CHCT - Earnings call 3 2023 | Community Healthcare Trust Incorporated

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Operator

Welcome to Community Healthcare Trust's 2023 Third Quarter Earnings Release Conference Call.

On the call today, the company will discuss its 2023 third quarter financial results. It will also discuss progress made in various aspects of its business. [Operator Instructions] The company's earnings release was distributed last evening and has also been posted on its website at www.chct.reit. The company wants to emphasize that some of the information that may be discussed on this call will be based on information as of today, November 1, 2023, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements.

For a discussion of the risks and uncertainties, you should review the company's disclosures regarding forward-looking statements in its earnings release as well as its risk factors and MD&A in its SEC filings. law. obligation new forward-looking otherwise, information, may required no the whether except undertakes be of result future by company to statements, update as as The developments or

GAAP During and between this X in posted which available earnings is company on call, will its the non-GAAP measures. website. A the financial reconciliation release, is its discuss

on Relations the is or prior written playback company's purposes. for for participants advised permission. call be days the Call will recorded and are Investor otherwise may the that company. property being this be the made XX approximately of reproduced available archive recorded without or website This conference of company's not call is distributed An call the

Dupuy, Healthcare Now turn like I would to of Dave Trust. CEO the to over Community call

David Dupuy

morning, thank for joining us Good third conference you. for and call. today quarter you XXXX our Thank

today Management. with Ann Tim Monroe, On Asset of Stach, me Chief Chief Leigh Meyer, Accounting our the is Officer; and Financial EVP Officer; Bill call our our

data night. Our last furnished report filed earnings was announcement and on XX-Q our report were X-K, and on last quarterly and night released supplemental

In addition, investor an to last night. was our posted website updated presentation

from from The busy, both, operations sorry, an and both an an also acquisition operations third I'm standpoint. standpoint -- from was quarter

to leases to at properties lease term running rejection average in The quarter. X.X $X.X perspective, remaining stable attributed annual XX.X% a acquired were Occupancy with the office buildings of leased, XX.X% lease occurring a XXX,XXX GenesisCare approximately can square with X purchase XX, medical XX%. a a running During feet through returns leased, we decreased we years. X properties our to single total September leases purchase quarter, XXXX, for operations transaction decrease be for of million. XX.X% X.X% $XX.X weighted price million. the That with price properties of in anticipated and XXXX. From remained The acquired approximately to of from XX.XX%. Subsequent an were through approximately

GenesisCare, Myers, been we square When to good during prior have have square rejected relates X representing Fort activity leasing quarter was it at lease square rejected lease with in coupled rejection Asheville feet the tenant. Florida, in the GenesisCare both had leases the As in quarter, X in the feet, XX,XXX locations. which building and at the XX,XXX foot sole seen

with asset the As as for prepared filings, of monitor bankruptcy September has a closely, team was We the and sole approximately of extended bankruptcy Based of tenant our scheduled real situation and the properties progresses. counsel or properties, process X. auction management today, the feet. XX, multi-tenanted gross in outside X XXXX, approximately representing in GenesisCare currently tenant XX,XXX GenesisCare properties, been of engage to square recent court is to our timeline November our our estate on our X.X% and the continue X quickly

on investments As million. it We an acquired to on be and properties X.X% return after XXXX. expect X these completion expected $XXX.X relates of The close from for throughout our to pipeline, currently occupancy these expected properties investment the aggregate should X.XX%. has to to and range company XXXX

fund properties credit up, XX%-plus. to dividend on under term the We availability several our to to $X.XX anticipate returns an to $X.XXX enough review for continue This acquisitions, per many annualized our ATM have properties our of and and strategically the we markets. To dividend third the it utilize with to opportunistically to We out have our continue indicative wrap common equates quarter of to and X% raised sheets declared share. access relationships per share. banking through equity to having on and facilities we expect

quarter our of to the care items I raised have since to proud cover. our wanted takes are dividend We every IPO. That

Bill to to will off I hand So the things discuss numbers.

