On February 27, 2024, Global Medical REIT Inc (GMRE, Financial) released its 8-K filing, outlining its financial results for the fourth quarter and full year ended December 31, 2023. The Maryland-based corporation, which specializes in acquiring healthcare facilities and leasing them to healthcare systems and physician groups, reported a decrease in rental revenue for the fourth quarter to $32.9 million. This decline was primarily due to property dispositions completed during the first nine months of 2023 and the recognition of reserves for rent related to a medical office building tenant.
Despite the challenges posed by high interest rates affecting transaction activity in the market, GMRE managed to generate $80.5 million in gross proceeds from dispositions, which contributed to reducing the company's leverage to 43.6% at year-end. Jeffrey M. Busch, Chairman, CEO, and President of GMRE, expressed appreciation for the team's efforts and optimism for a strong acquisition pipeline in 2024.
Financial Performance and Portfolio Health
GMRE's total expenses for the fourth quarter were $31.5 million, a decrease from the $34.5 million reported in the same period of the previous year. This reduction in expenses was attributed to the impact of property dispositions and a decrease in interest expense, which fell to $7.0 million from $8.1 million year-over-year.
The company's net loss attributable to common stockholders for the fourth quarter was $0.8 million, or $0.01 per diluted share, compared to a net income of $0.4 million, or $0.01 per diluted share, in the prior year period. Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) for the fourth quarter were reported at $13.3 million and $15.9 million, respectively, reflecting a slight decrease from the comparable prior year period.
GMRE's portfolio update showed a 96.5% occupancy rate, with 4.7 million leasable square feet and an annualized base rent of $110.2 million. The weighted average lease term stood at 5.8 years with average annual rent escalations of 2.1%, and a portfolio rent coverage ratio of 4.2 times.
Strategic Financial Management
In December 2023, GMRE completed the defeasance of a CMBS loan, resulting in a loss on extinguishment of debt of $0.9 million. The company's total debt carried a weighted average interest rate of 3.83% and a weighted average remaining term of 2.9 years. As of February 26, 2024, the company had a borrowing capacity under the credit facility of $294 million.
GMRE did not issue any shares of common stock under its ATM program for the year ended December 31, 2023, or from January 1, 2024, through February 26, 2024. The Board declared a cash dividend of $0.21 per share for the fourth quarter of 2023 and a cash dividend for the Series A Preferred Stock.
The company's balance sheet and capital management reflect a strategic approach to leveraging and growth, positioning GMRE for potential opportunities in the coming year.
For detailed financial tables and further information, readers are encouraged to view the full 8-K filing.
Global Medical REIT Inc. remains committed to delivering value to its stockholders through reliable dividends and long-term capital appreciation, despite the headwinds faced in the broader market.
Explore the complete 8-K earnings release (here) from Global Medical REIT Inc for further details.
