Global Medical REIT Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2026

Key Takeaways

  • Positive Sentiment: Portfolio performance remained stable: normalized same-store NOI increased 1.7% in the second quarter, in line with company expectations, despite the ongoing strategic repositioning.
  • Positive Sentiment: Chiron advanced its shift toward seniors housing by closing a $100 million investment and acquiring two communities totaling 292 luxury homes, while also putting The Pinnacle under contract.
  • Positive Sentiment: The company strengthened its balance sheet through approximately $200 million of gross proceeds from selling seven inpatient rehabilitation facilities, issuing $100 million of Series C preferred equity, and reducing net debt to adjusted EBITDAre to 6.0x from 6.6x.
  • Negative Sentiment: The transition will take time and raise near-term costs: management expects senior leadership additions to increase G&A temporarily, while further outpatient medical asset sales and portfolio repositioning remain in progress.
AI Generated. May Contain Errors.
Earnings Conference Call
Global Medical REIT Q2 2026
00:00 / 00:00

Transcript Sections

Skip to Participants
Operator

Good morning, ladies and gentlemen, welcome to the Chiron Real Estate Incorporated Second Quarter 2026 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Jamie Barber, General Counsel.

Jamie Barber
General Counsel at Chiron Real Estate

Good morning, everyone, welcome to Chiron Real Estate Inc.'s Second Quarter 2026 Earnings Conference call. My name is Jamie Barber, I am Chiron's General Counsel. On the call today are Mark Decker Jr., Chief Executive Officer, Matthew Whitlock, Chief Investment Officer, Bobby Zeiller, Chief Development Officer and Head of Seniors Housing, Danica Holley, Chief Administrative Officer, Bob Kiernan, Chief Financial Officer, Aaron Roseth, Chief Operating Officer. Statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested from any forward-looking statements due to a variety of factors which are discussed in detail in our SEC filings.

Jamie Barber
General Counsel at Chiron Real Estate

Additionally, on this call, the company may refer to certain non-GAAP financial measures. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and filings with the SEC. Additional information may be found on the investor relations page of the company's website at www.chironre.com. I would now like to turn the call over to Mark.

Mark Decker Jr.
CEO at Chiron Real Estate

Thank you, Jamie, good morning, everyone. I feel like a kid in a candy store this morning sitting around the table with all this talent, I'm even more excited that we share the same simple vision: to deliver value at the intersection of care, capital, and real estate. I want to start by welcoming Tami Cumings, Aaron Roseth, Matthew Whitlock, and Bobby Zeiller. I'd like to thank Bob, Danica, Jamie, and the rest of our team for a tremendously productive five months. I also want to recognize and thank Alfonso Leon, who stepped down earlier this week as Chief Investment Officer. When we laid out our priorities earlier this year, we said we would focus on active capital allocation, portfolio repositioning, and building the capabilities necessary to support our next phase of growth. Over the last several months, we've made meaningful progress on each of these objectives.

Mark Decker Jr.
CEO at Chiron Real Estate

Before discussing the transformation that's underway, it's important to recognize that our existing portfolio continues to perform well. During the quarter, same-store NOI increased 1.7% on a normalized basis, which is in line with our expectations and the same-store guidance we issued at the beginning of the year. The strategic actions we're taking today are not a response to operational challenges. It's about capital allocation. Outpatient medical can be an excellent investment, but as we've discussed, there are better total returns available within healthcare real estate. With that in mind, I'd like to discuss what we're doing to position Chiron for the future. The common thread across everything we're doing is straightforward. We're reallocating resources towards opportunities that we expect to create a more durable and relevant real estate platform that can compound stronger long-term returns. Let's review our recent progress.

Mark Decker Jr.
CEO at Chiron Real Estate

We closed on the $100 million Maewyn investment contemporaneously with the closing of our first two seniors communities, The Landing, a stabilized continuum of care community in Alexandria, Virginia, and The Riviera, a sister community across the courtyard from The Landing, which opened this March and is in lease up. Together, this forms a community of 292 luxury homes. We completed the sale of seven inpatient rehab facilities to a newly formed joint venture in June at an exit cap rate of 7.3%. This generated approximately $200 million of gross proceeds, and we retained a small equity interest in the venture. The combination of these transactions leaves us well-positioned on the balance sheet side with no maturities until 2028 and less than 40% leverage.

