed have metrics of our acquisitions. portfolio

states. well are number now XX diversified in XXX properties and Our buildings

rental million approximately X.X X.X per weighted foot a escalations foot lease X.X% XX.X% average $XX.XX, year. per is of weighted square Our average average term square leased a rent of and with of portfolio rate years at

an West in But houses million for of one Milwaukee. square a XX,XXX a and The $X.X and Mary’s located of array location busiest Hospital, specialists, St. endoscopy subsidiary suburb is a leased in a use owned area to wholly foot including pain a surgical suite MOB procedures. Allis, Columbia's Ascension. first, is property the of for primarily of is The Columbia

building two for portfolio by Grand surgery Bue a million On Michigan just centers hour Sky The March people. XX drive Chicago the a XX,XXX is a we portfolio X.X in from in with practice Grand MOB X Vision, The square anchored four ophthalmology, optometry includes over the is Rapids, approximately million. MSA $XX.X foot acquired area. and population of Rapids larger

square MOB the Dumfries, Community property Virginia, Washington support $XX.X outpatient submarket XXX,XXX DC. a to After operates of Healthcare Spectrum Dumfries the Hospital. acquired for million term government property in of a quarter growing Belvoir Health metro of the ended is we The nearby Fort Resources, a clinical services provide the long Center rapidly via in leased XXX% contract at federal which

currently under for We properties are acquire three million. approximately $XX contract to additional

practice close the operator the of not more may has as our timely the we or and past, terminate review, problems properties diligence our of As we been a in may agreement or transaction. the the transaction due one purchase properties not these close on during as we the identify basis or

During was between million and our XXXX for that our mentioned I million. acquisition $XXX call, $XXX goal last

pandemic our towards has XXXX acquisition Although acquisition goals, progress we added COVID-XX new the the process. challenges have substantial to made

will can environment, acquisition strategy able meantime, until current at informed, is remain resume the the the acquisition environment to achieve engaged we our goals the time. we uncertain we appropriate and XXXX In be normalizes. our so that whether Given it acquisition

be that, With your will we happy questions. take to

Operator

Thank you. Instructions]. [Operator

comes question proceed your from with first Baird. Kubicek with Our question. Please Alex

Alex Kubicek

a just just those We are Whether are going? little have asking to pay kind you on profile tenants they that for how the May morning wondering if everyone. of Good provide you types. of relief, come rents could yet to information were discussions of more kind

Jeff Busch

answer why you Bob, don’t that.

Bob Kiernan

as collections so anything Sure. think collections. this really unique month, there’s our I’m far May speaking I or to the unusual about don’t

now know morning this fact the we’re – rent this you being collected XX% as In it of number of May morning.

With the now really anything far, there about I we think there’s we're flow. really tenants tenants collected know collection is the is yet. process the just reflective where noteworthy XX about right not or to really so in flow and a So is there don’t noteworthy – what seeing you process I think anything the of that unusual and

Alex Kubicek

kind after did look And curious the of first like April? then, XX% us a number, number week could of you comparable Just that today. trended. where give What that that's

Bob Kiernan

around think May don’t anything same. collections. I about, X it the really the would of about noteworthy of think really being there’s right I morning don't again, be I – XX%

I the on can add based noted. maybe you that deferral know we've

end the months, over the next in collections our total know couple up of XXs You percentages. terms will in higher probably

So in including for months, over that of the about percentage, so up high the the we of probably May, you deferrals if know talked that of you total coming – XXs couple to kind think kind that XX% we’re going and of in terms type and in about likely in range. next the quarter end

Alex Kubicek

you I’m kind contracts. more of thanks if acquisitions. affected looking, we those and color or kind in on these Was I know a anything up helpful, have if really the properties color. could way negotiations. if to That's for was of signed contracts post along came turning wondering And COVID? little then the you pre just under that three get wondering

Jeff Busch

don’t why that. you Alfonzo, answer

Alfonzo Leon

Sure.

had start we in XXXX. good really a our acquisitions to So

So March. into month these contracts prior to were the entered of

And what question, it? of part the second was the

Alex Kubicek

in kind near how just in negotiation Just change of up that wondering landscape term. the the might of kind COVID – how negotiations those if and came

Alfonzo Leon

already So up, negotiation come and were, we didn’t COVID were in They terms time no, because the of in deals, and not our had these expired impact. diligence didn’t by these in they deals. period up March, come discussions and in we

it's as be definitely Going with that of has know going COVID always we're mean focused part on forward, it's be to case-by-case you discussions been going as really and and forward well. I be something to really – it's going it is to sellers our going

Alex Kubicek

helpful, one for you That’s Alfonzo. and follow-up then quick

your thinking with the to guys your term little site, you just but have looks about how Obviously asset team thoughts what are You opportunities it your kind wondering have being meeting seeing like of call always and and kind what know next how – pulled underwriting months, is near the talked back on guys underwriting of approaching of in yourself. the with now bit, doctors, on go-forward. a kind six three just about a

Alfonzo Leon

yeah, our the an is and Well going recruitment to a part our of with mean diligence. physician and correct. going extensive trends revenue like. tenants have and What part we've what's holistic been, that. and is understanding be is is to main business understanding I discussions always their impact been are is, property visiting about of what all is your it mean of the our what that the analysis big very added I COVID I to mean having recruitment, that's a is what strategy business? that source how their big really model to getting discussion responding you of how

you The going diligence – the home. our change, it’s mean that from lengthier. going of I process is perspective it’s but so not to to be fact from that all April, working month are

start going to hard really which to it still is it go visit continue visit are going to something makes properties in make there on to an it undoubtedly mandates, look know states go stay-at-home but sure. that's And go for making impact many to see hard properties. property, have it the reopening, these You and that's easier for properties, and restrictions process our as states to

