Generation me Properties(GIPR) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue from operations for Q2 2023 was $1.3 million, representing a slight year-over-year decrease due to a tenant vacancy in one of the properties [14] - Operating expenses remained flat at $2 million compared to the same period last year, reflecting efforts to reduce costs in a rising interest rate environment [14] - Net operating income decreased to $1 million from $1.1 million in the same period last year, also attributed to the tenant vacancy [15] - Net loss attributable to common stockholders was $881,000, an improvement from a loss of $1 million in the same period last year [15] - Core AFFO was a loss of $33,000 compared to income of $36,000 for the same period last year, again linked to the tenant vacancy [15][16] Business Line Data and Key Metrics Changes - The company has doubled its portfolio size with the acquisition of a 13-property, 202,000 square foot portfolio for $42 million, achieving a cap rate of 7.55% [6][9] - The weighted average remaining lease term is now approximately 5.2 years, reflecting a focus on short-term leases [9] - Retail asset distribution increased to 55% following the acquisition [9] Market Data and Key Metrics Changes - The company now owns 26 assets across 13 states, indicating a significant expansion in its market presence [11] - The acquisition was executed in a challenging market, highlighting the company's ability to identify and capitalize on opportunities [12] Company Strategy and Development Direction - The company aims to continue its external growth plans by acquiring high-quality, shorter-term assets [11] - The recent acquisition is viewed as transformative, demonstrating the company's capability to execute significant transactions even amid market uncertainty [12] Management's Comments on Operating Environment and Future Outlook - Management believes the market may be turning in their favor, allowing for continued growth opportunities [11] - The company is focused on maintaining a healthy balance sheet and is well-positioned to withstand current market uncertainties [16] Other Important Information - The acquisition was financed with approximately $21 million in mortgage debt, $9 million in cash, and $12 million in newly issued redeemable preferred shares [6] - The company emphasizes its relational core value, which facilitated the successful transaction with Modiv Inc. [10] Q&A Session Summary Question: Will the earnings from the recent acquisition cover the dividend? - Management indicated that while the dividends will not be covered immediately after the transaction, they are confident that continued growth will allow for coverage in the near term [21] Question: Does the company have the management capacity to pursue other transactions quickly? - Management expressed confidence in their ability to continue growing the portfolio without adding staff or incurring significant additional expenses, indicating readiness for further acquisitions [32]