Global Medical REIT Inc. [GMRE-PA] Filings

10-Q 1 gmre-20230930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission file number: 001-37815

Global Medical REIT Inc.

(Exact name of registrant as specified in its charter)


Maryland		46-4757266
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7373 Wisconsin Avenue, Suite 800 Bethesda, MD		20814
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (202) 524-6851

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Common Stock, par value $0.001 per share	GMRE	NYSE
Series A Preferred Stock, par value $0.001 per share	GMRE PrA	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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 ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at November 6, 2023 was 65,564,943

Table of Contents

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION



Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – September 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Equity – Three and Nine Months Ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2023 and 2022	8
	Notes to the Unaudited Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	41

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 3.	Defaults Upon Senior Securities	42

Item 4.	Mine Safety Disclosures	42

Item 5.	Other Information	42

Item 6.	Exhibits	43

Signatures		44

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Balance Sheets

(unaudited and in thousands, except par values)


	As of
	September 30, 2023		December 31, 2022
Assets
Investment in real estate:
Land	$	164,315	$	168,308
Building		1,034,822		1,079,781
Site improvements		21,480		22,024
Tenant improvements		65,772		65,987
Acquired lease intangible assets		138,617		148,077
		1,425,006		1,484,177
Less: accumulated depreciation and amortization		(232,518)		(198,218)
Investment in real estate, net		1,192,488		1,285,959
Cash and cash equivalents		1,281		4,016
Restricted cash		6,331		10,439
Tenant receivables, net		7,527		8,040
Due from related parties		289		200
Escrow deposits		9,861		7,833
Deferred assets		26,748		29,616
Derivative asset		38,379		34,705
Goodwill		5,903		5,903
Other assets		13,713		6,550
Total assets	$	1,302,520	$	1,393,261

Liabilities and Equity
Liabilities:
Credit Facility, net of unamortized debt issuance costs of $7,617 and $9,253 at September 30, 2023 and December 31, 2022, respectively	$	560,783	$	636,447
Notes payable, net of unamortized debt issuance costs of $337 and $452 at September 30, 2023 and December 31, 2022, respectively		56,823		57,672
Accounts payable and accrued expenses		13,300		13,819
Dividends payable		16,055		15,821
Security deposits		3,913		5,461
Other liabilities		12,138		7,363
Acquired lease intangible liability, net		5,860		7,613
Total liabilities		668,872		744,196
Commitments and Contingencies
Equity:
Preferred stock, $0.001 par value, 10,000 shares authorized; 3,105 issued and outstanding at September 30, 2023 and December 31, 2022, respectively (liquidation preference of $77,625 at September 30, 2023 and December 31, 2022, respectively)		74,959		74,959
Common stock, $0.001 par value, 500,000 shares authorized; 65,565 shares and 65,518 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		66		66
Additional paid-in capital		722,418		721,991
Accumulated deficit		(224,375)		(198,706)
Accumulated other comprehensive income		38,379		34,674
Total Global Medical REIT Inc. stockholders' equity		611,447		632,984
Noncontrolling interest		22,201		16,081
Total equity		633,648		649,065
Total liabilities and equity	$	1,302,520	$	1,393,261

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Operations

(unaudited and in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Revenue
Rental revenue	$	35,487	$	35,347	$	108,003	$	100,877
Other income		20		59		85		100
Total revenue		35,507		35,406		108,088		100,977

Expenses
General and administrative		4,367		3,961		12,633		12,494
Operating expenses		7,231		6,679		21,989		18,050
Depreciation expense		10,100		10,128		31,062		29,428
Amortization expense		4,095		4,287		12,828		12,202
Interest expense		7,170		6,963		23,909		17,166
Preacquisition expense		—		112		44		242
Total expenses		32,963		32,130		102,465		89,582

Income before gain on sale of investment properties		2,544		3,276		5,623		11,395
Gain on sale of investment properties		2,289		6,753		15,560		6,753

Net income	$	4,833	$	10,029	$	21,183	$	18,148
Less: Preferred stock dividends		(1,455)		(1,455)		(4,366)		(4,366)
Less: Net income attributable to noncontrolling interest		(240)		(517)		(1,187)		(830)
Net income attributable to common stockholders	$	3,138	$	8,057	$	15,630	$	12,952

Net income attributable to common stockholders per share – basic and diluted	$	0.05	$	0.12	$	0.24	$	0.20

Weighted average shares outstanding – basic and diluted		65,565		65,518		65,545		65,443

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Comprehensive Income

(unaudited and in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Net income	$	4,833	$	10,029	$	21,183	$	18,148
Other comprehensive income:
Increase in fair value of interest rate swap agreements		2,520		20,356		3,705		43,519
Total other comprehensive income		2,520		20,356		3,705		43,519
Comprehensive income		7,353		30,385		24,888		61,667
Less: Preferred stock dividends		(1,455)		(1,455)		(4,366)		(4,366)
Less: Comprehensive income attributable to noncontrolling interest		(418)		(1,744)		(1,440)		(3,450)
Comprehensive income attributable to common stockholders	$	5,480	$	27,186	$	19,082	$	53,851

