false000156792500015679252024-08-062024-08-06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 8-K
___________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 6, 2024
___________________________________________
SILA REALTY TRUST, INC.
(Exact Name of Registrant as Specified in Its Charter)
___________________________________________
| | | | | | | | | | | | | | |
| Maryland |
| 001-42129 |
| 46-1854011 |
(State or other jurisdiction of
incorporation or organization) |
| (Commission
File Number) |
| (I.R.S. Employer
Identification No.) |
1001 Water St.
Suite 800
Tampa, Florida 33602
(Address of principal executive offices)
(813) 287-0101
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
___________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| | | | | |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol | | Name of each exchange on which registered |
| Common Stock, $0.01 par value per share | | SILA | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| | | | | | | | |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | ☐ |
Item 2.02 Results of Operations and Financial Condition.
On August 6, 2024, Sila Realty Trust, Inc. (the “Company”) issued an earnings release announcing its financial results for the quarter ended June 30, 2024. The Company is also making available certain supplemental data for the quarter ended June 30, 2024. Copies of the earnings release and supplemental data for the quarter ended June 30, 2024, are attached hereto as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K, and are incorporated by reference herein.
The information contained in this Item 2.02, including Exhibits 99.1 and 99.2 and incorporated by reference herein, is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), except as shall be expressly set forth by the specific reference in such filing. By filing this Current Report on Form 8-K and furnishing this information, the Company makes no admission as to the materiality of any information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| | | | | |
| 99.1 | |
| 99.2 | |
| |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | SILA REALTY TRUST, INC. |
| | | |
| Dated: August 6, 2024 | | By: | /s/ Kay C. Neely |
| | Name: | Kay C. Neely |
| | Title: | Chief Financial Officer |
Sila Realty Trust Announces Second Quarter 2024 Results
TAMPA, Fla. August 6, 2024 - Sila Realty Trust, Inc. (NYSE: SILA) (“Sila”, the “Company”, “we”, or “us”), a net lease real estate investment trust (“REIT”) with a strategic focus on investing in the large, growing, and resilient healthcare sector, today announced operating results for the second quarter ended June 30, 2024.
Highlights for the quarter ended June 30, 2024:
•Listed on the New York Stock Exchange, or the NYSE, on June 13, 2024
•Net income of $4.6 million, or $0.08 per diluted share
•Cash net operating income*, or NOI, of $39.9 million
•Adjusted funds from operations*, or AFFO, of $30.8 million, or $0.54 per diluted share
•Declared regular monthly cash dividends per share of $0.1333, representing an aggregate $0.40 per share for the quarter
•Acquired a $10.8 million medical outpatient building in Reading, Pennsylvania
Subsequent Events
•Acquired a $28.3 million inpatient rehabilitation facility in Fort Smith, Arkansas
•Concluded a modified "Dutch Auction" tender offer, or the Tender Offer, purchasing approximately $50.0 million in value of common stock
Management Commentary
“The second quarter marked a significant milestone in Sila’s history since our founding 10 years ago. On June 13th, we became a publicly traded REIT listed on the NYSE, beginning the next chapter in our journey in creating a best-in-class owner of net leased healthcare real estate. We believe the Company has been successful to this point as a result of our outstanding team of employees, as well as the support of our shareholders who endorsed our approach to skillful and thoughtful investing in one of the most resilient sectors of the U.S. economy,” said Michael A. Seton, President and Chief Executive Officer of the Company.
“Our portfolio, spanning approximately 5.3 million rentable square feet at the end of the second quarter, we believe, is healthy with a weighted average leased rate of 97.5% and a weighted average remaining lease term of 8.2 years.
“Through the first half of the year, we acquired seven institutional quality healthcare properties for an aggregate purchase price of approximately $135.7 million, adding approximately 244,000 rentable square feet to our portfolio. At quarter end we owned 137 properties that are diversified both geographically and across high demand healthcare categories – Medical Outpatient Buildings (MOBs), Inpatient Rehabilitation Facilities (IRFs), and Surgical and Specialty Facilities. We believe our strategic focus on these healthcare segments gives us ample runway for growth that is supported by favorable demographics, emerging trends in healthcare delivery, and our successful relationship as the landlord of choice for many of the nation’s top healthcare
providers. With our strong balance sheet, ample liquidity position and an expansive acquisition sourcing network, Sila is in a uniquely strong position to expand our presence in this capital-constrained, high-interest rate environment.”
*Some of the financial measures throughout this press release are non-GAAP measures. Refer to the Non-GAAP Financial Measures Reconciliation tables at the end of this press release for additional information and reconciliations to the most directly comparable GAAP measure.
Financial Results
Second quarter results were impacted by certain events including the amended master lease with GenesisCare USA, Inc. and its affiliates, or GenesisCare, which covers seven of the original 17 properties that were covered under the prior master lease. In addition, new leases for six of the remaining 10 properties were executed with new tenants who acquired the operations at the related properties. The Company now has four unleased GenesisCare related assets remaining and is in final negotiations for the leasing of one of those properties, and is in different active stages of selling the other three. Also impacting the second quarter was the closure of operations at the Company’s sole property leased to Steward Health Care System LLC, or Steward, which filed for bankruptcy in May 2024. Sila is in the process of selling this asset.
Net Income
Our GAAP net income for the second quarter of 2024 was $4.6 million, or $0.08 per diluted share, compared to $3.9 million, or $0.07 per diluted share, for the second quarter of 2023. Our GAAP net income for the first half of 2024 was $19.6 million, or $0.34 per diluted share, compared to $18.1 million, or $0.32 per diluted share, for the first half of 2023.
Cash NOI*
Cash NOI was $39.9 million for the second quarter of 2024, as compared to $42.4 million for the second quarter of 2023. The decrease is primarily related to the GenesisCare and Steward events described above. This was partially offset by second quarter 2024 Cash NOI increases at our other same-store properties compared to the second quarter of 2023 as a result of rent increases. Additionally, the decrease in Cash NOI is the result of Cash NOI lost from dispositions exceeding Cash NOI gained from acquisitions primarily related to the timing of redeployment of proceeds from dispositions.
Cash NOI was $86.8 million for the first half of 2024, as compared to $88.0 million for the first half of 2023. The decrease is primarily the result of Cash NOI lost from dispositions exceeding Cash NOI gained from acquisitions primarily related to the timing of redeployment of proceeds from dispositions. Same store Cash NOI* increased in the first half of 2024 compared to the same period in 2023 due in part to the receipt of a one-time payment from GenesisCare as consideration for the removal of ten of the properties from the master lease, which offset the decrease in Cash NOI related to the GenesisCare and Steward events described above. Additionally, there was an increase in other same store property Cash NOI in the first half of 2024 compared to the first half of 2023 as a result of rent increases.
Adjusted Funds from Operations (AFFO)*
AFFO was $30.8 million, or $0.54 per diluted share, during the second quarter of 2024, compared to $31.6 million, or $0.55 per diluted share, during the second quarter of 2023.
AFFO for the first half of 2024 was $69.1 million, or $1.20 per diluted share, compared to $65.8 million, or $1.15 per diluted share, for the first half of 2023.
Real Estate Portfolio Highlights
Investment Activity
During the quarter ended June 30, 2024, the Company acquired one healthcare property in Reading, Pennsylvania, comprising approximately 30,000 rentable square feet, for a purchase price of $10.8 million.
Subsequent to the quarter ended June 30, 2024, the Company acquired one healthcare property in Fort Smith, Arkansas, or the Fort Smith Healthcare Facility, comprising approximately 62,570 rentable square feet, for a purchase price of approximately $28.3 million.
Portfolio
As of June 30, 2024, Sila's well diversified real estate portfolio consisted of 137 properties comprising approximately 5.3 million rentable square feet. The weighted average remaining lease term was approximately 8.2 years with 21% of annualized base rent maturing in the next five years and a weighted average fixed rent escalation rate of 2.2%, excluding leases tied to the consumer price index (CPI). The Company's new and renewal leases in the second quarter totaled 65,670 rentable square feet. The weighted average percentage of rentable square feet leased was 97.5%.
Balance Sheet and Capital Markets Activities
Sila had a strong balance sheet and liquidity position totaling approximately $587.0 million, consisting of $87.0 million in cash and cash equivalents and $500.0 million of availability under its unsecured credit facility as of June 30, 2024. Subsequent to June 30, 2024, the Company used $50.0 million in cash to close the Tender Offer and used $8.3 million in cash and borrowed $20.0 million on its revolving line of credit to acquire the Fort Smith Healthcare Facility.
Total principal debt outstanding under the unsecured credit facility as of June 30, 2024, was $525.0 million and was fixed through 11 interest rate swap agreements, which mature on various dates from December 2024 to January 2028. The Company's weighted average interest rate on the total principal debt outstanding was 3.3%, including the impact of the interest rate swap agreements, as of June 30, 2024. As of June 30, 2024, net debt to enterprise value was approximately 26.4%.
As previously reported, on June 13, 2024, Sila's common stock was listed and began trading on the NYSE under the ticker symbol "SILA." On April 8, 2024, in anticipation of the listing, the Company amended its charter to effect a one-for-four reverse stock split of each issued and outstanding share of each class of common stock, effective May 1, 2024, or the Reverse Stock Split. On April 5, 2024, the Company's board of directors, or the Board, approved the suspension of the Company’s Amended and Restated Share Repurchase Program, or SRP, and the termination of the SRP, effective upon listing. The Board also approved the termination of the distribution reinvestment plan, effective May 1, 2024. On June 13, 2024, in conjunction with the NYSE listing, the Company commenced the Tender Offer. As a result of the Tender Offer, the Company accepted for purchase approximately 2.2 million shares of its common stock (which represented approximately 3.9% of the total number of shares of common stock outstanding as of July 19, 2024, the expiration of the Tender Offer) at a purchase price of $22.60 per share, for an aggregate purchase price of approximately $50.0 million, excluding related fees and expenses. The Company funded the Tender Offer, and will fund all related costs, with its available cash.
