Global Medical REIT Inc
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
XRN$28.70-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-28.
0001558370-24-002000
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001558370-25-001938
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 135 current paragraphs.
73 unchanged; 29 reworded; 32 added; 14 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
During the year ended December 31, 2024 we completed the acquisition of a 15-property portfolio of outpatient medical real estate. In aggregate the portfolio had a purchase price of $80.3 million with 254,220 leasable square feet and annualized base rent of $6.4 million.
Current report
Properties Under Contract to Acquire and Acquisitions Completed Subsequent to December 31, 2024
Current report
In October 2024, we entered into a purchase agreement to acquire a five-property portfolio (the “five-property portfolio”) of medical real estate for an aggregate purchase price of $69.6 million. In February 2025, we completed the acquisition of three properties in the five-property portfolio encompassing an aggregate of 188,874 leasable square feet for an aggregate purchase price of $31.5 million with aggregate annualized base rent of $2.8 million. We expect to complete the acquisition of the remaining two properties in the five-
Current report
property portfolio, with an aggregate purchase price of $38.1 million, during the second quarter of 2025. The Company’s obligation to close the acquisition of the remaining two properties in the five-property portfolio is subject to certain customary terms and conditions, including due diligence reviews. Accordingly, there is no assurance that we will close this acquisition on the terms described above, or at all.
Current report
During the year ended December 31, 2024, we completed seven dispositions that generated aggregate gross proceeds of $60.7 million, resulting in an aggregate gain of $4.2 million. Of the $60.7 million of gross disposition proceeds in 2024, $35.2 million were related to the sale of two properties to a joint venture between us and Heitman (the “Joint Venture”), whereby Heitman maintains an 87.5% equity investment and we maintain a 12.5% equity investment in the Joint Venture.
Current report
Impairment of Investment Property
Current report
During the year ended December 31, 2024, we recognized an impairment loss of $1.7 million related to our Derby, Kansas facility.
Current report
During the year ended December 31, 2024, we generated gross proceeds of $12.0 million through ATM equity issuances of 1.2 million shares of our common stock at an average offering price of $9.95 per share.
Current report
Joint Venture
Current report
In December 2024, we entered into the Joint Venture with Heitman, a real estate investment firm with over $48 billion of assets under management. Pursuant to the Joint Venture operating agreement, we maintain a 12.5% investment in the Joint Venture and also serve as its managing member and Heitman maintains an 87.5% investment. Most economic decisions related to the Joint Venture are determined by the majority vote of an executive committee that consists of three members representing Heitman and two members representing our Company. As the managing member, we source new investments for the Joint Venture, manage the day-to-day activities of the Joint Venture and its assets, earn fees as compensation for such services, and are entitled to reimbursement of certain expenses we incur in the performance of such services. Pursuant to the terms of the Joint Venture operating agreement, we have the right to purchase investment opportunities for the Company before offering such opportunities to the Joint Venture.
Current report
In connection with the formation of the Joint Venture, we sold two of our assets to the Joint Venture (the “Seed Portfolio”) receiving gross proceeds of $35.2 million. We used $2.1 million of the sale proceeds from the Seed Portfolio to finance our initial 12.5%
Current report
capital investment in the Joint Venture. In connection with the acquisition of the Seed Portfolio, the Joint Venture entered into a mortgage loan with a principal amount of $17.6 million.
Current report
Recent Developments
Current report
CEO Succession Plan
Current report
On January 8, 2025, the Company and Jeffrey Busch, Chairman of the Board and Chief Executive Officer, reached an agreement regarding Mr. Busch’s transition from service as the Company’s Chief Executive Officer and anticipated continuation as a member of the Company’s Board. Pursuant toa Transition and Separation Agreement and General Release of Claims dated as of January 8, 2025 (the “Separation Agreement”), Mr. Busch, the Company and Inter-American Management LLC (“Inter-American”) agreed that Mr. Busch’s employment, and service as Chief Executive Officer and President of the Company and Inter-American, would end no later than the first to occur of (i) the date that a successor to the position of Chief Executive Officer who has been appointed in accordance with the Board’s approved succession process begins employment, or (ii) June 30, 2025 (such date that is the first to occur, the “Succession Date”). The Board has directed the Nominating and Corporate Governance Committee of the Board to conduct a comprehensive search process to identify a new Chief Executive Officer with the assistance of an executive search firm. Mr. Busch intends to stand for re-election as a director at the Company’s 2025 annual meeting of stockholders, and it is expected that he will continue to serve as non-executive Chairman of the Board following the Succession Date. Mr. Busch’s departure is not the result of any disagreement with the Company on any matter relating to its operations, policies, or practices.
