GMRE - Earnings call transcript Q1 2024 | Global Medical REIT Inc.

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

Operator

Good day, and welcome to the Global Medical REIT First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steve Swett with Investor Relations. Please go ahead.

Stephen Swett

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

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

the considered conference Statements statements Litigation in forward-looking. Reform intends this which The safe note company may the historical not of forward-looking this harbor call. for use the by Private by making covered company made statements contained Please the Securities forward-looking facts on those are call safe on is purpose be include of to and harbor and statements these for provisions. of Act with forward-looking XXXX provisions statement statements this complying are

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

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

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

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

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

Jeffrey Busch

X.Xx. portfolio was our X.X term earnings call. average weighted joining for thank XX.X%, of the XXXX with Good coverage portfolio of At first quarter Steve. a of you, Thank and rent ratio and first you morning, the average years occupancy end quarter, lease our

first in quarter. quarter, quarter compared And per in per XXXX. down our AFFO unit, prior-year net from FFO and quarter. unit, $X.XX $X.XX was the share per the from or $XXX,XXX common For was shareholders to of share $X.XX was the quarter to and income unchanged share first the $XXX,XXX $X.XX attributable our prior-year or first $X.XX share the per

regard looking that end, and to for estate aggregate our am actively purchase standards. criteria pleased meet outpatient subsequent into investment underwriting of of million. we $XX.X announce XX-property a real we a I an the medical to With properties to agreement entered acquisitions, are that purchase price for portfolio quarter for

are And including acquisition X to leased These leases. fourth of XXXX. properties we or third reviews. This and tranche subject under absolute during and to due is diligence close expect are the conditions, each quarter and of terms fully triple-net one in occupied triple-net customary tranches,

options provides our fund This flexibility X-tranche capital with closing us regarding acquisition. as structure consider the allocation to this of we

utilize dispositions we on market For from traditional and debt financing. strategic or may conditions, property example, depending equity proceeds net

leverage. long-term always, we strategy our and from targets, increase term any in short We to As are mindful need expect while this of to accretive maintain transaction the we leverage be leverage our prudent committed balancing growth nature. would remain resulting potential

progress. balance on the look of to the look we to updating you we As our year, forward

In Care, reorganization. that announced terms our of on one XXXX, filed for May Chapter tenant-related XX of tenants, Steward it items, X, Health bankruptcy

located the As represented XX, in in company's is facility of one of Steward that Texas. March Beaumont, base primarily X.X% annualized rent,

our aspects and location. this regarding facility this at his optimistic prior The our the bankruptcy long-term company the are in was will provide relationship actively pursuing of we announcement, to remarks. about re-leasing financial Steward more opportunities Steward at Bob details prospects

this We are this and situation any closely material progresses. the as monitoring update for situation market will event

want entire and contributions work with quarter to results. results our team to for first and our pleased hard thank Overall, their the I am

current Alfonzo in acquisition to turn I call more that, and detail. to the over market our conditions activity With the discuss investment

Alfonzo Leon

The quality our made for and progress. you, return criteria, Thank medical Jeff. has with promising our target align which market facilities, transaction

engage continue of brokers opportunities. with range We actively acquisition a physician sellers wide to groups, to and identify corporate

coupled sets buyers on in capital Our they market us reluctant our position existing less readiness us Furthermore, debt and consider liquid can difficult refinance platform, to from with our opportunities, apart the unattractive a to strong the work sellers navigate advantage, to compelling capitalize refinancing market. as market.

triple-net for price under as occupied a fit squarely an $XX.X leases. To we May, million. outpatient of triple-net investment and XX-property absolute agreement are These leased real our acquire mentioned, aggregate fully Jeff purchase in within to and that medical portfolio a purchase entered or of into properties end, estate criteria

close we the As and quarter quarter second fourth tranches, closing to which will us the during tranche provide during for XXXX, tranche first the Jeff of with third flexibility prudent explained, of closing with XXXX X expect capital this in transaction allocation. the

assurance and currently or a to including there no a contract under As deal reminder, this on all. that due acquisition this will company and timely Accordingly, the subject is close is customary diligence review. basis at terms conditions,

We transaction example with real is where deals and funds forced are estate accepting cap refinance is sell. market higher sellers to acquisition as trending of struggle to believe rate this the an the market continues

As that investment standards. to will opportunities our continue always, strategy we and meet seek underwriting

disposal, structures. unlock unit access to use potential deal the scale, using capital We have tools the our to our the including ability and OP of opportunities at