Distributions
The Company's dividend payout to AFFO ratio was 75.0% for the quarter ended June 30, 2024. On July 15, 2024, the Company paid cash distributions of approximately $7.7 million to the Company's stockholders of record as of the close of business on
July 1, 2024. On July 16, 2024, the Board approved and authorized a distribution payable on August 15, 2024, to the Company's stockholders of record as of the close of business on July 31, 2024. The distribution will be equal to $0.1333 per share of common stock, representing an annualized amount of $1.60 per share.
Conference Call and Webcast
A conference call and audio webcast for investors and analysts will be held on Wednesday, August 7, 2024, at 11:00 a.m. Eastern Time to discuss our second quarter 2024 operating results and to answer questions. The live and archived webcast can be accessed on the "Events" page of the Company's website at investors.silarealtytrust.com or by direct link at events.q4inc.com/attendee/762636139. The archived webcast will be available for 12 months following the call.
About Sila Realty Trust, Inc.
Sila Realty Trust, Inc., headquartered in Tampa, Florida, is a net lease real estate investment trust with a strategic focus on investing in the large, growing, and resilient healthcare sector. The Company invests in high quality healthcare facilities along the continuum of care, which, we believe, generate predictable, durable, and growing income streams. Our portfolio comprises high quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. As of June 30, 2024, the Company owned 137 real estate properties and two undeveloped land parcels located in 64 markets across the U.S. For more information, please visit the Company's website at www.silarealtytrust.com.
Forward-Looking Statements
Certain statements contained herein, other than historical fact, may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provided by the same. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties. No forward-looking statement is intended to, nor shall it, serve as a guarantee of future performance. You can identify the forward-looking statements by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar terms and phrases, including statements about and references to assumptions and forecasts of future results, strategic acquisitions and growth opportunities, our runway for growth, our position to expand our presence, and future distributions. Forward-looking statements are subject to various risks and uncertainties and factors that could cause actual results to differ materially from the Company's expectations, and you should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company's control and could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events. Additional factors include those described under the section entitled Item 1A. "Risk Factors" of Part I of the Company's 2023 Annual Report on Form 10-K with the SEC, copies of which are available at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Supplemental Information
The Company routinely provides information for investors and the marketplace through press releases, SEC filings, public conference calls, and the Company's website at investors.silarealtytrust.com. The information that the Company posts to its website may be deemed material. Accordingly, the Company encourages investors and others interested in the Company to
routinely monitor and review the information that the Company posts on its website, in addition to following the Company's press releases, public conference calls and SEC filings. A glossary of definitions (including those of certain non-GAAP financial measures) and other supplemental information may be found attached to the Current Report on Form 8-K filed on August 6, 2024.
Non-GAAP Financial Measures
This press release includes certain financial performance measures not defined by United States generally accepted accounting principles, or GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release. We believe such measures provide investors with additional information concerning our operating performance and a basis to compare our performance with the performance of other REITs. Our definitions and calculations of these non-GAAP measures may not be the same as similar measures reported by other REITs.
These non-GAAP financial measures should not be considered as alternatives to net income attributable to common stockholders (determined in accordance with GAAP) as indicators of our financial performance, as alternatives to cash flows from operating activities (determined in accordance with GAAP), or as measures of our liquidity, nor are these measures necessarily indicative of sufficient cash flows to fund all of our needs.
Investor Contact:
Miles Callahan, Senior Vice President of Capital Markets and Investor Relations
833-404-4107
IR@silarealtytrust.com
Condensed Consolidated Balance Sheets (amounts in thousands, except share data)
| | | | | | | | | | | |
| (Unaudited) | | |
|
June 30, 2024 | | December 31, 2023 |
| ASSETS |
| Real estate: | | | |
| Land | $ | 166,130 | | | $ | 157,821 | |
| Buildings and improvements, less accumulated depreciation of $251,413 and $227,156, respectively | 1,556,570 | | | 1,470,831 | |
| | | |
| Total real estate, net | 1,722,700 | | | 1,628,652 | |
| Cash and cash equivalents | 86,971 | | | 202,019 | |
| Intangible assets, less accumulated amortization of $112,069 and $102,456, respectively | 133,071 | | | 134,999 | |
| Goodwill | 17,700 | | | 17,700 | |
| | | |
| | | |
| Right-of-use assets | 36,027 | | | 36,384 | |
| | | |
| Other assets | 85,128 | | | 79,825 | |
| | | |
| | | |
| Total assets | $ | 2,081,597 | | | $ | 2,099,579 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Liabilities: | | | |
| | | |
| Credit facility, net of deferred financing costs of $3,699 and $1,847, respectively | $ | 521,301 | | | $ | 523,153 | |
| | | |
| Accounts payable and other liabilities | 38,742 | | | 30,381 | |
| Intangible liabilities, less accumulated amortization of $8,131 and $7,417, respectively | 7,699 | | | 10,452 | |
| | | |
| | | |
| Lease liabilities | 40,944 | | | 41,158 | |
| | | |
| | | |
| Total liabilities | 608,686 | | | 605,144 | |
| Stockholders’ equity: | | | |
| Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding | — | | | — | |
Common stock, $0.01 par value per share, 510,000,000 shares authorized; 61,670,830 and 61,154,404(1) shares issued, respectively; 57,216,478 and 56,983,564(1) shares outstanding, respectively | 572 | | | 570 | |
| Additional paid-in capital | 2,048,406 | | | 2,044,450 | |
| Distributions in excess of accumulated earnings | (593,423) | | | (567,188) | |
| Accumulated other comprehensive income | 17,356 | | | 16,603 | |
| Total stockholders’ equity | 1,472,911 | | | 1,494,435 | |
| | | |
| | | |
| Total liabilities and stockholders’ equity | $ | 2,081,597 | | | $ | 2,099,579 | |
(1) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024.
Condensed Consolidated (Unaudited) Quarterly Statements of Comprehensive Income (amounts in thousands, except share data and per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Revenue: | | | | | | | |
| Rental revenue | $ | 43,554 | | | $ | 44,965 | | | $ | 94,193 | | | $ | 94,609 | |
| Expenses: | | | | | | | |
| Rental expenses | 5,849 | | | 4,873 | | | 11,403 | | | 9,723 | |
Listing-related expenses | 2,924 | | | — | | | 2,980 | | | — | |
| General and administrative expenses | 5,347 | | | 5,547 | | | 13,521 | | | 11,650 | |
| | | | | | | |
| | | | | | | |
| Depreciation and amortization | 20,246 | | | 18,803 | | | 39,144 | | | 37,355 | |
| | | | | | | |
| | | | | | | |
| Impairment losses | 418 | | | 6,364 | | | 418 | | | 6,708 | |
| Total operating expenses | 34,784 | | | 35,587 | | | 67,466 | | | 65,436 | |
| Gain on real estate dispositions | — | | | — | | | 76 | | | 21 | |
| | | | | | | |
| Interest and other income | 1,051 | | | 141 | | | 3,292 | | | 147 | |
| Interest expense | 5,193 | | | 5,664 | | | 10,487 | | | 11,286 | |
| | | | | | | |
| | | | | | | |
| Net income attributable to common stockholders | $ | 4,628 | | | $ | 3,855 | | | $ | 19,608 | | | $ | 18,055 | |
| | | | | | | |
| | | | | | | |
| Other comprehensive (loss) income - unrealized (loss) gain on interest rate swaps, net | (2,115) | | | 7,382 | | | 753 | | | (882) | |
| Comprehensive income attributable to common stockholders | $ | 2,513 | | | $ | 11,237 | | | $ | 20,361 | | | $ | 17,173 | |
| Weighted average number of common shares outstanding: | | | | | | | |
Basic(1) | 57,230,472 | | | 56,744,341 | | | 57,171,756 | | | 56,692,674 | |
Diluted(1) | 57,601,204 | | | 57,208,783 | | | 57,574,634 | | | 57,155,224 | |
| Net income per common share attributable to common stockholders: | | | | | | | |
| | | | | | | |
Basic(1) | $ | 0.08 | | | $ | 0.07 | | | $ | 0.34 | | | $ | 0.32 | |
| | | | | | | |
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Diluted(1) | $ | 0.08 | | | $ | 0.07 | | | $ | 0.34 | | | $ | 0.32 | |
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| | | | | | | |
Distributions declared per common share(1) | $ | 0.40 | | | $ | 0.40 | | | $ | 0.80 | | | $ | 0.80 | |
(1) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024.
Non-GAAP Financial Measures Reconciliation
A description of FFO, Core FFO and AFFO, and reconciliations of these non-GAAP measures to net income, the most directly comparable GAAP measure, and a description of same store cash NOI and reconciliation of this non-GAAP measure to rental revenue, the most directly comparable GAAP measure, are provided below.
Reconciliation of Net Income to FFO, Core FFO and AFFO (amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Net income attributable to common stockholders | $ | 4,628 | | | $ | 3,855 | | | $ | 19,608 | | | $ | 18,055 | |
| Adjustments: | | | | | | | |
| Depreciation and amortization of real estate assets | 20,222 | | | 18,780 | | | 39,097 | | | 37,311 | |
| Gain on real estate dispositions | — | | | — | | | (76) | | | (21) | |
| | | | | | | |
| Impairment losses | 418 | | | 6,364 | | | 418 | | | 6,708 | |
FFO(1) | $ | 25,268 | | | $ | 28,999 | | | $ | 59,047 | | | $ | 62,053 | |
| Adjustments: | | | | | | | |
| Listing-related expenses | 2,924 | | | — | | | 2,980 | | | — | |
| Severance | — | | | 8 | | | 1,863 | | | 40 | |
| Write-off of straight-line rent receivables related to prior periods | — | | | 1,479 | | | — | | | 1,618 | |
| Accelerated stock-based compensation | — | | | — | | | 863 | | | — | |
| Amortization of above (below) market lease intangibles, including ground leases, net | 1,877 | | | 546 | | | 1,248 | | | 831 | |
| Loss on extinguishment of debt | — | | | — | | | 228 | | | — | |
Core FFO(1) | $ | 30,069 | | | $ | 31,032 | | | $ | 66,229 | | | $ | 64,542 | |
| Adjustments: | | | | | | | |
Deferred rent(2) | 333 | | | 344 | | | 2,721 | | | 863 | |
| | | | | | | |
| | | | | | | |
| Straight-line rent adjustments | (1,297) | | | (1,454) | | | (2,473) | | | (2,891) | |
| | | | | | | |
| Amortization of deferred financing costs | 577 | | | 412 | | | 1,029 | | | 825 | |
| Stock-based compensation | 1,163 | | | 1,251 | | | 1,624 | | | 2,493 | |
AFFO(1) | $ | 30,845 | | | $ | 31,585 | | | $ | 69,130 | | | $ | 65,832 | |
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(1) The six months ended June 30, 2024 and 2023 include $4,098,000 and $4,000,000, respectively, of lease termination fee income received.