Mark Decker Jr.
CEO at Chiron Real Estate

While I know we all prefer debt to EBITDA, given the nature of our lease-up communities, we're going to refer principally to our covenant metrics for a time. The team has maintained momentum on asset sales, and I'm pleased to announce that we're under contract to sell our Beaumont, Texas, surgical hospital for a price of $49 million, representing an exit cap rate of 5.9%. Proceeds from these sales will be directed towards assets offering a higher return on capital. The most immediate use will be to complete the previously announced acquisition of The Pinnacle, a marquee luxury community that we put under contract in the second quarter. The Pinnacle welcomed its first residence in June, and we couldn't be more pleased with the early momentum at the community.

Mark Decker Jr.
CEO at Chiron Real Estate

We remain active in evaluating further dispositions from our outpatient medical platform, or our outpatient medical portfolio, excuse me, including through individual sales or larger portfolio transactions. See no shortage of opportunities to redeploy these proceeds in a way that will drive our long-term return on capital higher and deliver value to our shareholders. While there's been a lot of transactional activity, the biggest story is our leadership team. Executing on a transition of this magnitude and then building the business we envision requires specialized expertise, and we've spent considerable time strengthening the organization accordingly. Over the past several weeks, we've welcomed Tami Cumings, Aaron Roseth, Matthew Whitlock, and Bobby Zeiller into leadership roles at Chiron. Together, they bring more than 100 years of experience sourcing, developing, operating, and managing senior housing communities.

Mark Decker Jr.
CEO at Chiron Real Estate

Most importantly, these additions are highly complementary. This is an operational business, and to be a good partner, we need a strong operator's eyes. With Tami Cumings, our new SVP of Seniors Housing, we've added decades of operating experience to ensure that our communities are managed in a best-in-class fashion. To be a great partner with operators and deliver a consistent experience for our team in the street, we need an organization that remains curious and focused on constant improvement. Aaron Roseth, who led a best-in-class architecture firm with industry-leading profitability, is skilled at both running large gray matter organizations and building deep client relationships. Together with Danica, who's in many ways the heart and soul of our company, we are seeking to become the best partner we can.

Mark Decker Jr.
CEO at Chiron Real Estate

Matthew joins us as Chief Investment Officer with three decades of senior housing, thought leadership, and experience on all sides of the business. He will be the tip of the spear as we seek to deploy capital wisely. Bobby is Chiron's Chief Development Officer and Head of Seniors. Bobby literally built the bedrock communities that we purchased from Silverstone, which he led. In addition to constructing communities, he has a great way with people, and ultimately, I think his superpower is working with operators with a focus on empathy and respect as well as accountability, and most importantly, an eye to what sustains a great customer experience for our residents. Together, these leaders expand our ability to identify opportunities, underwrite risk, support operators, work as an effective team, and maximize performance across the portfolio. We believe Chiron now has the leadership platform necessary to deliver on our vision.

Mark Decker Jr.
CEO at Chiron Real Estate

Finally, I'd like to address valuation. We continue to believe the market's not fully recognizing the value embedded within our legacy outpatient medical portfolio. Our belief is supported by a growing body of public and private market transaction activity that demonstrates the robust institutional demand for outpatient medical real estate at cap rates that compare favorably to the implied valuation of our MOB portfolio. We've highlighted this on page 14 of our most recent investor presentation. We can't control where the market values our shares in the near term. What we can control is disciplined execution. We believe that it's prudent to lean into this pricing dislocation and sell assets, which we believe will offer meaningful upside that's not currently reflected in our stock price and allow us to reallocate capital into higher-returning assets. Taken together, we believe the company is better positioned today than it was six months ago.