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

Robert Kiernan

escalations. total of average million Thank billion investments consisted decreased last first year estate our compared feet, X% to to coverage gross you, rent $X.X XX.X% real quarter XXXX, occupancy, of portfolio total quarter, dispositions. by lease revenues due to of leasable X.X years with Alfonzo. $XX.X million At the impact included In of average weighted in weighted term, the rent X.X% contractual first square our X.X the and X.Xx of of the end of

XXXX were for lower $XX.X expenses million quarter. transactions first during and primarily to were expense. disposition quarter Total the completed the was prior-year The compared XXXX to in $XX.X million of interest decrease due that

swaps $X.X the of quarter interest the comparable period. compared compared reflecting and Our impact last average $X.X borrowings rate the first in lower the million expense lower lower leverage year, to rates in due interest prior-year of quarter borrowing to million was to our and

Our million during operating million $X.X in XXXX of decrease with to quarter, dispositions the first XXXX. quarter the primarily the prior-year were $X.X expenses compared for due to

expenses, this related Regarding quarter company leases related recovery $X to revenue million to $X.X net amount first expense million comparable of where the gross leases. the and recognized

first $XXX,XXX compared the of for in million first quarter increase was $X.X for for expenses in XXXX. an XXXX. the $X.X $X.X noncash compared first expense, The million period were G&A the primarily of which in resulted quarter increase same the million from compensation to quarter LTIP to of XXXX XXXX

quarterly last in G&A call, the mentioned expect of to million XXXX basis. As $X.X throughout we expenses our to $X.X range on a be million

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

to sheet. Moving the balance on

real had debt. XX, our our of estate was XXXX, with of March debt gross we was debt, XXXX, At X.X million gross average of total in $X.X investment As fixed-rate a end, billion. remaining March years. of At $XXX weighted quarter term XX, total XX%

weighted our and XX.X%, was was average ratio leverage X.XX%. Our interest rate

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

lease feet. are date, lease with on With we on renewals. year's And progress on respect square activity XX% towards retention our to are rate expirations, our based and this investment portfolio expiring to trending a currently bulk of pleased a we XXXX

tenant approximately new to Regarding related site during up, be improvements, the $X the $XX and continue project first leases year. last million $X this our portfolio, call, quarter, lease million was completed renewals cash to million. we with and my associated during to spend and primarily to million improvement $X approximately capital with and to for on million our $XX remarks Consistent expenditures building

Steward Regarding Jeff Steward Health March $X.X the Care, of XX% represented million company's facility exposure to Beaumont, related to as our XX, mentioned, X.X% annualized in the located which of as of Texas. or financial company's rent, base

$XXX,XXX, March approximately as Additionally, Steward of deferred XX, the receivables including $XXX,XXX company's receivables. rent from totaled of

liquidity navigate ample look are our our and To market to the the sharing conditions us opportunities, you term. We throughout encouraged over the will portfolio conclude, with we progress year. our forward enable and acquisition to long believes by current

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

Operator

Austin Markets. question first the with And Capital Instructions] will from KeyBanc Wurschmidt be [Operator

Austin Wurschmidt

acquisitions. the on Just want hit to

acquisitions contemplating willing lined capital wait plans. market, I seen? the the how you've volatility you markets are and just the funding transaction So But on are point up this we've sort given and the now and to guess, that of speculate at

Jeffrey Busch

You're now, We we we're patient. exactly absolutely do sell in to do this These could acquisition. going we portfolio, triple-net, with acquisitions. today. wouldn't absolute-net, pleased MOB-style really assets. our what right. fit like be Right it We're I --

fire whether could sell equity see accretive. to We're and a ] doing not assets to are see We're we -- think there sale assets. I [ We're any stabilization. going need we basically be markets. of

direction few got you thought least rounds, the not last had really we Fed We upon past, where of X at of that. cuts. in any As where I'm -- -- relying good we the

other the Fed increase, we that, while, for short-term something. doesn't do have a opportunities have cut we debt So do if to

needed not our probably business assets too was that we getting some But also. pass strategic and this we portfolio continue assets, up, felt are progressing to wean and good and to we'll good

Austin Wurschmidt

line decide put funding. Just would sort as is? then these ultimate to that of the sort when on now, versus these just it of of funding the and kind to you timeline of on you plan fund when So close, of your and acquisitions trying intend way, what understand, the just understand

Jeffrey Busch

put it acquisitions, this, go sale, that ones. temporarily, match should we the The for of but on things have some credit we've up least earlier which could line do at our

There's combination, right. sale -- combination absolutely counting substantially, combination improve equity just a increasing [ not ]. a So markets of the you're but of it's possibly unless and a we're

Austin Wurschmidt

fit mean had then of portfolio? does I then, bit that's deal economics sort share vault the about forth? really of Are that And about just No, cap [ of some the can ] a it single-tenant for you little the so And can rate share here detail you and profile? you just What's of helpful. Okay. assets? these -- the talked the portfolio?