Current report
Pursuant to the Separation Agreement, and in consideration for Mr. Busch (i) assisting with the transition to the new Chief Executive Officer and continuing in employment through the Succession Date, (ii) executing, and not revoking, releases of claims in favor of the Company, and (iii) otherwise satisfying the terms of the Separation Agreement, Mr. Busch will receive separation benefits to which he is entitled under that certain Employment Agreement between Mr. Busch and the Company effective as of July 9, 2020 and later amended by that certain letter agreement dated January 27, 2021 following his cessation of employment.
Current report
For the year ended December 31, 2024 the Company accrued $3.2 million for cash severance related costs included in the “Accounts Payable and Accrued Expenses” line item on the Company’s Consolidated Balance Sheets with the expense included in the “General and Administrative Expense” line item on the Company’s Consolidated Statements of Operations.
Current report
Chapter 11 Bankruptcy Filing of Prospect Medical Group
Current report
On January 11, 2025, our tenant, Prospect Medical Group (“Prospect”), filed for Chapter 11 bankruptcy reorganization. As of January 11, 2025, Prospect owed us approximately $2.4 million related to leases at three of our healthcare facilities, including $2.2 million related to our facility in East Orange, New Jersey. As of February 26, 2025, Prospect had not yet decided if it was going to accept or reject its leases with us. If Prospect rejects any of its leases with us, we would have a general unsecured claim with respect to amounts owed under any rejected lease.
Current report
Depreciation expense for the year ended December 31, 2024 was $40.4 million, compared to $41.3 million for the same period in 2023, a decrease of $0.9 million. The decrease primarily resulted from the full year impact of three property dispositions that were completed during the year ended December 31, 2023 and the impact from seven property dispositions that were completed during the year ended December 31, 2024, partially offset by the impact of 15 properties that were acquired in 2024.
Current report
Amortization expense for the year ended December 31, 2024 was $14.9 million, compared to $16.9 million for the same period in 2023, a decrease of $2.0 million. The decrease primarily resulted from the full year impact of three property dispositions that were completed during the year ended December 31, 2023 and the impact from seven property dispositions that were completed during the year ended December 31, 2024, partially offset by the impact of 15 properties that were acquired in 2024.
Current report
Income Before Other Income (Expense)
Current report
Income before other income (expense) for the year ended December 31, 2024 was $4.2 million, compared to $7.0 million for the same period in 2023, a decrease of $2.8 million.
Current report
Impairment of Investment Property
Current report
In December 2024, we entered into an agreement to sell our facility located in Derby, Kansas. We recognized an impairment loss of $1.7 million during the fourth quarter of 2024 to reduce the carrying value of the asset to its fair value, which was determined to be the contractual sales price less commissions and fees. The sale of this facility was completed in February 2025.
Current report
Equity Loss from Unconsolidated Joint Venture
Current report
During the year ended December 31, 2024, we recognized a loss from the unconsolidated Joint Venture of $20 thousand, which represented our 12.5% ownership interest in the net loss of the Joint Venture from December 20, 2024, when the Joint Venture was formed, through December 31, 2024.
Current report
During the year ended December 31, 2024, we generated gross proceeds of $12.0 million through ATM equity issuances of 1.2 million shares of our common stock at an average offering price of $9.95 per share.
Current report
Net cash provided by operating activities for the year ended December 31, 2024 was $70.0 million, compared to $68.4 million for the same period in 2023. During the 2024 year there was a lower aggregate gain on the sale of investment properties, an impairment loss on an investment property, increases in accounts payable and accrued expenses and other assets and liabilities, and an increase in non-cash LTIP compensation expense, partially offset by lower net income, lower non-cash depreciation and amortization expenses, and a higher tenant receivables balance.
Current report
Net cash used in financing activities for the year ended December 31, 2024 was $21.9 million, compared to $143.8 million for the same period in 2023. During the 2024 year, dividends paid to common and preferred stockholders as well as holders of OP Units and LTIP Units and the repayment of our notes payable were partially offset by net borrowings on our Credit Facility and net proceeds received from ATM equity issuances.
