Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or ...

Group 1 - The announcement of tariffs is expected to lead to widespread dividend cuts across various sectors [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on corporate financial strategies and large-scale financings [2] - Berzins has contributed to the institutionalization of the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [2] - His work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [2]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Global Medical REIT Inc.'s unaudited condensed consolidated financial statements as of March 31, 2025, and for the three months ended March 31, 2025 and 2024, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, with detailed notes on accounting policies [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to **$1.27 billion**, driven by real estate investment, while total liabilities rose to **$731.5 million** due to increased borrowings, leading to a decrease in total equity to **$538.1 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investment in real estate, net | $1,178,002 | $1,161,995 | | Total assets | $1,269,555 | $1,256,486 | | Credit Facility, net | $662,782 | $631,732 | | Total liabilities | $731,452 | $700,570 | | Total equity | $538,103 | $555,916 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for Q1 2025 significantly increased to **$3.7 million** from **$2.3 million** year-over-year, primarily due to a **$1.4 million** gain on property sales, despite a slight revenue decrease to **$34.6 million** Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $34,618 | $35,118 | | Total expenses | $32,199 | $32,804 | | Gain on sale of investment properties | $1,358 | $— | | Net income | $3,737 | $2,314 | | Net income attributable to common stockholders | $2,104 | $794 | | Net income per share – basic and diluted | $0.03 | $0.01 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$12.3 million** in Q1 2025, while investing activities used **$27.2 million**, and financing activities provided **$13.6 million**, resulting in a **$1.4 million** overall cash decrease Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,272 | $14,293 | | Net cash used in investing activities | ($27,224) | ($2,716) | | Net cash provided by (used in) financing activities | $13,598 | ($10,495) | | Net (decrease) increase in cash | ($1,354) | $1,082 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, Q1 2025 property acquisitions and dispositions, debt structure including a **$900 million** credit facility and interest rate swaps, and the **$300 million** ATM program - During Q1 2025, the Company acquired three properties and sold two medical office buildings, resulting in a gain of **$1.3 million**[47](index=47&type=chunk)[50](index=50&type=chunk) - The Company has a **$900 million** unsecured syndicated credit facility, comprising **$500 million** in term loans and a **$400 million** revolver, with compliance to all financial covenants as of March 31, 2025[60](index=60&type=chunk)[61](index=61&type=chunk) - The Company uses nine interest rate swaps to fix the SOFR component on its **$350 million** Term Loan A at **1.36%** through April 2026 and its **$150 million** Term Loan B at **2.54%** through January 2028[69](index=69&type=chunk) - The company declared and paid quarterly dividends of **$0.21** per common share and **$0.46875** per Series A Preferred share during Q1 2025[75](index=75&type=chunk)[77](index=77&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, including **$31.5 million** in property acquisitions and **$8.2 million** in dispositions, monitoring interest rates and wage inflation, and addressing a tenant's Chapter 11 filing, while reconciling GAAP to non-GAAP metrics - The company's strategy focuses on investing in healthcare properties like medical office buildings in secondary markets, aiming for attractive dividends and stock price appreciation[128](index=128&type=chunk)[130](index=130&type=chunk) - In Q1 2025, the company acquired three properties for **$31.5 million** and sold two properties for **$8.2 million**, resulting in a **$1.4 million** gain[147](index=147&type=chunk)[148](index=148&type=chunk) - A tenant, Prospect Medical Group, filed for Chapter 11 bankruptcy, with an agreement reached for lease rejection at the East Orange, NJ facility and payment of post-petition amounts due through February 2025[149](index=149&type=chunk) Q1 2025 vs. Q1 2024 Key Performance Metrics (per share/unit) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income attributable to common stockholders | $0.03 | $0.01 | | FFO attributable to common stockholders | $0.20 | $0.21 | | AFFO attributable to common stockholders | $0.22 | $0.23 | | Dividends per share of common stock | $0.21 | $0.21 | [Consolidated Results of Operations](index=47&type=section&id=Consolidated%20Results%20of%20Operations) Q1 2025 total revenue decreased by **$0.5 million** to **$34.6 million** due to dispositions, while G&A expenses fell by **$0.8 million**, and a **$1.4 million** gain on property sales drove net income to **$3.7 million** - Total revenue decreased by **$0.5 