GMRE - Earnings call transcript Q3 2024 | Global Medical REIT Inc.

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Operator

Greetings, and welcome to the Global Medical REIT Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Swett, Investor Relations. Thank you, sir.

You may begin.

Stephen Swett

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

call are harbor Kiernan, covered are provisions The company statements the forward-looking intends statements Statements Chief Please forward-looking On by made today the facts the not by Investment Alfonzo Executive note call this the Officer; are historical Leon, be safe and is in Reform considered the forward-looking. contained Officer; on for making and company and Litigation conference this those with of this provisions. Act which for safe complying Bob use XXXX statements statements Chief on these Officer. Jeff Securities statement to Private Financial of forward-looking harbor Busch, purpose call. of Chief include may

including, actual be its and Furthermore, and that the statements those may other of from for XXXX, in risks the variety SEC control, ended materially limitation, results the beyond December factors and year described forward-looking in XX, the company's differ without affected are those XX-K a filings. contained by will company's

future assumes or to no any information, publicly statements, otherwise. as Company a new of update whether result forward-looking obligation events

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

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

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

Jeffrey Busch

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

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

compared per to quarter, shareholders to per $X.XX common $X.X million quarter was share income and or to third third million interest and in attributable unit, share and the shareholders attributable $X.X For FFO attributable quarter the common and the down share or noncontrolling net was third per $X.XX XXXX. quarter. prior share to $X.XX $X.XX in the per quarter. year the from from was AFFO common $X.XX shareholders unit, noncontrolling prior $X.XX interest of down

impact The decrease to is Beaumont basis including due our primarily Steward cash the at tenants, of Facility.

acquisition price These real outpatient acquire year, our to of triple we had properties that million. with into portfolio a for of rate absolute this activity early fully of announced estate $XX.X we leased X%. cap or are medical a entered purchase a net XX-property purchase aggregate under properties Regarding an leases agreement triple net

During to closed acquisition in consisting on the the acquisition, end million third the X of and we $XX.X quarter this first for completed tranche properties a of the subsequent XX we October, remaining quarter, of properties.

Looking are X ahead, cap outpatient medical under we portfolio a $XX X% leased under These of and have XX% tenants just rate. property purchase high-quality to facilities to properties million. currently for medical have contract

encouraged by are recent quality about portfolio. to market our assets class, our with optimistic our in remain We successes acquisition asset the adding

continue of the per to million average gross of In we third sheet. proceeds quarter, an staying price issued $XX As at strong a remain generating our committed $X.XX balance growth, X.X disciplined in through our million. ATM offering shares to common maintaining focus share, we on stock we our of

recycling initiatives. financing continues key to asset growth element addition, In a in be our

cap of facilities During $X.X resulting X% at generated quarter, of aggregate in sale proceeds rate a X gain an third medical we the gross closed million, the of million. of that on $XX.X aggregate

assets issue balance forward a sheet. maintain both and strong equity common as to move sell continue to we in to expect We order

with lease we of entered September, health Steward XX-year in an affiliate at care items, facility Health tenant-related that replacing Beaumont, announced we in Healthcare. a CHRISTUS Texas, terms of In triple-net into our new

want I'm to a team's thank entire and am work to contributions CHRISTUS, with to conditions shareholders. new the with hard relationship our outcome with turn pleased that, results. Overall, for and high-quality With our more our our results and call achieving current great quarter the tenant, market third are ability pleased team begin in over for property our to to discuss We Alfonzo I I excited and to re-lease a detail. activity to investment this