Current report
Off Balance Sheet Arrangements
Current report
We own an interest in an unconsolidated joint venture as described in Note 2 – “Summary of Significant Accounting Policies” in the footnotes to the Consolidated Financial Statements. The joint venture has mortgage debt of $17.6 million, of which our share is $2.2 million. Except in limited circumstances, our risk of loss is limited to our investment in the applicable joint venture. We have no other material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.
Removed paragraphs (14)
Previous report
The major factors that resulted in variances in our results of operations for each revenue and expense category for the year ended December 31, 2023 compared to the year ended December 31, 2022, were higher interest rates, significantly lower acquisition activity, increased disposition activity, and the recognition of a reserve related to one tenant. Regarding acquisitions, we completed one acquisition for a contractual purchase price of $6.7 million during the year ended December 31, 2023 compared to 14 completed acquisitions for an aggregate contractual purchase price of $148.9 million during the year ended December 31 2022. Regarding dispositions, we had three property dispositions during the year ended December 31, 2023 that generated aggregate gross proceeds of $80.5 million compared to one property disposition during the year ended December 31, 2022 that generated gross proceeds of $17.9 million. Our total investments in real estate, net of accumulated depreciation and amortization, was $1.2 billion and $1.3 billion as of December 31, 2023 and 2022, respectively.
Previous report
Depreciation expense for the year ended December 31, 2023 was $41.3 million, compared to $40.0 million for the same period in 2022, an increase of $1.3 million. The increase resulted primarily from the recognition of a full year of depreciation expense in 2023 from acquisitions that were completed during 2022, partially offset by the impact of property dispositions.
Previous report
Amortization expense for the year ended December 31, 2023 was $16.9 million, compared to $16.7 million for the same period in 2022, an increase of $0.2 million. The increase resulted primarily from the recognition of a full year of amortization expense in 2023 from acquisitions that were completed during 2022, partially offset by the impact of property dispositions.
Previous report
Income Before Gain on Sale of Investment Properties and Loss on Extinguishment of Debt
Previous report
Income before gain on sale of investment properties and loss on extinguishment of debt for the year ended December 31, 2023 was $8.1 million, compared to $13.2 million for the same period in 2022, a decrease of $5.1 million.
Previous report
During the year ended December 31, 2023, we completed three dispositions. In August 2023, we sold a medical office building located in North Charleston, South Carolina receiving gross proceeds of $10.1 million, resulting in a gain of $2.3 million. In June 2023, we sold a portfolio of four medical office buildings located in Oklahoma City, Oklahoma receiving gross proceeds of $66.0 million, resulting in a gain of $12.8 million. In March 2023, we sold a medical office building located in Jacksonville, Florida receiving gross proceeds of $4.4 million, resulting in a gain of $0.5 million.
Previous report
During the year ended December 31, 2022, we sold a medical office building located in Germantown, Tennessee receiving gross proceeds of $17.9 million, resulting in a gain of $6.8 million.
Previous report
In December 2023, we completed the defeasance of a CMBS loan by making a total payment of $31.5 million, including transaction costs, that was funded by borrowings on our Revolver. The carrying value of the loan, net of unamortized debt issuance costs, was $30.6 million on the date of the defeasance, resulting in a loss on extinguishment of debt of $0.9 million. In connection with the loan defeasance, we subsequently received $8.4 million in escrowed funds held by the CMBS servicer and used those funds to reduce our total debt.* *
Previous report
*Hedging Instruments.*We have ten interest rate swaps and three forward-starting interest rate swaps that are used to manage our interest rate risk. A description of these swaps is below:
Previous report
Term Loan A Swaps
Previous report
As of December 31, 2023, six of our interest rate swaps related to Term Loan A. The combined notional value of these swaps is $350 million, with $200 million of the swaps maturing in August 2024 and the remaining $150 million maturing in April 2026. In addition, we have three forward starting interest rate swaps with a combined notional value of $200 million, each with a maturity date of April 2026, that will become effective on the August 2024 maturity date of the existing swaps. Currently, the Term Loan A swaps fix the SOFR component of Term Loan A at a rate of 1.50% through August 2024. From August 2024 to April 2026 the SOFR component of Term Loan A will be fixed at 1.36%.
Previous report
Term Loan B Swaps
Previous report
Net cash provided by operating activities for the year ended December 31, 2023 was $67.6 million, compared to $76.5 million for the same period in 2022. The decrease during the 2023 year was primarily due to lower income before gain on sale of investment properties.
