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 June 30, 2023


☐	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.)

7373 Wisconsin Avenue, Suite 800 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 August 2, 2023 was 65,564,943

Table of Contents

GLOBAL MEDICAL REIT INC.

Condensed Consolidated Balance Sheets

(unaudited and in thousands, except par values)


	As of
	June 30, 2023		December 31, 2022
Assets
Investment in real estate:
Land	$	165,242	$	168,308
Building		1,038,464		1,079,781
Site improvements		21,404		22,024
Tenant improvements		66,544		65,987
Acquired lease intangible assets		139,715		148,077
		1,431,369		1,484,177
Less: accumulated depreciation and amortization		(218,109)		(198,218)
Investment in real estate, net		1,213,260		1,285,959
Cash and cash equivalents		2,460		4,016
Restricted cash		7,325		10,439
Tenant receivables, net		7,381		8,040
Due from related parties		391		200
Escrow deposits		9,725		7,833
Deferred assets		26,189		29,616
Derivative asset		35,864		34,705
Goodwill		5,903		5,903
Other assets		12,302		6,550
Total assets	$	1,320,800	$	1,393,261

Liabilities and Equity
Liabilities:
Credit Facility, net of unamortized debt issuance costs of $8,155 and $9,253 at June 30, 2023 and December 31, 2022, respectively	$	567,988	$	636,447
Notes payable, net of unamortized debt issuance costs of $375 and $452 at June 30, 2023 and December 31, 2022, respectively		57,121		57,672
Accounts payable and accrued expenses		15,457		13,819
Dividends payable		16,048		15,821
Security deposits		4,213		5,461
Other liabilities		12,137		7,363
Acquired lease intangible liability, net		6,444		7,613
Total liabilities		679,408		744,196
Commitments and Contingencies
Equity:
Preferred stock, $0.001 par value, 10,000 shares authorized; 3,105 issued and outstanding at June 30, 2023 and December 31, 2022, respectively (liquidation preference of $77,625 at June 30, 2023 and December 31, 2022, respectively)		74,959		74,959
Common stock, $0.001 par value, 500,000 shares authorized; 65,565 shares and 65,518 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		66		66
Additional paid-in capital		722,418		721,991
Accumulated deficit		(213,744)		(198,706)
Accumulated other comprehensive income		35,859		34,674
Total Global Medical REIT Inc. stockholders' equity		619,558		632,984
Noncontrolling interest		21,834		16,081
Total equity		641,392		649,065
Total liabilities and equity	$	1,320,800	$	1,393,261

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Revenue
Rental revenue	$	36,317	$	33,679	$	72,517	$	65,530
Other income		34		18		64		42
Total revenue		36,351		33,697		72,581		65,572

Expenses
General and administrative		4,462		4,336		8,266		8,534
Operating expenses		7,223		6,000		14,759		11,372
Depreciation expense		10,468		9,898		20,962		19,300
Amortization expense		4,337		4,138		8,732		7,915
Interest expense		8,468		5,401		16,739		10,202
Preacquisition expense		2		90		44		130
Total expenses		34,960		29,863		69,502		57,453

Income before gain on sale of investment properties		1,391		3,834		3,079		8,119
Gain on sale of investment properties		12,786		—		13,271		—

Net income	$	14,177	$	3,834	$	16,350	$	8,119
Less: Preferred stock dividends		(1,455)		(1,455)		(2,911)		(2,911)
Less: Net income attributable to noncontrolling interest		(902)		(143)		(947)		(313)
Net income attributable to common stockholders	$	11,820	$	2,236	$	12,492	$	4,895

Net income attributable to common stockholders per share – basic and diluted	$	0.18	$	0.03	$	0.19	$	0.07

Weighted average shares outstanding – basic and diluted		65,544		65,507		65,534		65,405

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Net income	$	14,177	$	3,834	$	16,350	$	8,119
Other comprehensive income:
Increase in fair value of interest rate swap agreements		8,449		5,770		1,185		23,163
Total other comprehensive income		8,449		5,770		1,185		23,163
Comprehensive income		22,626		9,604		17,535		31,282
Less: Preferred stock dividends		(1,455)		(1,455)		(2,911)		(2,911)
Less: Comprehensive income attributable to noncontrolling interest		(1,501)		(491)		(1,027)		(1,706)
Comprehensive income attributable to common stockholders	$	19,670	$	7,658	$	13,597	$	26,665

