GMRE - Earnings call transcript Q1 2021 | Global Medical REIT Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, this is the conference operator. Welcome to the Global Medical REIT First Quarter 2021 Earnings Call.

As a reminder, all participants are in a listen-only mode and this conference call is being recorded. After the presentation, there'll be an opportunity to ask questions [Operator Instructions] I'd now turn the conference over to Evelyn Infurna, Investor Relations. Please go ahead.

Evelyn Infurna

morning, XXXX welcome Earnings Good REIT's Global Operator, Quarter First Conference you everyone to and Medical Thank Call.

in publicly company's statements, as without filings. contained events future and a company be Kiernan, Investment on On pandemic and provisions. of Jeff commission from our XXXX safe forward-looking, considered the forward-looking business. including described include statements those the call. ended making differ and obligation its statements for related Chief and this company use are other that its call may Statements the Busch, XXXX forward-looking those including, of XX-K materially have Officer. are Bob these Officer; and conference Chief Securities Exchange COVID-XX effect harbor year provisions for The no are intends be facts new Executive may historical will company by statements contained for information, not note the statement assumes by call to Officer; is forward-looking complying Litigation Securities Alfonzo December of of forward-looking covered today, tenants Reform Private company's the those Chief update safe beyond purpose with to of control, The risks Financial we statements and made limitation, on statements statements the the affected Furthermore, in any forward-looking a this XX, to factors the the Please results and result whether Act variety the actual or harbor and in Leon, by which on otherwise.

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

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

Medical I'd www.globalmedicalreit.com. of Executive Relations may Busch, at company's call over to REIT. the on Jeff the the website like be found of to Investor Jeff? information Chief Global page turn Additional Officer

Jeffrey Busch

you, XXXX Good you and joining Thank Conference Call. First for Quarter morning thank Evelyn. our Earnings

on With to are we we the to to we to XXXX. share the be on execute year hope healthy would vaccinations high-quality both Leon, share our portfolio expanding Bob systems We well end execute was our continues quarter, are see a coming and and strongest return in today Chief to that Officer. per on And to respect per growth Kiernan, me units vision to the quarter Investment our is investors, the with continued the and a everyone facilities, compared Chief founded XX% our administered. the doing of by as wide well. strategy the by Financial local revenue $X.XX our focus unit to $X.XX positioned capacity FFO stay Joining in start earnings at financial our $X.XX to strong Officer and a with and and to grew the medical with with and quarterly markets, REIT XXXX continue properties on GMRE create XXXX share and to first align Alfonzo leveraging healthcare a tunnel, resilient generate of of for their in plan. expectation that operators stable our a off to FFO per call these

put offering underwritten of including the to in of capital by cap this a increasing completing XXXX. rate the ATM total from we were raised from fact first that seeing million in date in and market, $XXX target million work competition $XXX average X.X% our we for at an to acquisitions issuances, from acquisitions equity million weighted to able a $XXX we're Despite March. quarter, equity During issuances million $XX

currently While After volume our pleased acquisition our our with patents result period, acquisition expectations. any amended and isn't indicative we We in our quartering, capacity of that we increase facility quarter restated million. annual credit annual year more to borrowing by far are total. typical XXXX, in $XXX expect so activity this will in

So or we financial the evaluate do credit so provided a convert an our and facility borrowing new unsecured as facility portfolio. extended recent grow us and costs we to with debt raises, to acquisitions matured additional amended equity flexibility

to executing off rest of our are start and on plan this continuing to We forward while growth XXXX. year for we a the good look success

I Now to over will turn Alfonzo.

Alfonzo Leon

Thanks, Jeff.

their fundamentals facilities of given and As relative Jeff is healthcare. outperformance medical just for pandemic market increasingly a investors becoming on during competitive, optimism and long-term touched the the