Previous report
Net cash used in financing activities for the year ended December 31, 2023 was $143.8 million, compared to net cash provided by financing activities with $62.4 million for the same period in 2022. During the 2023 year we completed no common equity offerings and therefore did not receive any equity offering proceeds, we made net repayments on our Credit Facility, and we made a payment for the defeasance of a CMBS loan.
Reworded paragraphs (29)
Previous wording
Global Medical REIT Inc. (the “Company,” “us,” “we,” or “our”) is a Maryland corporation and internally managed REIT that owns and acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems. We hold our facilities and conduct our operations through a Delaware limited partnership subsidiary, Global Medical REIT L.P. (the “Operating Partnership”). Our wholly owned subsidiary, Global Medical REIT GP LLC, is the sole general partner of our Operating Partnership and, as of December 31, 2023, we owned 92.91% of the outstanding common operating partnership units (“OP Units”) of our Operating Partnership, with an aggregate of 7.09% of the Operating Partnership owned by holders of long-term incentive plan units (“LTIP Units”) and third-party limited partners who contributed properties or services to the Operating Partnership in exchange for OP Units.
Current wording
Global Medical REIT Inc. (the “Company,” “us,” “we,” or “our”) is a Maryland corporation and internally managed REIT that acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems. We hold our facilities and conduct our operations through a Delaware limited partnership subsidiary, Global Medical REIT L.P. (the “Operating Partnership”). Our wholly owned subsidiary, Global Medical REIT GP LLC, is the sole general partner of our Operating Partnership and, as of December 31, 2024, we owned 92.6% of the outstanding common operating partnership units (“OP Units”) of our Operating Partnership, with an aggregate of 7.4% of the Operating Partnership owned by holders of long-term incentive plan units (“LTIP Units”) and third-party limited partners who contributed properties or services to the Operating Partnership in exchange for OP Units.
Previous wording
During the year ended December 31, 2023 we completed one acquisition encompassing 18,698 leasable square feet for a contractual purchase price of $6.7 million with annualized base rent of $0.5 million. We funded this acquisition primarily through the issuance of OP Units to the seller. As of December 31, 2023, our portfolio consisted of gross investment in real estate of $1.4 billion, with an aggregate of 4.7 million leasable square feet and an aggregate $110.2 million of annualized base rent.
Current wording
As of December 31, 2024, our portfolio consisted of gross investment in real estate of $1.5 billion, with an aggregate of 4.8 million leasable square feet and an aggregate $110 million of annualized base rent.
Previous wording
In January 2024, the Company and the Operating Partnership implemented a $300 million “at-the-market” equity offering program, pursuant to which we may offer and sell, from time to time, shares of our common stock (the “2024 ATM Program”). No shares were sold under the 2024 ATM Program from January 2024 through February 26, 2024.
Current wording
In January 2024, the Company and the Operating Partnership implemented a $300 million “at-the-market” equity offering program, pursuant to which we may offer and sell (including through forward sales), from time to time, shares of our common stock (the “2024 ATM Program”).
Previous wording
During the year ended December 31, 2023, we borrowed $83.1 million under our Credit Facility and repaid $136.4 million, for a net amount repaid of $53.3 million. As of December 31, 2023, the net outstanding Credit Facility balance was $307.6 million and as of February 26, 2024, we had unutilized borrowing capacity under the Credit Facility of $293.6 million.
Current wording
During the year ended December 31, 2024, we borrowed $143.8 million under our Credit Facility and repaid $99.6 million, for a net amount borrowed of $44.2 million. As of December 31, 2024, the net outstanding Credit Facility balance was $631.7 million and as of February 26, 2025, we had unutilized borrowing capacity under the Credit Facility of $219.4 million.
Previous wording
The estimates and judgments used in the impairment process are highly subjective and susceptible to frequent change. Significant increases or decreases in any of these inputs, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed. Additionally, changes in economic and operating conditions, including changes in the financial condition of our tenants, and changes to our intent and ability to hold the related asset, that occur subsequent to our impairment assessment could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.
Current wording
The estimates and judgments used in the impairment process are highly subjective and susceptible to frequent change. Significant increases or decreases in any of these inputs, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed. Additionally, changes in economic and operating conditions, including changes in the financial condition of our tenants, and changes to our intent and ability
Previous wording
Total revenue for the year ended December 31, 2023 was $141.0 million, compared to $137.3 million for the same period in 2022, an increase of $3.7 million. The increase primarily resulted from the recognition of a full year of rental revenue in 2023 from acquisitions that were completed during 2022, partially offset by the impact of property dispositions and the recognition of reserves for $0.9 of rent and the write-off of $0.2 million of deferred rent. Within that increase, $19.5 million in revenue was recognized from net lease expense recoveries during the year ended December 31, 2023, compared to $18.7 million for the same period in 2022.