Jeffrey Busch

Alfonzo?

Alfonzo Leon

Yes, sure.

northern with is -- Most of facilities. it's vault these of [ Belt in until located no [ the [ XX physician coverage, them And X/X per ] in It's states ], About ]. XX X a foot credit balance good X.X-year grade. in properties, XXXX the with the investment part of behavioral XX% square located are ] is about the Sun rated. roll composed states, price So with the the is [ properties BB and X is ] vault per MOBs [ country. of $XXX is rent square And foot. and

Austin Wurschmidt

the rate cap on the deal? what's And

Alfonzo Leon

this off It's approximately that X%, and is portfolio market. sourced a we

Operator

Rob And the be will question from from Stevenson next Janney.

Robert Stevenson

Just up on wind to acquisition. tenants the a Or firm? Are going the tenants of any existing follow-up for the being tenants? new are these

Alfonzo Leon

It's a of yes, and it's mix existing -- new it's a mix. -- mix, but new. but a And --

Robert Stevenson

point? be into X X this those of And percentage -- that up up pushed the would anybody going top substantially in or to that's be the top at increased in the dramatically

Alfonzo Leon

No, no. no No, change. meaningful

Robert Stevenson

-- the rents the to that How Bob, of are those I relative in asset. are what were And the Okay. the then you other there And the asset? Steward assets Beaumont Beaumont many in portfolio? think, XX% said

Robert Kiernan

leases feet. around total. $XX,XXX Sure, monthly Rob. rent other assets There's X square is from assets. ] feet non-Beaumont And right around X the rent total those XX,XXX on $XX,XXX, on the is There's square in monthly And the other leases. those of [

Robert Stevenson

go I in in have in quarter XXX,XXX to $X.X million, first we figure that guess, here. a of did And basically the as trying how Okay. all roughly first -- Just out results? quarter, then of forward was you aggregate, quarter much XXX,XXX was results

Okay.

sense in some -- to they back point to negotiations going of be And to they a Beaumont property? re-lease basically of you rent where try are to just something looking come is said up getting XX? situation strategically that give are is reduction Is to then are winds when there's the Or guys you that have at of that? something Chapter guys sort the at going done? is probably that all out this that and just or going How when a

Jeffrey Busch

but ahead of don't re-leasing the accept of this lease, facility. of a they -- have facility. Actually, we've moved the can going process We out And don't We're in accept I the Steward's it. it. longer-term process we're to it, in Rob, got think they they the mean facility. believe I

we interesting with releasing this started really better the at We're process. the we way is is But of when facility. -- the ago, And we there this lot And Steward, as a on -- much hospital. months market hospital this it enough, good ] demand good feeling named a about believe well hospital X numbers. [ works

When much physicians it's And like there. we -- in like a surgical hospital, it, surgery and underwrote to the better everything. do to and physicians do it's

there's that. on expect do that, demand a of and very lot to optimistic on we So we're it, and re-lease

Robert Stevenson

and it some for Beaumont re-lease this you're of Okay. we -- somebody I being guess when then standpoint, able should until at the time else? point, planning to from that between on producing a be to nonrevenue period financial just

Robert Kiernan

fair think at I that's this point.

Operator

question Maher FBR. from Bryan Riley next B. the from be will And

Bryan Maher

questions one of Steward say out they've I and But would my already, going asked with answered. moved not if Most been thinking have just to they're re-up. second, probably for

acquisition, can about talk XX-property there? motivation seller the was what you the On

Alfonzo Leon

assets These in. want it's they're factor continue are not It that -- that investing was they a to strategic.

Bryan Maher

sticking pipeline a it say deep number? maybe for narrowing how Alfonzo with you realistically in a dollar When announcing are of meaningful maybe deal, your you're this at spread? minute. bid-ask And you Okay. looking And any the seeing would is after

Alfonzo Leon

Yes.

interesting market to sales a I I towards than the two has first One market few interesting So is interesting it's yields, ways. opportunities and more tenant question. is sales. ago. -- mean, asset the been at higher there's in they to portfolios. and that two part years sorry, what's parts portfolio look single been moving single And been actually opportunities fewer continued mean, the from were is, There's

properties attractive getting get the transact lot interesting pretty historically, actually a available situations of great. is always that at ones and pricing, the are been are which efficiency not But of where to And you the that's once, you're able being case.