Mark Decker Jr.
CEO at Chiron Real Estate

We have enhanced our leadership capabilities, made meaningful progress on our portfolio transition, and established a clear roadmap for continued execution. With that, I'll turn the call over to Bob to provide additional details on our financial and operating results for the quarter.

Bob Kiernan
CFO at Chiron Real Estate

Thanks, Mark. Regarding our second quarter results, GAAP-redefined FFO per share and unit was $0.88, and our Core FFO was $1.4 per share and unit. Driven by the timing of our investment and disposition activity, net debt to adjusted EBITDA was 6.0 times for the quarter, compared to 6.6 times in the first quarter. Our same-store cash NOI increased 0.8% on a year-over-year basis. This increase was consistent with our expectations and was adversely impacted by a one-time non-recurring revenue recovery recognized in the prior year period related to a single tenant. Excluding this asset, same-store cash NOI growth would have been 1.7%. Our cash G&A for the second quarter was $3.8 million. It's down slightly from the first quarter of this year.

Bob Kiernan
CFO at Chiron Real Estate

Looking ahead, while we expect that the changes in senior management will increase our G&A costs in the short term, we believe that as we reposition the investment portfolio, our costs will be in line with the size of our portfolio. Regarding our equity capital, we're pleased to have issued the $100 million of Series C convertible perpetual preferred in the quarter. The sale of our seven inpatient rehab facilities at an aggregate value of $217 million demonstrates our ability to recycle capital at an attractive rate. We ended the quarter with $259 million in unutilized borrowing capacity under our credit facility and our leverage ratio of just under 40%. Mark, would you like to provide any closing remarks?

Mark Decker Jr.
CEO at Chiron Real Estate

Thanks, Bob. Before opening the call for questions, I'd like to leave everyone with one final thought. The story at Chiron today is not about aspirations. It's about execution. Over the last several quarters, we've built a strategy, assembled a team, raised fresh capital, completed acquisitions, and successfully recycled assets. There's certainly more work ahead, but our entire team is laser-focused on building Chiron into a best-in-class organization. We're excited to share more about the business. Operator, please open the line.

Operator

Thank you. We will now begin our question and answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two, and if you're using a speakerphone, please lift the handset first before pressing any keys. We have our first question from Juan Sanabria with BMO Capital Markets.

Juan Sanabria
Juan Sanabria
Analyst at BMO Capital Markets

Hi. Good morning. Thanks for the time and congrats on the new team and being assembled, I guess. Just hoping, Mark, maybe you could talk a little bit about the strategy here going forward and what types of assets you're looking for, and as part of that, kind of the plans for the Reston Land parcel acquisition you announced with results yesterday.

Mark Decker Jr.
CEO at Chiron Real Estate

Sure. Thanks, Juan. The strategy is, as we've outlined, to be focused on Seniors Housing. I mean, honestly, the Reston Land we have a great plan for. I would remind you it's about 1% of assets, and we'll tell you more as that plan unfolds. Short version, we're going to use it as currency to build rapport with operators. It's shovel-ready in great demos

Juan Sanabria
Juan Sanabria
Analyst at BMO Capital Markets

Yeah, sorry. Maybe I wasn't super clear. I guess is the focus to be more on development assets that require patients in lease-up or more stabilized assets in terms of the acquisitions of capital recycling?

Mark Decker Jr.
CEO at Chiron Real Estate

Definitely more stabilized assets.

Juan Sanabria
Juan Sanabria
Analyst at BMO Capital Markets

Great. I think Bob alluded to it earlier, how should we think about the pro forma G&A run rate with the additions to the team?

Mark Decker Jr.
CEO at Chiron Real Estate

I think for the time, it'll be higher.

Juan Sanabria
Juan Sanabria
Analyst at BMO Capital Markets

Okay.

Mark Decker Jr.
CEO at Chiron Real Estate

I would say, Juan, we're really viewing this as a growth-oriented team and a growth-oriented business with a source of capital that's right in front of us in the form of the outpatient medical assets. Our expectation is the business will grow and mature, and our G&A will be in line or better.