(2) The six months ended June 30, 2024 includes a $2,000,000 severance fee received from GenesisCare in exchange for 10 properties removed from the prior master lease, or the Severed Properties, and will be recognized in rental revenues over the remaining GenesisCare amended master lease term.
Funds From Operations (FFO)
FFO is calculated consistent with NAREIT's definition, as net income (calculated in accordance with GAAP), excluding gains (or losses) from sales of real estate assets and impairments of real estate assets, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. It should be noted, however, that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than the Company does, making comparisons less meaningful.
Core FFO
The Company believes Core FFO is a supplemental financial performance measure that provides investors with additional information to understand the Company's sustainable performance. The Company calculates Core FFO by adjusting FFO to remove the effect of certain GAAP non-cash income and expense items, unusual and infrequent items that are not expected to impact its operating performance on an ongoing basis, items that effect comparability to prior periods and/or items that are not related to its core real estate operations. These include listing-related expenses, severance, write-off of straight-line rent receivables related to prior periods, accelerated stock-based compensation, amortization of above- and below-market lease intangibles (including ground leases) and loss on extinguishment of debt. Other REITs may use different methodologies for calculating Core FFO and, accordingly, the Company’s Core FFO may not be comparable to other REITs.
AFFO
The Company believes AFFO is a supplemental financial performance measure that provides investors appropriate supplemental information to evaluate the ongoing operations of the Company. AFFO is a metric used by management to evaluate the Company's dividend policy. The Company calculates AFFO by further adjusting Core FFO for the following items: deferred rent, current period straight-line rent adjustments, amortization of deferred financing costs and stock-based compensation. Other REITs may use different methodologies for calculating AFFO and, accordingly, the Company’s AFFO may not be comparable to other REITs.
FFO, Core FFO and AFFO should not be considered to be more relevant or accurate than the GAAP methodology in calculating net income or in its applicability in evaluating the Company's operational performance. The method used to evaluate the value and performance of real estate under GAAP should be considered as a more relevant measure of operating performance and considered more prominent than the non-GAAP FFO, Core FFO and AFFO measures and the adjustments to GAAP in calculating FFO, Core FFO and AFFO.
Reconciliation of Net Income to Same Store Cash Net Operating Income (Same Store Cash NOI) (amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| Rental revenue | | $ | 43,554 | | | $ | 44,965 | | | $ | 94,193 | | | $ | 94,609 | |
| Rental expenses | | (5,849) | | | (4,873) | | | (11,403) | | | (9,723) | |
| Net operating income | | 37,705 | | | 40,092 | | | 82,790 | | | 84,886 | |
| Adjustments: | | | | | | | | |
| Straight-line rent adjustments, net of write-offs | | (1,297) | | | 25 | | | (2,473) | | | (1,273) | |
| Amortization of above (below) market lease intangibles, including ground leases, net | | 1,877 | | | 546 | | | 1,248 | | | 831 | |
| Internal property management fee | | 1,260 | | | 1,345 | | | 2,532 | | | 2,681 | |
Deferred rent(2) | | 333 | | | 344 | | | 2,721 | | | 863 | |
Cash NOI(1) | | 39,878 | | | 42,352 | | | 86,818 | | | 87,988 | |
Non-same store cash NOI(1) | | (3,627) | | | (4,876) | | | (10,776) | | | (13,532) | |
Same store cash NOI(2) | | 36,251 | | | 37,476 | | | 76,042 | | | 74,456 | |
Listing-related expenses | | (2,924) | | | — | | | (2,980) | | | — | |
| General and administrative expenses | | (5,347) | | | (5,547) | | | (13,521) | | | (11,650) | |
| Depreciation and amortization | | (20,246) | | | (18,803) | | | (39,144) | | | (37,355) | |
| Impairment losses | | (418) | | | (6,364) | | | (418) | | | (6,708) | |
| Gain on real estate dispositions | | — | | | — | | | 76 | | | 21 | |
| Interest and other income | | 1,051 | | | 141 | | | 3,292 | | | 147 | |
| Interest expense | | (5,193) | | | (5,664) | | | (10,487) | | | (11,286) | |
| | | | | | | | |
| Straight-line rent adjustments, net of write-offs | | 1,297 | | | (25) | | | 2,473 | | | 1,273 | |
| Amortization of above (below) market lease intangibles, including ground leases, net | | (1,877) | | | (546) | | | (1,248) | | | (831) | |
| Internal property management fee | | (1,260) | | | (1,345) | | | (2,532) | | | (2,681) | |
Deferred rent(2) | | (333) | | | (344) | | | (2,721) | | | (863) | |
Non-same store cash NOI(1) | | 3,627 | | | 4,876 | | | 10,776 | | | 13,532 | |
| Net income attributable to common stockholders | | $ | 4,628 | | | $ | 3,855 | | | $ | 19,608 | | | $ | 18,055 | |
(1) The six months ended June 30, 2024 and 2023 include $4,098,000 and $4,000,000, respectively, of lease termination fee income received.
(2) The six months ended June 30, 2024 includes a $2,000,000 severance fee received from GenesisCare in exchange for the Severed Properties, and will be recognized in rental revenues over the remaining GenesisCare amended master lease term.
NOI
The Company defines net operating income, or NOI, as rental revenue, less rental expenses, on an accrual basis.
Same Store Properties
In order to evaluate the overall portfolio, management analyzes the net operating income of same store properties. The Company defines "same store properties" as properties that were owned and operated for the entirety of both calendar periods being compared and excludes properties under development, re-development, or classified as held for sale. By evaluating same store properties, management is able to monitor the operations of the Company's existing properties for comparable periods to
measure the performance of the current portfolio and readily observe the expected effects of new acquisitions and dispositions on net income. There were 127 same store properties for the quarters ended June 30, 2024 and 2023.
Cash NOI
The Company defines Cash NOI as NOI for its properties excluding the impact of GAAP adjustments to rental revenue and rental expenses, consisting of straight-line rent adjustments, net of write-offs, amortization of above- and below-market lease intangibles (including ground leases) and internal property management fees, then including deferred rent received in cash. Cash NOI is used to evaluate the cash-based performance of the Company’s real estate portfolio. Same store Cash NOI is calculated to exclude non-same store Cash NOI. The Company believes that NOI and Cash NOI both serve as useful supplements to net income because they allow investors and management to measure unlevered property-level operating results and to compare these results to the comparable results of other real estate companies on a consistent basis. The Company uses both NOI and Cash NOI to make decisions about resource allocations and to assess the property-level performance of the real estate portfolio.
EXHIBIT 99.2
Q2 | 2024 This presentation contains certain financial information not derived in accordance with the United States generally accepted accounting principles (GAAP). These items include, but are not limited to, earnings before interest, income taxes, depreciation and amortization (EBITDA), EBITDA for real estate (EBITDAre), earnings before interest, income taxes, depreciation, amortization, rent and management fees (EBITDARM), funds from operations (FFO), core funds from operations (Core FFO), adjusted funds from operations (AFFO), liquidity, net debt, net operating income (NOI), cash NOI, and same store cash NOI, as well as ratios derived from the foregoing. These measures (and the methodologies used to derive them) may not be comparable to those used by other companies. Refer to the glossary for a detailed explanation of these terms and reconciliations to the most directly comparable GAAP measures, as well as others appearing in the supplement. Management considers each item an important supplemental measure of operating and financial performance and believes they are frequently used by interested parties in the evaluation of real estate investment trusts. These measures should not be considered as alternatives, or superior measures, to net income or loss as an indicator of the Company's performance and should be considered only as a supplement to net income or loss and cash flows from operating, investing or financing activities as measures of profitability and/or liquidity, computed in accordance with GAAP. Certain statements contained herein, other than historical fact, may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provided by the same. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties. No forward-looking statement is intended to, nor shall it, serve as a guarantee of future performance. You can identify the forward-looking statements by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar terms and phrases, including references to extensions of the Company's term loan and revolving line of credit. Forward-looking statements are subject to various risks and uncertainties and factors that could cause actual results to differ materially from the expectations of Sila Realty Trust, Inc. (the "Company"), and investors should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company’s control and could materially affect the Company’s results of operations, financial condition, cash flows, performance or future achievements or events, including those described under the section entitled Part I, Item 1A. “Risk Factors” of the Company's 2023 Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Forward Looking Statements Non-GAAP Measures Unaudited Financial Information Disclosures All quarterly information presented in this supplement is unaudited and should be read in conjunction with the Company’s audited consolidated financial statements (and the notes thereto) included in the Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 6, 2024. All per share data has been retroactively adjusted to reflect the Company's one-for-four reverse stock split, or Reverse Stock Split, of each issued and outstanding share of each class of common stock, which occurred on May 1, 2024. See the glossary for a description of the Company's non-GAAP financial and operating metrics.