William Monroe

revolving to third utilities a and second the in of slightly increase repairs facility to under This from well we the details quarter-over-quarter of but more third have the in to the was our CEO the third decreased of property provide quarter pleased operating result I total quarter. From increase in on of acquired period, expenses of $XX.X quarter Thank taxes as in report the in in increased to from million $X.X Medicare an $XXX,XXX quarter-over-quarter. first the million third by in onetime seasonal total revenue quarter to $XX.X our higher quarter had million in expense caused XXXX during total basis, XXXX, $X.X former increased administrative third of quarter rates pro during in $X.X When day a from as properties XX.X% now by financial facility XXXX our expense the and decrease of growth third of the the quarter in total increases borrowings second expense primarily credit $X.X total increased second would the from during under million growth third $X.X representing to acquisitions the million third year. revenue vesting fund grew and to expenses of due XXXX, hot of of acquisitions quarter the if quarter summer the also on by $XXX,XXX months. General an the we pro our revolving in our to $XX.X of paid credit quarter, revenue interest quarter a I'm performance. the driven you, employer additional revenue same And XXXX. annual achieved compared $XX.X the as quarter in the HVAC our X.X% President's quarter. on XXXX million to second period over to million, forma last shares. Interest completed XXXX that million of forma occurred Dave. XXXX will perspective, million due the approximately the by

growth basis XXXX the quarter from important on Moving XXXX XXXX year-over-year. in to and to XXXX, per quarter quarter gain from share. the second for $XX remember, was the was X.X% second second these decreased in for the third quarter million common million quarter $XX the totaled casualty FFO in included compares of from the the funds quarter X of FFO million million of from also net third that per of of or of a compensation, vandalized. Adjusted to XXXX. in property quarter third from adjusts $XX.X $XX.X in X.X% growth AFFO, stock-based diluted quarter which third of $X.XX third which from received the basis, to operations, operations. in rent $XX.X AFFO third million XXXX insurance our proceeds or XXXX, is diluted to million over and FFO related the XXXX, in per periods, XXXX, or funds straight-line share increased $XX a to per it $XX.X to But $X.XX quarter FFO $X.XX year-over-year. $X.XX On $XXX,XXX share quarter declined of third and XXXX common or a in $X.XX AFFO of million. share was

the diluted share. That the question-and-answer grew session. pro the quarter-over-quarter. And a begin of to pro per So Joe, by quarter forma AFFO third are prepared remarks. $X.XX now ready our quarter, total million concludes the our we occurred have if by AFFO increased had the approximately we would a XXXX third common of or $XX.X $XXX,XXX X.X% day to acquisitions of first on finally, forma during completed on basis,

Operator

will time this Piper take At come Sandler. Instructions] first question, Connor [Operator from our Mitchell will we which with

Connor Mitchell

versus the talent without versus cash then great stock believe, So as And for thoughts multiplier multiplier? guys how G&A job mix compensation you all given compensation you your Xx any done new on about a was, how I the would just that thinking of all hire the can impact might finding provide the forward, with company look? have of stock you stock. But updated a going cash

David Dupuy

the hope for all well. is I thanks Connor, question.

the as Compensation we to Committee the and that are stock in part strong process -- with at to with with look with look knew a relates And And of -- recall, process to -- our that, that vote everyone but the it despite ongoing. to compensation. a of compensation the working at versus against going as along shareholders as consultant we the say-on-pay cash need provided were alignment now believe. that our So we ISS -- Board we is work of may unfortunately, mix,

give guidance I on So you any that can't yet, Connor.