XXXX weighted of be properties weighted good market. with successful million creative closed rate concentrated In at We rate we or cap average quarter, we finding of finished of our interest in sellers Despite participants cap urban from acquisitions and in increased a an other a barrier $XXX we capital acquiring and medical on of and liquidity to that flow our increased and are resulting average were historically in competition, classes asset range. high we acquisitions, increase coming four a momentum million markets X.X%. office and cap MOB target markets. to in seeing is supply $XX continue an at X.X%. Today this rate The completed more of a within target increased encouraging into in totaling

have million properties of currently $XX with aggregate under price we an purchase contract. three Additionally,

net assurances two these feet one women's portfolio, that will care sure our located by occupied acquisitions, large property half Among major market square within we the Myers escalations. groups is Buildings we are on year, ranks lease X.X After occupied are us have their $X.X a there expandable an Healthcare. a X% DFW make mile meet acre the occupancy. XX,XXX states the of In and with The the billion and the a April have we among that a Fort two we In and by are since triple we'd evaluating XXXX is acquisition, diversified been tenant per and carefully by policy XX in to facility sector. our a buildings all portfolio close has As $XX.X all the our thousands, active construction acquired million one X those now stabilize we recently million for we've in XX,XXX and overall is they which in The $XX.X facility acquisitions. on XX bed offer acquisition time health completed of in two site. these factoring of ultimately these rent primary buildings acquisitions, facility guaranteed criteria early closings contractual but in highlight. like behavioral to our of opened a March, hospital. hospitals, XX investment properties reached, operators that on Kindred closed MOB practices, been of care they today, and can foot square the averaged occupied behavioral no investors Kindred market

sustain We by have of acquiring been asset focused our to individual buying most on investors acquisition an pace large MOB primarily able portfolios.

but and the built have and of to our $XXX financial market we acquisition discuss million call million and our increasingly I'd to results. of As source the we not grow, guidance Bob? network continue at to the we've we niche, leveraging the our $XXX to in are deals, competitive changing is date, said, over $XXX while that track acquisitions now record completed to secure time. like are this we Bob turn to our

Robert Kiernan

results produced Well, stable Once strong our of Alfonzo. again, GMRE a from you. portfolio tenants. and The from strength the Thank benefits this the model business and profitability quarter.

of occupancy square remainder We have per amount portfolio rent weighted this tremendous we're respect XXXX with square metrics, of what average escalation. key $XX And with total With average square we contractual accomplished the ended the and year, to of weighted base feet million a to of a XX% see foot. already feet rent the performance quarter brings. X.X% excited leaseable $X.X XX

our the an in Our year tenants activity account a impact QX including basis. to coverage and escalations. we've benefit ratio remain achieved XX% of in on million two at X.X quarter of average years. of term rent, to tenants lease cash strong. increase we had collections We the first weighted X.X our year a rent and over Overall $XX.X times of our revenues end acquisition collected rental was XX% for over our that Rent average quarter the rent

G&A our to expenses Our compares increased a total for XXXX first $X.X months. $XX expense $XX.X expenses the the the XXXX from was stock first in pre-interview XX quarter. quarter non-cash XXXX. to the for the quarter to and increase million million combined largely and over million, first journalization billion with completed But is quarter quarter compensation G&A these in G&A costs in the in million then to million to growth acquisitions expenses expenses, former of including first XXXX the of $X the million XXXX. $X.X our in last drove XXX,XXX The $X.X year of related of compared $X.X prior advisor overall in compensation of management fees and

first in of in internalization. discussed expense the compared of one-time first million retention $X.X remain million quarter our as grants first quarter is our $X.XX even or portfolio. share as That's quarter per common of FFO size the quarter first AFFO of share, $X.XX from quarter. attributable for was was for $X.X the for unit income in $X.XX the XXXX. stock the to result made this of was year compared time increase per share and quarter will anticipate basis the million share per prior As just $X.XX quarterly million we share. $X.XX Net a up XX% quarter, to $X.X the or We XXXX, last the XXXX. XXXX to income the in increase unit between on at of net in unit first in per of per gene $X to

real to average sheet, gross On in the Moving in on the $XXX raising in of was on investment equity down Proceeds million of to of balance of revolver. million activity XX% $XXX price when $X.X equity these $XX.XX were our offering from share a in pay approximately proceeds combined approximately with balance gross per issuances our for at XX, first our and issuances million quarter quarter billion, March to weighted proceeds an to XXXX. increase acquisition ATM XXth, $XXX share. support our approximately of during million the used estate an rate gross the as XXXX, completed March we $X.X

On net and sheet $XXX our XX, is the balance March ratio our XX%. at we leverage million had liability side of debt of

was average weighted quarter the rate interest Our during X.XX%.

