Global Medical REIT Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2024

There are 12 speakers on the call.

Operator

Greetings, and welcome to the Global Medical REIT Third Quarter 20 24 Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Sweatt, Investor Relations.

Operator

Thank you, sir. You may begin.

Speaker 1

Thank you. Good morning, everyone, and welcome to Global Medical REIT's Q3 2024 Earnings Conference Call. On the call today are Jeff Busch, Chief Executive Officer Alfonso Leon, Chief Investment Officer and Bob Kiernan, Chief Financial Officer. Please note the use of forward looking statements by the company on this conference call. Statements made on this call may include statements which are not historical facts and are considered forward looking.

Speaker 1

The company intends these forward looking statements to be covered by the Safe Harbor provisions and forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and is making this statement for purpose of complying with those safe harbor provisions. Furthermore, actual results may differ materially from those described in the forward looking statements and will be affected by a variety of risks and factors that are beyond the company's control, including without limitation, those contained in the company's 10 ks for the year ended December 31, 2023 and its other SEC filings. The company assumes no obligation to update publicly any forward looking statements whether as a result of new information, future events or otherwise. Additionally, on this call, the company may refer to certain non GAAP financial measures such as funds from operations, adjusted funds from operations, EBITDAre and adjusted EBITDAre. You can find a tabular reconciliation of these non GAAP financial measures in the most currently comparable GAAP numbers in the company's earnings release and in filings with the SEC.

Speaker 1

Additional information can be found on the Investor Relations page of the company's website atwww.globalmedicalreit.com. I would now like to turn the call over to Jeff Busch, Chief Executive Officer of Global Medical REIT. Jeff?

Speaker 2

Thank you, Steve. Good morning and thank you for joining our Q3 2020 4 earnings call. Our high quality diversified portfolio continues to produce strong results. At the end of the Q3, portfolio occupancy was 96.1% with a weighted average lease term of 5.6 years and portfolio average rent coverage ratio of 4.6 times. For the 3rd quarter, net income attributable to common shareholders was $1,800,000 or $0.03 per share compared to $3,100,000 or $0.05 per share in the Q3 of 2023.

Speaker 2

FFO attributable to common shareholders and non controlling interest in the 3rd quarter was $0.19 per share and unit, down $0.03 from the prior quarter. AFFO attributable to common shareholders and non controlling interest was $0.22 per share and unit, down $0.01 from the prior year quarter. The decrease is due primarily to the impact of cash basis tenants, including Stewart at our Beaumont facility. Regarding our acquisition activity early this year, we announced that we had entered into a purchase agreement to acquire a 15 property portfolio of outpatient medical real estate properties for an aggregate purchase price of $80,300,000 These properties are fully leased under triple net or absolute triple net leases with a cap rate of 8%. During the Q3, we closed on the 1st tranche of this acquisition consisting of 5 properties for $30,800,000 and a subsequent to quarter end in October, we completed the acquisition of the remaining 10 properties.

Speaker 2

Looking ahead, we currently have 5 property portfolio of medical outpatient facilities under contract to purchase for just under $70,000,000 These properties are 94% leased to high quality medical tenants and have a 9% cap rate. We remain optimistic about the acquisition market with our asset class, are encouraged by our recent successes in adding quality assets to our portfolio. As we continue to focus on our growth, we remain committed to staying disciplined in maintaining a strong balance sheet. In the Q3, we issued 1,200,000 shares of our common stock to our ATM at an average offering price of $9.95 per share, generating gross proceeds of $12,000,000 In addition, asset recycling continues to be a key element in financing our growth initiatives. During the Q3, we closed on the sale of 2 medical facilities at a cap rate of 7% that generated aggregate gross proceeds of $12,100,000 resulting in an aggregate gain of $1,800,000 We expect to continue to both issue common equity and sell assets as we move forward in order to maintain a strong balance sheet.

Speaker 2

In terms of tenant related items, in September, we announced that we entered into a new 15 year triple net lease with an affiliate of CHRISTUS Health at our healthcare facility in Beaumont, Texas replacing Stewart Healthcare. We are excited to begin our new relationship with CHRISTUS and I'm pleased with our team's ability to re lease this property to a high quality tenant, achieving a great outcome for shareholders. Overall, I am pleased with our Q3 results and want to thank the entire team for hard work and contributions to our results. With that, I turn the call over to Alfonzo to discuss our investment activity and current market conditions in more detail.