Q2 | 2024 Section Page Corporate Address 1001 Water Street Suite 800 Tampa, FL 33602 Transfer Agent By Regular Mail: Computershare P.O. Box 43007 Providence, RI 02940-3007 By Overnight Delivery: Computershare 150 Royall Street, Suite 101 Canton, MA 02021 Contact Information Investor Support 833-404-4107 Miles Callahan, Senior Vice President of Capital Markets and Investor Relations IR@silarealtytrust.com www.silarealtytrust.com Quarterly Financial Summary ..................................................................... 3 Financial Statistics and Ratios ................................................................... 4 Condensed Consolidated Balance Sheets ............................................. 5 Condensed Consolidated Statements of Net Income ......................... 6 Reconciliations of Non-GAAP Measures - FFO, Core FFO, and AFFO ................................................................................................................. 7 Reconciliations of Non-GAAP Measures - EBITDA and EBITDAre ... 8 Reconciliations of Non-GAAP Measures - Net Operating Income (NOI) ................................................................................................................. 9 Same Store Cash NOI and Leasing Trends ............................................ 10 Debt .................................................................................................................. 11 Acquisitions and Dispositions .................................................................... 12 Property Map .................................................................................................. 13 Real Estate Diversification .......................................................................... 14 Portfolio ........................................................................................................... 16 Glossary ........................................................................................................... 20 Supplemental Information as of June 30, 2024 See the glossary for a description of the Company's non-GAAP financial and operating metrics.
Q2 | 2024 Three Months Ended Financial Results June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Rental revenue $ 43,554 $ 50,639 $ 45,914 $ 48,542 $ 44,965 Net income (loss) attributable to common stockholders $ 4,628 $ 14,980 $ (8,996) $ 14,983 $ 3,855 Net income (loss) per common share - diluted1 $ 0.08 $ 0.26 $ (0.16) $ 0.26 $ 0.07 EBITDAre $ 30,485 $ 39,096 $ 33,560 $ 38,732 $ 34,686 FFO $ 25,268 $ 33,779 $ 27,366 $ 33,055 $ 28,999 FFO per common share - diluted1 $ 0.44 $ 0.59 $ 0.47 $ 0.58 $ 0.51 Core FFO $ 30,069 $ 36,160 $ 30,928 $ 33,377 $ 31,032 Core FFO per common share - diluted1 $ 0.52 $ 0.63 $ 0.54 $ 0.58 $ 0.54 AFFO $ 30,845 $ 38,285 $ 32,697 $ 34,128 $ 31,585 AFFO per common share - diluted1 $ 0.54 $ 0.66 $ 0.57 $ 0.60 $ 0.55 As of Portfolio Metrics June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Number of properties2 137 136 131 132 132 Rentable square feet (in thousands) 5,288 5,258 5,114 5,487 5,420 Weighted average rent escalation 2.2% 2.2% 2.2% 2.1% 2.1% Weighted average leased rate 97.5% 99.2% 99.4% 99.4% 99.6% Weighted average remaining lease term 8.2 years 8.4 years 8.5 years 8.8 years 9.1 years The following tables summarize the Company's quarterly financial results and portfolio metrics. | Page (1) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024. (2) Excludes two undeveloped land parcels. Quarterly Financial Summary (dollars in thousands, except share data and per share amounts) 3 See the glossary for a description of the Company's non-GAAP financial and operating metrics.
Q2 | 2024 Three Months Ended Interest Coverage Ratio June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Interest expense $ 5,193 $ 5,294 $ 6,171 $ 5,653 $ 5,664 EBITDAre 30,485 39,096 33,560 38,732 34,686 Interest coverage ratio 5.9 x 7.4 x 5.4 x 6.9 x 6.1 x As of Net Debt Ratios June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Principal debt outstanding $ 525,000 $ 525,000 $ 525,000 $ 605,000 $ 565,000 Less: cash and cash equivalents 86,971 90,242 202,019 14,563 21,497 Net debt 438,029 434,758 322,981 590,437 543,503 EBITDAre annualized1 142,680 144,072 152,580 148,512 143,832 Net debt to EBITDAre ratio 3.1 x 3.0 x 2.1 x 4.0 x 3.8 x Net debt $ 438,029 $ 434,758 $ 322,981 $ 590,437 $ 543,503 Adjusted fair value of real estate investments — 2,119,620 2,001,202 2,447,094 2,387,442 Enterprise value 1,657,412 — — — — Net debt leverage ratio2 26.4 % 20.5 % 16.1 % 24.1 % 22.8 % Financial Metrics June 30, 2024 Other Key Metrics June 30, 2024 Net debt leverage ratio2 26.4 % Total real estate investments at cost $ 2,242,044 Net debt to EBITDAre ratio 3.1 x Common stock (NYSE: SILA) price per share4 $ 21.17 Interest coverage ratio 5.9 x Annualized distribution per share5 $ 1.60 Liquidity3 $ 586,971 (1) EBITDAre is annualized by taking the current month amount, removing lease termination income and other items that are not a result of normal operations, and multiplying by twelve months. (2) As a result of the Company's listing on the New York Stock Exchange on June 13, 2024, net debt leverage ratio is calculated as net debt to enterprise value as of June 30, 2024. (3) Liquidity represents cash and cash equivalents of $87.0 million and borrowing base availability on the Company’s credit facility of $500.0 million as of June 30, 2024. (4) Based on the closing price on June 28, 2024, which was the final trading day of the period. (5) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024. Financial Statistics and Ratios (dollars in thousands, except per share amounts) | Page4 See the glossary for a description of the Company's non-GAAP financial and operating metrics.
Q2 | 2024 (Unaudited) June 30, 2024 December 31, 2023 ASSETS Real estate: Land $ 166,130 $ 157,821 Buildings and improvements, less accumulated depreciation of $251,413 and $227,156, respectively 1,556,570 1,470,831 Total real estate, net 1,722,700 1,628,652 Cash and cash equivalents 86,971 202,019 Intangible assets, less accumulated amortization of $112,069 and $102,456, respectively 133,071 134,999 Goodwill 17,700 17,700 Right-of-use assets 36,027 36,384 Other assets 85,128 79,825 Total assets $ 2,081,597 $ 2,099,579 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Credit facility, net of deferred financing costs of $3,699 and $1,847, respectively $ 521,301 $ 523,153 Accounts payable and other liabilities 38,742 30,381 Intangible liabilities, less accumulated amortization of $8,131 and $7,417, respectively 7,699 10,452 Lease liabilities 40,944 41,158 Total liabilities 608,686 605,144 Stockholders’ equity: Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding — — Common stock, $0.01 par value per share, 510,000,000 shares authorized; 61,670,830 and 61,154,4041 shares issued, respectively; 57,216,478 and 56,983,5641 shares outstanding, respectively 572 570 Additional paid-in capital 2,048,406 2,044,450 Distributions in excess of accumulated earnings (593,423) (567,188) Accumulated other comprehensive income 17,356 16,603 Total stockholders’ equity 1,472,911 1,494,435 Total liabilities and stockholders’ equity $ 2,081,597 $ 2,099,579 | Page5 Condensed Consolidated Balance Sheets (dollars in thousands, except share data) See the glossary for a description of the Company's non-GAAP financial and operating metrics. (1) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024.
Q2 | 2024 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenue: Rental revenue $ 43,554 $ 44,965 $ 94,193 $ 94,609 Expenses: Rental expenses 5,849 4,873 11,403 9,723 Listing-related expenses 2,924 — 2,980 — General and administrative expenses 5,347 5,547 13,521 11,650 Depreciation and amortization 20,246 18,803 39,144 37,355 Impairment losses 418 6,364 418 6,708 Total operating expenses 34,784 35,587 67,466 65,436 Gain on real estate dispositions — — 76 21 Interest and other income 1,051 141 3,292 147 Interest expense 5,193 5,664 10,487 11,286 Net income attributable to common stockholders $ 4,628 $ 3,855 $ 19,608 $ 18,055 Weighted average number of common shares outstanding: Basic1 57,230,472 56,744,341 57,171,756 56,692,674 Diluted1 57,601,204 57,208,783 57,574,634 57,155,224 Net income per common share attributable to common stockholders: Basic1 $ 0.08 $ 0.07 $ 0.34 $ 0.32 Diluted1 $ 0.08 $ 0.07 $ 0.34 $ 0.32 Distributions declared per common share1 $ 0.40 $ 0.40 $ 0.80 $ 0.80 | Page6 Condensed Consolidated Statements of Net Income (unaudited; dollars in thousands, except share data and per share amounts) See the glossary for a description of the Company's non-GAAP financial and operating metrics. (1) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024.
Q2 | 2024 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income attributable to common stockholders $ 4,628 $ 3,855 $ 19,608 $ 18,055 Adjustments: Depreciation and amortization of real estate assets 20,222 18,780 39,097 37,311 Gain on real estate dispositions — — (76) (21) Impairment losses 418 6,364 418 6,708 FFO1 $ 25,268 $ 28,999 $ 59,047 $ 62,053 Adjustments: Listing-related expenses 2,924 — 2,980 — Severance — 8 1,863 40 Write-off of straight-line rent receivables related to prior periods — 1,479 — 1,618 Accelerated stock-based compensation — — 863 — Amortization of above (below) market lease intangibles, including ground leases, net 1,877 546 1,248 831 Loss on extinguishment of debt — — 228 — Core FFO1 $ 30,069 $ 31,032 $ 66,229 $ 64,542 Adjustments: Deferred rent2 333 344 2,721 863 Straight-line rent adjustments (1,297) (1,454) (2,473) (2,891) Amortization of deferred financing costs 577 412 1,029 825 Stock-based compensation 1,163 1,251 1,624 2,493 AFFO1 $ 30,845 $ 31,585 $ 69,130 $ 65,832 Net income per common share - diluted3 $ 0.08 $ 0.07 $ 0.34 $ 0.32 FFO per common share - diluted3 $ 0.44 $ 0.51 $ 1.03 $ 1.09 Core FFO per common share - diluted3 $ 0.52 $ 0.54 $ 1.15 $ 1.13 AFFO per common share - diluted3 $ 0.54 $ 0.55 $ 1.20 $ 1.15 | Page7 Reconciliations of Non-GAAP Measures - FFO, Core FFO and AFFO (dollars in thousands, except share data and per share amounts) See the glossary for a description of the Company's non-GAAP financial and operating metrics. (1) The six months ended June 30, 2024 and 2023 include $4.1 million and $4.0 million, respectively, of lease termination fee income received. (2) The six months ended June 30, 2024 includes a $2.0 million severance fee received from GenesisCare USA, Inc. and its affiliates, or GenesisCare, in exchange for the 10 properties removed from the prior master lease, or the Severed Properties, and will be recognized in rental revenues over the remaining GenesisCare amended master lease term. (3) Retroactively adjusted for the effects of the Reverse Stock Split effective May 1, 2024.