million** year-over-year, primarily due to property dispositions completed since March 31, 2024[160](index=160&type=chunk)[162](index=162&type=chunk) - General and administrative expenses decreased by **$0.8 million**, mainly due to a **$1.0 million** reduction in non-cash LTIP compensation expense related to the CEO's transition agreement[163](index=163&type=chunk) - Interest expense rose by **$0.3 million** due to higher average debt balances, despite a slight decrease in the weighted average interest rate from **3.90%** to **3.83%**[167](index=167&type=chunk)[168](index=168&type=chunk) - A gain on sale of investment properties of **$1.4 million** was recognized in Q1 2025, with no comparable gains in Q1 2024[170](index=170&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is sourced from operations, debt, and equity, with **$187 million** available on the Revolver and a **$300 million** ATM program, while fixed-rate debt totals **$514.3 million** at **3.18%** - Short-term liquidity requirements include interest, principal payments, including a **$13 million** loan maturing in July 2025, G&A expenses, and dividends[176](index=176&type=chunk) - Primary external liquidity sources are the Credit Facility and equity issuances, with **$187 million** available on the Revolver as of May 6, 2025[181](index=181&type=chunk)[183](index=183&type=chunk) - The company has a **$300 million** "at-the-market" (ATM) equity offering program, with no shares sold under it during Q1 2025[182](index=182&type=chunk) - Net cash from financing activities provided **$13.6 million** in Q1 2025, a reversal from a **$10.5 million** use in Q1 2024, driven by higher net borrowings on the Credit Facility[191](index=191&type=chunk) [Non-GAAP Financial Measures](index=54&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP measures like FFO and AFFO, reporting Q1 2025 FFO per share at **$0.20** and AFFO per share at **$0.22**, with detailed reconciliations provided Reconciliation of Net Income to FFO and AFFO (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $3,737 | $2,314 | | **FFO attributable to common stockholders** | **$14,779** | **$14,883** | | **AFFO attributable to common stockholders** | **$16,019** | **$16,529** | Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $3,737 | $2,314 | | **EBITDAre** | **$23,458** | **$23,288** | | **Adjusted EBITDAre** | **$24,200** | **$24,772** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate fluctuations on variable-rate debt, with **$167.1 million** unhedged borrowings; a **100 basis point** SOFR increase would reduce annual cash flow by **$1.7 million**, mitigated by interest rate swaps - The primary market risk is interest rate changes affecting debt used to acquire facilities, particularly borrowings under the Credit Facility[201](index=201&type=chunk)[202](index=202&type=chunk) - As of March 31, 2025, the company had **$167.1 million** of unhedged variable-rate debt; a **100 basis point** change in SOFR would impact annual cash flow by approximately **$1.7 million**[203](index=203&type=chunk) - The company's risk management objectives are to limit the impact of interest rate changes and lower borrowing costs, utilizing instruments like interest rate swaps[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[207](index=207&type=chunk) - No changes were made to internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[209](index=209&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, nor is it aware of any threatened litigation that would materially impact its financial condition - The Company is not presently subject to any material litigation nor is any material litigation threatened against it[211](index=211&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section supplements annual risk factors, highlighting potential adverse effects of global trade disruptions, trade barriers, and economic downturns on company performance - A new risk factor is disclosed concerning global trade disruption, trade barriers, and bilateral trade frictions, which could adversely affect the company's performance[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the period - None[214](index=214&type=chunk) [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the period - None[215](index=215&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No other information to report for the period - None[217](index=217&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL data, incorporating previously filed documents by reference - The report includes CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and Inline XBRL documents as filed exhibits[218](index=218&type=chunk)

Global Medical REIT (GMRE) Q1 2025 Earnings Call May 08, 2025 09:00 AM ET Company Participants Stephen Swett - PartnerJeffrey Busch - Chairman, President & CEOAlfonzo Leon - CIORobert Kiernan - CFO & TreasurerNone - ExecutiveJuan Sanabria - Managing DirectorGaurav Mehta - Managing Director Conference Call Participants Austin Wurschmidt - Senior Equity Research AnalystWesley Golladay - Senior Research AnalystJohn Massocca - Senior Research Analyst Operator Greetings, and welcome to the Global Medical REIT Fi ...