Speaker 3

Thank you, Jeff. The transaction market for medical facilities that align with our investment criteria continues to evolve. We remain actively engaged with a diverse range of physician groups, brokers and corporate sellers to source acquisition opportunities that will help us continue growing our portfolio. In anticipation of Fed rate cuts, volume and quality has ticked up. However, the increase in mortgage rates has tempered demand in the past month.

Speaker 3

As Jeff mentioned, in July, we closed on the first tranche of our 15 property portfolio of outpatient medical real estate, acquiring 5 properties encompassing approximately 95,000 leasable square feet. In early October, we completed the acquisition of the remaining 10 properties encompassing approximately 160,000 leasable square feet. In total, the existing property portfolio had an aggregate purchase price of $80,300,000 with an aggregate of approximately 254,000 leasable square feet and aggregate annualized base rent of $6,400,000 equating to an ACAP. We view this transaction as reflective of current market trends where sellers are increasingly accepting higher cap rate deals in response to ongoing challenges in the refinancing market and pressure on real estate funds to sell. Looking ahead on acquisitions, as Jeff previously stated, we have a $70,000,000 portfolio of 5 medical outpatient facilities under contract to purchase at a 9 cap rate.

Speaker 3

Similar to our 2024 acquisitions, we have anticipated closing on this acquisition in 2 tranches during the first half of twenty twenty five. These five properties are located in 3 states, are 94% occupied, have an aggregate of approximately 487,000 leasable square feet and an aggregate in place NOI of approximately $6,300,000 We are purchasing these properties at $143 per square feet, well below replacement cost. Most tenants in these buildings have invested significant capital in their own suite resulting in rents averaging $14 to $15 per square foot triple net. These properties have been very well maintained and are mission critical assets to the corresponding health systems. Tenancy in these buildings includes a comprehensive mix of providers offering primary care and urgent care, specialists like neuro, cardio, ortho and cancer, as well as diagnostics, radiology and lab.

Speaker 3

In addition, all of these properties are subject to ground leases with an average remaining term of 60 years and approximately 2 thirds of the property square footage is on campus. Approximately 60% and 82% of the on and off campus properties respectively are leased investment grade tenants. Note that our obligation to close this acquisition is subject to certain customary terms and conditions, including due diligence reviews and tenant interviews. Accordingly, there is no assurance that we will close this acquisition on a timely basis or at all. On a dispositions front, pursuant to our normal capital recycling process, during the quarter, we closed on the sale of a medical facility in Panama City, Florida, receiving gross proceeds of $11,000,000 resulting in

Operator

a gain of

Speaker 3

$1,700,000 Later in the quarter, we also sold another medical facility located in Panama City Beach, Florida, receiving gross proceeds of $1,100,000 resulting in a gain of $100,000 In total, the cap rate on these dispositions was 7%. As always, we remain committed to a disciplined approach to investments that align with our strategy and disciplined underwriting standards. By leveraging our competitive advantages, our scale, access to capital and the potential use of OP unit deal structures, we intend to unlock opportunities and drive value. I'd now like to turn the call over to Bob to discuss our financial results. Bob?

Speaker 4

Thank you, Alfonso. At the end of the Q3 2024, our portfolio consisted of gross investments in real estate of $1,400,000,000 and included $4,800,000 of total leasable square feet, 96.1 percent occupancy, 5.6 years of weighted average lease term, 4.6 times rent coverage with 2.2 percent weighted average contractual rent escalations. In the Q3 of 2024, our total revenues decreased by approximately 3.5% compared to the prior year quarter to $34,300,000 due primarily to changes in our portfolio, including lower occupancy in 2024 compared to 2023 and the impact of tenants being placed on cash basis accounting subsequent to the end of the Q3 of 2023. Total expenses for the Q3 of 2024 were $32,700,000 compared to $33,000,000 in the prior year quarter. The decrease is due to reduced depreciation and amortization expenses, primarily related to disposition transactions that were completed during 2024, partially offset by increased operating expenses and interest expense.