facilities our increased that million the interest as into accordion. $XXX Jeff swaps $XXX loan revolver, our recent on that they on This fronts of our XXXX, many the effective be us a restated As rate Xrd, May as the transaction to on term noted amended and interest closing facility. a significant These credit we is in forward mentioned, very we million The term the swaps grid, subsequent rate in we cost library press to release rate a mature pricing begin $XXX August to years. amended May by a run and to capacity now hedge an log. new debt our starting average of our across to and of borrowing unsecured interest comprised current maturity swaps XXXX. to million the converted entered will $XXX after reduced facility our of Those components weighted facility million also borrowing and until expanded X.X will

syndicate capacity Overall, today, far Morgan even sharing the amended acquisition the execute based lenders for the facility. support vote ex As to JP remarks our our and well questions. all and under GMRE. of in we to concludes on are strategy operative. forward taken with open our with approximately Please like our their to believe the thank call borrowing we confidence positioned of are the XXXX, we've steps coming this for million, in This by that's the quarters. I'd on so closing progress of that revolvers, $XXX looking of prepared

Operator

and We will now the [Operator begin session. answer question Instructions].

comes question Amanda go from Sweitzer The first ahead. from Baird. Please

Amanda Sweitzer

that it, for guess I'm about your the do Acquisition that whether get because that by desire competition do to that seeing guidance driven you market? that acquisition guidance, maintain more find Good Is being On a Thanks. later lever trying more your or sense morning. year, maintain if or you're if opportunities that to increase this to leverage? in I of you to you talked could [inaudible] expect

Jeffrey Busch

within That's buy actually we whatever competition We buy the question. more a market. could could there's the that quality great and we buy on

leverage we basically, happen because we're working where we still, is do know, and may our if find will but situation buy could amount, there we really a buy you right leverage the fits realistic So, more point, they which it that within later. to but of I'll, our have it and on down asked It's market bring we you product this guidance we're the do know, buy will the absolutely we to now want at of change ability to products.

Amanda Sweitzer

And Okay. the exchanges, That things increases could rolling like use, line? think are that about makes tools units any then or there think to you tax OP potentially more you back sense. down could you become other sellers or as that attractive XXXX

Jeffrey Busch

Alfonzo?

Alfonzo Leon

Sure. I we always become it's, to predict, I always introduce belief selling concept we we OP Yeah, hard can. with that but of of think it. the I mean, it's I'm so. many mean as but it'll the parties units more attractive, as offer

Amanda Sweitzer

we across vacancy for think portfolio, of lease have? terms just year, especially amount last seeing activity see of And Cool. occupancy today? me. given this do more you the in but maturities one don't leasing you You Can could you then uptick much you're obviously talk an what the have low about

Jeffrey Busch

kind be Yeah. vacant. I'll you know, one of,

have at We one this point. property vacant

over it's is work to we're, detailed this and don't it we're actively update in but you know, that we're So you progress our something on. occupancies, we actively, a actively and XX% we're to tick at a it's but more a that working facility, working have point, release know,

Amanda Sweitzer

thank guys. Great, you. appreciate I the time

Operator

next The from BMO Sanabria capital ahead. markets. Juan Please comes from go question

Juan Sanabria

acquisitions? Bob, firepower to Maybe your and balance morning. new leveraging, question a terms to fund have So debt for much and end EBITDA target, either the equity good how race you what Hi, your sheet is a do post the leverage

Robert Kiernan

Sure.

know you quarter, our you over we down, was last end and, goal know, at and at forties and that we reduce w reported of to talked XX%. you you we our know, know, in the the the to leverage do lower in know, our quarter, time. as the So, leverage And,

comfortable expectation million now into know, our the, forties of today, that our comfortable and, that capacity is mid the be And right would, level. we be so increasing we $XXX our you Lethbridge, that know, you you we have with borrowing know, would to and into at

scale, from And and comfortable forties. not, and in target as grow could mid where you our get So not where see, know, we're I our even in these more we're, in larger. you know, that larger as we you But really and we, over lower comfortable in, we'll it stay as at know, know, still levels and bring possibly is that, you forties get target, that changing we, now you we're time, down that, range. we're lower know, in, we we're in right get

Juan Sanabria

it to should and just strategic Right. for past, that and the reward more behavioral given And like you're cap second shift more away than in medical maybe health question health? risk and bit from dialysis is the compression food doing traditional then groups, a of [indiscernible] the maybe offices behavioral just we rate seems expect dialysis those and a more other