Global Medical REIT (GMRE) Q1 2025 Earnings Call May 08, 2025 09:00 AM ET Speaker0 Greetings, and welcome to the Global Medical REIT First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Sweatt, Investor Relations. Thank you, sir. You may begin. Speaker1 Thank you. Good mor ...

Atrium Health – Winston-Salem, NC FIRST QUARTER 2025 EARNINGS SUPPLEMENTAL www.globalmedicalreit.com NYSE: GMRE TABLE OF CONTENTS Legent Hospital for Special Surgery – Plano, TX | Company Overview | 3 | | --- | --- | | Select Quarterly Financial Data | 6 | | Business Summary | 7 | | Acquisitions / Dispositions | 8 | | Portfolio Summary | 9 | | Key Tenants | 12 | | Debt and Hedging Summary | 13 | | Total Capitalization and Equity Summary | 15 | | Sustainability Summary | 16 | | Condensed Consolidated | 17 | ...

Financial Performance - Global Medical REIT (GMRE) reported quarterly funds from operations (FFO) of $0.22 per share, matching the Zacks Consensus Estimate, but down from $0.23 per share a year ago [1] - The company posted revenues of $34.62 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.32% and down from $35.12 million year-over-year [2] - Over the last four quarters, GMRE has not surpassed consensus FFO or revenue estimates [2][3] Market Performance - GMRE shares have remained flat since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The current consensus FFO estimate for the upcoming quarter is $0.23 on revenues of $35.66 million, and for the current fiscal year, it is $0.91 on revenues of $143.05 million [7] Industry Outlook - The REIT and Equity Trust - Other industry is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of GMRE may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company reported steady Q1 results, highlighted by the completion of a **$69.6 million** five-property acquisition at an attractive **9.0%** cap rate, while FFO and AFFO per share saw slight year-over-year decreases, and net income attributable to common stockholders more than doubled, with portfolio leased occupancy remaining high at **95.6%** Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income (to common stockholders) | $2.1 million | $0.8 million | | Diluted EPS | $0.03 | $0.01 | | FFO per share and unit | $0.20 | $0.21 | | AFFO per share and unit | $0.22 | $0.23 | - Completed the acquisition of a five-property medical real estate portfolio for **$69.6 million** at a **9.0%** cap rate, adding **486,598** leasable square feet and **$6.3 million** in annualized base rent[2](index=2&type=chunk)[4](index=4&type=chunk) - Completed the disposition of two medical facilities for gross proceeds of **$8.2 million**, realizing a gain of **$1.4 million**, with the cap rate on the single occupied facility sold at **6.7%**[4](index=4&type=chunk)[11](index=11&type=chunk) - Portfolio leased occupancy was **95.6%** as of March 31, 2025[4](index=4&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) In Q1 2025, rental revenue decreased by **1.4%** year-over-year to **$34.6 million**, while total expenses also decreased to **$32.2 million**, primarily due to lower G&A costs related to executive compensation changes, consequently, net income attributable to common stockholders increased significantly to **$2.1 million** from **$0.8 million** in the prior year period Condensed Statement of Operations (YoY Comparison) | Account (in millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Rental Revenue | $34.6 | $35.1 | -1.4% | | Total Expenses | $32.2 | $32.8 | -1.8% | | Net Income | $3.7 | $2.3 | +61.5% | | Net Income (to common stockholders) | $2.1 | $0.8 | +162.5% | - General and administrative expenses decreased to **$3.6 million** from **$4.4 million** year-over-year, mainly due to a reduction in non-cash LTIP compensation expense related to the CEO's transition agreement[6](index=6&type=chunk) - Interest expense increased to **$7.2 million** from **$6.9 million** year-over-year, primarily due to higher average borrowings, which was partially offset by lower interest rates[7](index=7&type=chunk) [Portfolio and Investment Activity](index=2&type=section&id=Portfolio%20and%20Investment%20Activity) The company was active in portfolio management, completing a significant **$69.6 million**, five-property acquisition and disposing of two facilities