The following is a summary of the Community Healthcare Trust Incorporated (CHCT) Q2 2024 Earnings Call Transcript:
Financial Performance:
Rental income was negatively impacted by a reversed $1.9 million due to uncollected payments from a key tenant. Total revenue in Q2 was approximately $27.5 million, down from both the previous quarter and year-over-year.
A credit loss reserve of $11 million was recorded on the notes receivable from the problematic tenant, reflecting the challenges in collection and tenant performance.
Funds from operations (FFO) stood at $11.6 million in Q2, down from $14 million in the first quarter. Adjusted funds from operations (AFFO) also decreased from $15.7 million to $14.3 million.
Business Progress:
Acquired an inpatient rehabilitation facility for $23.5 million with a new lease set to expire in 2039 and an anticipated annual return of 9.1%.
Signed agreements for acquiring seven properties expected to yield returns ranging from 9.1% to 9.75%.
Portfolio occupancy increased slightly from 92.3% to 92.6%.
Conducting significant renovations and redevelopments on five properties.
Opportunities:
Expecting growth through strategic acquisitions and maintaining a strong pipeline with expected investments of about $169.5 million.
Capitalizing on modest leverage levels and existing banking relationships to fund acquisitions and operational expansions.
Risks:
A major operational disruption due to a significant tenant's failure to make lease and interest payments, affecting financial performance.
Financial risks associated with an $11 million credit loss reserve on notes receivable from the underperforming tenant.
More details: Community Healthcare Trust Inc IR
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