Home Alts News Sila Realty Trust Reports Fourth Quarter 2020 and Year-End Results

Sila Realty Trust Reports Fourth Quarter 2020 and Year-End Results

Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, reported its operating results for the fourth quarter and year ended December 31, 2020.

Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, reported its operating results for the fourth quarter and year ended December 31, 2020.

Quarter Ended December 31, 2020, Compared to Quarter Ended December 31, 2019

Net income attributable to common stockholders was $14.7 million for the fourth quarter of 2020, an increase of 717 percent compared to $1.8 million for the fourth quarter of 2019.

Funds from operations was $39.2 million for the fourth quarter 2020, an increase of 16 percent compared to $33.7 million for the fourth quarter of 2019.

Modified funds from operations was $33.9 million for the fourth quarter of 2020, an increase of 24 percent compared to $27.4 million for the quarter ended December 31, 2019.

Adjusted funds from operations was $35.2 million for the fourth quarter of 2020, an increase of 24 percent compared to $28.4 million for the fourth quarter of 2019.

Net operating income was $58.8 million for the quarter ended December 31, 2020, an increase of 1 percent compared to $58.5 million for the quarter ended December 31, 2019.

Rental revenue was $67.8 million for the quarter ended December 31, 2020, a decrease of 2 percent compared to $69.4 million for the quarter ended December 31, 2019.

Same store NOI was $38.5 million for the quarter ended December 31, 2020, a decrease of 2%, compared to $39.4 million for the quarter ended December 31, 2019.

Year Ended December 31, 2020, Compared to Year Ended December 31, 2019

Net income was $36.8 million for the year ended December 31, 2020, an increase of 1,214 percent compared to $2.8 million for the year ended December 31, 2019.

FFO was $139.1 million for the year ended December 31, 2020, an increase of 42 percent compared to $97.8 million for the year ended December 31, 2019.

MFFO was $117.9 million for the year ended December 31, 2020, an increase of 47 percent compared to $80.1 million for the year ended December 31, 2019.

AFFO was $122.3 million for the year ended December 31, 2020, an increase of 47 percent compared to $83 million for the year ended December 31, 2019.

NOI was $233 million for the year ended December 31, 2020, an increase of 37 percent compared to $169.9 million for the year ended December 31, 2019.

Rental revenue was $276.5 million for the year ended December 31, 2020, an increase of 31 percent compared to $210.9 million for the year ended December 31, 2019.

Same store NOI was $151.1 million for the year ended December 31, 2020, an increase of 1 percent compared to $149.4 million for the year ended December 31, 2019.

The company said that the increase in financial results during the fourth quarter of 2020 is primarily the result of closing the internalization transaction on September 30, 2020. As an internally managed company, the REIT no longer pay its former advisor and affiliates any fees or expense reimbursements arising from the advisory agreement that was terminated prior to the internalization transaction closing.

Additionally, the increased net income during the fourth quarter of 2020 was also due to the impairment loss on real estate recorded during the quarter ended December 31, 2019, the REIT said.

The decreases in same store NOI and rental revenue during the fourth quarter 2020, as compared to the fourth quarter 2019, are primarily attributable to rent not being collected from one tenant at a data center property since October 2020. Sila said that the tenant was experiencing financial difficulty due to the COVID-19 pandemic. In addition, there was a decrease in parking garage revenue from that property due to the COVID-19 pandemic’s impact on the property’s traffic.

The REIT noted that the decrease in these rent collections were offset by the merger with Carter Validus Mission Critical REIT in October 2019, which added 60 properties to the portfolio, as well as the company no longer paying property management fees to the former advisor as a result of the internalization transaction closing.

As of December 31, 2020, the company had total principal debt outstanding of $1.39 billion, consisting of $453.4 million of notes payable and $938 million of the credit facility, with a net debt leverage ratio of 41.1 percent.

The company’s outstanding debt was comprised of 61.3 percent fixed rate debt (including debt fixed through the use of interest rate swaps) and 38.7 percent variable rate debt.

During the three months ended December 31, 2020, the company repaid $45 million on its credit facility.

As of December 31, 2020, the company had liquidity of approximately $253.4 million, consisting of $53.2 million in cash and cash equivalents and $200.2 million in borrowing base availability on the credit facility.

During the fourth quarter of 2020, Sila Realty Trust sold one healthcare property, located in the Dallas market, for $23 million, which generated net proceeds of $22.4 million and resulted in a gain on sale of the property in the amount of $0.4 million.

Sila Realty Trust purchased one development healthcare property for approximately $0.1 million in acquisition costs and funded approximately $0.8 million related to the construction in the fourth quarter of 2020. The company anticipates completing the development project in January 2022.

Additionally, the REIT placed in service one development healthcare property with approximately 20,000 rentable square feet. The property is 100 percent leased to a single-tenant, whose rent commenced on December 1, 2020.

As of December 31, 2020, the REIT entered into 30 rent concessions and lease modifications with tenants impacted by COVID-19 and collected approximately 99 percent of rental revenue related to these lease concessions and lease modifications.

As of December 31, 2020, Sila Realty Trust owned 153 real estate properties, consisting of 29 data centers and 124 healthcare properties, with a total purchase price of approximately $3.1 billion. The company’s properties had a weighted average occupancy of 93 percent and weighted average remaining lease term of 9.6 years.

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