Speaker 4

Our operating expenses for the Q3 of 2024 were $7,400,000 compared to $7,200,000 in the prior year quarter. Regarding the Q3 2024 expenses, dollars 4,800,000 related to net leases where the company recognized a comparable amount of expense recovery revenue and $1,600,000 related to gross leases. Relative to the increase in expense in 2024, this reflects increased costs from properties acquired in 2024 as well as the impact of tenants placed on cash basis accounting subsequent to the end of Q3 of 2023, partially offset by a net reduction in cost at other properties. G and A expenses were $4,400,000 in both the Q3 of 2024 and the prior year quarter. We continue to expect our quarterly G and A expenses to be in the range of $4,400,000 and $4,600,000 In the Q3 of 2024, we completed 2 dispositions that generated aggregate gross proceeds of $12,100,000 resulting in an aggregate gain of $1,800,000 In the Q3 of 2023, we completed 1 disposition receiving gross proceeds of $10,100,000 resulting in a gain of $2,300,000 Net income attributable to common stockholders for the Q3 of 2024 was $1,800,000 or $0.03 per share compared to $3,100,000 or $0.05 per share in the Q3 of 2023.

Speaker 4

FFO attributable to common stockholders and non controlling interest in the Q3 of 2024 was $13,700,000 or $0.19 per share and unit compared to $15,300,000 or $0.22 per share and unit in the Q3 of 2023. AFFO attributable to common stockholders and non controlling interest in the Q3 of 2024 was $15,300,000 or $0.22 per share and unit compared to $16,500,000 or $0.23 per share and unit in the Q3 of 2023. Moving on to the balance sheet. As of September 30, 2024, our gross investment in real estate was $1,400,000,000 At September 30, 2024, we had $634,000,000 of total gross debt with a weighted average remaining term of 2.2 years. At quarter end, 81% of our total debt was 5th grade debt.

Speaker 4

Our leverage ratio was 44.1% and our weighted average interest rate was 3.79%. Lastly, as of today, the current unutilized borrowing capacity under the credit facility is $221,000,000 Relative to equity, in the Q3, we generated gross proceeds of $12,000,000 through ATM issuances of 1,200,000 shares of common stock at an average price of $9.95 per share. As we consider funding options for the acquisitions that we have closed, we're expected to close next year. We will continue to be disciplined and consider both potential asset dispositions and equity issuances as we seek to maintain leverage in our target range of 40% to 45%. With respect to our investment portfolio in our 2024 lease expirations, we are pleased with our progress on renewals and based on activity to date, we are currently trending towards an 85% retention rate on this year's expiring leasable square feet.

Speaker 4

Regarding capital expenditures on the portfolio, during the Q3, our cash spend was approximately $4,800,000 Year to date through September 30, our cash outflows for capital expenditures were approximately $10,000,000 with approximately 42% of that related to tenant improvements. For the full year 2024, we're projecting total capital expenditures of $12,000,000 to $14,000,000 As previously mentioned, earlier in the year, we discussed Steward Healthcare's bankruptcy announcement and their exposure in the company's portfolio. At the time of the bankruptcy announcement, Steward represented 2.8 percent or $3,100,000 of the company's annualized base rent, of which 86% related to our facility located in Beaumont, Texas. Post bankruptcy, the company received base rent payments on its lease at the Beaumont facility for the month of June, July August. During the quarter, Steward rejected our lease at the Beaumont facility and we entered into a new 15 year triple net lease for the affiliate of CHRISTUS Health at this property.

Speaker 4

We are pleased to have secured a long term lease with CHRISTUS affirming the quality of this property and we expect rent to commence on this lease in March or April 2025. In conclusion, we continue to believe that we are well positioned to execute on our acquisition and overall business strategy and look forward to sharing our progress in the quarters to come. This concludes our prepared remarks. Operator, please open the call for questions.

Operator

Thank you. We will now be conducting a question and answer session. Thank you. Our first question comes from the line of Austin Wurschmidt with KeyBanc. Please proceed with your question.

Speaker 5

Great. Thank you and good morning. Jeff or Bob, you both kind of referenced that you're committed to maintaining a strong balance sheet. I guess when you look at the options available, you mentioned equity and dispositions, which do you view as kind of more attractive source today? And can you just remind us how much you have left to fund to sustain your leverage target?

Speaker 4

Thanks, Austin. Good morning. So right now, we ended the quarter at leverage of 44%. If we don't sell any assets or raise equity in the Q4, we would end the year at 46%. So we would be just outside the range that we've talked about.

Speaker 4

And we're not uncomfortable going above the range. Ideally, we want to stay in our range. But from the 46% coming back down into the target range doesn't require a lot of asset sales or equity issuances to bring it down. And so we have potential sales opportunities, but again, there's lead time that's involved in sales. And so we are always looking at the portfolio and considering potential just normal capital recycling disposition activity.

