News Release: Global Medical REIT Inc. Announces Q4 and 2016 Financial Results

Reconciliations of non-GAAP financial measures for Funds from Operations and Adjusted Funds from Operations are included in the financial tables at the end of this announcement.

March 27, 2017 08:00 AM Eastern Daylight Time

BETHESDA, Md.–(BUSINESS WIRE)–Global Medical REIT Inc. (NYSE: GMRE) (the “Company”), a Maryland corporation engaged primarily in the acquisition of licensed, state-of-the-art, purpose-built healthcare facilities and the leasing of these facilities to leading clinical operators with dominant market share, today announces its financial results for the fourth quarter and year ended December 31, 2016.

2016 Fourth Quarter Highlights (all comparisons are to the same quarter in the prior year unless otherwise noted)

• Total revenue increased to $3.1 million from $0.7 million.
• Net loss increased to $(1.9) million from $(0.8) million.
• Funds from Operations (“FFO”) of $(0.06) per share.
• Adjusted Funds from Operations (“AFFO”) of $0.06 per share.
• Occupancy rate of 100% at both December 31, 2016 and December 31, 2015.
• During the fourth quarter, the Company completed the acquisition of an additional 13 facilities containing a total of 289,724 square feet of gross leasable area for an aggregate purchase price of approximately $81.4 million.
• On December 14, 2016, the Company declared a quarterly cash dividend of $0.20 per share of common stock to stockholders of record as of December 27, 2016 and to the holders of the Company’s long-term incentive plan units that were granted on July 1, 2016 and December 21, 2016. On an annualized basis, this amounts to a dividend of $0.80 per share, or an 8.97% dividend yield based on the closing price of the Company’s common stock of $8.92 per share on December 30, 2016.
• On December 5, 2016, the Company announced an initial agreement with BMO Harris Bank N.A. and syndicate members for a $75 million secured credit facility plus a $125 million accordion feature for a total commitment of $200 million. On March 6, 2017, the Company announced that it had entered into an amended secured credit facility agreement with an increased base commitment amount of up to $200 million plus an accordion feature of up to $50 million, bringing the total commitment under the secured credit facility to $250 million.

2016 Full Year Highlights (all comparisons are to prior year unless otherwise noted)

• Total revenue increased to $8.2 million from $2.1 million.
• Net loss increased to $(6.4) million from $(1.6) million.
• FFO of $(0.43) per share.
• AFFO of $(0.03) per share.
• As of December 31, 2016, the Company’s property portfolio included 31 buildings with gross leasable area of 664,879 square feet, compared to December 31, 2015, when the Company owned 9 properties with gross leasable area of 129,412 square feet.

David A. Young, the Company’s Chief Executive Officer, commented, “During the fourth quarter we more than doubled our level of completed acquisitions compared to the third quarter, from a dollar standpoint, as during the fourth quarter we closed on the acquisition of 13 properties, adding approximately 290,000 square feet of gross leasable area, for a combined purchase price of approximately $81.4 million. Including these properties, our gross leasable area at December 31, 2016 was approximately 665,000 square feet and our gross investment in real estate was approximately $207 million (including approximately $7 million of intangible assets acquired, net of intangible liabilities acquired).”

Mr. Young continued, “During the first quarter of 2017 as we have closed on acquisitions totaling approximately $33.5 million bringing our gross investment to approximately $241 million and we have an additional $75.1 million of acquisitions currently under contract. When these pending acquisitions close our total portfolio will be approximately $316 million. I would also like to point out our recently amended syndicated revolving credit facility which provides a financing commitment of up to $200 million plus an accordion feature for an additional $50 million. We first announced the initial revolving credit facility back in December and since then BMO, the lead syndicate bank, has seen tremendous interest from its syndicate members, resulting in the amended and expanded credit facility entered into in early March 2017 that provides us with more ammunition to pursue the acquisitions discussed above. This additional funding will allow us to continue building our portfolio at an attractive cost of capital.”