a to premium. always had pay You

taking advantage situation we're current that So of market. in the

pricing of year, I were that the the owners office spread. hoping that the for narrowing is of we the lot at towards of spread, end a hoping Fed my the has for part of was terms In year. were that bid-ask year end rate the a of think started bid-ask And of medical cuts properties the stronger and of at sense what beginning evolved the

minimum, So have maybe today me Fed it of rate year. the no result had widening a you cuts the question a spread of asked instances, ago, bid-ask in at month the the would feel and decreasing second a been in half different. some is, not as I

not a that I'm -- long are pricing. pricing has for holding a time. and of available though, and lot have taking that, said been lot owners there's of to office for is Having owners is of of a in been, I amenable medical that that sense, kind their seeing buyers think breath what better more a I'm increasingly hoping what expecting And these for

trending. lot increasing that is So caps, opportunities see and also to expect opportunities given to point, mid-X a where I'm I numbers Xs, the high stuff opportunities expect increased things the at to in Xs. trading are forward, in in low I of is the going continue low this and of the beginning us, just improve, And and for the to there's that

Bryan Maher

would acquisition you million? million, is, your million, deep how $XXX And pipeline $XXX $XX say

Alfonzo Leon

of [ opportunities. because Hard of gauge ], are some portfolio again, to these

$XXX the in XXXX, say, in $XX a But range, And reasonable into going million the I've acquisition I million I'd $XX and number. think million so I've in potential is million seen range. million, $XX some to $XX opportunities seen

Bryan Maher

me helpful. just That's for for Bob. maybe And last

debt you But see us on there? little you Your with what average color think wait is thoughts want years. said a maturity weighted X.X suspect What of on can happens be I that's out? answer And your rates. while give to your that me. for little kind like, to might your interest all I you a terming are

Robert Kiernan

of of Thanks, X.X It's consistent and in volatility to kind market work contact to is some the subside, that front. discussions with that with being do really in banks still years kind of the but Bryan. to we relative patient answer. and just that time opportunities, a with have putting short Yes, and that and the be work to our on

Operator

[Operator Instructions] from Baird. The question next Wes will be Golladay from

Wesley Golladay

for What of you are mentioned looking disposition? type You at the some potentially acquisitions. the to rate assets fund selling cap

Alfonzo Leon

Yes.

looking we're to to pricing we So the try get best can.

we're for low in looking the so And Xs. things

Wesley Golladay

based just you mention the How the of asset re-lease demand, you Okay. could And the you Steward demand Fantastic. turn will did asset? pretty costs you're quickly like had looking have meantime? on there. type carry then to in the And you good what

Alfonzo Leon

to I I understand that trying am question. mean

quickly You want it? could to understand re-lease we how

Wesley Golladay

sounds It demand. Yes. like you have

say tenant months, few months? they rejection you few have a in they space out assuming upon lease a a then build So close a of signing and a reject the deal to the do lease you for a

Or term -- picking the based little re-lease you quickly bit you're up OpEx sense meantime, the be space. of can for how long could long get [ you And cost the a -- just demand a you ] of few the that in trying how to the on seeing over can months. space, a the -- near how for

Alfonzo Leon

Yes. Sure.

to was but so interest I predict, And it's always mean, quick. hard the

was quickly got And expressed interest the that went So the a interest. facility strong pretty as shortly well. after parties we available, of that from made announcement number was conversations the

be few a I sincere, hard interest very it's are have or been hard negotiating mean, ourselves to we it it soon finding But that conversations positive. the position, very the to to lease months gauge. seems say. and for that take be in could But us could a

is of other on a deal signed a would that need having them it are things prospective occupy discussing exactly for the space. end mean facility happen the on space we're how to and I the for with at the using -- how the again, happen. of to changes they what not exactly tenant, planning take one clear exactly they I'd say that long to

it will facility question, really So the gauge. the a when little hard of mean it's mean age, premier probably the say, of And it's town. project. that the despite a -- that done nicely really best one I part surgical was mean in, of it in I though, ones facility brand-new. second I in walk you I arguably, Beaumont. its is on feels a

So not be clear to but that something we're exactly evaluate. of process what need made, to changes would trying in that's the

Wesley Golladay

Bob. ] And a Okay. this sequential uptick. million due one look There's rent? -- variable largely there the in [ at a revenue, to then $X for I maybe was change Was

Robert Kiernan

base sequential would that The perspective. really rent like relative expense yes, any have anything a probably from to base rent -- in related would There rent, be increase been quarter-over-quarter. material change wasn't versus it

Operator

question-and-answer And REIT's you joining concludes gentlemen, and for We ladies session and Medical XXXX this Global First thank today's Call. Conference Earnings concludes today's Quarter thus call.

care. now may Take disconnect. You

Global Medical REIT (GMRE) 8 May 242024 Q1 Earnings call transcript