Current wording
Total revenue for the year ended December 31, 2024 was $138.8 million, compared to $141.0 million for the same period in 2023, a decrease of $2.2 million. The decrease primarily resulted from the full year impact of three property dispositions that were completed during the year ended December 31, 2023 and the impact from seven property dispositions that were completed during the year ended December 31, 2024, partially offset by the impact of 15 properties that were acquired in 2024. Within that decrease, $19.4 million in revenue was recognized from net lease expense recoveries during the year ended December 31, 2024, compared to $19.5 million for the same period in 2023.
Previous wording
General and administrative expenses for the year ended December 31, 2023 were $16.9 million, compared to $16.5 million for the same period in 2022, an increase of $0.4 million. The increase resulted from an increase in cash compensation costs and general corporate expenses, partially offset by a reduction in non-cash LTIP compensation expense, which was $4.2 million for the year ended December 31, 2023, compared to $4.7 million for the same period in 2022.
Current wording
General and administrative expenses for the year ended December 31, 2024 were $21.1 million, compared to $16.9 million for the same period in 2023, an increase of $4.2 million. The increase primarily resulted from $3.2 million that was expensed in 2024 related to cash severance costs owed to Mr. Jeffery Busch, our Chairman and Chief Executive Officer, pursuant to the Transition and Separation Agreement and General Release of Claims, dated January 8, 2025, by and among the Company, Inter-American Management LLC and Mr. Busch, and an increase in non-cash LTIP compensation expense, which was $5.1 million for the year ended December 31, 2024, compared to $4.2 million for the same period in 2023.
Previous wording
Operating expenses for the year ended December 31, 2023 were $28.1 million, compared with $25.2 million for the same period in 2022, an increase of $2.9 million. The increase results primarily from $19.5 million of recoverable property operating expenses incurred during the year ended December 31, 2023, compared to $18.7 million for the same period in 2022. In addition, our operating expenses included $5.9 million of non-recoverable property operating expenses from gross leases for the year ended December 31, 2023, compared to $4.7 million for the same period in 2022.
Current wording
Operating expenses for the year ended December 31, 2024 were $29.3 million, compared with $28.1 million for the same period in 2023, an increase of $1.2 million. While the increase compared to 2023 was not significant, the increase relative to revenue reflects the impact of tenants placed on cash basis accounting in the fourth quarter of 2023 and the second quarter of 2024, partially offset by a net reduction in costs at other properties. Included in these amounts were $19.4 million of recoverable property operating expenses incurred during the year ended December 31, 2024, compared to $19.5 million for the same period in 2023. In addition, our operating expenses included $5.7 million of non-recoverable property operating expenses from gross leases for the year ended December 31, 2024, compared to $5.9 million for the same period in 2023.
Previous wording
Interest expense for the year ended December 31, 2023 was $30.9 million, compared to $25.2 million for the same period in 2022, an increase of $ 5.7 million. This increase was due to increased interest rates, partially offset by lower average borrowings during the year ended December 31, 2023, compared to the same period in 2022.
Current wording
Interest expense for the year ended December 31, 2024 was $28.7 million, compared to $30.9 million for the same period in 2023, a decrease of $2.2 million. This decrease was due to lower interest rates and lower average borrowings during the year ended December 31, 2024, compared to the same period in 2023.
Previous wording
The weighted average interest rate of our debt for the year ended December 31, 2023 was 4.12% compared to 3.43% in 2022. Additionally, the weighted average interest rate and term of our debt was 3.83% and 2.9 years, respectively, at December 31, 2023.
Current wording
The weighted average interest rate of our debt for the year ended December 31, 2024 was 3.94% compared to 4.12% in 2023. Additionally, the weighted average interest rate and term of our debt was 3.75% and 2.0 years, respectively, at December 31, 2024.
Previous wording
During the year ended December 31, 2023, the Company completed three dispositions that generated aggregate gross proceeds of $80.5 million, resulting in an aggregate gain of $15.6 million.
Current wording
During the year ended December 31, 2024, we completed seven dispositions resulting in an aggregate gain of $4.2 million. During the year ended December 31, 2023, we completed three dispositions resulting in an aggregate gain of $15.6 million.
