Global Medical REIT(US:GMRE)2023-11-07 19:30Financial Data and Key Metrics Changes - FFO in Q3 was $0.22 per share, down $0.01 from the previous year, while AFFO was $0.23 per share, down $0.02 from the previous year, primarily due to increased interest costs in the current quarter [9][18] - Net income attributable to common shareholders for Q3 was $3.1 million or $0.05 per share, compared to $8.1 million or $0.12 per share in Q3 2022, which included a gain from the sale of a property [31][41] - Total revenues increased slightly to $35.5 million, driven by the timing of 2022 acquisitions and portfolio performance, partially offset by property dispositions [38] Business Line Data and Key Metrics Changes - The portfolio consisted of gross investments in real estate of $1.4 billion with 96.7% occupancy and a weighted average lease term of 5.7 years [14][30] - Total expenses for Q3 were $33 million, up from $32.1 million in the prior year, mainly due to increased operating and G&A expenses [15] - G&A expenses in Q3 were $4.4 million compared to $4 million in Q3 2022, with stock compensation costs of $1.2 million [16] Market Data and Key Metrics Changes - The transaction market for target assets remains restricted due to higher interest rates and a wide bid-ask spread, although opportunities are beginning to emerge [11][24] - The investment landscape has shifted from a seller's market to a buyer's market, with expectations for improved leverage for buyers with access to capital [36] Company Strategy and Development Direction - The company intends to remain disciplined in its investment process, focusing on high-quality assets that are accretive to earnings [32][36] - The company is prepared to ramp up acquisition efforts once market conditions normalize and cap rates provide an attractive spread relative to the cost of capital [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market challenges and capitalizing on opportunities as they arise, with a strong portfolio and ample liquidity [35][20] - The company expects to retain 80% of the 363,000 square feet of leases expiring this year, projecting occupancy to end the year at approximately 96.5% [19][70] Other Important Information - The current unutilized borrowing capacity under the credit facility is $318 million, with no shares issued under the ATM program during the quarter [19] - The weighted average interest rate on total debt is 3.78%, with 89% of total debt being fixed rate [42] Q&A Session Summary Question: Is the dividend safe at current levels? - Management indicated that the Board does not plan to change the dividend and feels safe with it, expecting increases to exceed additional debt costs [2][75] Question: How much of the investment pipeline comes from new relationships versus existing ones? - Approximately one-third of the opportunities seen are from new sources, with the rest from existing relationships [79] Question: What is the outlook for lease expirations and occupancy? - The company expects to retain 80% to 85% of expiring leases, with occupancy projected around 96% to 96.5% [70][41] Question: Are sellers receptive to taking OP units? - The receptiveness to OP units varies, and many sellers are not familiar or comfortable with this option [76]