UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission file number: 001-37815

Global Medical REIT Inc.

(Exact name of registrant as specified in its charter)


Maryland		46-4757266
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2 Bethesda Metro Center, Suite 440 Bethesda, MD		20814
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (202) 524-6851

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Common Stock, par value $0.001 per share	GMRE	NYSE
Series A Preferred Stock, par value $0.001 per share	GMRE PrA	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at November 1, 2022 was 65,518,306

Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Balance Sheets

(unaudited and in thousands, except par values)


	As of
	September 30, 2022		December 31, 2021
Assets
Investment in real estate:
Land	$	168,289	$	152,060
Building		1,079,380		985,091
Site improvements		21,983		19,021
Tenant improvements		65,004		58,900
Acquired lease intangible assets		147,836		127,931
		1,482,492		1,343,003
Less: accumulated depreciation and amortization		(182,255)		(143,255)
Investment in real estate, net		1,300,237		1,199,748
Cash and cash equivalents		3,199		7,213
Restricted cash		10,396		5,546
Tenant receivables, net		6,382		6,070
Due from related parties		337		163
Escrow deposits		7,660		5,957
Deferred assets		28,667		25,417
Derivative asset		36,926		1,236
Goodwill		5,903		5,903
Other assets		7,042		6,232
Total assets	$	1,406,749	$	1,263,485

Liabilities and Equity
Liabilities:
Credit Facility, net of unamortized debt issuance costs of $9,802 and $8,033 at September 30, 2022 and December 31, 2021, respectively	$	634,898	$	514,567
Notes payable, net of unamortized debt issuance costs of $491 and $607 at September 30, 2022 and December 31, 2021, respectively		57,918		57,162
Accounts payable and accrued expenses		13,100		10,344
Dividends payable		15,777		15,668
Security deposits		5,404		4,540
Derivative liability		—		7,790
Other liabilities		6,848		7,709
Acquired lease intangible liability, net		8,220		8,128
Total liabilities		742,165		625,908
Commitments and Contingencies
Equity:
Preferred stock, $0.001 par value, 10,000 shares authorized; 3,105 issued and outstanding at September 30, 2022 and December 31, 2021, respectively (liquidation preference of $77,625 at September 30, 2022 and December 31, 2021, respectively)		74,959		74,959
Common stock, $0.001 par value, 500,000 shares authorized; 65,518 shares and 64,880 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		66		65
Additional paid-in capital		722,074		711,414
Accumulated deficit		(185,316)		(157,017)
Accumulated other comprehensive income (loss)		36,883		(6,636)
Total Global Medical REIT Inc. stockholders' equity		648,666		622,785
Noncontrolling interest		15,918		14,792
Total equity		664,584		637,577
Total liabilities and equity	$	1,406,749	$	1,263,485

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Operations

(unaudited and in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

Revenue
Rental revenue	$	35,347	$	29,967	$	100,877	$	85,492
Other income		59		16		100		101
Total revenue		35,406		29,983		100,977		85,593

Expenses
General and administrative		3,961		3,852		12,494		12,519
Operating expenses		6,679		3,973		18,050		10,964
Depreciation expense		10,128		8,639		29,428		24,779
Amortization expense		4,287		3,303		12,202		9,443
Interest expense		6,963		4,830		17,166		14,887
Preacquisition expense		112		18		242		146
Total expenses		32,130		24,615		89,582		72,738

Income before gain on sale of investment property		3,276		5,368		11,395		12,855
Gain on sale of investment property		6,753		—		6,753		—

Net income	$	10,029	$	5,368	$	18,148	$	12,855
Less: Preferred stock dividends		(1,455)		(1,455)		(4,366)		(4,366)
Less: Net income attributable to noncontrolling interest		(517)		(224)		(830)		(492)
Net income attributable to common stockholders	$	8,057	$	3,689	$	12,952	$	7,997

Net income attributable to common stockholders per share – basic and diluted	$	0.12	$	0.06	$	0.20	$	0.13

Weighted average shares outstanding – basic and diluted		65,518		64,204		65,443		59,398

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Comprehensive Income

(unaudited and in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

Net income	$	10,029	$	5,368	$	18,148	$	12,855
Other comprehensive income:
Increase in fair value of interest rate swap agreements		20,356		1,838		43,519		6,273
Total other comprehensive income		20,356		1,838		43,519		6,273
Comprehensive income		30,385		7,206		61,667		19,128
Less: Preferred stock dividends		(1,455)		(1,455)		(4,366)		(4,366)
Less: Comprehensive income attributable to noncontrolling interest		(1,744)		(329)		(3,450)		(858)
Comprehensive income attributable to common stockholders	$	27,186	$	5,422	$	53,851	$	13,904