Previous wording
In December 2023, we completed the defeasance of a CMBS loan by making a total payment of $31.5 million, including transaction costs, that was funded by borrowings on our Revolver. The carrying value of the loan, net of unamortized debt issuance costs, was $30.6 million on the date of the defeasance, resulting in a loss on extinguishment of debt of $0.9 million. In connection with the loan defeasance, we subsequently received $8.4 million in escrowed funds held by the CMBS servicer and used those funds to reduce our total debt.
Current wording
In December 2023, we completed the defeasance of a CMBS loan resulting in a loss on extinguishment of debt of $0.9 million.
Previous wording
Net income for the year ended December 31, 2023 was $22.8 million compared to $20.0 million for the same period in 2022, an increase of $2.8 million.
Current wording
Net income for the year ended December 31, 2024 was $6.7 million compared to $21.7 million for the same period in 2023, a decrease of $15.0 million.
Previous wording
As of December 31, 2023 and 2022, our principal assets consisted of investments in real estate, net, of $1.2 billion and $1.3 billion, respectively. We completed one acquisition during the year ended December 31, 2023 and sold six medical office buildings through three disposition transactions. Our liquid assets consisted primarily of cash and cash equivalents and restricted cash of $6.7 million and $14.5 million, as of December 31, 2023 and 2022, respectively.
Current wording
As of December 31, 2024 and 2023, our principal assets consisted of investments in real estate, net, of $1.2 billion. We completed the acquisition of a 15-property portfolio and completed seven disposition transactions during the year ended December 31, 2024. Our liquid assets consisted primarily of cash and cash equivalents and restricted cash of $8.9 million and $6.7 million, as of December 31, 2024 and 2023, respectively.
Previous wording
The decrease in our cash and cash equivalents and restricted cash balances to $6.7 million as of December 31, 2023, compared to $14.5 million as of December 31, 2022, was primarily due to net repayments on our Credit Facility primarily using funds from our property dispositions, funds used to pay dividends to our common and preferred stockholders and holders of OP Units and LTIP Units, a payment for the defeasance of a CMBS loan, and funds used for capital expenditures on existing real estate investments, partially offset by net proceeds received from the sale of investment properties and net cash provided by operating activities.
Current wording
The increase in our cash and cash equivalents and restricted cash balances to $8.9 million as of December 31, 2024, compared to $6.7 million as of December 31, 2023, was primarily due to net cash provided by operating activities, net proceeds received from the sale of investment properties, net borrowings on our Credit Facility, and net proceeds received from ATM equity issuances, partially offset by funds used to acquire investment properties, the payment of dividends to our common and preferred stockholders and holders of OP Units and LTIP Units, funds used for capital expenditures on existing real estate investments and leasing commissions, the repayment of notes payable, and funds we invested in an unconsolidated joint venture.
Previous wording
The decrease in our total liabilities to $662.0 million as of December 31, 2023 compared to $744.2 million as of December 31, 2022, was primarily the result of lower net borrowings outstanding.
Current wording
The increase in our total liabilities to $700.6 million as of December 31, 2024 compared to $662.0 million as of December 31, 2023, was primarily the result of higher net borrowings outstanding on our Credit Facility, partially offset by a lower notes payable balance outstanding.
Previous wording
In 2024, we are contractually obligated to pay, or have capital commitments for, approximately (i) $34.8 million of principal and interest payments on our outstanding debt, and (ii) $0.7 million in ground and operating lease expenses. In addition, if we decide to redeem our preferred stock, we would have to pay the liquidation preference of $77.6 million plus accrued dividends, fees and expenses.
Current wording
In 2025, we are contractually obligated to pay, or have capital commitments for, approximately (i) $37.5 million of principal and interest payments on our outstanding debt, and (ii) $0.7 million in ground and operating lease expenses. In addition, if we decide to redeem our preferred stock, we would have to pay the liquidation preference of $77.6 million plus accrued dividends, fees and expenses.
Previous wording
Our long-term (beyond 12 months) liquidity requirements consist primarily of funds necessary to pay for acquisitions, capital and tenant improvements at our properties, scheduled debt maturities, general and administrative expenses, operating expenses, and distributions. Beyond 2024, we are contractually obligated to pay, or have capital commitments for, approximately (i) $655.5 million of principal and interest payments on our outstanding debt, and (ii) $12.7 million in ground and operating lease expenses.