Q2 | 2024 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income attributable to common stockholders $ 4,628 $ 3,855 $ 19,608 $ 18,055 Adjustments: Interest expense1 5,193 5,664 10,487 11,286 Depreciation and amortization 20,246 18,803 39,144 37,355 EBITDA $ 30,067 $ 28,322 $ 69,239 $ 66,696 Gain on real estate dispositions — — (76) (21) Impairment losses 418 6,364 418 6,708 EBITDAre $ 30,485 $ 34,686 $ 69,581 $ 73,383 | Page8 Reconciliations of Non-GAAP Measures - EBITDA and EBITDAre (dollars in thousands) See the glossary for a description of the Company's non-GAAP financial and operating metrics. (1) Includes loss on extinguishment of debt of $0.2 million for the six months ended June 30, 2024, in connection with the pay-off of our prior term loan agreement.
Q2 | 2024 Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Rental revenue $ 43,554 $ 44,965 $ 94,193 $ 94,609 Rental expenses (5,849) (4,873) (11,403) (9,723) Net operating income $ 37,705 $ 40,092 $ 82,790 $ 84,886 Adjustments: Straight-line rent adjustments, net of write-offs (1,297) 25 (2,473) (1,273) Amortization of above (below) market lease intangibles, including ground leases, net 1,877 546 1,248 831 Internal property management fee 1,260 1,345 2,532 2,681 Deferred rent 333 344 2,721 863 Cash NOI $ 39,878 $ 42,352 $ 86,818 $ 87,988 Cash NOI margin1 91.6 % 94.2 % 92.2 % 93.0 % Cash NOI yield2 7.1 % 7.2 % 7.7 % 7.3 % (1) Calculated by dividing Cash NOI by rental revenue. (2) Calculated using annualized Cash NOI for the three months ended June 30, 2024 and 2023, respectively, (determined by multiplying actual Cash NOI excluding lease termination income by four quarters, then adding lease termination income collected for the quarter) to weighted average total real estate investments at cost. Calculated using annualized Cash NOI for the six months ended June 30, 2024 and 2023, respectively, (determined by multiplying actual Cash NOI excluding lease termination income by two quarters, then adding lease termination income collected for the two quarters) to weighted average total real estate investments at cost. | Page9 Reconciliations of Non-GAAP Measures - Net Operating Income (NOI) (dollars in thousands) See the glossary for a description of the Company's non-GAAP financial and operating metrics.
Q2 | 2024 127 Properties1 (1) Each period's results reflect only properties owned and operated for the entirety of all calendar periods being compared. Sa m e St or e C as h N et O pe ra tin g In co m e End of Period Leased Rate $37.5 $37.5 $37.8 $39.8 $36.3 99.6% 99.4% 99.4% 99.2% 97.3% 2Q23 3Q23 4Q23 1Q24 2Q24 $0M $10M $20M $30M $40M $50M 40% 50% 60% 70% 80% 90% 100% | Page10 Same Store Cash NOI and Leasing Trends See the glossary for a description of the Company's non-GAAP financial and operating metrics.
Q2 | 2024 $250M $275M 2023 2024 2025 2026 2027 2028 $0M $125M $250M $375M $500M Unsecured Credit Facility Key Covenants Required Actual Ratio of total indebtedness to total gross asset value ≤ 60.0% 22.5 % Ratio of secured indebtedness to total gross asset value ≤ 30.0% 0.0 % Ratio of adjusted EBITDA to fixed charges ≥ 1.50x 7.26 x Ratio of adjusted NOI from unencumbered properties under the credit facility to total unsecured interest expense ≥ 1.75x 4.18 x The table above includes a summary of key financial covenants for the Company's credit facility, as defined and calculated within the terms of the Company's credit and term loan agreements. These calculations are presented to reflect the Company's compliance with the covenants and are not intended to be measures of the Company's liquidity or performance. Debt Summary Hedged debt Amount Rate1 % of Total Credit facility term loans, fixed through interest rate swaps $ 525.0 3.3 % 100.0 % Total debt $ 525.0 3.3 % 100.0 % Debt Maturities (1) Weighted average interest rate as of June 30, 2024. (2) The revolving line of credit, at the Company's election, may be extended for a period of six-months on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. (3) The 2027 term loan may be extended for a period of one year on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. Credit Facility Term Loan - Fixed Through Swaps 2 3 | Page11 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Debt (dollars in millions) Re vo lv er (U nd ra w n $5 00 M )
Q2 | 2024 2024 Acquisitions1 Date Acquired Property Rentable Square Feet Market State Acquisition Price2 (in thousands) 02/26/2024 Brownsburg Healthcare Facility 55,986 Indianapolis IN $ 39,115 03/20/2024 Cave Creek Healthcare Facility 32,450 Phoenix AZ 19,355 03/20/2024 Marana Healthcare Facility 32,250 Tucson AZ 16,156 03/20/2024 Surprise Healthcare Facility 32,450 Phoenix AZ 18,602 03/20/2024 Tucson Healthcare Facility V 32,450 Tucson AZ 15,994 03/20/2024 Weslaco Healthcare Facility 28,750 McAllen TX 15,713 05/21/2024 Reading Healthcare Facility 30,000 Reading PA 10,754 Total Year-to-Date Acquisitions 244,336 $ 135,689 2024 Dispositions Date Disposed Property Rentable Square Feet Market State Sale Price (in thousands) 01/31/2024 New Bedford Healthcare Facility 70,657 Providence MA $ 1,500 Total Year-to-Date Dispositions 70,657 $ 1,500 | Page12 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Acquisitions and Dispositions (1) Subsequent to June 30, 2024, the Company purchased a healthcare property in Fort Smith, Arkansas, for a contract purchase price of $28.3 million. (2) Includes capitalized acquisition costs.
Q2 | 2024 (1) Surgical and Specialty Facilities includes Surgical Facilities, Long-Term Acute Care Hospitals, Behavioral, Transitional Care, Micro-Hospitals and Short-Term Acute Care Hospitals. (2) Based on annualized June 2024 contractual base rent. (3) Excludes two undeveloped land parcels. | Page13 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Property Map (as of June 30, 2024) 37.4% 28.6% 34.0% Property Diversification Medical Outpatient Building Inpatient Rehabilitation Facility Surgical and Specialty Facilities1 66.4% 13.9% 19.7% Properties3Annualized Base Rent2 89.8% 10.2% 90.8% 9.2% Annualized Base Rent2 Properties3 Single/Multi-Tenant Concentration Single Tenant Multi-Tenant
Q2 | 2024 7.9% 7.3% 5.4% 4.2% 4.0% 4.0% 3.5% 3.0% 2.9% 2.8% Dallas Oklahoma City San Antonio Akron Tucson Des Moines Philadelphia Houston Chicago Austin Total Statistics As of June 30, 2024 2023 Rentable square feet 5,287,638 5,420,230 Number of properties1 137 132 Weighted average annualized base rent per leased square foot $32.13 $31.83 Weighted average remaining lease term 8.2 years 9.1 years Weighted average leased rate 97.5 % 99.6 % Top 10 Markets2 As of June 30, 2024 As of June 30, 2023 Rentable Square Feet % Leased3 Rentable Square Feet % Leased3 Dallas 312,590 100.0 % 312,590 100.0 % Oklahoma City 479,137 100.0 % 479,137 100.0 % San Antonio 293,782 96.3 % 293,782 100.0 % Akron 191,269 100.0 % 191,269 100.0 % Tucson 224,314 100.0 % 159,614 98.7 % Des Moines 244,548 100.0 % 244,548 100.0 % Philadelphia 89,139 100.0 % 122,356 100.0 % Houston 117,672 100.0 % 490,742 100.0 % Chicago 129,634 100.0 % 24,722 100.0 % Austin 125,269 100.0 % 125,271 100.0 % Total 2,207,354 99.5 % 2,444,031 99.9 % Top 10 Markets2 (1) Excludes two undeveloped land parcels as of June 30, 2024 and June 30, 2023. (2) Represents each market's annualized June 2024 contractual base rent as a percentage of total annualized June 2024 contractual base rent. (3) Weighted average based on rentable square feet. | Page14 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Real Estate Diversification
Q2 | 2024 15.7% 7.9% 6.8% 5.8% 5.5% 5.4% 4.9% 4.6% 2.8% 2.6% Post Acute Medical, LLC Baylor Scott and White Health Community Health Systems, Inc. Integris Health, Inc. Trinity Health Tenet Healthcare Corporation Select Medical Holdings Corporation Surgery Partners, Inc. Cleveland Clinic Foundation Community Health Network, Inc. 28.1% 36.4% 35.5% A nn ua liz ed B as e Re nt Square Feet 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Thereafter $0M $10M $20M $30M $40M $50M $60M $70M 0.0M 0.5M 1.0M 1.5M 2.0M 2.5M Tenant Diversification3,4 Lease Expirations1,2 (1) The table includes tenants who have been moved to the cash basis of accounting for revenue recognition purposes that have continued to make rental payments as of June 30, 2024. (2) 2024 lease expirations include Steward Health Care System (Stoughton Healthcare Facility), which accounts for 1.5% of total portfolio annualized June 2024 contractual base rent. (3) Based on annualized June 2024 contractual base rent. (4) Includes tenants under common control. (5) All credit ratings are from major credit rating agencies. Parent credit rating is used where tenant is not rated. (6) Surgical and Specialty Facilities includes Surgical Facilities, Long-Term Acute Care Hospitals, Behavioral, Transitional Care, Micro-Hospitals and Short-Term Acute Care Hospitals. (7) Included within non-reporting properties are vacant properties. Annualized Base Rent Expiring Leased Square Feet Tenant Credit Concentrations3,5 Investment Grade Rated Tenant/ Guarantor or Affiliate Rated Tenant/Guarantor or Affiliate Non-Rated Tenant/Guarantor 3 Real Estate Diversification | Page15 See the glossary for a description of the Company's non-GAAP financial and operating metrics. % of ABR3 EBITDARM Coverage Medical Outpatient Building 16.1% 5.37x Inpatient Rehabilitation Facility 25.2% 3.58x Surgical and Specialty Facilities6 26.3% 5.21x Reporting Properties 67.6% 4.64x Non-Reporting Properties7 32.4% Total Portfolio 100.0% EBITDARM Coverage Ratio 2