Alfonzo Leon

our brokers our facilities with portfolio. source medical cuts, and for of engaged criteria to remain market transaction and anticipation ticked volume In of acquisition evolve. will physician quality Fed The diverse has sellers Jeff. opportunities with that us help corporate up. groups, to continues investment that rate you, actively Thank align a We growing range continue

increase tempered in rates the month. demand in mortgage the However, has past

completed leasable properties, mentioned, XX X of first early in encompassing Jeff XX-property July, closed on $XX.X medical encompassing In portfolio estate, of acquiring properties As tranche total, to portfolio of of the the aggregate XXX,XXX X% XX,XXX of cap. an square XX-property $X.X with acquisition we aggregate aggregate real we leasable price and the outpatient remaining feet base leasable an equating million, square In approximately our annualized October, purchase feet. XXX,XXX had of approximately approximately the square an feet. million rent

trends of to challenges pressure cap on and to the sellers We rate current increasingly estate reflective this in higher sell. ongoing where market are refinancing view response deals transaction real in as accepting market funds

anticipated purchase in medical a ahead half the Looking facilities we during this portfolio have XXXX contract first acquisitions, cap X our million tranches stated, to on as rate. XXXX. outpatient under of we Similar of to a X on X% $XX acquisition previously at Jeff have closing acquisitions,

in are and of square aggregate an approximately are XXX,XXX X in-place properties $X.X have located approximately an XX% leasable feet of X states, occupied, These NOI aggregate million.

below $XXX triple in properties net. in tenants these own replacement purchasing to their square well $XX these $XX cost. square foot per significant rents are We invested have suite, Most in feet, at buildings per capital resulting averaging

systems. includes radiology a well as providers corresponding care, urgent buildings cardio, neuro, these and of Tenancy lab. mix primary very mission-critical and and care comprehensive These properties as maintained are have been offering diagnostics, ortho to cancer like in and well assets specialists the health

addition, properties these ground approximately footage and subject are of campus. years with term property remaining is In X/X XX on of to square average of the leases an all

Accordingly, basis the due at to this and assurance our on- off-campus XX% investment-grade close are is XX% that conditions, that and this and Approximately all. including customary diligence we properties, tenant respectively, to of will obligation subject terms or Note a timely acquisition no and leased acquisition to is on reviews close interviews. there tenants. certain

during of a medical our closed in on in sale pursuant front, gross dispositions recycling gain the Panama the the we On $XX to normal quarter, Florida, of of receiving million. facility resulting City, a $X.X million, process, capital proceeds

sold we another gain of $XXX,XXX. In in quarter, the facility gross medical the City million, Florida, dispositions on in Panama rate was receiving cap located Beach, proceeds X%. of total, Later in a also these resulting $X.X

remain financial drive over leveraging we strategy access competitive OP like always, capital opportunities potential committed intend we our the our to standards. our Bob? results. disciplined unlock I'd of advantages, value. to and use align underwriting structures, our now the As approach a to unit to call scale, By discuss to disciplined that to Bob and deal investments with to turn and

Robert Kiernan

feet, the weighted X.X real including million and the estate of coverage subsequent of compared XXXX. Alfonzo. occupancy, total square included third term, year XXXX, impact you, our rent and contractual our to quarter portfolio, of end end lease in by weighted In placed the prior decreased third consisted revenues $X.X quarter of investments compared to X.X% the escalations. with quarter $X.X the $XX.X accounting to XXXX our being leasable of total XX.X% approximately XXXX, the average X.Xx of At gross to X.X% third billion Thank occupancy of primarily lower tenants rent years portfolio to the basis in cash of million due changes of in on XXXX quarter average

XXXX, by for related XXXX and offset expenses expenses quarter were to depreciation during completed expense. prior partially interest decrease operating the is Total the that in primarily compared due $XX $XX.X expenses, reduced to amortization were million increased third transactions quarter. disposition The to million year and of

compared Our operating quarter. the year third of to $X.X million for the XXXX million were $X.X prior expenses in quarter

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

properties. in Relative acquired well to partially third prior tenants placed net from quarter subsequent the increase to G&A the expenses reduction costs in the by of of third both million impact and costs the XXXX expense other in properties as XXXX, the quarter of at $X.X the reflects this basis were cash year increased in XXXX, accounting of end quarter. XXXX as in on offset a

$X.X million. quarterly in our We the of be range $X.X to expenses G&A continue to million expect to