Current wording
Our long-term (beyond 12 months) liquidity requirements consist primarily of funds necessary to pay for acquisitions, capital and tenant improvements at our properties, scheduled debt maturities, general and administrative expenses, operating expenses, and distributions. Beyond 2025, we are contractually obligated to pay, or have capital commitments for, approximately (i) $666.5 million of principal and interest payments on our outstanding debt, and (ii) $12.0 million in ground and operating lease expenses.
Previous wording
As of December 31, 2023, the Company had aggregate capital improvement commitments and obligations to improve, expand, and maintain the Company’s existing facilities of approximately $18 million. Many of these amounts are subject to contingencies that make it difficult to predict when they will be utilized, if at all. In accordance with the terms of the Company’s existing and proposed leases, capital improvement obligations in the next 12 months are expected to total approximately $14 million.
Current wording
As of December 31, 2024, the Company had aggregate capital improvement commitments and obligations to improve, expand, and maintain the Company’s existing facilities of approximately $24.5 million. Many of these amounts are subject to contingencies that make it difficult to predict when they will be utilized, if at all. In accordance with the terms of the Company’s existing and proposed leases, capital improvement obligations in the next 12 months are expected to total approximately $12.9 million.
Previous wording
In January 2024, the Company and the Operating Partnership implemented the 2024 ATM Program, pursuant to which we may offer and sell, from time to time, shares of our common stock. No shares were sold under the 2024 ATM Program from January 2024 through February 26, 2024. In March 2022, the Company and the Operating Partnership implemented a $300 million “at-the-market” equity offering program, pursuant to which the Company could offer and sell, from time to time, shares of its common stock (the “2022 ATM Program”). No shares were sold under the 2022 ATM Program during the year ended December 31, 2023. The 2022 ATM Program was terminated in connection with implementing the 2024 ATM Program.
Current wording
In January 2024, the Company and the Operating Partnership implemented the 2024 ATM Program, pursuant to which we may offer and sell (including through forward sales), from time to time, shares of our common stock.
Previous wording
*Credit Facility.*Our Credit Facility consists of (i) the $350 million Term Loan A, (ii) the $150 million Term Loan B, and (iii) the $400 million Revolver. The Credit Facility also contains a $500 million accordion feature. As of February 26, 2024, we had unutilized borrowing capacity under the Credit Facility of $293.6 million.
Current wording
*Credit Facility.*Our Credit Facility consists of (i) the $350 million Term Loan A, (ii) the $150 million Term Loan B, and (iii) the $400 million Revolver. The Credit Facility also contains a $500 million accordion feature. As of February 26, 2025, we had unutilized borrowing capacity under the Credit Facility of $219.4 million.
Previous wording
*Other Fixed Debt.*We have $26.0 million in gross notes payable as of December 31, 2023, which is comprised of three instruments.
Current wording
*Other Fixed Debt.*We have $14.4 million in gross notes payable as of December 31, 2024, which is comprised of two instruments.
Previous wording
As of December 31, 2023, four of our interest rate swaps related to Term Loan B with a combined notional value of $150 million that fix the SOFR component on Term Loan B through January 2028 at 2.54%.
Current wording
Hedging Instruments.As of December 31, 2024, we had nine interest rate swaps that are used to manage our interest rate risk. Five of our interest rate swaps related to Term Loan A with a combined notional value of $350 million that fix the SOFR component on Term Loan A through April 2026 at 1.36%. Four of our interest rate swaps related to Term Loan B with a combined notional value of $150 million that fix the SOFR component on Term Loan B through January 2028 at 2.54%.
Previous wording
Total Fixed Debt. Our fixed debt totaled $526.0 million on a gross basis at December 31, 2023, with a weighted average interest rate of 3.31% based on our interest rate swaps and at current leverage. The weighted average maturity of our fixed debt was 2.8 years at December 31, 2023. Due to our forward starting interest rate swaps related to Team Loan A, the weighted average interest rate on fixed debt outstanding as of December 31, 2023 is expected to improve over the next two years.
Current wording
Total Fixed Debt. Our fixed debt totaled $514.4 million on a gross basis at December 31, 2024, with a weighted average interest rate of 3.18% based on our interest rate swaps at current leverage. The weighted average maturity of our fixed debt was 1.9 years at December 31, 2024.