for **$8.2 million**, while maintaining a high portfolio occupancy of **95.6%** and actively managing a tenant, Prospect Medical Group, which filed for Chapter 11 bankruptcy [Investment Activity](index=2&type=section&id=Investment%20Activity) - Completed a five-property portfolio acquisition for **$69.6 million** at a **9.0%** cap rate, adding **486,598** leasable square feet and **$6.3 million** in annualized base rent[9](index=9&type=chunk)[10](index=10&type=chunk) - The acquisition was completed in two tranches: three properties for **$31.5 million** in February 2025 and the remaining two for **$38.1 million** in April 2025[9](index=9&type=chunk)[10](index=10&type=chunk) - Disposed of two medical facilities for aggregate gross proceeds of **$8.2 million**, resulting in a **$1.4 million** gain, with the cap rate on the sale of the occupied facility at **6.7%**[11](index=11&type=chunk) [Portfolio Status](index=3&type=section&id=Portfolio%20Status) Portfolio Statistics (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Occupancy | 95.6% | | Leasable Square Feet | 4.9 million | | Annualized Base Rent | $113.4 million | | Weighted Average Lease Term | 5.6 years | | Weighted Average Annual Rent Escalations | 2.2% | | Portfolio Rent Coverage Ratio | 4.4 times | - Tenant Prospect Medical Group filed for Chapter 11 bankruptcy, rejecting its lease at the East Orange, NJ facility, and as of May 6, 2025, has paid the Company **$250 thousand** in post-petition amounts due through February 28, 2025 for that facility[13](index=13&type=chunk) [Balance Sheet, Capital, and Dividends](index=3&type=section&id=Balance%20Sheet%2C%20Capital%2C%20and%20Dividends) As of March 31, 2025, the company had total debt of **$677.0 million** with a leverage ratio of **46.1%** and a weighted average interest rate of **3.84%**, declaring its regular quarterly cash dividends for both common and Series A Preferred Stock without issuing any shares under its ATM program during the quarter [Balance Sheet and Capital Structure](index=3&type=section&id=Balance%20Sheet%20and%20Capital%20Structure) Debt & Leverage (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Total Debt Outstanding | $677.0 million | | Leverage | 46.1% | | Weighted Average Interest Rate | 3.84% | | Weighted Average Remaining Term | 1.8 years | - As of May 6, 2025, the Company had **$187 million** of borrowing capacity under its credit facility[16](index=16&type=chunk) - No shares of common stock were issued under the ATM program during Q1 2025 or through May 6, 2025[16](index=16&type=chunk) [Dividends](index=3&type=section&id=Dividends) - Declared a Q1 2025 cash dividend of **$0.21** per share for common stockholders, paid on April 9, 2025[17](index=17&type=chunk) - Declared a quarterly cash dividend of **$0.46875** per share for Series A Preferred Stock, paid on April 30, 2025[18](index=18&type=chunk) [2025 Guidance](index=4&type=section&id=2025%20Guidance) The company reaffirmed its full-year 2025 AFFO per share and unit guidance of **$0.89** to **$0.93**, based on assumptions including no additional unannounced acquisitions, dispositions, or equity/debt issuances, and excluding one-time costs related to the CEO succession plan - Reaffirmed full-year 2025 AFFO per share and unit guidance of **$0.89** to **$0.93**[19](index=19&type=chunk) - Key guidance assumptions include: - No additional acquisitions or dispositions beyond what has been announced - No additional equity or debt issuances outside of normal Revolver activity - Exclusion of one-time obligations related to the CEO succession plan[19](index=19&type=chunk)[24](index=24&type=chunk) [Appendix: Financial Statements and Reconciliations](index=8&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) This section provides the detailed unaudited financial statements for the period ended March 31, 2025, including the Condensed Consolidated Balance Sheets and Statements of Operations, and reconciliations of GAAP Net Income to non-GAAP measures such as Funds from Operations (FFO), Adjusted Funds from Operations (AFFO), and Adjusted EBITDAre [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investment in real estate, net | $1,178,002 | $1,161,995 | | Total Assets | $1,269,555 | $1,256,486 | | Total Liabilities | $731,452 | $700,570 | | Total Equity | $538,103 | $555,916 | [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Revenue | $34,618 | $35,118 | | Total Expenses | $32,199 | $32,804 | | Net Income | $3,737 | $2,314 | | Net income attributable to common stockholders | $2,104 | $794 | [Reconciliation of Net Income to FFO and AFFO](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20to%20FFO%20and%20AFFO) FFO and AFFO Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Income | $3,737 | $2,314 | | FFO attributable to common stockholders | $14,779 | $14,883 | | AFFO attributable to common stockholders | $16,019 | $16,529 | [Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDAre%20and%20Adjusted%20EBITDAre) EBITDAre Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Income | $3,737 | $2,314 | | EBITDAre | $23,458 | $23,288 | | Adjusted EBITDAre | $24,200 | $24,772 | [Appendix: Non-GAAP Measures and Definitions](index=5&type=section&id=Appendix%3A%20Non-GAAP%20Measures%20and%20Definitions) This section defines the non-GAAP financial measures used by the company, including Funds From Operations (FFO), Adjusted Funds From Operations (AFFO), and EBITDA for Real Estate (EBITDAre), and clarifies the calculation methodology for key operational metrics like Rent Coverage Ratio, Annualized Base Rent, and Capitalization Rate, which are used to evaluate portfolio performance - FFO is defined per NAREIT standards, starting with net income and excluding gains/losses from property sales, impairment losses, and real estate depreciation to measure core operating performance[27](index=27&type=chunk) - AFFO further adjusts FFO for items such as straight-line rent, stock-based compensation, and amortization of debt issuance costs to provide a measure of recurring operating performance[28](index=28&type=chunk) - EBITDAre and Adjusted EBITDAre are used to evaluate and compare core operating results and the ability to service debt[30](index=30&type=chunk)[31](index=31&type=chunk) - The Rent Coverage Ratio calculation excludes certain credit-rated tenants and approximately **21%** of the portfolio due to lack of financial information or small tenant size[32](index=32&type=chunk)

Debt and Financial Obligations - As of December 31, 2024, the company had $646.1 million of indebtedness outstanding, net of unamortized debt issuance costs[118]. - The company may face challenges in refinancing its debt on favorable terms, particularly as portions of its Credit Facility are set to mature in 2026[118]. - The company’s operational flexibility is limited by covenants in its debt agreements, and breaches could result in defaults and adverse financial impacts[113]. - The company is subject to financial covenants under the Credit Facility, including a maximum consolidated unsecured leverage ratio of less than 60%[415]. - As of December 31, 2024, the Company had outstanding borrowings under the Credit Facility totaling $636,600 million, netting to $631,732 million after unamortized debt issuance costs[418]. - The Company borrowed $143,800 million and repaid $99,600 million under the Credit Facility during the year ended December 31, 2024, resulting in a net amount borrowed of $44,200 million[417]. Revenue and Income - Total revenue for 2024 was $138,780, a decrease of 1.9% from $141,049 in 2023[335]. - Net income attributable to common stockholders for 2024 was $811, down 94.5% from $14,790 in 2023[335]. - Comprehensive loss attributable to common stockholders was $(5,211) in 2024, compared to a gain of $5,899 in 2023[338]. - Rental revenue for 2024 was $138,410, a decrease of 1.8% from $140,934 in 2023[335]. - The company reported a gain on the sale of investment properties of $4,205 in 2024, down from $15,560 in 2023[335]. Assets and Liabilities - Total assets decreased from $1,267.7 million in 2023 to $1,256.5 million in 2024, reflecting a reduction of approximately 0.9%[333]. - The company's total liabilities increased from $661.9 million in 2023 to $700.6 million in 2024, representing a rise of approximately 5.8%[333]. - The accumulated deficit increased from $238.98 million in 2023 to $293.74 million in 2024, indicating a decline of approximately 23%[333]. - The total equity of the company decreased from $605.8 million in 2023 to $555.9 million in 2024, a