Speaker 4

And so those are the things we look at. And again, if equity markets are there, we would tap into those as well. But we're not far outside our range would be the main point I'd make.

Speaker 5

Are there any assets you're marketing today? And I guess with the move higher in long term interest rates, has there been any change in sort of level of interest from buyers or the cap rates that are being negotiated versus few months ago?

Speaker 4

There's assets that we're considering and there's again, Alfonso, you can speak to the pressure on pricing. But yes, there's definitely been the market is always evolving.

Speaker 3

Yes. And I'd say, an expectation of the Fed rate cuts, there was increased optimism in the market and pricing that was beginning to increase and cap rates beginning to decrease. But in the last month in October with debt rates on mortgages going up, that has subdued the interest. And so there's mixed messages right now and it's not settled. Previously, I thought that maybe your end would be pretty meaningful pickup in volume as a result of the Fed rate cuts.

Speaker 3

But I'm beginning the same question if how much that's going to materialize.

Speaker 5

So I guess given kind of you're optimistic about the acquisition market today, but still have some funding to do, I guess how comfortable are you moving forward with any additional deals prior to funding what you've announced here for?

Speaker 3

I mean, we take it step by step. So we're focused on this next acquisition and are routinely observing kind of where we are and looking at our portfolio, as Bob said, for things that we can sell in the market and looking for assets that either we think can achieve optimal pricing in the current market or just assets that we feel long term are not ones we want to continue owning and want to just recycle capital. But it's something that we evaluate almost on a weekly basis.

Speaker 6

Thank you. Appreciate the time.

Operator

Our next question comes from the line of Bryan Maher with B. Riley. Please proceed with your question.

Speaker 7

Great. Thank you and good morning. Thanks for all that color on the new set of assets that you're acquiring. I don't think that you gave us the states though. Can you give us kind of where in

Speaker 6

the country you're buying these?

Speaker 3

Yes. So given the fact that we just put these under contract and we're working due diligence, I mean, we've opted to not mention the states really for confidentiality purposes. But as we move forward, I mean, yes, of course, we're going to provide more color and more detail on the transaction. But at this point, we wanted to be more confidential.

Speaker 7

Okay. Maybe following on Austin's questioning on equity. You've talked about this in the past a little bit about the ability to do accretive transactions even with your stock kind of here in the 9s. But should we think about it that you're going to issue high-9s, 10s on these new deals? Or at what level is it accretive to do this second transaction that's forthcoming

Speaker 3

to raise equity?

Speaker 2

Yes. I'd

Speaker 4

say. 9 cap asset purchases, and again, depending on where the debt side of the forward curve is and debt side of the cost of capital, when we look at that, we can be accretive anywhere from say $950,000,000 and above when you look at those purchases.

Speaker 7

Okay. And then on the disposition side, what's kind of driving the selectivity of the assets that you sell? Is it just there's slower growers? Are there known vacates coming? I mean, what's driving that side of the equation?

Speaker 3

I mean, it's a variety of things. I mean, the ones you mentioned, I mean, also properties that we feel can get optimal pricing. So it kind of covers the full spectrum. But yes, I mean, properties that are just given our current company and where we want to where we want to go forward, properties that are just too small or locations that are just not ideal, but also properties that we feel have renewals that are not as high as we would want. And so we're getting ahead of those expirations with and trying to sell these things with term on them.

Speaker 7

Okay. And then just last from me. Correct me if I'm wrong, you talked a little bit about Stewart and Beaumont and that you had collected rents for, I guess, June, July, August or July, August, September. Did you guys I somehow feel like you didn't collect March, April, May. Am I thinking about that right?

Speaker 7

And has that since changed?

Speaker 2

Yes, you think that right.

Speaker 4

That's right, Brian. We did not collect for March, April and up to that point in bankruptcy. And so we did collect the month subsequent to bankruptcy, but we still have a claim in pursuant to the bankruptcy we would we do have a claim in bankruptcy court to collect any rent and other expenses that are due during the period post bankruptcy up until the point where they rejected the lease. So that's something that we're actively working on and would be pursuing with the court.

Speaker 7

Okay. Thank you. That's all for me.

Operator

Our next question comes from the line of Rob Stevenson with Janney. Please proceed with your question.

