GMRE - Earnings call 4 2023 | Global Medical REIT Inc.

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Operator

Greetings, and welcome to Global Medical REIT's Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Steve Swett, Investor Relations. Thank you.

You may begin.

Stephen Swett

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

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

Private ended statements note considered this call. on intends forward-looking. may Securities statements forward-looking The for be statements the and by variety covered Statements without the those statements company's and will assumes may that result from factors SEC information, XXXX, historical limitation, not forward-looking the harbor year call and conference differ company's that materially this as a actual be events XXXX company of forward-looking are for those a and forward-looking of the to by the XX, those purpose to provisions. Furthermore, forward-looking whether control, other risks results any with on statement Reform otherwise. XX-K beyond facts or obligation by publicly the no contained Litigation described future the Please these is include company statements are its December safe statements, made for provisions in company and new complying safe these including, The filings. update are this of harbor Act contained affected in making in of

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

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

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

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

Jeffrey Busch

year Good Steve. earnings call. full XXXX fourth Thank for and thank our morning, you quarter joining you, and

and X.X medical average of of continues rent coverage XX.X%, term a of the fourth ratio results. real end weighted with estate to X.Xx. lease occupancy the the high-quality portfolio portfolio portfolio years, average steady At produce quarter, was Our

extinguishment compared of attributable shareholders share attributable to For the the or share fourth $XXX,XXX per had fourth loss in reflecting of of quarter, we common $X.XX quarter the debt, a loss of shareholders $XXX,XXX per $X.XX or net income a on common to net impact XXXX. of to

to in we per down assets FFO market down was fourth from to quarter and AFFO $X.XX conditions quarter, year of and reduce per prior $X.XX look debt. patiently share and unit, and continual through the year $X.XX dispose $X.XX rate prior managed difficult share In for opportunistically from was our XXXX, unit, leverage quarter. and the the our acquisitions variable

our variable arise. executing for team of resulting year a XX.X% ratio opportunities to am proceeds completed to results our net debt, acquisition company weighted We X.X% that the these end are these the leverage the as dispositions the year. for during as gross activity average rate accretive in of of growth in proceeds. dispositions efficiently generated we of pay a We XXXX pleased with used cap the down rate X disposition million our of of at $XX.X dispositions at position proud I the from

between ahead improved that near-term compared properties meet meaningfully medical to our million Looking excited market the of XXXX. Significantly, investment to we pipeline XXXX, have for target acquisitions to acquisition I'm see of our $XXX has criteria. million a and $XX

lowering rates higher will continued the prudent environment while interest in believe leverage. maintaining our or portfolio to stockholders. long-term strategy we growth growth sustained ahead, our look accretive of the growth and of is leverage lower We we lead current for As strategy our

the hard discuss entire I work and With to current for more call to detail. turn activity to conditions to their want acquisition Overall, team the I market pleased over that, the and our results Alfonzo the XXXX with contributions am and in of thank our results. transaction

Alfonzo Leon

Thank you, Jeff.

As ranging targeting our process, on $XXX meet for closing criteria. from opportunities these million near-term of half the million Based transactions. to we the Jeff second year acquisition that diligence reviewing our investment we're due $XX this mentioned, typical currently are timeline for

increased have rates cap risen acquisition is in their response accretive adjust begin seeing As to sellers are capital, expectations, of cost buyers which to more leading to opportunities. we acquisition

brokers to potential our various advantage We over involved which to to less with deleveraging gives opportunities, along should with us continued buyers. activities actively identify us acquisition sellers continue in remain dialogue capitalize groups, physician on and This opportunities. XXXX an liquid corporate allow

sellers reluctant these Additionally, run an sellers out previously unattractive push options. could way refinancing our refinancing of as debt market

market We the continue XXXX about see and for we monitor what to excited ever-changing closely conditions are and beyond.

access to We unit to scale, of unlock and competitive capital opportunities. OP our continue utilization potential leverage structures including deal advantage, to the will