Q2 | 2024 Market Property Name State Rentable Square Feet Date Acquired % Leased Property Subtype Akron Akron Healthcare Facility OH 98,705 10/4/2019 100.0 % Medical Outpatient Building Akron Akron Healthcare Facility II OH 38,564 10/4/2019 100.0 % Medical Outpatient Building Akron Akron Healthcare Facility III OH 54,000 10/4/2019 100.0 % Long-Term Acute Care Hospital Alexandria Alexandria Healthcare Facility LA 15,600 10/4/2019 100.0 % Medical Outpatient Building Appleton Appleton Healthcare Facility WI 7,552 10/4/2019 100.0 % Medical Outpatient Building Augusta Augusta Healthcare Facility ME 51,000 7/22/2015 100.0 % Medical Outpatient Building Augusta Oakland Healthcare Facility ME 20,000 7/22/2015 100.0 % Medical Outpatient Building Austin Austin Healthcare Facility TX 66,095 3/31/2017 100.0 % Inpatient Rehabilitation Facility Austin Austin Healthcare Facility II TX 18,273 10/4/2019 100.0 % Medical Outpatient Building Austin Luling Healthcare Facility TX 40,901 7/30/2015 100.0 % Specialty Facility Beaumont Beaumont Healthcare Facility TX 61,000 3/31/2017 100.0 % Inpatient Rehabilitation Facility Beckley Fairlea Healthcare Facility WV 5,200 10/4/2019 100.0 % Medical Outpatient Building Boston Stoughton Healthcare Facility MA 180,744 12/23/2014 100.0 % Specialty Facility Bremerton Silverdale Healthcare Facility WA 26,127 8/25/2017 100.0 % Medical Outpatient Building Bremerton Silverdale Healthcare Facility II WA 19,184 9/20/2017 100.0 % Medical Outpatient Building Chicago Aurora Healthcare Facility IL 24,722 3/30/2017 100.0 % Medical Outpatient Building Chicago Burr Ridge Healthcare Facility IL 104,912 9/27/2023 100.0 % Medical Outpatient Building Cincinnati Cincinnati Healthcare Facility OH 14,868 10/29/2014 100.0 % Medical Outpatient Building Cincinnati Cincinnati Healthcare Facility III OH 41,600 7/22/2015 100.0 % Medical Outpatient Building Cincinnati Florence Healthcare Facility KY 41,600 7/22/2015 100.0 % Medical Outpatient Building Corpus Christi Corpus Christi Healthcare Facility TX 25,102 12/22/2016 100.0 % Medical Outpatient Building Covington Covington Healthcare Facility LA 43,250 10/4/2019 100.0 % Specialty Facility Dallas Allen Healthcare Facility TX 42,627 3/31/2017 100.0 % Inpatient Rehabilitation Facility Dallas Carrollton Healthcare Facility TX 21,990 4/27/2018 100.0 % Medical Outpatient Building Dallas Dallas Healthcare Facility TX 62,390 10/4/2019 100.0 % Surgical Facility Dallas Fort Worth Healthcare Facility TX 83,464 12/31/2014 100.0 % Surgical Facility Dallas Fort Worth Healthcare Facility II TX 8,268 12/31/2014 100.0 % Medical Outpatient Building Dallas Fort Worth Healthcare Facility III TX 36,800 12/23/2015 100.0 % Medical Outpatient Building Dallas Frisco Healthcare Facility TX 57,051 10/4/2019 100.0 % Inpatient Rehabilitation Facility Denver Denver Healthcare Facility CO 131,210 10/4/2019 100.0 % Specialty Facility Des Moines Clive Healthcare Facility IA 58,156 11/26/2018 100.0 % Medical Outpatient Building Des Moines Clive Healthcare Facility II IA 63,224 12/8/2021 100.0 % Medical Outpatient Building Des Moines Clive Healthcare Facility III IA 33,974 12/8/2021 100.0 % Medical Outpatient Building Des Moines Clive Healthcare Facility IV IA 35,419 12/8/2021 100.0 % Medical Outpatient Building Des Moines Clive Undeveloped Land IA — 12/8/2021 — % Undeveloped Land Des Moines Clive Undeveloped Land II IA — 12/8/2021 — % Undeveloped Land Des Moines Grimes Healthcare Facility IA 14,669 2/19/2020 100.0 % Medical Outpatient Building Des Moines Indianola Healthcare Facility IA 18,116 9/26/2018 100.0 % Medical Outpatient Building Des Moines Indianola Healthcare Facility II IA 20,990 9/26/2018 100.0 % Medical Outpatient Building Destin Crestview Healthcare Facility FL 5,685 10/4/2019 100.0 % Medical Outpatient Building Destin Fort Walton Beach Healthcare Facility FL 9,017 10/4/2019 100.0 % Medical Outpatient Building | Page16 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Portfolio (as of June 30, 2024)
Q2 | 2024 Market Property Name State Rentable Square Feet Date Acquired % Leased Property Subtype Destin Santa Rosa Beach Healthcare Facility FL 5,000 10/4/2019 100.0 % Medical Outpatient Building Elkhart Goshen Healthcare Facility IN 15,462 10/4/2019 100.0 % Medical Outpatient Building Fayetteville Fayetteville Healthcare Facility AR 55,740 10/4/2019 100.0 % Surgical Facility Fort Myers Bonita Springs Healthcare Facility FL 9,800 10/4/2019 100.0 % Medical Outpatient Building Fort Myers Fort Myers Healthcare Facility FL 32,148 10/4/2019 — % Medical Outpatient Building Fort Myers Fort Myers Healthcare Facility II FL 47,089 10/4/2019 — % Medical Outpatient Building Fort Myers Lehigh Acres Healthcare Facility FL 5,746 10/4/2019 100.0 % Medical Outpatient Building Frankfort Frankfort Healthcare Facility KY 4,000 10/4/2019 100.0 % Medical Outpatient Building Grand Rapids Grand Rapids Healthcare Facility MI 108,014 12/7/2016 83.5 % Medical Outpatient Building Green Bay Bellevue Healthcare Facility WI 5,838 10/4/2019 100.0 % Medical Outpatient Building Green Bay De Pere Healthcare Facility WI 7,100 10/4/2019 100.0 % Medical Outpatient Building Green Bay Howard Healthcare Facility WI 7,552 10/4/2019 100.0 % Medical Outpatient Building Green Bay Sturgeon Bay Healthcare Facility WI 3,100 10/4/2019 100.0 % Medical Outpatient Building Hammond Hammond Healthcare Facility LA 63,000 10/4/2019 100.0 % Surgical Facility Hammond Hammond Healthcare Facility II LA 23,835 10/4/2019 100.0 % Specialty Facility Hot Springs Hot Springs Healthcare Facility AR 8,573 10/17/2018 100.0 % Medical Outpatient Building Houston Houston Healthcare Facility TX 13,645 7/31/2014 100.0 % Medical Outpatient Building Houston Houston Healthcare Facility III TX 16,217 10/4/2019 100.0 % Medical Outpatient Building Houston Katy Healthcare Facility TX 34,296 6/8/2018 100.0 % Specialty Facility Houston Webster Healthcare Facility TX 53,514 6/5/2015 100.0 % Inpatient Rehabilitation Facility Indianapolis Brownsburg Healthcare Facility IN 55,986 2/26/2024 100.0 % Inpatient Rehabilitation Facility Indianapolis Greenwood Healthcare Facility IN 53,560 4/19/2021 100.0 % Inpatient Rehabilitation Facility Jacksonville Jacksonville Healthcare Facility FL 13,082 10/4/2019 100.0 % Medical Outpatient Building Kansas City Overland Park Healthcare Facility KS 54,568 2/17/2015 100.0 % Inpatient Rehabilitation Facility Lafayette Lafayette Healthcare Facility LA 73,824 10/4/2019 100.0 % Surgical Facility Lakeland Winter Haven Healthcare Facility FL 7,560 1/27/2015 100.0 % Medical Outpatient Building Laredo Laredo Healthcare Facility TX 61,677 9/19/2019 100.0 % Medical Outpatient Building Laredo Laredo Healthcare Facility II TX 118,132 9/19/2019 100.0 % Medical Outpatient Building Las Vegas Henderson Healthcare Facility NV 6,685 10/4/2019 100.0 % Medical Outpatient Building Las Vegas Las Vegas Healthcare Facility NV 56,220 6/24/2016 100.0 % Inpatient Rehabilitation Facility Las Vegas Las Vegas Healthcare Facility II NV 6,963 10/4/2019 100.0 % Medical Outpatient Building Little Rock Benton Healthcare Facility AR 104,419 10/17/2018 100.0 % Medical Outpatient Building Little Rock Benton Healthcare Facility II AR 11,350 10/17/2018 100.0 % Medical Outpatient Building Little Rock Bryant Healthcare Facility AR 23,450 10/17/2018 100.0 % Medical Outpatient Building | Page17 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Portfolio (Continued)
Q2 | 2024 Market Property Name State Rentable Square Feet Date Acquired % Leased Property Subtype Little Rock Bryant Healthcare Facility II AR 16,425 8/16/2019 100.0 % Medical Outpatient Building Los Angeles El Segundo Healthcare Facility CA 12,163 10/4/2019 — % Medical Outpatient Building Lubbock Lubbock Healthcare Facility TX 102,143 10/4/2019 100.0 % Surgical Facility Manitowoc Manitowoc Healthcare Facility WI 7,987 10/4/2019 100.0 % Medical Outpatient Building Manitowoc Manitowoc Healthcare Facility II WI 36,090 10/4/2019 100.0 % Medical Outpatient Building Marinette Marinette Healthcare Facility WI 4,178 10/4/2019 100.0 % Medical Outpatient Building Miami West Palm Beach Healthcare Facility FL 25,150 6/15/2023 100.0 % Medical Outpatient Building McAllen Weslaco Healthcare Facility TX 28,750 3/20/2024 100.0 % Specialty Facility Oklahoma City Edmond Healthcare Facility OK 17,700 1/20/2016 100.0 % Medical Outpatient Building Oklahoma City Newcastle Healthcare Facility OK 7,424 2/3/2016 100.0 % Medical Outpatient Building Oklahoma City Oklahoma City Healthcare Facility OK 94,076 12/29/2015 100.0 % Specialty Facility Oklahoma City Oklahoma City Healthcare Facility II OK 41,394 12/29/2015 100.0 % Medical Outpatient Building Oklahoma City Oklahoma City Healthcare Facility III OK 5,000 1/27/2016 100.0 % Medical Outpatient Building Oklahoma City Oklahoma City