Juan Sanabria
Juan Sanabria
Analyst at BMO Capital Markets

Great. Thank you.

Mark Decker Jr.
CEO at Chiron Real Estate

Thanks, Juan.

Operator

Our next question comes from Wes Golladay with Baird.

Wesley K. Golladay
Wesley K. Golladay
Analyst at Baird

Hey. Good morning, everyone. Maybe a follow-up to Juan's question on the development parcel. Do you have an idea what you want to do? Would it be an active adult, or would it be more up the acuity curve? Maybe talk about the competitive landscape in that market.

Mark Decker Jr.
CEO at Chiron Real Estate

Yeah. Again, I think you're probably overemphasizing a 1% investment. It's your time. It would be a likely full continuum community. It's right down the middle of fairway in terms of demographics. I would expect we'll come up with some thoughtful way to partner with someone on an earnings-oriented manner.

Wesley K. Golladay
Wesley K. Golladay
Analyst at Baird

Okay. Maybe going back to the team build-out, do you have the team in place, or are you still looking to fill any positions?

Mark Decker Jr.
CEO at Chiron Real Estate

I think we're in a great spot.

Wesley K. Golladay
Wesley K. Golladay
Analyst at Baird

Okay. The last one for me. You have made the pivot to senior housing, but you're still remaining opportunistic in OM. Is that going to be part of the playbook going forward?

Mark Decker Jr.
CEO at Chiron Real Estate

Yeah. I think the playbook is really to try to generate the best returns on capital possible and work with partners who value what we're up to. We're very focused proportionally on senior housing.

Wesley K. Golladay
Wesley K. Golladay
Analyst at Baird

Okay. Thanks a lot.

Mark Decker Jr.
CEO at Chiron Real Estate

Thank you.

Operator

Our next question is from Dave Rodgers with Raymond James.

Dave Rodgers
Dave Rodgers
Analyst at Raymond James

Good morning, Mark. Wanted to follow up, I guess, on some of those same questions. You mentioned valuation in your opening, and setting aside the right value for now historically in the space, best way to highlight value, eliminate loans, eliminate mezzanine, eliminate joint ventures, get to a clean portfolio, and kind of highlight that. Obviously, some of the steps in the quarter aren't going in that direction. I guess, do you see just a longer exit than maybe people have originally anticipated from your comments from the outpatient medical? Is it that you're trying to kind of maintain some level of earnings or cash flow for debt coverage? What's the rationale, I guess, for staying involved in these businesses, given how good seniors is today?

Mark Decker Jr.
CEO at Chiron Real Estate

You're talking about the two loans?

Dave Rodgers
Dave Rodgers
Analyst at Raymond James

Yeah. A combination of the loans, the active adult, and just where do you want to be in that spectrum? Again, the IRF JV that you did, why not exit that outright? Why stay in some of these businesses, I think is kind of the question of why continue to allocate capital there, even though you sold them, you're still allocating capital to the IRFs as opposed to allocating that full capital into seniors.

Mark Decker Jr.
CEO at Chiron Real Estate

Yeah, fair question. Listen, I don't know what everyone's expectations are for the axis of how long this will take, but I think it's reasonable to assume it'll take more time than immediate. Some of these things, it just depends. If you think about the IRF business, that's really a niche within a niche, and there is some kind of mid-duration leasing work to be done there. That is how we think we optimize value and to get the best price. That's a space where money, investors want some expertise. They value our expertise there. We think that there is an opportunity to reset those leases, but it isn't today. It's four and a half years from now.

Mark Decker Jr.
CEO at Chiron Real Estate

I think to get the execution we got there, which was outstanding from a cap rate and valuation perspective, that's what we needed to do to drive the best value for the company. That's really how we're focused. I think you'll continue to see that. I think if you looked at the quarter, we announced $421 million of seniors investments, and we announced a $15 million land piece and $5 million of mezz loans. I should think those are reasonable proportions to expect going forward.