Previous wording
Net cash provided by investing activities for the year ended December 31, 2023 was $67.6 million, compared to net cash used in investing activities of $137.3 million for the same period in 2022. During the 2023 year less funds were used to complete property acquisitions and we received more net proceeds from the sale of investment properties.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 was $45.9 million, compared to net cash provided by investing activities of $67.6 million for the same period in 2023. During the 2024 year we used more funds to acquire investment properties, we received less net proceeds from the sale of investment properties, more funds were used for capital expenditures on existing real estate investments and leasing commissions, and we invested funds in an unconsolidated joint venture.
Previous wording
The non-GAAP financial measures presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results,
Current wording
The non-GAAP financial measures presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income, as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs. Management believes that in order to facilitate a clear understanding of the Company's historical consolidated operating results, these measures should be examined in conjunction with net income and cash flows from operations as presented in the Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.
Previous wording
In accordance with the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition, FFO means net income or loss computed in accordance with GAAP before noncontrolling interests of holders of OP Units and LTIP Units, excluding gains (or losses) from sales of property and extraordinary items, less preferred stock dividends, plus real estate-related depreciation and amortization (excluding amortization of debt issuance costs and the amortization of above and below market leases), and after adjustments for unconsolidated partnerships and joint ventures. Because FFO excludes real estate-related depreciation and amortization (other than amortization of debt issuance costs and above and below market lease amortization expense), the Company believes that FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from the closest GAAP measurement, net income or loss.
Current wording
In accordance with the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition, FFO means net income or loss computed in accordance with GAAP before noncontrolling interests of holders of OP Units and LTIP Units, excluding gains (or losses) from sales of property and extraordinary items, property impairment losses, less preferred stock dividends, plus real estate-related depreciation and amortization (excluding amortization of debt issuance costs and the amortization of above and below market leases), and after adjustments for unconsolidated partnerships and joint ventures. Because FFO excludes real estate-related depreciation and amortization (other than amortization of debt issuance costs and above and below market lease amortization expense), the Company believes that FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from the closest GAAP measurement, net income or loss.
Previous wording
AFFO is a non-GAAP measure used by many investors and analysts to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations. Management calculates AFFO by modifying the NAREIT computation of FFO by adjusting it for certain cash and non-cash items and certain recurring and non-recurring items. For the Company these items include recurring acquisition and disposition costs, loss on the extinguishment of debt, recurring straight line deferred rental revenue, recurring stock-based compensation expense, recurring amortization of above and below market leases, recurring amortization of debt issuance costs, and other items.
Current wording
AFFO is a non-GAAP measure used by many investors and analysts to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations. Management calculates AFFO by modifying the NAREIT computation of FFO by adjusting it for certain cash and non-cash items and certain recurring and non-recurring items. For the Company these items include recurring acquisition and disposition costs, loss on the extinguishment of debt, recurring straight line deferred rental revenue, recurring stock-based compensation expense, recurring amortization of above and below market leases, recurring amortization of debt issuance costs, severance and transition related expense, and other items.
Previous wording
The Company calculates EBITDAre in accordance with standards established by NAREIT and defines EBITDAre as net income or loss computed in accordance with GAAP plus depreciation and amortization, interest expense, gain or loss on the sale of investment properties, and impairment loss, as applicable. The Company defines Adjusted EBITDAreas EBITDAre plus loss on extinguishment of debt, non-cash stock compensation expense, non-cash intangible amortization related to above and below market leases, preacquisition expense and other normalizing items. Management considers EBITDAre and Adjusted EBITDAre important measures because they provide additional information to allow management, investors, and our current and potential creditors to evaluate and compare our core operating results and our ability to service debt.
Current wording
The Company calculates EBITDAre in accordance with standards established by NAREIT and defines EBITDAre as net income or loss computed in accordance with GAAP plus depreciation and amortization, interest expense, gain or loss on the sale of investment properties, property impairment losses, andadjustments for unconsolidated partnerships and joint ventures, as applicable. The Company defines Adjusted EBITDAreas EBITDAre plus loss on extinguishment of debt, non-cash stock compensation expense, non-cash intangible amortization related to above and below market leases, severance and transition related expense, transaction expense, and other normalizing items. Management considers EBITDAre and Adjusted EBITDAre important measures because they provide additional information to allow management, investors, and our current and potential creditors to evaluate and compare our core operating results and our ability to service debt.
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Current report — wording carried from elsewhere
to hold the related asset, that occur subsequent to our impairment assessment could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.
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Previous report — wording carried elsewhere
these measures should be examined in conjunction with net income and cash flows from operations as presented in the Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.