Global Medical REIT(GMRE)2025-02-28 16:20Financial 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]