Property Portfolio - As of September 30, 2023, the company owned 204 properties across 33 states, totaling 9.0 million rentable square feet[271]. - The SHOP segment includes 48 properties with a percentage leased of 74.1% as of September 30, 2023[286]. - The company acquired 7 properties and disposed of 5 properties during the nine months ended September 30, 2023[289]. - The company disposed of four SHOPs and one MOB for an aggregate contract sales price of $13.8 million during the nine months ended September 30, 2023[394]. - During the nine months ended September 30, 2023, the company acquired seven single-tenant MOBs for an aggregate purchase price of $34.9 million[392]. Financial Performance - Net loss attributable to common stockholders decreased to $19.6 million for Q3 2023 from $23.3 million in Q3 2022, representing a reduction of approximately 16%[290]. - Revenue from tenants increased to $85.686 million in Q3 2023, up from $83.460 million in Q3 2022, reflecting a growth of 2.7%[290]. - Total operating expenses decreased to $86.425 million in Q3 2023 from $92.004 million in Q3 2022, a decline of approximately 6.5%[290]. - Net loss attributable to common stockholders decreased to $57.8 million for the nine months ended September 30, 2023, compared to $71.2 million for the same period in 2022, representing an improvement of $13.3 million[326]. - Revenue from tenants increased by $8.2 million to $259.1 million for the nine months ended September 30, 2023, compared to $250.9 million in 2022[326]. Operating Expenses - Property operating and maintenance expenses remained consistent at $9.4 million for both Q3 2023 and Q3 2022[299]. - Property operating and maintenance expenses rose by $3.1 million to $44.95 million for the three months ended September 30, 2023, primarily due to a $4.4 million increase in Same Store Properties expenses[304]. - Property operating and maintenance expenses in the MOB segment increased by $1.4 million, primarily due to a $1.2 million increase from same store properties[331]. - The increase in property operating and maintenance expenses was largely attributed to inflation impacts on utility and maintenance costs, which are reimbursed by tenants[332]. Revenue Segments - Revenue from tenants in the Medical Office Buildings (MOB) segment was $32.594 million in Q3 2023, slightly down from $32.779 million in Q3 2022, a decrease of 0.6%[296]. - Revenue from tenants in the SHOP segment increased by $1.8 million to $52.03 million for the three months ended September 30, 2023, compared to $50.25 million for the same period in 2022[302]. - Revenue from tenants in the MOB segment increased by $3.2 million, driven by $2.4 million from acquired properties and $0.7 million from same store properties[329]. - Revenue from tenants in the SHOP segment increased by $5.0 million to $157.96 million for the nine months ended September 30, 2023, compared to $152.91 million in the same period of 2022, primarily driven by an increase of $8.1 million from Same Store properties[336]. Debt and Interest Expenses - Outstanding debt obligations as of September 30, 2023, were $1.2 billion at a weighted average interest rate of 5.56%, compared to $1.1 billion at 4.29% in the prior year[318]. - Interest expense increased to $15.720 million in Q3 2023 from $13.284 million in Q3 2022, an increase of approximately 18.3%[290]. - Interest expense increased by $13.1 million to $50.2 million for the nine months ended September 30, 2023, compared to $37.1 million in 2022[326]. - Interest expense increased by $2.4 million to $15.7 million for the three months ended September 30, 2023, due to higher average rates and balances of indebtedness[317]. Dividends and Distributions - The company has declared and paid quarterly dividends entirely in shares of common stock since October 2020, with an Estimated Per-Share NAV of $14.00 as of December 31, 2022[274]. - Since mid-2020, no cash dividends have been paid on common stock, only stock dividends at a rate of $0.85 per share per year[413]. - Total cash distributions for the nine months ended September 30, 2023, amounted to $10.487 million, with each quarter showing consistent distributions around $3.494 million to $3.497 million[416]. - The Board may reduce or suspend dividend payments based on various factors, including financial condition and capital expenditure requirements[414]. Cash Flow and Operating Activities - Net cash provided by operating activities was $16.4 million for the nine months ended September 30, 2023, with cash inflows including non-cash items of $18.1 million[361]. - Net cash provided by operating activities for the nine months ended September 30, 2023, was $21.1 million, with cash inflows including non-cash items of $30.4 million[362]. - Cash flows provided by operations for the nine months ended September 30, 2023, were $16.358 million, indicating a reliance on operational cash flow to fund distributions[416]. Economic and Market Conditions - The company’s ability to pay dividends depends on increasing cash generated from property operations, which is influenced by various external factors[418]. - Increased operating costs under net leases could adversely affect tenants' ability to pay rent, impacting the company's revenue[421]. - The company faces risks related to inflation and labor costs in its SHOPs, which could affect operational results if unable to renew leases at market rates[422]. - As of September 30, 2023, the 12-month CPI increase was 3.7%, impacting leases without indexed escalation provisions[420]. - Most leases in the MOB segment contain rent escalation provisions, but these rates are generally below the current inflation rate, potentially affecting revenue[420].
HEALTHCARE(HTIBP) - 2023 Q3 - Quarterly Report