On May 28, 2025, the company announced a reduction in the quarterly common stock dividend from $0.21 per share to $0.15 per share. The reduction is expected to provide balance sheet flexibility to optimize growth opportunities, strengthen the balance sheet, and provide investors with an attractively yielding, well-covered dividend. The reduction will generate over $17 million annually of estimated retained cash flow, assuming a $0.60 annual dividend rate per share on approximately 72.5 million shares of common stock and operating partnership units outstanding as of March 31, 2025.
The company's YTD 2025 investment activity totaled $69.6 million, consisting of 5 properties with 486,598 leasable square feet, at a 9.0% weighted average capitalization rate. This represents a decrease from the 2024 investment activity, which totaled $80.3 million, consisting of 15 properties with 254,220 leasable square feet, at an 8.0% weighted average capitalization rate. Additionally, the company sold two medical facilities in 2025, receiving aggregate gross proceeds of $8.2 million, resulting in an aggregate gain of $1.4 million.
One of the significant business updates includes the commencement of a new, 15-year, triple-net lease with an affiliate of CHRISTUS Health in Beaumont, TX, with $2.9 million of annual base rent for the first lease year and 2.5% annual rent increases thereafter, replacing Steward Health Care. Another notable case study is the acquisition of five medical outpatient buildings (MOBs) with a purchase price of $69.6 million and a weighted average capitalization rate of 9.1%.
The company's real estate portfolio consists of 191 buildings with 297 tenants and a 95.6% occupancy rate, representing 4.9 million net leasable area (SF). The portfolio is diversified across geography, specialty, and provider type, with a focus on net lease tenants, including triple-net, absolute-net, modified gross, and gross leases.
The company's high performing real estate has an annualized base rent of $113.4 million, with a rent coverage ratio of 4.4x, weighted average lease term of 5.6 years, and weighted average rent escalations of 2.2%.
In terms of financing, the company has a predominantly fixed-rate debt profile and access to multiple capital sources. As of May 27, 2025, the company had $190 million in unutilized revolver capacity and a total gross debt of $681 million, with 75% fixed-rate debt.
The leadership team comprises individuals with extensive experience in healthcare, real estate, financial accounting, reporting, and management. The board of directors is also diverse, with members bringing decades of experience in finance, real estate, and healthcare.
The company's strategy focuses on longer-term leases, annual rent escalations, bedroom communities, secondary markets with favorable demand drivers, and sustainable cash flows from essential or mission-critical services. Additionally, the company emphasizes stringent underwriting and due diligence and maintains a resilient financial structure.
The press release also includes forward-looking statements and disclosures related to rent coverage ratio and other matters. The information provided by the company about its tenants was obtained from them or publicly available sources and has not been independently verified.
As a result of these announcements, the company's shares have moved -0.63% on the market, and are now trading at a price of $6.32. Check out the company's full 8-K submission here.