Speaker 8

Good morning, guys. Can you talk about where the CHRISTUS rent is versus Stewart? And do you have CHRISTUS elsewhere in the portfolio today?

Speaker 4

The annual rent for the new lease is $2,900,000 and it's slightly above the previous rent that Stuart was paying. They were right around $2,800,000

Speaker 8

Okay. And is this going to be your only location at present with them when this lease starts?

Speaker 3

Yes. I'm pretty sure. I mean, there might be a small lease, but to my knowledge, I mean, nothing material. This would be a new relationship.

Speaker 8

Okay. So your exposure then will be less than 3% in terms of tenant as percentage of ABR? And then I guess do you have any CapEx on this asset prior to the moving in that you'll have to complete?

Speaker 4

Yes, Rob. So part of the process of just getting the asset in the condition for CHRISTUS and getting it all situated involved a fair amount of CapEx. We've been spending upwards of probably before it's all said and done, close to $900,000 in CapEx specific to the property. A lot of that, it will be cost that we will claim in the bankruptcy core as a claim against Steward for things that should have been or been maintained as part of the lease. And so these are mainly infrastructure type items and some of them have lead times in terms of getting the equipment, installing the equipment, things of that nature.

Speaker 4

And so it's there's definitely a process involved in just delivering that asset.

Speaker 8

Okay. And then on the $70,000,000 portfolio acquisition, is there a specific reason why the closing is further out and in 2 tranches? Is that just to allow you guys to finance it? Is it something on the sellers' part? Is there something that needs to happen before you can close?

Speaker 8

Can you just talk about that?

Speaker 3

Yes. So I mean, variety of things, but preliminarily, it's just flexibility. And actually, with our experience on the most recent transaction when we did it in a couple of tranches, it resulted in some efficiencies as well. And so if we can do it again, it's something that we want to do on this transaction as well. But I mean, it's flexibility that can go either way.

Speaker 3

And if we changed our minds later on and we want to do it all at once, that's something that we consider. But having said that, I mean, there's also diligence items that we have to dig into and it just made more sense to spread it out over a couple of tranches.

Speaker 8

Okay. And is there any significant tenant concentration in that portfolio that's going to push into your top 10 post deal?

Speaker 3

Yes, there is. And so the biggest change would be Trinity. So that one would bump up from number 10 to potentially number 3.

Speaker 8

Okay, that's helpful. Thanks guys. Appreciate the time this morning.

Operator

Thank you. Our next question comes from the line of Alex Fagan with Baird. Please proceed with your question.

Speaker 9

Hi, thanks for taking my question. First one is, what is the plan to fund the portfolio deal and future acquisition opportunities? Is it just the dispositions and equity? Or are you going to potentially raise debt as well?

Speaker 2

Right now, the plan is to do dispositions and equity. We raised a little bit of equity, dollars 12,000,000 in the last quarter, and we do have some sales already in process. So we're realigning our acquisitions. We're taking a look at some of our assets that are not performing as well and we've been able to sell them at pretty attractive prices. So we're looking more towards equity and dispositions than debt.

Speaker 2

But we may go it may go slightly and temporarily above on the debt that we target.

Speaker 9

And how much more runway does GMRE have with its asset recycling program? Is it something you can do for quarters on end, years?

Speaker 2

It's probably not going to be a permanent solution. The market tends to adjust. So for instance, the market tends to adjust. We've been buying, as you noticed, our average buying is somewhere in the mid-8s right now. So for instance, if the rates do not come down, the market always adjusts because groups have to sell.

Speaker 2

So we will be buying higher cap rates and which means that we can go to equity also.

Speaker 9

Got it. And are you planning to issue a term loan to reduce the line balance anytime soon?

Speaker 4

Currently, that's something we'll look at probably in the first half of next year.

Speaker 9

Thanks guys. That's it for me.

Speaker 2

Thank you.

Operator

Our next question comes from the line of Juan Sanabrio with BMO Capital Markets. Please proceed with your question.

Speaker 6

Good morning. This is Robin Hanelan sitting in for Juan. I'm not sure if this was touched on already, but on CHRISTUS, how much is any did rents decline on the Bumont assets under transition? And should we model any other modest sequential declines in the non Beaumont assets post the Steward bankruptcy?

Speaker 4

With the rent at the Beaumont facility, yes. Go ahead.