decline of approximately 8.2%[333]. - Tenant receivables rose to $7,424 million in 2024 from $6,762 million in 2023, with $2,838 million owed for earned but not received rent[366]. Tax and Regulatory Compliance - The company is required to distribute at least 90% of its taxable income to maintain its REIT status, which may limit its ability to fund future capital needs from retained cash[119]. - The company must distribute at least 90% of its REIT taxable income to maintain its REIT status, or face U.S. federal corporate income tax on undistributed taxable income[169]. - Failure to maintain REIT qualification could significantly reduce funds available for distributions to stockholders, impacting financial condition and stock price[165]. - The company may face tax liabilities that could reduce cash flows, including taxes on undistributed income and certain transactions conducted by its taxable REIT subsidiary[168]. - The company must ensure that at least 75% of its assets consist of qualified real estate assets to maintain REIT qualification, or risk adverse tax consequences[175]. Operational Challenges - Adverse trends in the healthcare industry, including regulatory changes and reimbursement pressures, may negatively impact tenants' ability to pay rent[123]. - Increased scrutiny and potential legal actions in the healthcare sector could lead to higher operating costs for tenants, affecting their rent payments[129]. - The company may be unable to sell healthcare facilities at a profit due to uncertain market conditions, potentially leading to losses[134]. - The company may face challenges in maintaining effective internal control over financial reporting, which could impact financial statements and stockholder distributions[143]. - Changes in national or regional economic conditions could affect the company's ability to acquire or dispose of healthcare properties at attractive prices[135]. Corporate Governance and Structure - The company has opted out of certain provisions of the Maryland General Corporation Law, which may inhibit third-party acquisition proposals[151]. - The Board has the authority to change business, investment, and financing strategies without stockholder approval, potentially increasing exposure to market fluctuations[156]. - Conflicts of interest may arise due to the company's UPREIT structure, affecting management duties and fiduciary responsibilities[144]. - The company’s charter restricts stock ownership to ensure compliance with REIT requirements, potentially delaying changes of control[149]. - The company has provisions in its charter that make it difficult to remove directors, requiring a two-thirds vote for removal, which may limit stockholder influence on management changes[159]. Cash Flow and Dividends - The company declared dividends to common stockholders of $0.84 per share, totaling $55,563 in 2024[341]. - The company paid dividends totaling $59,868,000 to common stockholders in 2024, slightly up from $59,025,000 in 2023[344]. - Net cash provided by operating activities increased to $70,046,000 in 2024 from $68,440,000 in 2023, reflecting a growth of 2.4%[344]. - The company reported a net cash used in investing activities of $(45,942,000) in 2024, a significant decrease from $67,616,000 in 2023[344]. - Total cash and cash equivalents at the end of the period increased to $8,942,000 in 2024 from $6,724,000 in 2023, marking a rise of 32.9%[344]. Investment and Acquisitions - The Company completed the acquisition of a 15-property portfolio during the year ended December 31, 2024, with transaction costs capitalized[400]. - The Company sold an in-patient rehabilitation facility in Mishawaka, Indiana for gross proceeds of $8.1 million, resulting in a loss of $3.4 million in June 2024[401]. - The Company sold a medical office building in Panama City, Florida for gross proceeds of $11.0 million, resulting in a gain of $1.7 million in July 2024[401]. - On December 20, 2024, the company entered into a joint venture, retaining a 12.5% ownership interest, which is expected to enhance its market position[384]. - The Company has aggregate capital improvement commitments of approximately $24.5 million, with expected obligations in the next twelve months totaling approximately $12.9 million[406].

