• Total Revenue: $29.3 million for Q4 2024, compared to $29.6 million in Q3 2024.
• Property Operating Expenses: Decreased by $500,000 to $5.5 million in Q4 2024.
• General and Administrative Expenses: Decreased from $4.9 million in Q3 2024 to $4.8 million in Q4 2024.
• Interest Expense: Increased from $6.3 million in Q3 2024 to $6.4 million in Q4 2024.
• Funds From Operations (FFO): $12.7 million in Q4 2024, down 14.5% year over year from $14.9 million in Q4 2023.
• FFO per Diluted Share: $0.48 in Q4 2024, unchanged from the previous quarter.
• Adjusted Funds From Operations (AFFO): $14.6 million in Q4 2024, same as Q3 2024.
• AFFO per Diluted Share: $0.55 in Q4 2024, unchanged from the previous quarter.
• Occupancy Rate: Decreased slightly to 90.9% at year-end 2024.
• Weighted Average Remaining Lease Term: Declined slightly to 6.7 years.
• Dividend: Raised to $46.75 per common share, annualized to $1.87 per share.

• Warning! GuruFocus has detected 10 Warning Signs with CHCT.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Community Healthcare Trust Inc (NYSE:CHCT) acquired three physician clinics in the fourth quarter, fully leased with anticipated annual returns of approximately 9.4%.
• The company has signed definitive purchase agreements for six properties with an expected investment of $146 million, with returns ranging from 9.1% to 9.75%.
• CHCT increased its revolving credit facility from $150 million to $400 million, extending its maturity date by five years and achieving lower pricing.
• The company declared a dividend for the fourth quarter and raised it to $46.75 per common share, continuing its streak of raising dividends every quarter since its IPO.
• CHCT's property operating expenses decreased by approximately $500,000 quarter over quarter, primarily due to lower utility expenses.

Negative Points

• Occupancy decreased slightly to 90.9%, and the weighted average remaining lease term declined to 6.7 years.
• The geriatric psychiatric hospital operator, a tenant in six properties, did not pay rent or interest in the fourth quarter, impacting financial results.
• Funds from operations (FFO) declined by 14.5% year over year, primarily due to the loss of rent and interest from the geriatric psychiatric hospital operator.
• Interest expense increased from $6.3 million to $6.4 million due to higher borrowings and interest rate spreads.
• The company's low share price prevented it from issuing shares under its ATM program last quarter, impacting capital raising efforts.

Q & A Highlights

Q: Can you provide more details on the timeline and potential outcomes for the geriatric in-patient behavioral tenants? A: We received a small payment at the end of January, which is a positive step. The tenant has indicated they can make payments of $100,000 to $200,000 per quarter. We are exploring options, including the tenant's potential sale of hospitals. We expect clarity on these matters over the next few quarters. - David Dupuy, CEO

Q: Is there any update on the notes receivable tied to the geriatric psychiatric hospital operator? A: We aim to receive both rent and interest payments. The $100,000 to $200,000 per quarter mentioned would cover both rent and interest. We will evaluate the best approach for these payments. - David Dupuy, CEO

Q: How do you plan to fund acquisitions, and is there a focus on stock buybacks? A: We are considering all options, including capital recycling and using our revolving credit facility. We aim to maintain leverage levels that our investors prefer. Stock buybacks are also on the table, depending on share price movements. - David Dupuy, CEO

Q: Can you confirm the acquisitions expected to close in the first quarter of 2025? A: We expect to close on a behavioral residential treatment facility for $9.5 million and an in-patient rehab facility for $23.5 million by the end of the first quarter. - David Dupuy, CEO

Q: How do you view the dividend coverage in terms of cash flow? A: We are comfortable with our dividend coverage. We expect to resolve the geriatric psych issue, which will enhance AFFO. Our investments in redevelopment projects will also generate returns, supporting our dividend strategy. - David Dupuy, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.