Property Portfolio - As of June 30, 2023, the company owned 202 properties across 33 states, totaling 9.0 million rentable square feet[269] - As of June 30, 2023, the company had 154 medical office and other healthcare-related buildings with a leased percentage of 91.5%[283] - The company has acquired 5 properties and disposed of 5 properties in the six months ended June 30, 2023[286] Financial Performance - Net loss attributable to common stockholders for Q2 2023 was $20.8 million, a slight improvement from a loss of $21.1 million in Q2 2022, representing a decrease of 1.4%[287] - Revenue from tenants increased to $86.1 million in Q2 2023, up from $83.8 million in Q2 2022, reflecting a growth of 2.7%[287] - Total operating expenses decreased to $84.985 million in Q2 2023, down from $89.762 million in Q2 2022, a reduction of 5.3%[287] - Net loss attributable to common stockholders decreased to $38.3 million for the six months ended June 30, 2023, compared to $47.9 million for the same period in 2022, representing a reduction of approximately 20.5%[326] - Revenue from tenants increased by $5.983 million to $173.459 million for the six months ended June 30, 2023, compared to $167.476 million in 2022, marking a growth of approximately 3.6%[326] - Total expenses decreased by $15.197 million to $170.515 million for the six months ended June 30, 2023, from $185.712 million in 2022, a decline of approximately 8.2%[326] Occupancy and Rent Concessions - The occupancy rate in the Seniors Housing Operating Properties (SHOP) segment was 73.3% as of June 30, 2023, a decline of 1.5% from December 31, 2022[275] - The company experienced a decline in occupancy in the SHOP segment from a high of 85.1% in December 2019 to a low of 72.0% in March 2021[275] - Rent concessions granted in the SHOP segment amounted to $0.8 million and $1.4 million for the three and six months ended June 30, 2023, compared to $0.7 million and $2.0 million in the same periods of 2022[277] - Same Store properties experienced a reduction in rent concessions, amounting to $1.4 million in the first half of 2023, compared to $4.9 million in the same period of 2022[337] Expenses and Operating Income - Net Operating Income (NOI) for Same Store Properties was $23.566 million in Q2 2023, compared to $24.109 million in Q2 2022, indicating a decline of 2.3%[292] - Property operating and maintenance expenses increased by $1.1 million in Q2 2023, primarily due to inflation impacts on utility and maintenance costs[296] - Property operating and maintenance expenses decreased by $0.1 million to $44.1 million for the three months ended June 30, 2023, primarily due to a $1.6 million decrease from Disposed Properties, partially offset by a $1.5 million increase in Same Store Properties[303] - Same Store properties' operating and maintenance expenses increased by $1.9 million due to higher overtime wages and inflation on utilities and supplies, while contract labor costs decreased by $2.0 million[304] - Property operating and maintenance expenses in the MOB segment increased by $1.4 million, primarily due to inflation impacts, reaching $18.172 million for the six months ended June 30, 2023[331] Debt and Interest Expense - The company reported a significant increase in interest expense, rising to $18.703 million in Q2 2023 from $12.050 million in Q2 2022, an increase of 55.5%[287] - As of June 30, 2023, outstanding debt obligations were $1.2 billion at a weighted average interest rate of 5.49%, compared to $1.1 billion at 3.76% as of June 30, 2022[318] - Interest expense increased by $6.7 million to $18.7 million for the three months ended June 30, 2023, mainly due to the acceleration of deferred financing costs and higher average rates[317] - Interest expense rose to $34.488 million for the six months ended June 30, 2023, compared to $23.814 million in 2022, an increase of approximately 44.8%[326] - Interest expense rose by $10.7 million to $34.5 million for the six months ended June 30, 2023, primarily due to higher average rates and balances of outstanding debt[353] Cash Flow and Dividends - Net cash provided by operating activities was $10.7 million for the six months ended June 30, 2023, down from $13.7 million in the same period of 2022[363] - Net cash used in investing activities was $34.4 million for the six months ended June 30, 2023, including $25.4 million for the acquisition of five properties[365] - The company declared quarterly dividends of $1.84375 per share for Series A Preferred Stock, equivalent to 7.375% per annum based on a $25.00 liquidation preference[407] - The company has not paid cash dividends on common stock since mid-2020, opting instead for stock dividends at a rate of $0.85 per share per year[409] - Total cash distributions for the three months ended June 30, 2023, amounted to $3.497 million, with 52.5% allocated to Series A Preferred Stock and 46.2% to Series B Preferred Stock[413] Market and Economic Conditions - As of June 30, 2023, the 12-month Consumer Price Index (CPI) increase was 3.0%, impacting leases without indexed escalation provisions[417] - The company’s ability to pay dividends is contingent on cash generated from property operations, which is influenced by various factors including the COVID-19 pandemic[414] - There has been no material change in the company's exposure to market risk during the six months ended June 30, 2023[421]
HEALTHCARE(HTIA) - 2023 Q2 - Quarterly Report