Speaker 6

Go ahead,

Speaker 4

Rob. Well, the rent at the Beaumont facility is just marginally higher than the previous Stewart rents are $2,900,000 of annual rent. And we talked about that cash rent starting in March or April of next year is our current outlook. And so that asset again is kind of net above. The other Steward leases have not been rejected with the exception of one very small lease in the multi tenant building that we have in Hialeah, Florida.

Speaker 4

The lease was projected in at the end of October and it's a very again, it's a very small lease. It's under 4,000 square feet of space. So not anything noteworthy from an overall perspective.

Speaker 6

Okay. And your dividend payout ratio inclusive of CapEx is north of 100% of FAD. How does the Board and management think about this dividend sustainability in particular with leverage generally elevated?

Speaker 2

Yes. Right now, we could maintain our dividend and we're looking in the future that we can maintain our dividend. We do see accretive deals coming through. So we get and we get the rent increases regularly. We had a very big 2 years of releasing.

Speaker 2

It's an unusual amount of releasing in the last 2 years, which causes a bit more capital, a bit more TI type of thing. So we do see that TI and capital starting to reduce given proportionally we don't have so many releases coming up. So we do look like to maintain our dividend.

Speaker 6

Okay. And this has been combed over quite a bit, but is there a dollar size of the pool of assets that are targeted for future disposition?

Speaker 4

Is there a fluid number. It's not a targeted number. It's something we look at all the time in assessing potential sales opportunities. And sometimes they're inbound, inquiries about assets that people want to purchase that we are dealing with as well. So I think it's not a set number.

Speaker 4

It's just I think it's think of it more as a fluid situation.

Speaker 3

Yes. We've had a few LOIs that have come in on assets that were attractively priced, which forced us to reconsider whether we wanted to sell it or not and a couple of those we move forward on.

Speaker 6

Got it. Makes sense. And just curious on your lease expiration exposure for 2025, it just increased a little bit. Could you maybe just elaborate on that?

Speaker 2

I think it would have been

Speaker 4

Could it be from again from assets that we've acquired that would have impacted the number. But from an outlook on our 2025 expirations, I mean, we're currently looking at this very similar to how our experience was in this year in calendar 2024 relative to releasing. So I think we're optimistic about our occupancy and leasing activity looking ahead into 2025.

Speaker 6

Okay. And last one for me. The pipeline, how big is it today? What assets are you looking at? And what types of yields should investors expect?

Speaker 6

Is this 9% a good run rate going forward?

Speaker 3

Yes. So I mean the market is continually evolving. And what we're focused on primarily is medical office and that's typically where the bulk of the volume is in the market anyways. But cap rates that in the market for the type of assets that we're looking at, they're more in the high 7s to mid 8s range depending also on whether it's single tenant or multi tenant. And so there are not that many opportunities that are 9 and above, but we're always looking for unique situations and they do occur.

Speaker 3

And there's a couple of opportunities that I've heard of that might be coming down the road where you are getting into that high 8s, low 7s range. But the bulk of the market is in the high seven's to mid eight's.

Speaker 4

Thank you.

Operator

Our next question comes from the line of Gaurav Mehta with Alliance Global Partners. Please proceed with your question.

Speaker 10

Yes. Thank you. Good morning. I wanted to ask you on your portfolio acquisition that you have under contract and your comments about market cap rates in high 7 to mid 8. What was specific about this portfolio that drove the cap rate to 9%, which is higher than where the market is?

Speaker 3

A variety of factors, but I mean one of the things that drives cap rates, a big one is properties that are attractive to funds that have short lifespans, 5 year hold periods. What they're looking for are properties that are ideal for flipping, for putting within a portfolio and getting a premium on the exit. And given the fact that these properties are on campus and just given the profile of the properties and its location, I mean, it's not ideal for that kind of strategy. And so you're getting extra yield for that reason. But the other one too is this was a relationship deal, one that the parties involved, we have connections with that span many, many years.

Speaker 3

And there was a process that they employed to find somebody to partner with for this. And I think that contributed as well to some of the yield.

Speaker 11

Okay. Thank you. That's all I had.

Operator

Thank you. We have reached the end of the question and answer session. I would now like to turn the floor back over to management for closing comments.

Speaker 2

Thank you, everybody. I think we had a good quarter. We've acquired nice properties with good rates and we have good contracts on future properties. And thank you very much for attending.

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

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Earnings Conference Call
Global Medical REIT Q3 2024
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