Dave Rodgers
Dave Rodgers
Analyst at Raymond James

Maybe just on your last comment, that was all helpful. Thank you. That last comment about kind of the senior side of the business, can you talk about maybe what the pipeline of assets that you're looking at today, looking forward as you are trying to make that shift? Is that continuing to grow? Are we waiting for the new team members to kind of take a look at that and kind of redefine where we want to go? How do you think about what that pipeline looks like today?

Mark Decker Jr.
CEO at Chiron Real Estate

To quote our president, "It's huge." No, listen, we have lots of good ideas. Matthew, who's sitting next to me, can speak to this himself. We have a very large pipeline. More ideas, I'd say, than capital right now. The art of it for us is to Get out of those, deliver some proceeds for those investments. Matthew, you want to speak to that for a second?

Matthew Whitlock
Chief Investment Officer at Chiron Real Estate

Yeah. Thanks, Mark. Just to let you know, we've already begun developing a pretty robust pipeline of investment opportunities. We're focusing on investments which will provide long-term earnings growth, excuse me, and as importantly, partnership opportunities with best-in-class operators. The sky's the limit. Our canvas is blank, but we're concentrating on specific MSAs and specific operating partners who have shown time and again their ability to operate efficiently and also to provide the best living and care experience to the residents.

Dave Rodgers
Dave Rodgers
Analyst at Raymond James

All right. Thank you.

Mark Decker Jr.
CEO at Chiron Real Estate

Thanks, David.

Operator

We have our next question from Gaurav Mehta with Alliance Global Partners.

Gaurav Mehta
Gaurav Mehta
Analyst at Alliance Global Partners

Thank you. Good morning. I wanted to ask you on the asset sales, are you looking to sell any more assets after Beaumont sale?

Mark Decker Jr.
CEO at Chiron Real Estate

Sorry, I didn't catch the last part. Are we looking to sell what? More assets?

Gaurav Mehta
Gaurav Mehta
Analyst at Alliance Global Partners

Are you looking to sell any more assets after the Beaumont sale?

Mark Decker Jr.
CEO at Chiron Real Estate

Yes. We've hired a broker to help us evaluate the best way to do that in a way that maximizes value. Looking at the portfolio, we could obviously sell it in 180 pieces or five or one, there's a lot of considerations that go into that. That's how we're exploring it right now.

Gaurav Mehta
Gaurav Mehta
Analyst at Alliance Global Partners

Okay. Second question on the mezz loans that you guys did. Is it rational for mezz loans to generate some income? How do you think about mezz loans as a percentage of your assets? Are you looking to grow that part of your portfolio?

Mark Decker Jr.
CEO at Chiron Real Estate

Yeah. Those are really one small 33 basis points of the whole book, if you will, two, they're cash pay. They're with an outstanding sponsor with an outstanding credit. We have all the docs. It's pretty easy for us to do those. I would say, we just look at that as a nice way to generate some return on capital where we get our money back in two years and have optionality on those assets. That's sort of the why of it.

Gaurav Mehta
Gaurav Mehta
Analyst at Alliance Global Partners

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

Mark Decker Jr.
CEO at Chiron Real Estate

Thanks.

Operator

There are no further questions at this time. I will now turn the call over to Mark for closing remarks.

Mark Decker Jr.
CEO at Chiron Real Estate

Well, thanks everybody. We appreciate everyone's time and attention, and as we like to point out, the transition's underway, capital allocation is improving, and there's outstanding value in our stock today. We look forward to talking to you next quarter.

Operator

Ladies and gentlemen, this concludes today's conference. We thank you for your participation. You may now disconnect.

Analysts
    • Jamie Barber
      General Counsel at Chiron Real Estate
    • Mark Decker Jr.
      CEO at Chiron Real Estate
    • Bob Kiernan
      CFO at Chiron Real Estate
    • Juan Sanabria
      Analyst at BMO Capital Markets
    • Wesley K. Golladay
      Analyst at Baird
    • Dave Rodgers
      Analyst at Raymond James
    • Matthew Whitlock
      Chief Investment Officer at Chiron Real Estate
    • Gaurav Mehta
      Analyst at Alliance Global Partners
Powered by Quartr