Community Healthcare Trust(US:CHCT)2023-11-01 19:16Financial Data and Key Metrics Changes - Total revenue increased from $24.8 million in Q3 2022 to $28.7 million in Q3 2023, representing a 15.8% year-over-year growth [23] - Funds from operations (FFO) rose from $13.8 million in Q3 2022 to $15 million in Q3 2023, an 8.9% increase year-over-year [24] - Adjusted funds from operations (AFFO) totaled $16.4 million in Q3 2023, up from $15.4 million in Q3 2022, marking a 6.9% year-over-year growth [89] - General and administrative expenses decreased from $3.8 million in Q2 2023 to $3.6 million in Q3 2023 [5] - Interest expense increased from $4.1 million in Q2 2023 to $4.6 million in Q3 2023 due to higher borrowings and interest rates [68] Business Line Data and Key Metrics Changes - The company acquired 7 properties totaling approximately 177,000 square feet for about $51.7 million, with properties 99.8% leased [65] - The weighted average remaining lease term remained stable at 7.1 years, while occupancy decreased from 91.7% to 91% due to lease rejections [86] Market Data and Key Metrics Changes - The company has 7 properties under review with expected investments of $166.5 million, anticipated returns ranging from 9.1% to 9.75% [66] - The company continues to see good leasing activity at locations previously occupied by GenesisCare, indicating a stable market demand [31] Company Strategy and Development Direction - The company plans to opportunistically utilize the ATM to access equity markets and expects to continue funding acquisitions through banking relationships [22] - The focus remains on healthcare-related assets, with a willingness to consider selling non-core properties if they do not fit long-term strategies [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing dialogue with potential sellers, indicating a positive outlook for acquisition opportunities [78] - The company is monitoring the debt markets closely, with no immediate maturities until 2026, allowing for strategic planning [76] Other Important Information - The company declared a dividend of $0.455 per common share for Q3, raising the annualized dividend to $1.82 per share [87] - Property operating expenses increased by approximately $670,000 quarter-over-quarter, attributed to seasonal increases and newly acquired properties [88] Q&A Session Summary Question: What is the mix of cash versus stock compensation for new hires? - Management is evaluating the compensation structure and will disclose details in the next 6 months [8] Question: How is the company approaching debt financing in the next 6 months? - The company plans to primarily use its revolving credit facility and will monitor the debt markets for opportunistic refinancing [76] Question: What is the confidence level in re-tenanting rejected assets versus selling them? - Management is optimistic about re-leasing the spaces and has conducted market studies to assess rental rates [31] Question: How has the recent rise in interest rates affected conversations with potential sellers? - The company feels it has an advantage as an all-cash buyer, allowing for selective acquisition opportunities [100]