Global Medical REIT Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property Portfolio

Property Portfolio

6 Months Ended

Jun. 30, 2022

Property Portfolio

Property Portfolio

Note 3 – Property Portfolio

Summary of Properties Acquired During the Six Months Ended June 30, 2022

During the six months ended June 30, 2022 the Company completed nine acquisitions. For each acquisition, substantially all of the fair value was concentrated in a single identifiable asset or group of similar identifiable assets and, therefore, each acquisition represents an asset acquisition. Accordingly, transaction costs for these acquisitions were capitalized.

A rollforward of the gross investment in land, building, improvements, and acquired lease intangible assets as of June 30, 2022 resulting from these acquisitions is as follows:


					Site		Tenant		Acquired Lease		Gross Investment in
	Land		Building		Improvements		Improvements		Intangible Assets		Real Estate
Balances as of December 31, 2021	$	152,060	$	985,091	$	19,021	$	58,900	$	127,931	$	1,343,003
Facility Acquired – Date Acquired:
Gainesville – 2/4/22		555		3,899		76		199		575		5,304
Grand Rapids – 2/28/22		1,238		4,976		221		270		595		7,300
Sarasota – 3/29/22		747		3,703		84		331		1,263		6,128
Greenwood – 3/30/22		929		4,332		194		360		426		6,241
Fairbanks – 4/1/22		1,782		12,262		215		753		7,946		22,958
Rocky Point – 4/8/22		613		6,243		223		317		589		7,985
Fairfax – 5/11/22		4,012		13,238		399		310		3,304		21,263
Lee's Summit – 5/19/22		1,349		4,101		83		410		674		6,617
Lexington – 5/27/22		1,760		11,350		289		556		3,036		16,991
Capitalized costs⁽¹⁾		—		681		—		94		—		775
Total Additions:		12,985		64,785		1,784		3,600		18,408		101,562
Balances as of June 30, 2022	$	165,045	$	1,049,876	$	20,805	$	62,500	$	146,339	$	1,444,565

⁽¹⁾ Represents capital projects that were completed and placed in service during the six months ended June 30, 2022 related to the Company’s existing facilities.

Depreciation expense was $9,898 and $19,300 for the three and six months ended June 30, 2022, respectively, and $8,292 and $16,140 for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the Company had aggregate capital improvement commitments and obligations to improve, expand, and maintain the Company’s existing facilities of approximately $24,183. Many of these amounts are subject to contingencies that make it difficult to predict when they will be utilized, if at all. In accordance with the terms of the Company’s leases, capital improvement obligations in the next twelve months could total up to approximately $20,403.

Summary of Properties Acquired During the Year Ended December 31, 2021

During the year ended December 31, 2021 the Company completed 20 acquisitions. For each acquisition, substantially all of the fair value was concentrated in a single identifiable asset or group of similar identifiable assets and, therefore, each acquisition represents an asset acquisition. Accordingly, transaction costs for these acquisitions were capitalized.

A rollforward of the gross investment in land, building, improvements, and acquired lease intangible assets as of December 31, 2021 resulting from these acquisitions is as follows:


						Site		Tenant		Acquired Lease		Gross Investment in
	Land		Building			Improvements		Improvements		Intangible Assets		Real Estate
Balances as of December 31, 2020	$	128,857	$	851,427		$	15,183	$	49,204	$	98,234	$	1,142,905
Facility Acquired – Date Acquired:
El Paso – 1/12/21		899		7,549			71		160		1,338		10,017
Syracuse – 1/15/21		616		4,745			128		136		772		6,397
West El Paso – 1/15/21		851		7,160			144		567		856		9,578
Fort Worth – 3/9/21		1,817		13,020			143		395		2,069		17,444
Port St. Lucie – 4/6/21		590		3,583			70		185		359		4,787
Cape Coral and Fort Myers – 4/13/21		5,623		20,155			480		1,132		4,311		31,701
Dallas – 4/16/21		3,101		2,593			63		469		493		6,719
East Grand Forks – 4/19/21		845		6,248			278		815		2,092		10,278
Coos Bay – 4/21/21		861		5,095			56		50		410		6,472
Caledonia – 6/2/21		582		2,669			66		96		497		3,910
Tallahassee – 6/2/21		782		6,720			137		387		1,218		9,244
Forsyth – 7/28/21		1,554		9,627			348		456		7,439		19,424
North Charleston – 7/29/21		927		4,248			106		801		1,098		7,180
Munster – 9/15/21		780		4,451			161		391		953		6,736
Hialeah – 9/30/21		—		9,633			264		716		1,231		11,844
Athens – 9/30/21		564		4,106			58		63		548		5,339
Lemoyne – 12/3/21		299		3,661			113		359		904		5,336
Athens 200 – 12/13/21		327		1,336			42		134		204		2,043
Mentor – 12/16/21		2,249		6,291			354		253		1,322		10,469
Oklahoma City – 12/20/21		727		5,839			261		495		1,583		8,905
Capitalized costs⁽¹⁾		—		8,756	⁽²⁾		495		1,636		—		10,887
Total Additions:		23,994		137,485			3,838		9,696		29,697		204,710
Disposition of Prescott – 10/13/21		(791)		(3,821)			—		—		—		(4,612)
Balances as of December 31, 2021	$	152,060	$	985,091		$	19,021	$	58,900	$	127,931	$	1,343,003

(1)	Represents capital projects that were completed and placed in service during the year ended December 31, 2021 related to the Company’s existing facilities.

(2)	During the year ended December 31, 2021, the Company completed and funded a $6,814 expansion at its Oklahoma City facility that was acquired in April 2019 with Mercy Rehabilitation Hospital as the tenant.

Lease Intangible Assets and Liabilities

The following is a summary of the carrying amount of lease intangible assets and liabilities as of the dates presented:


	As of June 30, 2022
			Accumulated
	Cost		Amortization		Net
Assets
In-place leases	$	79,661	$	(29,172)	$	50,489
Above market leases		28,061		(7,998)		20,063
Leasing costs		38,617		(12,538)		26,079
	$	146,339	$	(49,708)	$	96,631
Liability
Below market leases	$	12,694	$	(4,791)	$	7,903


	As of December 31, 2021
			Accumulated
	Cost		Amortization		Net
Assets
In-place leases	$	70,527	$	(23,638)	$	46,889
Above market leases		22,615		(6,407)		16,208
Leasing costs		34,789		(10,201)		24,588
	$	127,931	$	(40,246)	$	87,685
Liability
Below market leases	$	11,842	$	(3,714)	$	8,128

The following is a summary of the acquired lease intangible amortization:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Amortization expense related to in-place leases	$	2,895	$	2,168	$	5,534	$	4,258
Amortization expense related to leasing costs	$	1,221	$	945	$	2,337	$	1,839
Decrease in rental revenue related to above market leases	$	866	$	542	$	1,591	$	1,033
Increase in rental revenue related to below market leases	$	551	$	457	$	1,077	$	888

As of June 30, 2022, scheduled future aggregate net amortization of the acquired lease intangible assets and liabilities for each year ended December 31 is listed below:



	Net Decrease		Net Increase
	in Revenue		in Expenses
2022 (six months remaining)	$	(742)	$	8,366
2023		(1,515)		15,823
2024		(1,356)		13,693
2025		(1,745)		10,219
2026		(1,822)		8,500
Thereafter		(4,980)		19,967
Total	$	(12,160)	$	76,568

As of June 30, 2022, the weighted average amortization periods for asset lease intangibles and liability lease intangibles were 4.7 years and 3.6 years, respectively.