I think cash of what will on not point, mix next, forward. to we're be say we're in prepared there some details at any is, And know, disclose in to it's so, evaluating stock again, And work disclosed. safe that the some just, going will stages my that's or early how that. that's X to and be months point of going I But to guess at don't like. look this that the and going

Connor Mitchell

construction some going do then And opportunity, course. of topic. core pulling and lending at different back, and banks the weakening what's from course, looking merchant let acquire developers of rather in given maybe and take see build-to-suit it stepping and a up would the of Yes, the developers? and developments And fund would group you maybe The be to on along once leased entrepreneurial comfortable that, in you guys developments? with some then stabilized? Or place then maybe is you

David Dupuy

have to the work to banking would fund seen community, level I for we've business the banks some a development there's takeout we've for that that us though continue projects those even of like with of years these types the past. And worked is, occupancy. certificate in banks our deals with what within done we have of with core in, of say So group go pressure that broadly actually upon

those or would funding a would as look. of those far take we doing ourselves, second to question, projects projects your some development certainly be As some of open we development

make think we that projects the vehicle a more the if overall to and I forward. intend construction that's partner our banks, given us to development then we partners of as projects, their do our is debt and, significant their we out. that quickly we're little with looking with change. cost those to in they're have increase become just kind those at help have that frankly, well. There's Obviously, preferred our for think what going and seen projects can And develop debt. But with can closely. budgets a more preferred things efficiently the evolve folks take or no working fund But bank of working projects to And very we're I more and have bit is counteract those they our adapt sure now, with partners. work haven't change, method our lenders expensive question

Operator

And Rob our next question with Stevenson come will from Janney.

Robert Stevenson

difference remaining Dave, centers feel was where the a profitability the there for Just the to assets? X if the others? on GenesisCare rejected major and trying was versus assets of X the between get coverage a those

David Dupuy

Yes.

-- and actually sort opportunity it's gives describe an X that So back me step a of facilities. take those to

rejection, lease the we first lease the because call, last a not through our that was working on they termination mentioned actually that tenant services with at to we think to I continue there location. decided Asheville, So were provide had

were not get not was was resolved were all that. to So lease disappointed as was going we our not resolved, part surprised process. that, that and Obviously, at of settlement we our termination before this that rejected

So that situation. Asheville is the

So time. care they were providing facility that at the in not

in a using. The administrative other back-office essentially space, was location use, space Fort office an is Myers that GenesisCare

that, providers to not was health cancer given that for disappointed that in dynamics. care care place all we together again, the so, And that leases surprising providing are The but rejected, all have are remaining patients. lease clinics,

from basis think to We you do levels obviously financial get more stable coverage than here. answer the other And center-by-center can't question on ones. those statements not so standpoint, so your give coverage are a a we

Robert Stevenson

those how is then how balls? back, assets you sort you vacant and those your you are confidence others selling of were -- those and -- juggling you re-tenanting just to versus were X level if And moving that how on, are in get Okay. any guys

David Dupuy

the Well, we're Myers prepared getting Fort both leasing in good I activity said locations. the as and at remarks, Asheville

So we're those re-lease to spaces. looking actively

feel those. good we So about

done being teams what We kind just have health move very spaces have studies care those able at need locations, we sure about the quickly I locations think rents determine actually market done also good to providing and But re-lease in the made feel to views are to. And that and our to some those those market they the tenants are. also other extent to of are. we

these is so hope move continue our and leases the for our under the would ownership. those next new to is And expectation buyer forward assets, whoever

Robert Stevenson

with just firm other about particular law that lends tenanted tenant medical asset in Fort anything or financials as office? some non-medical there Myers that to to fit could Is a that term? longer sort itself back would probably be your portfolio of the then firm easily Or not or a

David Dupuy

it's that. -- look, mean, we're looking relates to Yes. at I it as all options

that the we're care we on a magical that, all the space, health based but to potential to health ultimately, user, fit kinds there. different talking certainly So the users care as right talking being about well There's decide of nothing we're portfolio, for tenants isn't other as that final both may tenants. although

Robert Stevenson

we're list that watch And its the on subject, is next not any may on or focused that of you're you're X? tenants sort Okay. note That's then meet worried while or rent quarter delinquent the helpful. of more obligations other becoming over that