I'd to Bob turn over to now results. call Bob? discuss our like financial the to

Robert Kiernan

feet, to and square the of months to Jersey, property compared including included reduction well as contractual total Thank of X.X% of medical our building of of to of quarter, recognition by rent. reserves $X.X X.X escalations. In X.Xx the the X.X revenues million last million. quarter million driven $XX fourth East in with in tenant of approximately The of occupancy, you, revenue Alfonzo. related total leasable deferred investments lease fourth our XXXX, end dispositions At million estate rent office real average the XX.X% years weighted weighted completed rent year Orange, portfolio average gross coverage the our first the in year of billion decreased term, $X.X approximately rent $X.X during primarily is for X as consisted New our

fourth Our compared decrease interest expenses. was total in The expense and operating were million quarter. year quarter primarily due the to $XX.X prior for decreased to $XX.X million the expenses

quarter borrowings the in impact compared of expense the in fourth to million period. prior the to reflecting quarter $X.X rates comparable Our lower $X lower million interest was last interest average and of year year, compared the

as points our result by leverage. beginning basis the credit facility of August, At a XX reduced in our early improved pricing

periods. swaps certain which swaps, to replacing maturing interest interest August, basis reduced forward prior early effective, cost XX became in term loan the million our addition, $XXX In points of on rate starting our compared by

million for the quarter expenses the since year compared $X.X in were prior our that our prior $X.X in the fourth component operating largest quarter, operating represent changes the million by comparable decrease driven the Note in period. Our primarily real of expenses. these portfolio with the expenses year taxes to estate-related

$X.X stock Regarding comparable note leases. G&A million $X and to recognized million revenue where of quarter these in quarter expenses quarter in related costs expense $X fourth gross were compared company for million recovery Within quarter that our $X.X million quarter, compensation of the amount cash were G&A million. leases $X.X our expenses, to million the fourth related costs the XXXX. and current our $X.X the net fourth the G&A of to expenses, were XXXX

basis. Looking million our million expect quarterly on $X.X a in and of ahead, G&A XXXX expenses to we range $X.X to the increase in be

and those in million subsequently by the $XXX,XXX. During the costs. CMBS fourth connection we date value and a net on of defeasance of held the debt loan CMBS carrying of funds with a used reduce to escrowed a $X.X in total million quarter, In million, of $XX.X on loss making leverage. the our of including was completed debt funds loan received transaction defeasance, resulting by servicer we payment The the $XX.X total of extinguishment defeasance, the

AFFO to share in unit was attributable per share compared share to to was and for Net stockholders unit to $X.XX $XX.X $X.XX quarter in the million $XXX,XXX income share compared fourth quarter or or the net $XX.X of loss million of $XXX,XXX fourth stockholders in per common $XX.X of the was $X.XX or $X.XX quarter per and $X.XX compared the in and per the the fourth attributable $XX.X quarter or per or and $X.XX XXXX. quarter quarter FFO million to unit share in XXXX. fourth common million of share XXXX. or fourth per unit fourth

balance the on Moving to sheet.

years. was remaining XX, and gross rate $XXX X.XX%. debt As of is weighted investment of rate activity. reflecting term disposition XXXX, At in of total estate our leverage had the real fixed X.X At billion, quarter XX.X% was was average total December down end, year, million interest we a the our average million $X.X which XXXX, debt $XX was of start XX, debt, our from of about December XX% ratio gross with our our weighted

with mentioned, facility credit leverage our reduced ratio, XX now points, in at by term now third margins X.XX%. SOFR previously the during the our at As lowered SOFR the our X.XX%, with loan quarter, our are basis revolver we margins and on margin

borrowing unutilized date under or under facility of during this $XXX did not in current capacity is ATM Lastly, common stock any shares million. to quarter the quarter year. of program credit issue the first our the the We

square expiring expiring retaining we expirations, lease the XXXX of our year's of to ended and respect the ABR. XX% full XXX,XXX year the related XX% With feet

Currently, and lease our Our expirations general, and are our on in consistent lease will good outlook with regarding expirations. XXXX expecting experience XX.X%. occupancy we XX% during range between XXXX that very is XXXX

related Regarding and of to expenditures million our XXXX. lease improvements we're approximately XXXX, $XX to $XX portfolio. $X.X and capital million capital and $X In Currently, renewals tenant expenditures be building associated primarily cash improvements in completed was XXXX million spend the with site to projecting on approximately up to approximately million. lease million during $X

navigate market we to year, ample conditions. we and challenging continue our liquidity will portfolio available confident that resilient As are us begin the us to help these

in efforts with and optimistic We forward XXXX progress our throughout to moving our look year. acquisition you in about sharing the are forward

please This questions. call for open concludes remarks. our prepared the Operator,

Operator

of comes [Operator first Instructions] from question Our KeyBanc. Wurschmidt with the Austin line