Financial Data and Key Metrics Changes - At the end of Q4 2024, portfolio occupancy was 96.4% with a weighted average lease term of 5.6 years and a portfolio average rent coverage ratio of 4.5 times [8] - Net income attributable to common shareholders was $1.4 million, or $0.02 per share, compared to a net loss of $800,000, or $0.01 per share in Q4 2023 [29] - FFO attributable to common stockholders was $11.1 million, or $0.15 per share, down from $13.3 million, or $0.19 per share in Q4 2023 [29] - AFFO attributable to common stockholders was $15.8 million, or $0.22 per share, compared to $15.9 million in Q4 2023 [30] - Total revenues increased by approximately 6.7% to $35.2 million compared to the prior year [25] Business Line Data and Key Metrics Changes - The company completed the acquisition of a 15-property portfolio for $80.3 million, with an aggregate annualized base rent of $6.4 million, equating to an 8% cap rate [10][17] - In Q4, the company also entered into a purchase agreement for a five-property portfolio for $69.6 million at a 9% cap rate [11] Market Data and Key Metrics Changes - The transaction market for medical facilities continues to show promising momentum, with active engagement with physician groups and brokers to identify acquisition opportunities [16] - The company completed four property dispositions generating gross proceeds of $40.5 million, resulting in a gain of $5.8 million [12][22] Company Strategy and Development Direction - The company remains committed to maintaining a strong balance sheet through a strategic asset recycling program [12] - The joint venture with Heitman aims to target strong cash-on-cash returns and is expected to grow as Heitman raises more capital [42][44] - The company is focused on improving the quality of its portfolio by potentially selling off lower-quality assets [66][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current environment and execute its business strategy [38] - The CEO transition is seen as an opportunity to bring in fresh perspectives while maintaining a strong portfolio [14][51] - The company expects a 70% to 80% retention rate on lease expirations scheduled for 2025 [34] Other Important Information - The company recognized an impairment loss of $1.7 million in Q4 related to a facility in Derby, Kansas [28] - As of year-end 2024, the company had $651 million of total gross debt with a leverage ratio of 44.8% [35] Q&A Session Summary Question: Can you discuss the Heitman joint venture regarding target size and asset types? - The joint venture targets strong properties with decent lease terms, primarily single-tenant assets, and has about $50 million of equity available for this strategy [42][44] Question: What are the reasons for the CEO transition? - The CEO is stepping down due to age and a desire to reduce responsibilities, while still remaining active as chairman [50][51] Question: How much rent was collected from Prospect in Q4? - Prospect's exposure is around $150,000 per month, with the largest piece being the East Orange facility, which has been on a cash basis since late 2023 [56][82] Question: What is the expected CapEx for 2025? - The company expects capital expenditures of approximately $12 million to $14 million for 2025 [32][88] Question: Does the Heitman JV have a right of first refusal on new acquisitions? - No, the company retains the right to pursue acquisitions independently of the joint venture [106]