Alex Kubicek

That’s really Thanks taking helpful questions. color. my for

Operator

with Your next Bryan with your Maher B. question from proceed Riley. question. comes Please

Bryan Maher

think you be you’re a will for but what on don’t XX, I one better Hi, that deferrals this of if good know when maybe about comfort is or those of full Bob, paid? Jeff you granting, your that deferrals to is morning. in ultimately level know the scale

Jeff Busch

our substantial see procedures I’ll in is the that up and to back tenants tend We the perform. industry a answer this. seeing

stop came non-discretionary. said not anything and procedures mostly our urgent, you are know that's to when So out they

example, So now facilities, going back in they opened now type surgeries cataracts have we where with expanding months that and like and booked for Oklahoma eye-centers stopped are were were two out re-opening. they people the for other emergencies, of our in have advance, lot three Texas we and in during of and Florida a they and to

a the people right take a of areas demand came. are patients, because in So medical got coming our that's away talking, we lot pent-up New just and care the even to see lot first is of that's one to going of of rebound York

So we that's the one of things considered.

coverage meant very we our was our which went which element this, very our facilities underwriting into a ratios, making of When high, money. key were were

month So we the to they them of minimal again, to expect be got just March and making money the a for caught of month level April.

May starting to Now accelerating. start in they are

it brought committee we and comfortable became to their a and we see we financials. through So had

to pay us, we're Board potential we of so to One one back, the each their of them to expecting their pay evaluated brought we financials, and back. them

You lot was and there because had all surgeries sit can't defined that you there's shut to industries lot it going out project, naturally it, time in sort re-open down that others was mass, first non-discretionary it's time be the urgent, it and ones difficult but needed but I obviously more. a and a a really the been they of we're to your know to and of and wouldn't while of to there, procedures urgent told hands, call there's back, of – over pushed happen, on

six got closed more months now for appointments weeks, So out, book if three that weeks was if those for you you weeks six your of and you didn't. you’re got six

to places cash have to pay us our back. expect we So the flow

Bryan Maher

expect million $X $X in correct? deferrals in comments million I of you I become next or $X toughen Okay. deferrals, $X it months expect want the And this make but to – get be million then there more to immaterial. just sure you to or deferrals, related about I wouldn't is following-up you but over that expect said you that’s you the also order to know $X $X of magnitude, but million, million think currently couple on that million the that out would in right,

Jeff Busch

Bob, would you answer it.

Bob Kiernan

as mean engaged Yes, know you we're been last we know six all very know you think would perspective so thorough mean from I but could I course degree, going a with I large today. increase? how this it mean based of magnitude has sure a work we of weeks tenants. to magnitude – I this to we You we've certain where really Brian. know based know, is, that what actively are progress, the and the you our things over to uncertainty process far, be there’s don't are the on on done what a to least at know today.

Bryan Maher

here just comes then it on me, And maybe all the comments we not Great! Alfonzo. your the or the you potential last for cap did reaching note deal you're shown, When the for you're seeing you the and rates type due for acquisitions today. the to made goals thus are those of of year. shown we and being being change sit and in for slowing diligence the type as assets any that potentially of far But of that

Alfonzo Leon

next I there's going yet, how the was to a Yes, the how stay of folks not went try what too the with everybody a – right I rest lot month April of and predict discussions unprecedented year. really. to of over play think April the to month and it's it's I now ahead curve know things so the continuously really soon through of and are with it's you hard would in clear know everyone. of mean I just lot to say currents definitely and in the know April and in mean slowed to will throughout touch of cross out stay this it's evolve.

Bryan Maher

thanks. for me. That’s all Alright,

Jeff Busch

you. Thank

Operator

comes Please Gaurav Our National question. Securities. next your from with proceed with [Operator the Instructions] question Mehta

Gaurav Mehta

Good morning.

is on CNBS the for debt First you comment funding about the question that maybe have the talk what guys in as far know you that have markets loans and are market. as seeing Maybe you on the I assets under contract. funding

Jeff Busch

answer. you why Bob, don't

Bob Kiernan

Sure.

the as our $XX in under of XX, our million about cash on capacity of as comfortable release the debt approaches but standalone debt. well conditions, different we increasing as to current and you noted we So increasing you the where new and capacity. are looking We’d know April as consider credit know facility, we credit based with market facility today, have we're are at

April; a we as debt of acquisition $XX that part assumed the in million closed we CMBS. No

still small So ongoing an we direction, this it’s process. in took a step but

So increase continue evaluate we’re but to look today, to and we as comfortable just pursue we’ll are with again where opportunities flexibility. a ahead,

Gaurav Mehta

common question XXX% the the payout dividends. dividends I economic some current on the XQ your almost more uncertainty of is given common and as you're ’XX. Okay, how second Maybe is on your of that color have provide climate in viewing

Jeff Busch

that. Yes, I’ll answer

good a have liquidity very position. We

the as position. have but a any we and good the of We up Board and this to issues decide rate are goes in don't on now, – don't the to very very we collection dividend, right I good always has now see but Board

Gaurav Mehta

Okay, great, all I that's had.

Jeff Busch

you. Thank

Operator

the We've question-and-answer over this end comments. At of to back Jeff call reached the I'd like time the session. closing turn for to Busch

Jeff Busch

that conference participating call. you. like in everybody I Thank this thank for

Operator

conference. This concludes today's

may You your disconnect thank your you this and participation. lines at for we time

Global Medical REIT (GMRE) 7 May 202020 Q1 Earnings call transcript