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Sila Realty Trust Reports 12% Growth in Net Income During Third Quarter 2023

Sila Realty Trust Reports 12% Growth in Net Income During Third Quarter 2023. Alternative investments, healthcare, medical office, real estate investment trust, REIT, Sila, Sila Realty Trust

Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, announced operating results for the third quarter ended Sept 30, 2023, including the acquisition of the Burr Ridge Healthcare Facility at a purchase price of $59.9 million.

The facility is a 104,912-square-foot medical office building located in Burr Ridge, Illinois and fully leased to Loyola University Medical Center. Sila says the Burr Ridge Healthcare Facility was purpose-built for the medical center, and “benefits from its proximity” to LUMC’s three affiliated hospitals, including the flagship Loyola University Medical Center with 547 licensed beds. The three-story building is situated on a 6.9-acre lot and is approximately 20 miles southwest of downtown Chicago.

The company also declared distributions per share of common stock in the amount of $0.10 for the quarter ended Sept. 30, 2023. The company’s dividend payout to adjusted funds from operations ratio was 67.5% during the third quarter.

The company also reported:

  • Rental revenue of $48.5 million, a year-over-year increase of 4%.
  • Net income attributable to common stockholders equaled $15.0 million, an increase of 12%.
  • Funds from operations, or FFO, grew 3%, to $33.1 million.
  • Core funds from operations, or Core FFO, was also up 3%, to $33.4 million.
  • Adjusted funds from operations, or AFFO, grew by 9%, to $34.1 million.
  • Same store cash net operating income, or same store cash NOI, was $40.3 million, an increase of 2%.

“We are pleased to announce the results of the third quarter, reporting positive year-over-year trends in FFO, Core FFO and AFFO, as well as the addition of a Class A medical office building to our carefully assembled portfolio of institutional quality healthcare properties,” stated Michael Seton, the company’s president and chief executive officer. “The addition of the Burr Ridge Healthcare Facility demonstrates, we believe, the company’s ability to continue sourcing accretive acquisitions with strong creditworthy tenancy in the current market environment. We believe strategic and conservative portfolio growth, while maintaining low leverage, a flexible balance sheet, and a considerable liquidity position, puts the company in an advantageous position and supports our goal to maximize value for our stockholders.”

As of Sept. 30, 2023, the company’s properties had a weighted average leased rate of 99.4%, a weighted average remaining lease term of 8.8 years, and a weighted average rent escalation rate of 2.1%.

As of Sept. 30, 2023, the company had total principal debt outstanding of $605.0 million under the company’s credit facility, with a net debt leverage ratio, which is the ratio of principal debt outstanding less cash to adjusted fair value of real estate investments, of approximately 24.1%.

As of Sept. 30, 2023, the company’s outstanding debt was comprised of approximately 87% fixed rate debt through the use of interest rate swaps and approximately 13% variable rate debt. The company’s weighted average interest rate on total debt was 3.7% as of Sept. 30, 2023.

As of Sept. 30, 2023, the company had liquidity of approximately $464.6 million, consisting of $14.6 million in cash and cash equivalents and $450.0 million in borrowing base availability under its credit facility.

Sila Realty Trust owned 132 healthcare properties and two undeveloped land parcels as of Sept. 30, 2022. The REIT raised approximately $1.2 billion in investor equity after launching its initial offering in May 2014. Its follow-on offering closed in November 2018 after raising $129.3 million.

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