$X.X million. in million of $X.X per attributable of In million, XXXX, in of completed or generated the compared disposition gain $X.XX gross proceeds a resulting of was $X.XX completed XXXX. the income aggregate to or quarter common of share $XX.X XXXX XXXX, third resulting receiving quarter million. stockholders quarter X quarter third dispositions third Net $X.X an per gain of million of of in gross aggregate X million, we In we for share the $XX.X that $X.X the proceeds to third

of and $XX.X third AFFO XXXX. stockholders and noncontrolling $XX.X quarter attributable and million per compared $X.XX unit XXXX and common XXXX to the compared per $X.XX million quarter was unit and or stockholders to or per $XX.X in share of interest in of common per the to attributable to million the $X.XX XXXX. share share third FFO or was third the $XX.X in in $X.XX interest and share unit quarter of quarter noncontrolling million third unit or

the to on Moving balance sheet.

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

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

borrowing proceeds stock million of quarter, of Lastly, an average $X.XX capacity of $XX million. as common unutilized Relative current is per we third issuances gross million under the generated of in of $XXX equity, at price through today, the credit to the facility X.X shares share. ATM

XX%. leverage As funding be in on we to to as range and to expirations, and the date, feet. to year's XX% renewals close consider With on that maintain potential expiring year, dispositions have issuances, continue pleased rate we and with currently we to our options of based are to disciplined leasable XX% activity seek will our an are we for lease we target acquisitions and or on square consider are our next we this closed asset equity investment towards our XXXX both respect trending portfolio retention expected progress

capital for during million expenditures were the $X.X our through spend third the related expenditures that tenant XX, portfolio, cash on Year-to-date quarter, cash approximately of million. XX% capital to outflows $XX September approximately approximately improvements. Regarding with our was

For $XX the full year XXXX, of we're million to projecting expenditures capital million. total $XX

the Healthcare's mentioned, company's year, the Steward their previously and in in bankruptcy announcement exposure As discussed earlier portfolio. we

At the of located June, facility rent, in bankruptcy Texas. Steward time and July of payments X.X% August. related rent XX% the received at of the $X.X or the our million company on Beaumont of company's base lease the which facility annualized to for base Beaumont, months Post-bankruptcy, represented its announcement, the

CHRISTUS the quarter, affiliate into this with and the property. Beaumont entered Steward During XX-year lease our Health new triple-net of a rejected at lease we facility, an at

expect we our please secured a this we of rent well the affirming in March concludes April CHRISTUS progress on lease overall are prepared execute or business an we XXXX. conclusion, positioned forward questions. the to and acquisition with in our come. on quality affiliate sharing pleased Operator, and In lease with have open to that lease to triple-net believe This commence to quarters of look property, are the for this We and to call to remarks. our continue strategy long-term

Operator

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

Austin Wurschmidt

can do left mentioned Jeff kind when fund you sustain and you're have options of I which committed us as to just of sheet. available, you referenced strong leverage both or you to more view attractive you much you dispositions, And Bob, equity maintaining how today? remind guess you balance source your kind look a that the target? at to

Robert Kiernan

Austin. Thanks,

sell So fourth any now, do ended year at raise don't XX%. quarter or at the we the leverage end equity in the XX%. right of we assets would quarter, If we

it from the outside just we've above not stay about. we I Ideally, be mean, to we're into of our target a the uncomfortable going issuances down back would that in range. bring we the want But the range. XX%, range to asset So range down. require sales doesn't equity And or talked lot coming

there's again, time And opportunities. sales that's lead we have involved potential But so sales. in

so are disposition activity. portfolio recycling the capital we always potential at And normal considering looking and just

equity would into we are those are And And But look as we far at. we're the there, things markets outside. well. so again, not those if tap

be point would the I'd make. range main Our

Austin Wurschmidt

today? long-term ago? of there higher the interest interest And with there of cap level any Are been rates, move in any that assets a you're guess from sort negotiated rates has marketing months are or being change few buyers I the versus in

