Global Medical REIT's Q2 2025: Key Contradictions in Capital Strategy, Leverage, and Dividend Sustainability

Capital recycling strategy, leverage target and strategic review, leasing activity and occupancy, dividend sustainability are the key contradictions discussed in Global Medical REIT's latest 2025Q2 earnings call.



Portfolio Acquisitions and Yield:
- During the quarter, Global Medical REIT completed the acquisition of a five-property portfolio of outpatient medical real estate, adding approximately $150 million to its acquisition volume for 2024 and 2025, with a blended going-in cash yield of 8.5%.
- These acquisitions were achieved through portfolio discounts and wide discounts to replacement cost, positioning the company to grow rents at faster-than-market rates.

Dividend Adjustment and Strategic Focus:
- The company lowered its second quarter 2025 dividend from $0.21 per share to $0.15 per share, with dividend coverage decreasing from 110% in Q1 to 79% in Q2 on a FAD basis.
- This adjustment is aimed at generating approximately $17 million per year to allocate to the company's best ideas, as the equity capital markets have been closed for recent years.

Occupancy and Leasing Activity:
- Global Medical REIT's occupancy stood at 94.5% as of June 30, 2025, down from the first quarter primarily due to lease expirations at Aurora, Illinois, and the East Orange, New Jersey, property.
- The company expects total occupancy to end the year over 95%, with 150,000 square feet of new leases, including 130,000 square feet already completed.

Operational and Strategic Priorities:
- Mark O. Decker, the new CEO, outlined immediate strategic priorities, including the refinancing of the line and Term Loan A by the fourth quarter of 2025, and capital recycling to potentially lower leverage.
- The company is focusing on expanding its lender relationships to include long-term debt providers like insurance companies, aiming to improve earnings quality and broaden access to debt capital.