Austin Wurschmidt

accretive maybe the remarks keeping specifics you check of the highlighted environment. I and transactions? on throughout times of leverage economics some these in of the you importance then deals about investment are prepared how your mean additional Jeff, plans current kind finance around the thinking opportunities hit to several and in

Jeffrey Busch

Absolutely.

don't real close basically quite Out the while. have the an plan, in us for to Fed the optimistic are a basically lowers is we opportunities there, that there's rates. have purchase market. which We agreements These for

always X or of market things it. into happened lowering you lowering, can that $XX equity moved times rates of to $XX.XX So it's the get and One where rates a when opportunistic is see and use type X were we the that's stock, to could lower X happen. the an felt we

and On in others. like low caps, acquisitions triple X the assets sell last year, X that the around net other are and caps have we're at looking will showed hand, we the we

while, trade my could or things, bring these out So be and spread if either or X of go a and is also but XX%. X to of and are facilities of we accretive, our do type basically with other lower is new and before market a that mean and the -- criteria debt X caps conditions it will up the would I of to to we take eventually XX%. our keep equity debt, make right, sort be our -- but do we below And preference debt. equity combination buy to caps goal our lower X the to lowering

Austin Wurschmidt

Alfonzo, mentioned are forward move equity with much think deals? willing I I can to guess, how how need need that take OP and units potentially, you'll maybe And OP to you limit the these units that buyers

Alfonzo Leon

of has It's estate it's planning hard a seller year. decision that, we try to predict. very hard but mean it's discuss have. last had I predict. it's stimulate had to hard and And And to -- but really, success we in lot and try And X idiosyncratic. that always to interest, the it XXXX, we to an offer predict. pretty And had with that we to it's

Austin Wurschmidt

provide for some specifics MOB you lease-up mean, lastly detail types me, just provide details any deals? straight I them? or unique guess, of Just I stabilized? just can opportunities transactions, about these sort you the on all can Are would then additional they appreciated. more of be are And or anything

Alfonzo Leon

Yes, sure.

surgery that is more nature versus centers, also multi-tenant. pursue MOBs single focus to we're tenant trying Our are more and and in opportunities

Operator

Janney of with line Our Scott. Montgomery question the from next comes Rob Stevenson

Robert Stevenson

there you that down revenues $X.X quarter-over-quarter timing it's that is over Bob, that and to about? we the were $X.X that due where operating of down million, there talking were something aware of? thing on million reimbursements last going be need expenses to been sort else Or below Is and were few.

Robert Kiernan

property we for the was reserves number that overall That a fourth two, big decrease on reduction then New related But million. quarter mentioned that, property some put the And that color quarter. the East activity, was was in a on the driver a September fact of $X.X one. for Orange, XXXX. the was number just that bought to unique for in in revenue the we of release to Rob, Jersey. And disposition is the we that's that

property. appropriate of were The we closely hadn't we event, a significant informed were them this keeping that issues with us issues recent and most So was is the there while we've owned Medical that tenant accounting. for their cash they And that, concluded it and had until with while. flow working the any facing, Prospect

quarter. But reduction to work So location the through think relative that's said, our that we'll property, facility. in the that that's and in this this in Prospect to tenant, with establishing the payments at both term, the the relative the terms with of tenants issues and fourth we new that from longer

Robert Stevenson

I then -- how And how this versus the on on at point that Okay. guess I point? mean, watch this anybody cash list? is accruals that, tenant, is extensive accruals And beyond at else

Robert Kiernan

X no at else this No, point.

Robert Stevenson

debt I the I purchase of get is these as you're you Alfonzo, in these well are Okay. is That's financing, only local agreements that's guys on mean, guys there else today. Or assets the then looking transactions? helpful. at are type are everything is -- much And of there market acquiring assets? on how to as mean, availability that under be X focused of able to these town? the you broad how competitive for players out financing

Alfonzo Leon

Yes. No.

that take and resources to to advantage, that trying So strengths and doing find play position to is our opportunities try to really always the ourselves we're what leverage have. we -- we

And our so a facility competitive advantage. credit right is now,

where are And of that us efficiency so our and use to deals we're is of sense that trying get sheet the and at the make we looking the balance ones that opportunity for accretive. certainty close can

position use to to advantages attractive to the unique, but us. are to have are So trying it's we get is deals we that ourselves that case each --

Operator

Our next the Maher Bryan B. question with of comes from line Riley.