David Dupuy

-- and on we've mentioned the Rob too. call, this last

But specific along estate or relates time we're tell where when we're delinquent manage concerning to there's good and in receivables with of some are say we We a to tenants. folks a, be you're that XX process but names or kind a you to lines. could We that we're would we about is have in that manage you've of But X that nothing it's The sector watch X are that good your list. real consistent. any through. the our would I in shape, those that list. different, seeing vis-a-vis really that normal issues a general, sort it's anything feel are watch our that I at tenants. working got usually It's business working

is meaningful And or changed has different or a than it nothing was X so ago. today quarter

Robert Stevenson

Is last it other leave you debt there for over replenish on how Okay. you floating to attractive there? debt, the to line? about over term should thinking line How some you the and X fund some Bill, that's the in And X then or place be or be quarter that swaps to loans and me. X push are would months? today it the fixed term about it next put we that? next Is the just thinking out financing

William Monroe

$XX the of quarter revolver. at our under the outstanding With revolver we availability balance that end $XXX of currently have at million, million

certainly, we and primary over certainly mechanism And our use so the to think, of of look X to continue I facility. that all our in will financing as banks months, the our revolver appreciate next debt support

So near-term continue debt markets. horizon. monitor nothing But we the to the on certainly,

to near-term XXXX, so certainly maturities. we extend further and fortunate if look certainly, monitor maturities, next to until is Our opportunity isn't markets. maturity But opportunistic no the we at will will feel And that there's there continue an that.

Operator

from will question Our come Baird. next Wes Golladay with

Wesley Golladay

like it part place? the to plans talk wanted lease you for some how just just deal, and for it that's if to this be back-office the up got I plan It if to was have re-lease Would looks space follow sell the but action on and Genesis. space, maybe it? long-term the this curious bigger you first about asset? in a And up your of

David Dupuy

it is. Wes, question. Yes, thanks for the

So I we of the -- made, a portfolio this XXXX. that the December timeframe was acquisition company think, in

was that asset a is the part if it Fort ordinarily related a the wouldn't as after so, asset, in that And single Myers. to an you case sometimes asset you of go portfolio, get and

I firm after provision not health health our And yes, a care of care-related is -- look, we're going as assets. so focus mean,

the that, our knows everyone business. think of that's I focus

good some activity so, fit markets. away, both we both -- to translate And experiencing respective doesn't the options if said, lease Fort long might ultimately, although activity that like that, we good into that are attractive property. at sell and are Myers We're a in we're term, look locations, on good right table. their doesn't I necessarily feel All

wasn't part mean, health a acquisition we we not firm, But for so, a get right if larger a providers care back-office it to have and yes, ultimately, away. for transaction. the of done focus re-leased space that wouldn't And I hope those is

Wesley Golladay

that makes Yes, changed sense. in sellers with they -- how The interest guess, rise your have recent it. the conversations changed I all Got at potential with Have all? rates?

David Dupuy

on as translate we're going we're so an dialogue both seeing for from having some about in and activity on very standpoint, feel lot opportunities, us, sellers. precious is activity I I sides think we're solid the but marketplace. listen, and yes, mean, that good business. call, too. seeing great. is to the We everybody activity Yes, precious, that, that really been activity our We into activity knows it's good think potential a Capital more the it's with of this acquisition

agreements at us people that resulted from sale know, purchase good and market, well forward conversations in both And going As potential having an feel for today, we're brokerage dialogue though client also we are bodes looking those assets most in represented haven't acquisition the like but standpoint. specific that good dialogue we're with companies. even

this high, really other to they XXXX tougher buyers, it's because financing opportunities. had get and are in extent exchange to and from buyer, rates to obviously, now, the And competition seeing we -- be in funds, though choosy, the it's like a smaller a all-cash smaller feel buyers as and us or for so lot estate pretty whether even buyers environment. an advantage those for and got we're we've good funds So be we allowed of those marketplace right real nice

Wesley Golladay

can reasons, actual at Got a When give cap something always the due set you is change it. that can is clarification. have of rate the range, there the is actually the And typical rates, deal a you time cap nondisclosure or to this finally they closed?

