That brought the company's gross investment in real estate to approximately $315 million, including approximately $16 million of intangible assets and liabilities that it also acquired, covering over 946,000 square feet of leasable space, according to comments CEO David Young made during the REIT's recent earnings call. “And we continue to be very busy evaluating a range of acquisition opportunities which we hope to move along through our due diligence process quickly,” he said.

Over the coming weeks, the REIT will be pushing more deals currently in its pipeline into the executed contract stage, he said in a prepared statement released with the announcement of its latest property acquisition.

All of these acquisitions have, not surprisingly, boosted the REIT's rental revenues, which totalled $4.6 million in the first quarter, compared with $1.3 million the same quarter in 2016, according to CFO Donald McClure.

Future Funding Plans

So far, so much to be expected from any young REIT — or real estate firm for that matter — that has been growing via acquisition. More telling from the earnings call was the executives' explanation of how future acquisitions will be funded.

The REIT has an acquisition goal of $400 million, which it is on track to reach by mid year. It plans to use the “little bit of dry credit” remaining on its credit facility, according to McClure. It is also looking at mortgage debt and at the capital markets. The revolver also comes with an accordion feature, which could be triggered, Young added.

Other topics executives discussed during the earnings call (per Fair Disclosure) included:

What the REIT is looking for in acquisitions and what it is seeing in the market

I think right now we're enjoying seeing probably a little bit more hospital-type properties available for us to propose on and to pursue, perhaps, than last year. I can't speak to that necessarily. I don't know if it's a trend or whether it's just a function of our increasing networking and visibility. Because we are becoming more and more visible. But it's still a mix. And the single-tenant universe of acute medical properties, which is our preferred appetite, it's robust. I mean, we're not seeing any shortage of opportunity.

Whether will regulations affect its portfolio

… I really don't expect revenues of operators to change, or caseloads or volumes to change, regardless of the regs, whether the [Affordable Care Act] is repealed or not, because it's demographically driven. I mean, these are not elective cases, for the most part. Probably 80% of the volume of our operators or tenants is nonelective. So it's not a major driver of what we're doing, and we really don't expect to have any exposure from it.

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BETHESDA, MD–Global Medical REIT announced recently that it entered into a contract to purchase from SDB Partners the Carrus Specialty Hospital and the Carrus Rehabilitation Hospital, both located in Sherman, Texas, for $26 million. The two properties, a physician-owned post-acute care facility and an inpatient rehabilitation facility, respectively, total 81,352 square feet, including 17,529 square feet of shell space. As part of the deal Global Medical REIT has agreed to a tenant improvement allowance of $2 million and up to $5 million for expanding the facility.

The REIT will fund this acquisition from its revolving credit facility.

Read Global Medical REIT Upsizes Credit Facility to $200M

The properties are leased by two operators affiliated with the seller and when the deal closes, Global Medical REIT will enter into a new, 20-year triple net lease with the seller, which will, in turn, enter into two separate subleases with operators.

The initial rent will be based on a capitalization rate of 8.8%.

$315M in Real Estate Investments

By now this acquisition — any acquisition — by Global Medical REIT should come as little surprise to company watchers, as it has been steadily acquiring hospital and medical care facilities for the last year or so.

In the first quarter of 2017, the REIT closed 8 acquisitions, or $107.5 million worth of properties.

That brought the company's gross investment in real estate to approximately $315 million, including approximately $16 million of intangible assets and liabilities that it also acquired, covering over 946,000 square feet of leasable space, according to comments CEO David Young made during the REIT's recent earnings call. “And we continue to be very busy evaluating a range of acquisition opportunities which we hope to move along through our due diligence process quickly,” he said.

Over the coming weeks, the REIT will be pushing more deals currently in its pipeline into the executed contract stage, he said in a prepared statement released with the announcement of its latest property acquisition.

All of these acquisitions have, not surprisingly, boosted the REIT's rental revenues, which totalled $4.6 million in the first quarter, compared with $1.3 million the same quarter in 2016, according to CFO Donald McClure.

Future Funding Plans

So far, so much to be expected from any young REIT — or real estate firm for that matter — that has been growing via acquisition. More telling from the earnings call was the executives' explanation of how future acquisitions will be funded.

The REIT has an acquisition goal of $400 million, which it is on track to reach by mid year. It plans to use the “little bit of dry credit” remaining on its credit facility, according to McClure. It is also looking at mortgage debt and at the capital markets. The revolver also comes with an accordion feature, which could be triggered, Young added.

Other topics executives discussed during the earnings call (per Fair Disclosure) included:

What the REIT is looking for in acquisitions and what it is seeing in the market

I think right now we're enjoying seeing probably a little bit more hospital-type properties available for us to propose on and to pursue, perhaps, than last year. I can't speak to that necessarily. I don't know if it's a trend or whether it's just a function of our increasing networking and visibility. Because we are becoming more and more visible. But it's still a mix. And the single-tenant universe of acute medical properties, which is our preferred appetite, it's robust. I mean, we're not seeing any shortage of opportunity.

Whether will regulations affect its portfolio

… I really don't expect revenues of operators to change, or caseloads or volumes to change, regardless of the regs, whether the [Affordable Care Act] is repealed or not, because it's demographically driven. I mean, these are not elective cases, for the most part. Probably 80% of the volume of our operators or tenants is nonelective. So it's not a major driver of what we're doing, and we really don't expect to have any exposure from it.

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