Robert Kiernan

we the But speak you yes, to that considering. again, always on market is Alfonzo, can assets are There's definitely pricing. there's And there's pressure -- the evolving. --

Alfonzo Leon

that Yes. in decrease. I'd the optimism beginning beginning rates pricing in subdued mortgages rate with October cap in Fed and last the market there in increased say and And that expectation rates debt going of interest. the up, to to was the on was has month cuts, But increase

right that as messages question not be pickup in going pretty the of result much is it'd a now, it's but how a same year-end, cuts, I'm beginning materialize. there's mixed I And maybe and settled. volume, that's rate Fed thought the Previously, meaningful so to

Austin Wurschmidt

I So how I kind prior additional given forward announced comfortable but to moving of are what you're to some X? with do, acquisition guess, you've deals market funding about still any today, Tier the optimistic have funding you guess,

Alfonzo Leon

mean step. I we it take step by

we're So Bob looking are at we sell for this we think market are acquisition long feel not routinely we weekly basis. are ones just assets the optimal and we market and where we that observing continue But achieve want next capital. or we as in looking recycle the kind current on on that portfolio, and said, our just either that want to and things that to for can of it's term can almost owning something assets in focused pricing evaluate a

Operator

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

Bryan Maher

new gave buying Can you're set Thanks the you in I assets don't country you're give us that acquiring. where states the color the on for us of all that think though. you of kind these?

Alfonzo Leon

Yes.

that color So mention not course, the and to we're point, just to and I forward, mean, But fact the opted the really going yes, we given under states purposes. provide contract to as move these around due more confidential. I working be transaction. diligence, put more mean, at confidentiality But we this we're for wanted we of we've detail more

Bryan Maher

on questioning Okay. Maybe following equity. on Austin's

kind at do with little to we even about the that's this should ability transaction the these equity? forthcoming the you're it bit of on to Xs, new level in a raise in here is it talked You've think this second about but about transactions accretive issue XXs past to that deals? to accretive what your stock Or going high Xs, do

Robert Kiernan

the when from, Yes. purchases, you and can again, cost side those is when curve above that X of forward that, debt purchases. at depending asset look on capital, look XXX of of and where cap and we the anywhere accretive at side the be we say,

Bryan Maher

of the driving coming? driving side, just slower growers? then mean the Are of vacates that selectivity there's disposition equation? assets there the of I sell? Is what's it And known what's that on kind Okay. side the you

Alfonzo Leon

a mean, of we mean properties mean, the variety I get ones you also optimal I things. pricing. that I feel can it's mentioned,

that that of just kind it or are as locations and full covers want. given high want properties renewals are that would ideal, I too company But are properties properties the not forward, mean, yes, we go are our have not also spectrum. that to we current small that -- but where So we just as just feel

trying expirations so to on with sell term with of -- things those we're And ahead these and them. getting

Bryan Maher

March, and a Did me that wrong, June, Am rents guess, that just guys talked about you I about And that then bit somehow had you and me, September. May. right? you or for, and last like August, collected Steward collect I'm thinking feel July, I And little July, correct if for changed? since August Beaumont has Okay. -- you April, didn't

Robert Kiernan

and up collect not March, for bankruptcy. that We in Bryan. point did right, April That's to

in So we rejected to until do collect court still during rent the lease. the due bankruptcy pursuant where we a claim but point they period other expenses to subsequent we the post-bankruptcy would bankruptcy, bankruptcy, and we have that are and a to up did -- have claim any collect the month the

something the pursuing that's be So we're would on and with working actively that court.

Operator

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

Robert Stevenson

about rent where you you CHRISTUS the the talk Can And versus is in do Steward? CHRISTUS elsewhere portfolio have today?

Robert Kiernan

it's was rent CHRISTUS They previous -- the that million, slightly $X.X for above and rent is lease The the Steward annual around paying. were $X.X million. the rent new

Robert Stevenson

them And at Okay. be location this your to when is only with going starts? lease present this

Alfonzo Leon

but might mean, be I'm I be lease, would new there small This my a a Yes. sure. mean relationship. I knowledge, material. to nothing pretty

Robert Stevenson

Okay.