David Dupuy

what -- referring that's are specifically, Wes? think I mean, I Yes. you to

Wesley Golladay

rate? cap the range see the set? can't the kind trying you Just there want give? have the cause a officially can if you deals, kind doesn't cap many Would You variation of million term for seller disclose? like -- range instead official Maybe this the rate not reason pinpoint this the $XXX to of of a you Or at rates? like -- or give, give not what deal on we range give between a is cap you is the to

David Dupuy

cap That purchase is a books. based the range sale and have agreements of rates we on on

they And between to so that's X.XX%. X.X% referring -- what you're and range in

and are break at rate just at out are higher We the some some the So don't which are lower rate. which.

Operator

will with Our Instructions] Jim Kammert Evercore. from next [Operator question come

James Kammert

remaining and ABR. the second right? check, third about Just Does talking leases to double supplements, with the of that between Genesis, about quarter sound it's X.X%

David Dupuy

X.X% -- that gross we've properties. I real question? leases, your remaining of representing X got think Is estate leases the so our

James Kammert

about [ was I rent ABR No, average base is rents. of of speaking ] X.X%

David Dupuy

amount. I'm not Yes. sure disclosed look. to I that we've have

James Kammert

thought... I Because right. All

David Dupuy

supplemental, have there. could you our disclosed think go mean, But that it. we into back I obviously I calculate you and could

James Kammert

kind No, companies How And that. about, do That's I et covered will thinking watch get cetera. maintain the of just parent then ABR do watch fine. of -- you identify I'm a you curious you talked -- combination are or potential is tenants where you assess how problems? list, financial on level how guarantor really do which how the do you and/or that of unit either report? list how much

David Dupuy

watch is requests on the special -- identified or based paying part that for lease delaying mean, Well, their maybe whatever. or payments I asking list as folks their are of

it XXX-plus got I mean, Jim. really varies. we've tenants, so And

give in It's are that. it's issues And tend broad-brush and tenants variety a related these would the is, if I our tell -- multi-tenanted to of can't be buildings. what And so specific you a most to I you on tenants of what situations.

we're issues. represents footage, of those of dialogue having it and small working focused on but through so and very, all And any very very square amount

getting buildings, they're our smaller multi-tenanted physician tenants if XYZ we're in so financial group's And not statements. the

-- but really we're larger with statements have -- about, that issues larger to so can if but we having them varies. it's tenant, just if a we -- it it may then talk And financial a

on a And for that's give me related so to you to. it's hard broad-brush what

represent these list you tenants is, footage. of would we're don't square tell are amounts most the I of large with tenants dialogue that watch What having

they're not financial that are so They not information tend that And "client we're operate. so tenants," be getting the on MOBs those. to and in tenants smaller we

James Kammert

more? tenant where of appreciate less it. financials? actually for clear that I is ]. the receive or reported do [ But No, you ABR, get what fair. financials I you XX% covered that's amount I or wasn't ABR mean of do is percentage

David Dupuy

answer calculated amount. can for never that a I We don't -- good you. I've have

James Kammert

I just know. Okay. curious may was you

David Dupuy

Yes. the overall about and and be if of significant tenants, MOBs, amount that's physician our percent just would XX-plus of of I guessing. think assets. you our got I clinics mean it, makeup we've a

going And be so those individual to in not we're statements. getting financial assets,

kind financial single on remaining can larger you tenants, to so that look give we're The And of those. it going at statements way.

So my I XX%, less but specific is, than guess you it's a can't number. something give

Operator

session. conference remaining And with the remarks. like questions, Dave now no closing question-and-answer to Dupuy we I over the for will conclude back any turn to would

David Dupuy

look appreciate again the on appreciate to Thank We talking to the and everybody really forward in phone everybody questions. new the year. We you.

Operator

presentation. Thank now you today's conference concluded. The for has attending

You may disconnect now lines. your

Community Healthcare Trust (CHCT) 1 Nov 232023 Q3 Earnings call transcript