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 Six Months Ended June 30, 2023:


													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, December 31, 2022	65,518	$	66	3,105	$	74,959	$	721,991	$	(198,706)	$	34,674	$	632,984	$	16,081	$	649,065
Net income	—		—	—		—		—		15,403		—		15,403		947		16,350
LTIP Units redeemed for common stock	47		—	—		—		427		—		—		427		(427)		—
OP Units issued for a property acquisition	—		—	—		—		—		—		—		—		5,482		5,482
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		1,185		1,185		—		1,185
Stock-based compensation expense	—		—	—		—		—		—		—		—		1,835		1,835
Dividends to common stockholders ($0.42 per share)	—		—	—		—		—		(27,530)		—		(27,530)		—		(27,530)
Dividends to preferred stockholders ($0.9375 per share)	—		—	—		—		—		(2,911)		—		(2,911)		—		(2,911)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(2,084)		(2,084)
Balances, June 30, 2023	65,565	$	66	3,105	$	74,959	$	722,418	$	(213,744)	$	35,859	$	619,558	$	21,834	$	641,392

For the Three Months Ended June 30, 2023:


													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, March 31, 2023	65,530	$	66	3,105	$	74,959	$	722,113	$	(211,794)	$	27,410	$	612,754	$	15,721	$	628,475
Net income	—		—	—		—		—		13,275		—		13,275		902		14,177
LTIP Units redeemed for common stock	35		—	—		—		305		—		—		305		(305)		—
OP Units issued for a property acquisition	—		—	—		—		—		—		—		—		5,482		5,482
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		8,449		8,449		—		8,449
Stock-based compensation expense	—		—	—		—		—		—		—		—		1,147		1,147
Dividends to common stockholders ($0.21 per share)	—		—	—		—		—		(13,769)		—		(13,769)		—		(13,769)
Dividends to preferred stockholders ($0.46875 per share)	—		—	—		—		—		(1,456)		—		(1,456)		—		(1,456)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(1,113)		(1,113)
Balances, June 30, 2023	65,565	$	66	3,105	$	74,959	$	722,418	$	(213,744)	$	35,859	$	619,558	$	21,834	$	641,392

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 Six Months Ended June 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	—		—	—		—		—		7,806		—		7,806		313		8,119
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	—		—	—		—		—		—		23,163		23,163		—		23,163
Stock-based compensation expense	—		—	—		—		—		—		—		—		2,576		2,576
Dividends to common stockholders ($0.42 per share)	—		—	—		—		—		(27,492)		—		(27,492)		—		(27,492)
Dividends to preferred stockholders ($0.9375 per share)	—		—	—		—		—		(2,911)		—		(2,911)		—		(2,911)
Dividends to noncontrolling interest	—		—	—		—		—		—		—		—		(1,902)		(1,902)
Balances, June 30, 2022	65,518	$	66	3,105	$	74,959	$	722,074	$	(179,614)	$	16,527	$	634,012	$	15,097	$	649,109

For the Three Months Ended June 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, March 31, 2022	65,400	$	65	3,105	$	74,959	$	720,306	$	(168,089)	$	10,757	$	637,998	$	14,619	$	652,617
Net income	—		—	—		—		—		3,691		—		3,691		143		3,834
Issuance of shares of common stock, net	118		1	—		—		1,768		—		—		1,769		—		1,769
Change in fair value of interest rate swap agreements	—		—	—		—		—		—		5,770		5,770		—		5,770
Stock-based compensation expense	—		—	—		—		—		—		—		—		1,289		1,289
Dividends to common stockholders ($0.21 per share)	—		—	—		—		—		(13,760)		—		(13,760)



Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – June 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2023 and 2022	4
	Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2023 and 2022	5
	Condensed Consolidated Statements of Equity – Three and Six Months Ended June 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2023 and 2022	8
	Notes to the Unaudited Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

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