So then have tenant of to less that on will any of as X% I you this asset CapEx And them a complete? be than prior in your then percentage do to guess, have exposure terms ABR? in moving you'll

Robert Kiernan

Yes, Rob.

So the of to a claim as the specific part all the A done, close all of to part things been that of and maintained process asset it We've the court in probably, situated, the condition of $XXX,XXX Steward been CapEx that should amount property. of we CHRISTUS it before of lease. and CapEx. getting upwards in spending for fair the getting said have involved it's for that in claim be will lot will a against as bankruptcy cost just

have items, of these equipment, type so some nature. of lead of in And times the the installing infrastructure getting things them terms and are mainly equipment, that

just a -- it delivering definitely in there's process involved And so that asset.

Robert Stevenson

you you talk there guys before about something seller's acquisition, reason it million that the close? a part? on in tranches? to to there needs can closing something Is happen you just specific X Is that? and Can that out finance further just it? allow on the portfolio And is then why is the Okay. Is to $XX

Alfonzo Leon

Yes.

So but most just a of of efficiencies I on it's experience couple mean, tranches, flexibility. a we as with it -- did And recent in variety transaction preliminarily, actually, in things, we some resulted the when well. our it

made And to either But our spread that at -- I and into, so do something want diligence there's this do more of having consider. that if all mean, a changed have also said couple sense we flexibility well. I to we it to items something want mean, And it it's But later dig once, do again, on over minds we that that we on we we just transaction as to that's -- if way. it tranches. that go it's can it out can and

Robert Stevenson

Okay. And in is deal? portfolio to going push top XX there any that concentration tenant significant post into that's your

Alfonzo Leon

Yes, is. Yes. there

be so And change Trinity. the would biggest

one from to potentially that bump XX would So # up #X.

Operator

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

Alec Feygin

well? is First is, acquisition the and the debt potentially deal to future as what Is equity? opportunities? going just dispositions raise portfolio fund and are one the plan you Or it to

Jeffrey Busch

Right we in plan in we to million of now, raised last quarter, $XX bit dispositions do the do equity, process. equity, some a have sales already the and little and

We're been of we've as So our look able to not well, assets a and acquisitions. taking at performing some are we're our realigning prices. pretty attractive that at sell them

dispositions and above target. may we that So it may go But temporarily slightly we're on the looking and more debt debt. towards than equity -- we

Alec Feygin

its more runway something much program? GMRE have recycling how you can And do for end, asset years? this on quarters does Is with

Jeffrey Busch

to permanent a going not adjust. tends The be solution. market probably to It's

been somewhere is market noticed, tends the We've the now. -- as instance in adjust. buying right -- mid-Xs our for average to buying So you

adjusts for not market come if groups have always down, So the to sell. instance, rates the do because

we higher which cap be -- equity go will and that also. we means So can rates to buying

Alec Feygin

a anytime to planning to balance line term the soon? are you loan And issue reduce

Robert Kiernan

the something at look year. first in next of Not currently. half That's we'll probably

Operator

of question with Juan Sanabria line next Markets. the comes BMO Our Capital from

Robin Haneland

under the not assets sitting is should This for And declines sure was CHRISTUS, if non-“Beaumont rents on sequential in I'm already, post Haneland Beaumont other the if modest on we this touched assets Steward Robin any, but declined model much, transition? the on Juan. bankruptcy? any the in how the

Alfonzo Leon

And in facility next the outlook. at of March million is the marginally about Beaumont rent year current $X.X Well, is just than annual Steward of our that the cash or we rent. starting of talked April rent previous higher rent

asset, net above. And so kind that of again, is

very was The It's small again, of small other Steward exception the and feet October, leases a one very The projected that Hialeah, in lease. building with lease have -- not multi-tenant it's lease X,XXX Florida. of very in we under rejected it's have a end at of square space. the been a