Robert Kiernan

pretty smaller which inventory the that market bulk really that type makes the for And, you of doesn't the portfolio. It's dialysis typically a been with product it space type product so we've And is well available tenant the the exchange fits becomes low know, in single long-term we've not not looking a typically been trading is it's typically market. that fit us, like our dialysis, in cap it at very but it's XXXX to attractive lease, for rate. a

off lease. look have acquired three two had head, you at you the or the we've I We tenants. over they've if starting ones one a we've one and or So tenant, single that like centers acquired look not that a top at acquired you two we But three the you feel the non-typically if ground know, my ago. dialysis got that acquired years years, dialysis know, we've of

that are exchange because So is was what what looking When I'm and XXXX complexity A more know, of ago, my what business market. in with I've not I looking the yields for extra sense we a models for like years I market. behavioral addiction not an lot on dialysis a behavioral product lot we've you the evolution of at that at the market point looking over has I that similar I bit we niche been needed years, lot seen and And pick hasn't the to behavioral centers. there of of compare That looking, suited the centers years been I we've that am more really us. is that a ideally for niche seeing is my sense, mean, to in been is and make much side, more three within extra the a today, me. story. very sense of up operators

So we what to makes and in facilities you know, bought a the ton they're with of makes they of way Texas know facility underwriting. it's deals They They operator. balance it doing. what spoke know Kindred about at It point, fact are, our that sheet, look a We -- is the with plans. It in the, large ideally a [ph] starting with resources particular business you portfolio. case have suited it's kindred fits a our we our sense have Kindred fits if sense these for ton the do. want

be not shift. the that like. and it's past, been it's just hasn't that there not really opportunities So just It's we'd in a liked want been to

Juan Sanabria

MOB's, one foot on Just look food about main rates you how that? a and think kind where you you dialysis up do basis? follow and if quick behavioral, dialysis, traditional that, square per our groups, to at value the do cap Or across of

Robert Kiernan

Okay.

the it's, deals. our there foot. with talk that's competition. of they're makes group So one, know, you We within it's at it's the it's square the where the mean, mean, bringing but starting the look questions the their the rent, I It's building. the way. multiple holistic. the We it with dialysis all there, it's term, It's condition was building, why I patients, per We specific look at sense. same price

We So we many portfolio. also at obviously our look needs things. at fit yield look to it the

that pounds. at not price sense that within and dialysis know, to we're opportunity that trading you it a, going that that there's we'll, we, make they're and the makes service Central. we if five know, But or yes, chase you that us, yield buy a it's the range are, location is sense. makes we'll we we, it's prospects, know, are our come conclusion long-term there's Dallas sense dialysis You then a to know, we'll, to And, that offering centers there's has you

any metric is were is So What look more have? parts other it's not point we all one question. of my it. of you your questions do at There

Juan Sanabria

Sorry, MOBs the just for for? or bandwidth ranges the relative in or dialysis, different same they health, us for yields all behavioral similar of are within we're lumped and kind looking

Robert Kiernan

equity behavioral been in fives, cap of sectors. behavioral. the a interest more in I've the behavioral, you'll lot in Right. that one XX dialysis that in on of the the a segment compression vary a interest for last there's, higher that again, are five six mean, And more in have We're cap market there has a mean, of looking the trades you've another a other in a I and this trades has depending seven that there's that a another than for the market more but center, a six rates the that sevens anecdotally in rates in in in the cap range months, profile, heard trades quite bit. lot one rates, the got in I similar sector private story. MOBs historically market or segment been dialysis has, that a on side

now the you are I trading before. behavioral there's, a that trading which in behaviorals So saw and, know, in sixth, seventh rare trading are was that NDAs

there's traded has definitely definitely So been shift. there's, a yields, in type at there's, a but months, is higher an been but last behavioral asset six shift, that historically the there's

Operator

Riley Please Maher from comes go ahead. Securities. B. question next The Bryan from

Bryan Maher

from real new Bob So and out you of right, predominant right general, you you any by that to before? a product estate view and, the good of there's so mean, kind All there kind you're as the were Kiernan. for reset in Alfonzo beds, I what can of Jeff chasing know, capital surprising that, any XX looking buyers are morning, surprised type but rates used know, I but this on one now. to us assets interesting, are type. at players be don't think not rate, identify chasing the you're specific cap us beds, Good your cap been can't are in down really market. for any you of pips much entering Has to XX not who clearly there hundred