Healthcare Facility IV OK 8,762 1/27/2016 100.0 % Medical Outpatient Building Oklahoma City Oklahoma City Healthcare Facility V OK 43,676 2/11/2016 100.0 % Medical Outpatient Building Oklahoma City Oklahoma City Healthcare Facility VI OK 14,676 3/7/2016 100.0 % Medical Outpatient Building Oklahoma City Oklahoma City Healthcare Facility VII OK 102,978 6/22/2016 100.0 % Surgical Facility Oklahoma City Oklahoma City Healthcare Facility VIII OK 62,857 6/30/2016 100.0 % Surgical Facility Oklahoma City Oklahoma City Healthcare Facility IX OK 34,970 10/4/2019 100.0 % Medical Outpatient Building Oklahoma City Yukon Healthcare Facility OK 45,624 3/10/2022 100.0 % Medical Outpatient Building Omaha Omaha Healthcare Facility NE 40,402 10/14/2015 100.0 % Specialty Facility Oshkosh Oshkosh Healthcare Facility WI 8,717 10/4/2019 100.0 % Medical Outpatient Building Philadelphia Marlton Healthcare Facility NJ 89,139 11/1/2016 100.0 % Inpatient Rehabilitation Facility Phoenix Cave Creek Healthcare Facility AZ 32,450 3/20/2024 100.0 % Specialty Facility Phoenix Surprise Healthcare Facility AZ 32,450 3/20/2024 100.0 % Specialty Facility Pittsburgh Clarion Healthcare Facility PA 33,000 6/1/2015 100.0 % Medical Outpatient Building Pittsburgh Pleasant Hills Healthcare Facility PA 33,712 5/12/2022 100.0 % Medical Outpatient Building Poplar Bluff Poplar Bluff Healthcare Facility MO 71,519 9/19/2019 100.0 % Medical Outpatient Building Prosser Prosser Healthcare Facility I WA 6,000 5/20/2022 100.0 % Medical Outpatient Building Prosser Prosser Healthcare Facility II WA 9,230 5/20/2022 100.0 % Medical Outpatient Building Prosser Prosser Healthcare Facility III WA 5,400 5/20/2022 100.0 % Medical Outpatient Building Providence North Smithfield Healthcare Facility RI 92,944 10/4/2019 100.0 % Inpatient Rehabilitation Facility Reading Wyomissing Healthcare Facility PA 33,217 7/24/2015 100.0 % Surgical Facility Reading Reading Healthcare Facility PA 30,000 5/21/2024 100.0 % Medical Outpatient Building Riverside Palm Desert Healthcare Facility CA 6,963 10/4/2019 100.0 % Medical Outpatient Building Riverside Rancho Mirage Healthcare Facility CA 47,008 3/1/2016 100.0 % Inpatient Rehabilitation Facility Riverside Rancho Mirage Healthcare Facility II CA 7,432 10/4/2019 100.0 % Medical Outpatient Building Riverside Yucca Valley Healthcare Facility CA 12,240 10/4/2019 — % Medical Outpatient Building Saginaw Saginaw Healthcare Facility MI 87,843 12/21/2017 100.0 % Medical Outpatient Building | Page18 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Portfolio (Continued)
Q2 | 2024 Market Property Name State Rentable Square Feet Date Acquired % Leased Property Subtype San Antonio New Braunfels Healthcare Facility TX 27,971 10/4/2019 100.0 % Specialty Facility San Antonio San Antonio Healthcare Facility TX 44,746 6/29/2017 100.0 % Specialty Facility San Antonio San Antonio Healthcare Facility III TX 50,000 10/4/2019 100.0 % Inpatient Rehabilitation Facility San Antonio San Antonio Healthcare Facility IV TX 113,136 10/4/2019 100.0 % Inpatient Rehabilitation Facility San Antonio San Antonio Healthcare Facility V TX 57,929 10/4/2019 81.3 % Medical Outpatient Building San Diego Escondido Healthcare Facility CA 56,800 7/21/2022 100.0 % Inpatient Rehabilitation Facility Sarasota Lakewood Ranch Healthcare Facility FL 10,919 10/4/2019 100.0 % Medical Outpatient Building Savannah Savannah Healthcare Facility GA 48,184 10/4/2019 100.0 % Specialty Facility Scranton Wilkes-Barre Healthcare Facility PA 15,996 10/4/2019 100.0 % Medical Outpatient Building Sherman Sherman Healthcare Facility TX 57,576 11/20/2015 100.0 % Surgical Facility Sherman Sherman Healthcare Facility II TX 8,055 11/20/2015 100.0 % Medical Outpatient Building St. Louis Bridgeton Healthcare Facility MO 66,914 10/4/2019 100.0 % Inpatient Rehabilitation Facility Tampa Tampa Healthcare Facility FL 33,822 9/8/2020 100.0 % Medical Outpatient Building Tampa Tampa Healthcare Facility II FL 87,649 7/20/2022 100.0 % Inpatient Rehabilitation Facility Tucson Marana Healthcare Facility AZ 32,250 3/20/2024 100.0 % Specialty Facility Tucson Tucson Healthcare Facility AZ 34,009 9/19/2019 100.0 % Medical Outpatient Building Tucson Tucson Healthcare Facility II AZ 60,913 12/26/2019 100.0 % Inpatient Rehabilitation Facility Tucson Tucson Healthcare Facility III AZ 20,000 12/27/2019 100.0 % Medical Outpatient Building Tucson Tucson Healthcare Facility IV AZ 44,692 12/22/2020 100.0 % Medical Outpatient Building Tucson Tucson Healthcare Facility V AZ 32,450 3/20/2024 100.0 % Medical Outpatient Building Valdosta Valdosta Healthcare Facility GA 24,750 11/28/2018 100.0 % Medical Outpatient Building Valdosta Valdosta Healthcare Facility II GA 12,745 11/28/2018 100.0 % Medical Outpatient Building Victoria Victoria Healthcare Facility TX 34,297 10/4/2019 100.0 % Inpatient Rehabilitation Facility Victoria Victoria Healthcare Facility II TX 28,752 10/4/2019 100.0 % Specialty Facility Winston Winston-Salem Healthcare Facility NC 22,200 12/17/2014 100.0 % Medical Outpatient Building | Page19 See the glossary for a description of the Company's non-GAAP financial and operating metrics. Portfolio (Continued)
Q2 | 2024 Contractual Annualized Base Rent The sum of each tenant’s contractual base rent in the last month of the period multiplied by twelve months, unless otherwise specified. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) These supplemental non-GAAP performance measures are defined as net income or loss, calculated in accordance with GAAP, adjusted for interest expense, income tax expense (benefit), depreciation and amortization. EBITDAre also includes adjustments for impairments of real estate assets and gains or losses from the disposition of properties. EBITDAre is a definition promulgated by the National Association of Real Estate Investment Trusts (NAREIT). The Company believes these metrics are important indicators of the Company’s operating performance and its ability to service debt. The following is a reconciliation of net income (loss) attributable to common stockholders, which is the most directly comparable GAAP financial measure, to EBITDA and EBITDAre for the following quarterly periods (amounts in thousands): Adjusted Fair Value of Real Estate Investments Adjusted fair value of real estate investments is calculated using the real estate values determined as of the most recent NAV (as defined below), adjusted for property acquisitions and dispositions, major capital expenditures, and impairments. Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Net income (loss) attributable to common stockholders $ 4,628 $ 14,980 $ (8,996) $ 14,983 $ 3,855 Adjustments: Interest expense1 5,193 5,294 6,171 5,653 5,664 Depreciation and amortization 20,246 18,898 18,841 18,097 18,803 EBITDA $ 30,067 $ 39,172 $ 16,016 $ 38,733 $ 28,322 Gain on real estate dispositions — (76) — (1) — Impairment losses 418 — 17,544 — 6,364 EBITDAre $ 30,485 $ 39,096 $ 33,560 $ 38,732 $ 34,686 Glossary | Page20 Earnings Before Interest, Taxes, Depreciation, Amortization, Rent and Management Fees (EBITDARM) EBITDARM Coverage The Company utilizes EBITDARM, a supplemental non-GAAP performance measure, to evaluate the core operations of our tenants and/or guarantors (together, the “Obligor”) of our properties. An Obligor’s reported EBITDARM may be adjusted for certain non-recurring items or items not core to operations. Management believes such adjustments are reasonable and necessary to evaluate Obligor performance. Most Obligor financial statements are unaudited, and we have not independently verified any financial information received from Obligors and, therefore, we cannot confirm that such information is accurate or complete. Represents the ratio of EBITDARM of our reporting Obligors, divided by either (i) in the case of tenant individual property level reporting, the rent payable to the Company for the related period, or (ii) in the case of tenant multiple property level reporting, or in the case of guarantor reporting, total rent reported in its financial statements. EBITDARM Coverage is one indicator of an Obligor’s ability to generate sufficient cash flows to cover its rental obligations. This ratio is based on the latest financial statements available to the Company and is calculated on a trailing twelve-month basis, when available and appropriate. For reporting purposes, the ratio for each Obligor is then weighted based on the annualized base rent of the reporting property. Properties for which Obligor financial statements are excluded include those (i) that are either not available or not sufficiently detailed, (ii) are not operating or are currently unoccupied, (iii) where the Obligor has filed for bankruptcy, or (iv) properties which are not stabilized. Properties with new operations are considered stabilized only upon the earlier to occur of (i) the Obligor generating a 1.25x EBITDARM Coverage ratio, or (ii) twenty-four months after the property has been open for operations. (1) Includes loss on extinguishment of debt of $0.2 million for the six months ended June 30, 2024, in connection with the pay-off of our prior term loan agreement.