So not anything perspective. overall noteworthy an from

Robin Haneland

of and ratio, And dividend with Board elevated? particular, How Okay. FAD. this your in dividend inclusive north leverage does payout XXX% generally think is of CapEx about management the sustainability, of

Jeffrey Busch

maintain future coming the do see we dividend, our our we're we We now, Right and looking deals that accretive Yes. can could through. maintain in dividend.

rent in TI of So It's big amount we X capital, an get -- causes which and a unusual of X bit We we the get bit type the increases a re-leasing. had of last thing. more more regularly. a years very years, re-leasing

So we given many reduce up. do see coming that TI proportionally, and capital releases so have starting don't we to

like look dividend. do maintain we So to our

Robin Haneland

dollar Okay. And there disposition? is bit, been quite for a but future combed this over are a that assets the pool of targeted of size has

Robert Kiernan

It's we a assessing number. It's at a look sales targeted fluid the time It's number. not all opportunities. in potential something

inbound dealing well. are want inquiries that there purchase we sometimes are with assets that to as about people And

It's -- situation. think just think set number. it So not of would I a I more think it's a fluid I as

Alfonzo Leon

on had those we were we we've come reconsider few not moved of attractively priced, us and a on. assets in or whether to LOIs have a wanted couple No, that which forced to Yes. forward that it sell

Robin Haneland

on Got increased exposure just just your elaborate for bit. a lease XXXX. it. curious just little you And that? Could Makes sense. on expiration It maybe

Robert Kiernan

to number. the have very this this mean, in I was increased. on relative 'XX it similar from could acquired experience looking expirations, think in I we've re-leasing. year our would be that assets XXXX have we're calendar how currently, It to that our -- outlook But again, an again, from would impacted from at

leasing our activity So looking I think ahead optimistic and XXXX. we're occupancy about into

Robin Haneland

are rate what how last expect? good a What one you investors And this of assets me. big yields at? run types it is today? looking X% going And Is pipeline, should for forward? The Okay.

Alfonzo Leon

Yes.

focused that is medical So and in the I the bulk But the mean And primarily of we're volume office looking evolving. multi-tenant. more high whether on we're rates is type what the range Xs cap where for mid-Xs in single at, typically it's market in market that or of the also continually tenant the on the they're market that's anyways. is to assets depending

so there's not that opportunities and they of down always that that unique but situations, market in a the range, there where And you Xs looking of opportunities high low the might do of And are road are couple coming Xs, occur. many above, but X and mid-Xs. into we're be the bulk to that for that I've is Xs are getting the high heard

Operator

question Our line Partners. Gaurav next from Global of comes Alliance Mehta with the

Gaurav Mehta

wanted where have which to higher to acquisition cap about market cap X% X%, and portfolio under rate portfolio the you high drove specific on than your that to that rates is this I mid-Xs. the you market the ask contract in was comments What is? about

Alfonzo Leon

have of the and a on And location, and these the the strategy. within of are campus the the one its hold that one mean, premium it's A are drives cap profile attractive properties funds that on that life are given and is are they're variety that I spans, ideal not of ideal that for but mean, I getting properties portfolio looking factors, fact to kind a just big given of What a for X-year periods. putting properties flipping, for that short for things exit. rates, properties

for extra getting yield reason. you're that so And

a But one the one, relationship the is other parties too, that involved. was this deal,

some connections contributed to yield. with for was that this. span many And employee process a to years. think partner there as with And have We find I the that the somebody that many, well of to

Operator

of end the floor comments. back the I reached the question-and-answer session. now to turn management to for like have We would closing over

Jeffrey Busch

everybody. Thank you,

with I we attending. had thank you very properties We've have acquired on contracts for much future good and quarter. a think good properties. And good rates, we nice

Operator

Ladies and conclude teleconference. today's does this gentlemen,

have day. your this your Thank and participation, You at you may disconnect time. wonderful for a lines

Global Medical REIT (GMRE) 7 Nov 242024 Q3 Earnings call transcript