Jeffrey Busch

Sure.

money $XX about come They they is thing, wants $XXX big increments. interested when, less to one to well, was million million specially money, million increments. consider million, that you million portfolios increments, strongly when in So to $XXX time. and has nine is, come the at to $XX into the last The that's to in ideally a sector, grow move $XX to think months, money million in one $XXX thing want big that $XX in move growing six in million, would $X much, their in million, prefer it's there

of portfolios to or has the the most in pressure acutely the larger lot in last a six been assets. nine been put market months that's into So

really know, compression And my, parties. lot there's a from my of in lot trading, you strong. perspective, lot lot asset been portfolios in a a on show any are interest that for up million more things parties So attention. of portfolios over new gets space is that a $XX compression particular to And

to points hear is, market basis year it when $XXX north know, have a coming is would million, So that a of basis I'm trade, been is I points, to to XX where ago. probably that portfolio XX expecting you that of

where bulk in a money new money I coming it's mean, terms know, the characterizing of the that's, a of coming that's see I So in. from mix. you the pressure

very continued lot has You continue have funds private active. being a a money handful of raising and that equity of established

the going new they're and not to we're we're, determined and a but and money inpatient active and they're space is or a MOBs facilities You there in be a$X else specific everybody much whether know, very coming once facilities, competing $XX as players to interest, our and million of it's that XX,XXX also larger to and, XX,XXX they're successful in at range niche Still, to you million within foot still have wants funds you new be grade niche doesn't the which investment health lot markets. system what in chase, necessarily anchored square know, facilities. a attract the chase, larger looking to

So, you of know, we're the, location, on the actually depending kind across, we've the running varies lot. competition work same we're deal. the that it's surprising it's getting very we come a in the is the into on how depending more building, chase for profile, people every on a scattered not It's it, the and depending different deals people the

hopefully know, You question. paint your the helps that for picture

Bryan Maher

you $XX million, headquarter think or picture And know, accounting point know, great. term? asset we million, $XXX new million, or longer really just changes whatever, and [ph] four know, how talked expect in Bob four, $XXX of of one layer would require, you you dollars don't kind question break acquisitions know, that's the FTE about what's quarter, or about Yeah, at incremental bigger this kind maybe any per the the of kind assets as for you management year, four you G&A you to a range, should that you and but of on

Robert Kiernan

Sure.

head from in from senior total know, head and people, leadership perspective, we've are know, have, count you down place. is well a staffing a we we know, XX, are, we know, today you So, you as you very you we is, where know,

senior to you much know, management, it And the the, are so are, that we not just make that that as adding things as is of layers asset company either the within and level, this additions as nature. accounting at at management grows help point within

off, so costs perspective, at, to internalization start to a and we've talked going we've, those from if cost of are how know, think the roll about are total cost, I going systemic as grants to you G&A and a total those you And decrease. look

total additional you into see time of any to You core you a asset impact decreased half is on up know, looking replacement know, into head billion that shouldn't $X significant our you'll come, we and as a over type. our, scale with going billion that, know, and have count, on and G&A,

looks, this, you ish, think you from with it we I'm pretty are of bringing kind our our, with and, and our run a of costs staff be, gross the our, you rate in know, more down percentage our, G&A of it So know, call the, a total peers. where it, of million $XX larger range as know, with of total you we about if our, comfortable as scale, perspective of G&A, to

fill management support So the today that of be assets the, to have. it's senior And we're at I we know, in for really maintain certainly incremental, level. going our to think help be but then staffed to the again yeah, and pretty well at it'll more kind additions, you

Bryan Maher

Okay. Thanks. Great.

Operator

back like again, question, you are over turn I then me. if Busch for there for star, please all a no closing queue. That's to further press have questions in would Once any conference remarks. the Jeff to one, the

Jeffrey Busch

again, I appreciate and and had time quarter great Have questions. a good We everybody. you day. a your Thank

Operator

conference today's This concludes call.

pleasant disconnect a lines. participating may your You day. and for Thank have you

Global Medical REIT (GMRE) 6 May 212021 Q1 Earnings call transcript