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Sila Realty Trust, Inc.(SILA) - 2024 Q3 - Earnings Call Transcript
SILASila Realty Trust, Inc.(SILA)2024-11-12 22:01
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Financial Data and Key Metrics Changes - GAAP net income for Q3 2024 was 11.9millionor11.9 million or 0.21 per diluted share, down from 15millionor15 million or 0.26 per diluted share in Q3 2023 [38] - Cash NOI for Q3 2024 was 40.8million,adecreaseof7.640.8 million, a decrease of 7.6% from 44.2 million in Q3 2023 [39] - AFFO for Q3 2024 was 31.7millionor31.7 million or 0.57 per diluted share, a decrease of 7.1% from 34.1millionor34.1 million or 0.60 per diluted share in Q3 2023 [43] Business Line Data and Key Metrics Changes - The company reported cash NOI increases at other same-store properties of 2.2% or approximately 765,000comparedtoQ32023[39]−Theportfolioconsistedof136propertiesin65markets,withaweightedaverageremainingleasetermof8.3years,upfrom8.2yearslastquarter[28]MarketDataandKeyMetricsChanges−Thecompany’sportfolioweightedaverageleaseratedecreasedby2765,000 compared to Q3 2023 [39] - The portfolio consisted of 136 properties in 65 markets, with a weighted average remaining lease term of 8.3 years, up from 8.2 years last quarter [28] Market Data and Key Metrics Changes - The company’s portfolio weighted average lease rate decreased by 2% to 95.5% from 97.5% due to the reduction of approximately 181,000 lease square feet related to a property formerly leased to Steward [29] - 68% of ABR from tenants who provided financial reporting maintained a strong EBITDARM coverage ratio of 4.82 times [31] Company Strategy and Development Direction - The company focuses on investing in high-quality healthcare properties, particularly in medical outpatient buildings, inpatient rehab facilities, and surgical and specialty facilities [16] - The company aims to leverage its low leverage fortified balance sheet and strong capital position to pursue investment opportunities [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the investment thesis due to demographic trends, with an increasing number of patients expected in healthcare facilities [12] - The company anticipates greater acquisition opportunities in 2025, particularly in the Sunbelt region [60] Other Important Information - The company announced a share repurchase program and completed a tender offer buying approximately 50 million of outstanding shares [19] - The Board of Directors approved a change in the frequency of the company's distributions from monthly to quarterly, effective in 2025 [52] Q&A Session Summary Question: Can you talk about the acquisition pipeline and pricing? - Management noted an increasing volume of potential transactions and emphasized a focus on outpatient medical facilities in the Sunbelt region [60] Question: What about the EBITDARM coverage disclosures? - Management clarified that 10 properties fall under the one times EBITDARM coverage, with 50% affiliated with large national healthcare systems [64] Question: What is the primary use of the Staunton facility? - Management stated they are agnostic to the use of the property and have engaged a broker to market it [67] Question: What is the interest rate on the Lynchburg mezzanine loans? - The interest rate is characterized as mid-teens for both loans, with draws expected to begin later this month [72] Question: What was the revenue impact from the Steward property? - The revenue impact from the Steward property was approximately $275,000 for the quarter [75] Question: Can you share the cap rate on the Arkansas acquisition? - Management does not disclose cap rates on acquisitions but indicated it fits within their expected range [88]