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Equity

(unaudited and in thousands, except per share amounts)

For the Nine Months Ended September 30, 2023:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity		Interest		Equity
Balances, December 31, 2022	65,518	$	66	3,105	$	74,959	$	721,991	$	(198,706)	$	34,674	$	632,984	$	16,081	$	649,065
Net income	—		—	—		—		—		19,996		—		19,996		1,187		21,183
LTIP Units redeemed for common stock	47		—	—		—		427		—		—		427		(427)		—
OP Units issued for a property acquisition	—		—	—		—		—		—		—		—		5,482		5,482
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		3,705		3,705		—		3,705
Stock-based compensation expense	—		—	—		—		—		—		—		—		3,020		3,020
Dividends to common stockholders ($0.63 per share)	—		—	—		—		—		(41,299)		—		(41,299)		—		(41,299)
Dividends to preferred stockholders ($1.40625 per share)	—		—	—		—		—		(4,366)		—		(4,366)		—		(4,366)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(3,142)		(3,142)
Balances, September 30, 2023	65,565	$	66	3,105	$	74,959	$	722,418	$	(224,375)	$	38,379	$	611,447	$	22,201	$	633,648

For the Three Months Ended September 30, 2023:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity		Interest		Equity
Balances, June 30, 2023	65,565	$	66	3,105	$	74,959	$	722,418	$	(213,744)	$	35,859	$	619,558	$	21,834	$	641,392
Net income	—		—	—		—		—		4,593		—		4,593		240		4,833
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		2,520		2,520		—		2,520
Stock-based compensation expense	—		—	—		—		—		—		—		—		1,185		1,185
Dividends to common stockholders ($0.21 per share)	—		—	—		—		—		(13,769)		—		(13,769)		—		(13,769)
Dividends to preferred stockholders ($0.46875 per share)	—		—	—		—		—		(1,455)		—		(1,455)		—		(1,455)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(1,058)		(1,058)
Balances, September 30, 2023	65,565	$	66	3,105	$	74,959	$	722,418	$	(224,375)	$	38,379	$	611,447	$	22,201	$	633,648

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Equity - Continued

(unaudited and in thousands, except per share amounts)

For the Nine Months Ended September 30, 2022:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Income (Loss)		Equity		Interest		Equity
Balances, December 31, 2021	64,880	$	65	3,105	$	74,959	$	711,414	$	(157,017)	$	(6,636)	$	622,785	$	14,792	$	637,577
Net income	—		—	—		—		—		17,318		—		17,318		830		18,148
Issuance of shares of common stock, net	598		1	—		—		9,978		—		—		9,979		—		9,979
LTIP Units and OP Units redeemed for common stock	40		—	—		—		682		—		—		682		(682)		—
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		43,519		43,519		—		43,519
Stock-based compensation expense	—		—	—		—		—		—		—		—		3,615		3,615
Dividends to common stockholders ($0.63 per share)	—		—	—		—		—		(41,251)		—		(41,251)		—		(41,251)
Dividends to preferred stockholders ($1.40625 per share)	—		—	—		—		—		(4,366)		—		(4,366)		—		(4,366)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(2,637)		(2,637)
Balances, September 30, 2022	65,518	$	66	3,105	$	74,959	$	722,074	$	(185,316)	$	36,883	$	648,666	$	15,918	$	664,584

For the Three Months Ended September 30, 2022:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity		Interest		Equity
Balances, June 30, 2022	65,518	$	66	3,105	$	74,959	$	722,074	$	(179,614)	$	16,527	$	634,012	$	15,097	$	649,109
Net income	—		—	—		—		—		9,512		—		9,512		517		10,029
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		20,356		20,356		—		20,356
Stock-based compensation expense	—		—	—		—		—		—		—		—		1,039		1,039
Dividends to common stockholders ($0.21 per share)

Global Medical REIT Inc. [GMRE-PA] Filings
Global Medical REIT Inc. [GMRE] Filings
10-Q	[2023-11-07]
10-Q	[2023-08-04]
10-Q	[2023-05-05]
10-K	[2023-03-01]
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-03-01]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-08]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-03-09]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-11]
10-Q	[2018-11-06]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-03-12]
10-Q	[2017-11-09]
10-Q	[2017-08-10]
10-Q	[2017-05-11]
10-K	[2017-03-27]
10-Q	[2016-11-10]
10-Q	[2016-08-11]
10-Q	[2016-05-09]
10-K	[2016-03-21]
10-Q	[2015-11-03]
10-Q	[2015-07-30]
10-Q	[2015-05-01]
10-Q	[2015-02-13]
10-K	[2014-12-16]
10-Q	[2014-07-22]
10-Q	[2014-04-22]
10-Q	[2014-01-14]
10-K	[2013-11-29]
10-Q	[2013-07-15]
10-Q	[2013-04-18]
10-Q	[2013-01-16]
10-K	[2012-11-29]
10-Q	[2012-07-19]
10-Q	[2012-04-16]

Global Medical REIT Inc. [GMRE-PA] Filings

Global Medical REIT Inc. [GMRE] Filings