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Equity

(unaudited and in thousands, except per share amounts)

For the Nine Months Ended September 30, 2022:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Income (Loss)		Equity		Interest		Equity
Balances, December 31, 2021	64,880	$	65	3,105	$	74,959	$	711,414	$	(157,017)	$	(6,636)	$	622,785	$	14,792	$	637,577
Net income	—		—	—		—		—		17,318		—		17,318		830		18,148
Issuance of shares of common stock, net	598		1	—		—		9,978		—		—		9,979		—		9,979
LTIP Units and OP Units redeemed for common stock	40		—	—		—		682		—		—		682		(682)		—
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		43,519		43,519		—		43,519
Stock-based compensation expense	—		—	—		—		—		—		—		—		3,615		3,615
Dividends to common stockholders ($0.63 per share)	—		—	—		—		—		(41,251)		—		(41,251)		—		(41,251)
Dividends to preferred stockholders ($1.40625 per share)	—		—	—		—		—		(4,366)		—		(4,366)		—		(4,366)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(2,637)		(2,637)
Balances, September 30, 2022	65,518	$	66	3,105	$	74,959	$	722,074	$	(185,316)	$	36,883	$	648,666	$	15,918	$	664,584

For the Three Months Ended September 30, 2022:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity		Interest		Equity
Balances, June 30, 2022	65,518	$	66	3,105	$	74,959	$	722,074	$	(179,614)	$	16,527	$	634,012	$	15,097	$	649,109
Net income	—		—	—		—		—		9,512		—		9,512		517		10,029
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		20,356		20,356		—		20,356
Stock-based compensation expense	—		—	—		—		—		—		—		—		1,039		1,039
Dividends to common stockholders ($0.21 per share)	—		—	—		—		—		(13,759)		—		(13,759)		—		(13,759)
Dividends to preferred stockholders ($0.46875 per share)	—		—	—		—		—		(1,455)		—		(1,455)		—		(1,455)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(735)		(735)
Balances, September 30, 2022	65,518	$	66	3,105	$	74,959	$	722,074	$	(185,316)	$	36,883	$	648,666	$	15,918	$	664,584

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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GLOBAL MEDICAL REIT INC.

Condensed Consolidated Statements of Equity - Continued

(unaudited and in thousands, except per share amounts)

For the Nine Months Ended September 30, 2021:


													Global
											Accumulated		Medical
							Additional				Other		REIT Inc.		Non-
	Common Stock			Preferred Stock			Paid-in		Accumulated		Comprehensive		Stockholders’		controlling		Total
	Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Equity		Interest		Equity
Balances, December 31, 2020	49,461	$	49	3,105	$	74,959	$	504,789	$	(116,773)	$	(18,219)	$	444,805	$	12,955	$	457,760
Net income	—		—	—		—		—		12,363		—		12,363		492		12,855
Issuance of shares of common stock, net	14,685		15	—		—		194,498		—		—		194,513		—		194,513
LTIP Units and OP Units redeemed for common stock	62		—	—		—		919		—		—		919		(919)		—
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		6,273		6,273		—		6,273
Stock-based compensation expense	—		—	—		—		—		—		—		—		4,568		4,568
Dividends to common stockholders ($0.615 per share)	—		—	—		—		—		(38,786)		—		(38,786)		—		(38,786)
Dividends to preferred stockholders ($1.40625 per share)	—		—	—		—		—		(4,366)		—		(4,366)		—		(4,366)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(2,592)		(2,592)
Balances, September 30, 2021	64,208	$	64	3,105	$	74,959	$	700,206	$	(147,562)	$	(11,946)	$	615,721	$	14,504	$	630,225

For the Three Months Ended September 30, 2021:

Global

Accumulated

Medical

Additional

Other

REIT Inc.

Non-

Common Stock

Preferred Stock

Paid-in

Accumulated



Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Equity – Three and Nine Months Ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2022 and 2021	8
	Notes to the Unaudited Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	40

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3.	Defaults Upon Senior Securities	41

Item 4.	Mine Safety Disclosures	41

Item 5.	Other Information	41

Item 6.	Exhibits	42

Signatures		43