Bryan Maher

Maybe in little you can times, give defeasance us bit on terms? referred a that couple out for layman's of played you Bob, a more of color how to kind this that

Robert Kiernan

Bryan. Sure, Sure.

as causing CMBS on of as cash more administrative the a free servicer. that an issues a . IPO the million extinguish opportunity kind issues. with saw XXXX roughly $XX and the it was been and by being tied the more And predates held us up well we as put in up CMBS the company. lot So and But of of debt was cash we it's that servicer, so to getting is, had cash management the the

perspective And to free cash. able that kind to burden with so and cash that the management issue we current eliminate of were reduce administrative we both that were of dealing there kind and up

And up our with the debt. $XX end back that we can million but so million defease ultimately, we $X-ish CMBS, overall reduce

leverage. So through the transaction, we're able to reduce our overall debt and

So was successful that of reduce that kind of it leverage really of the element and was perspective. the overall an of element it from kind to the debt

Bryan Maher

out there But basically I here? facility CMBS Right. a just had against any property it did were your something? with or mean, properties involved buy you credit that

Robert Kiernan

through it refinanced credit facility. We Right. the

facility. original debt this And the XXXX so again, our properties kind X, X probably in vintage had had of of from

those were so And the assets to attributable CMBS.

as things maintenance with property can simple change to burdensome those CMBS the again, even or assets with And you ability the such the at does want things burdensome be limit your can CMBS. CMBS be to is relative what the as

alone cash that of the so then idea -- to -- And being also, let was amount held was by servicer. and cash the the of element the again,

So to refinancing to have, the the then again, properties. it relative those ability flexibility us more through up frees revolver with

Bryan Maher

Got it. That's helpful. super

million? XXXX. for made million And $X $X comment $XX in the to million? side, improvements. $XX million you million the $XX $X tenant addition $X a to is million about to million $XX said the then On $XX to Or to in million CapEx $XX Is million the you million to in

Robert Kiernan

predict to but addition, in the it's It's timing. harder

could it we'll that's that in that And at. to timing -- may be the kind delayed, time harder it the of be can them differently flow. -- again, I will I -- exact fall bucketed frames because how often, predict see and So you're same the it why think it not will looking

I So piece out. second to just break that wanted

Bryan Maher

for last just maybe And helpful. That's Okay. Alfonzo.

about talked you comments, prepared acquisitions. half your for loaded in think I back

think So range in magnitude the happen and half? you're might give of what can in us expecting XQ of some really to XQ. you And anything be level of you second clear, maybe not

Alfonzo Leon

Yes.

a So what nothing we And and year QX. have than XQ. nothing that in of to be in trying correct, the And range. is we're is towards the more in provided what do end XQ

that to So more in we're trying weight QX.

Operator

Alec from with Our line next question Robert of comes Feygin the Baird. W.

Alec Feygin

Or First pipeline. made GMRE one is is single on assets? is investment the the that What securing? portfolios any yields all And today? are pipeline is of up the it

Alfonzo Leon

Yes.

our that complete are fact to trying of that yes, And are targeting to we're now targeting yields X%. advantage to these -- transactions. difficult that have we the So take approximately credit portfolios right and finance those we're facility

Alec Feygin

Got for have that rate this that is for could demand so for you leasing you -- historic expiring portfolio any the they're for that who already the retention Kind the year? re-signing, of tenants space? And efforts helpful. the current how the been it. has speak That's and been on may what's notified not space

Robert Kiernan

Yes.

and mentioned from So the now, a feet XX% the we we think under square ABR for largely just -- in retention mid-XXs an in were tracking did And basis. we that I year, XXXX that our call on we expirations, in on same basis, vicinity. on script right last we're the a

use as in maybe is numbers a we're late both as So -- here XX% proxy on looking how it, February. call at you it

Alec Feygin

And on resigned, the looking that's be for not that going to you the know like? space how is that demand already

Robert Kiernan

possible. as move can to, like incent keep working to again, anything, try the as we're to we our just mean it keep as actively and space ourselves I fully occupancy -- we high leased mean, the and -- I to it's up occupied as

is a active whole process in. engaged team very it's So the that

Operator

queue. call to for back the further in hand the no to I'd are management questions closing There remarks. like

Jeffrey Busch

year. Have care. attending for thank to good like everybody a meeting. Take our I'd

Operator

does for teleconference. this conclude gentlemen, and Thank today's your Ladies you participation.

disconnect may lines time, at day. your have and wonderful You this a

Global Medical REIT (GMRE) 28 Feb 242023 Q4 Earnings call transcript