Q2 | 2024 Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Net income (loss) attributable to common stockholders $ 4,628 $ 14,980 $ (8,996) $ 14,983 $ 3,855 Adjustments: Depreciation and amortization of real estate assets 20,222 18,875 18,818 18,073 18,780 Gain on real estate dispositions — (76) — (1) — Impairment losses 418 — 17,544 — 6,364 FFO1 $ 25,268 $ 33,779 $ 27,366 $ 33,055 $ 28,999 Adjustments: Listing-related expenses 2,924 56 — — — Severance — 1,863 1,318 43 8 Write-off of straight-line rent receivables related to prior periods — — 1,650 — 1,479 Accelerated stock-based compensation — 863 318 — — Amortization of above (below) market lease intangibles, including ground leases, net 1,877 (629) 276 279 546 Loss on extinguishment of debt — 228 — — — Core FFO1 $ 30,069 $ 36,160 $ 30,928 $ 33,377 $ 31,032 Adjustments: Deferred rent2 333 2,388 456 325 344 Straight-line rent adjustments (1,297) (1,176) (1,357) (1,217) (1,454) Amortization of deferred financing costs 577 452 425 415 412 Stock-based compensation 1,163 461 2,245 1,228 1,251 AFFO1 $ 30,845 $ 38,285 $ 32,697 $ 34,128 $ 31,585 The following is a reconciliation of net income (loss) attributable to common stockholders, which is the most directly comparable GAAP financial measure, to FFO, Core FFO and AFFO for the following quarterly periods (amounts in thousands): Funds From Operations (FFO), Core Funds From Operations, and Adjusted Funds From Operations (AFFO) FFO, a non-GAAP financial measure, is calculated consistent with NAREIT’s definition, as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of real estate assets and impairments of real estate assets, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. It should be noted, however, that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than the Company does, making comparisons less meaningful. The Company calculates Core FFO by adjusting FFO to remove the effect of certain GAAP non-cash income and expense items, unusual and infrequent items that are not expected to impact its operating performance on an ongoing basis, items that effect comparability to prior periods and/or items that are not related to its core real estate operations. These include listing-related expenses, severance, write-off of straight-line rent receivables related to prior periods, accelerated stock- based compensation, amortization of above- and below-market lease intangibles (including ground leases), and loss on extinguishment of debt. The Company considers Core FFO to be a useful supplemental measure because it provides investors with additional information to understand our sustainable performance. Other REITs may use different methodologies for calculating Core FFO and, accordingly, the Company’s Core FFO may not be comparable to other REITs. In addition to FFO and Core FFO, the Company uses AFFO as a non-GAAP supplemental financial performance measure because the Company believes it provides to investors appropriate supplemental information to evaluate the ongoing operations of the Company. AFFO is a metric used by management to evaluate the Company's dividend policy. The Company calculates AFFO by further adjusting Core FFO for the following items: deferred rent, current period straight-line rent adjustments, amortization of deferred financing costs and stock-based compensation. Other REITs may use different methodologies for calculating AFFO and, accordingly, the Company’s AFFO may not be comparable to other REITs. FFO, Core FFO and AFFO should not be considered to be more relevant or accurate than the GAAP methodology in calculating net income (loss) or in its applicability in evaluating our operational performance. The method used to evaluate the value and performance of real estate under GAAP should be considered as a more relevant measure of operating performance and considered more prominent than the non-GAAP FFO, Core FFO and AFFO measures and the adjustments to GAAP in calculating FFO, Core FFO and AFFO. Glossary | Page21 Enterprise Value Enterprise value represents market capitalization plus net debt. (1) The three months ended March 31, 2024 includes $4.1 million of lease termination fee income received. (2) The three months ended March 31, 2024 includes a $2.0 million severance fee received from GenesisCare in exchange for the Severed Properties, and will be recognized in rental revenues over the remaining GenesisCare amended master lease term.
Q2 | 2024 Net Debt Net debt, a non-GAAP financial measure, represents principal debt outstanding less cash and cash equivalents. Net debt provides useful information by calculating and monitoring the Company’s leverage metrics. The following is a reconciliation of total credit facility debt, net, which is the most directly comparable GAAP financial measure to net debt, for the following quarterly periods (amounts in thousands): As of June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Total credit facility debt, net $ 521,301 $ 521,009 $ 523,153 $ 603,052 $ 562,893 Deferred financing costs, net 3,699 3,991 1,847 1,948 2,107 Principal debt outstanding 525,000 525,000 525,000 605,000 565,000 Less: cash and cash equivalents 86,971 90,242 202,019 14,563 21,497 Net debt $ 438,029 $ 434,758 $ 322,981 $ 590,437 $ 543,503 Net Asset Value (NAV) NAV is determined by the board of directors, at the recommendation of the Company's audit committee, and based on the estimated fair value of the Company’s assets, less the estimated fair value of the Company’s liabilities, divided by the number of shares outstanding on a diluted basis. This valuation is performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Institute for Portfolio Alternatives in April 2013, in addition to guidance from the SEC. Liquidity A financial metric that represents the outstanding cash and cash equivalents combined with the remaining borrowing base availability on the Company’s credit facility at a point in time. Glossary | Page22 Net Operating Income (NOI), Cash NOI and Same Store Cash NOI NOI, a non-GAAP financial measure, is defined as rental revenue, less rental expenses, on an accrual basis. Cash NOI is calculated to exclude the impact of GAAP adjustments to rental revenue and rental expenses, consisting of straight-line rent adjustments, net of write-offs, amortization of above- and below- market lease intangibles (including ground leases), and internal property management fees, then including deferred rent received in cash, and is used to evaluate the cash-based performance of the Company’s real estate portfolio. Same store Cash NOI is calculated to exclude non-same store cash NOI. The Company believes that NOI and Cash NOI both serve as useful supplements to net income (loss) because they allow investors and management to measure unlevered property-level operating results and to compare these results to the comparable results of other real estate companies on a consistent basis. The Company uses both NOI and Cash NOI to make decisions about resource allocations and to assess the property-level performance of the real estate portfolio. As an indicator of financial performance, neither metric should be considered as an alternative to net income (loss), determined in accordance with GAAP. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results, both metrics should be evaluated in conjunction with net income (loss) as presented in the consolidated financial statements included on the Company’s Annual Report on Form 10- K filed with the SEC on March 6, 2024. Market Capitalization The total number of outstanding shares of the Company's common stock, restricted stock, and performance-based deferred stock units as of period end multiplied by the closing price per share of the Company's common stock on the New York Stock Exchange as of period end.
Q2 | 2024 The following is a reconciliation from net income (loss) attributable to common stockholders, which is the most directly comparable GAAP financial measure, to NOI, Cash NOI and Same Store Cash NOI, for the following periods (amounts in thousands): Net Operating Income (NOI), Cash NOI and Same Store Cash NOI (Continued) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Rental revenue $ 43,554 $ 50,639 $ 45,914 $ 48,542 $ 44,965 Rental expenses (5,849) (5,554) (5,468) (5,005) (4,873) Net operating income 37,705 45,085 40,446 43,537 40,092 Adjustments: Straight-line rent adjustments, net of write-offs (1,297) (1,176) 293 (1,217) 25 Amortization of above (below) market lease intangibles, including ground leases, net 1,877 (629) 276 279 546 Internal property management fee 1,260 1,272 1,332 1,237 1,345 Deferred rent2 333 2,388 456 325 344 Cash NOI1,2 39,878 46,940 42,803 44,161 42,352 Non-same store cash NOI1 (3,627) (7,149) (4,985) (6,633) (4,876) Same store cash NOI2 36,251 39,791 37,818 37,528 37,476 Listing-related expenses (2,924) (56) — — — General and administrative expenses (5,347) (8,174) (7,418) (4,828) (5,547) Depreciation and amortization (20,246) (18,898) (18,841) (18,097) (18,803) Impairment losses (418) — (17,544) — (6,364) Gain on real estate dispositions — 76 — 1 — Interest and other income 1,051 2,241 532 23 141 Interest expense (5,193) (5,294) (6,171) (5,653) (5,664) Straight-line rent adjustments, net of write-offs 1,297 1,176 (293) 1,217 (25) Amortization of above (below) market lease intangibles, including ground leases, net (1,877) 629 (276) (279) (546) Internal property management fee (1,260) (1,272) (1,332) (1,237) (1,345) Deferred rent2 (333) (2,388) (456) (325) (344) Non-same store cash NOI 3,627 7,149 4,985 6,633 4,876 Net income (loss) attributable to common stockholders $ 4,628 $ 14,980 $ (8,996) $ 14,983 $ 3,855 Glossary | Page23 Remaining Lease Term The number of periods remaining in each tenant’s lease, calculated on a weighted average basis using annualized base rent. Rent Escalation The amount of base rent increases that are included within each tenant’s lease, calculated on a weighted average basis using contractual annualized base rent, excluding leases tied to the consumer price index (CPI). (1) The three months ended March 31, 2024 includes $4.1 million of lease termination fee income received. (2) The three months ended March 31, 2024 includes a $2.0 million severance fee received from GenesisCare in exchange for the Severed Properties, and will be recognized in rental revenues over the remaining GenesisCare amended master lease term.
Q2 | 2024 Total Real Estate Investments at Cost Represents the contractual purchase price of real estate properties acquired, including capitalized acquisition costs, and capital expenditures incurred since acquisition, reduced by the cost basis of properties sold. Same Store Properties Operating properties that were owned and operated for the entirety of all calendar periods being compared, excluding properties under development, re- development, or classified as held for sale. To evaluate properties on a comparable basis, management analyzes metrics of same store properties in order to assess the core operations of the portfolio. By evaluating same store properties, management is able to monitor the operations of the Company's existing properties for comparable periods to measure the performance of the current portfolio and the effects of new acquisitions and dispositions on net income (loss). Glossary | Page24
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Sila Realty (PK) (USOTC:SLRTI)
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