2016 Fourth Quarter Financial Review

• For the three months ended December 31, 2016, total revenue increased to $3.1 million, compared with total revenue of $0.7 million for the fourth quarter in the prior year as the Company’s larger property portfolio generated increased rental revenue.
• Net loss for the three months ended December 31, 2016 was $(1.9) million, or $(0.11) per basic and diluted share, compared to net loss of $(0.8) million, or $(3.16) per basic and diluted share, during the fourth quarter in the prior year.
• The increase in net loss for the three months ended December 31, 2016 was primarily due to acquisition costs, stock-based compensation expense, and generally due to increased operating expenses as a result of the growth in the Company’s portfolio of properties.
• FFO per share was $(0.06) based on 17,605,675 basic and diluted weighted average shares outstanding compared to $(2.31) for the fourth quarter in the prior year based on 250,000 basic and diluted weighted average shares outstanding.
• AFFO per share was positive $0.06 based on 17,605,675 basic and diluted weighted average shares outstanding compared to $(0.65) for the fourth quarter in the prior year based on 250,000 basic and diluted weighted average shares outstanding. The positive AFFO per share during the current quarter resulted primarily from the add back of both acquisition costs and stock-based compensation expense .

2016 Full Year Financial Review

• For the twelve months ended December 31, 2016, total revenue increased to $8.2 million, compared with total revenue of $2.1 million for the prior year. This year over year growth was driven by the Company’s larger portfolio of properties, resulting in higher rental revenues.
• Net loss for the twelve months ended December 31, 2016 was $(6.4) million, or $(0.68) per basic and diluted share, compared to net loss of $(1.6) million, or $(6.44) per basic and diluted share, for the prior year.
• The increase in net loss for the twelve months ended December 31, 2016 was primarily due acquisition costs, stock-based compensation expense, and generally due to increased operating expenses as a result of the growth in the Company’s portfolio of properties.
• FFO per share was $(0.43) based on 9,302,244 basic and diluted weighted average shares outstanding compared to $(3.80) for the prior year period based on 250,000 basic and diluted weighted average shares outstanding.
• AFFO per share was $(0.03) based on 9,302,244 basic and diluted weighted average shares outstanding compared to $(0.88) for the prior year period based on 250,000 basic and diluted weighted average shares outstanding.

Acquisition Activity

Completed Acquisitions During the Fourth Quarter Ended December 31, 2016

• The Company closed on the acquisition of a total of five buildings from Northern Ohio Medical Specialists (“NOMS”) on October 7, 2016. The total purchase price for the five buildings was $4.6 million, adding 24,184 square feet to the Company’s portfolio. Upon its acquisition of the five buildings from NOMS, the Company entered into a new 11-year triple-net lease with the NOMS Tenant, effective as of October 7, 2016, and expiring in 2027 including four additional five-year renewal options. The acquisition was funded using a portion of the proceeds from the Company’s initial public offering.As part of the original NOMS agreement there were two additional buildings that the Company is under contract to acquire for a total purchase price of approximately $5.4 million adding a total of 25,573 square feet. The acquisition of one building was completed in the first quarter of 2017 for approximately $4.3 million and 20,518 square feet. The Company intends to acquire the remaining building for approximately $1.1 million adding 5,055 square feet during the second quarter of 2017. Refer to the “Acquisition Activity” tables below.
• On October 31, 2016, the Company closed on the acquisition of two buildings located in Carson City, NV which were acquired for approximately $3.8 million adding a total of 20,632 square feet. As part of this transaction, the Company assumed a seven-year triple net lease agreement with the existing tenant including one five-year renewal option. The acquisition was funded using a portion of the proceeds from the Company’s initial public offering.
• On December 16, 2016, the Company completed its acquisition of one medical office building and two ancillary healthcare related buildings, encompassing 44,162 square feet located in Ellijay, Georgia for an aggregate purchase price of approximately $4.9 million. Upon the closing of the transaction, the Company assumed a 10-year triple net lease agreement with the existing master tenant that leases all three buildings. The acquisition was funded using a portion of the proceeds from the Company’s initial public offering.
• On December 20, 2016, the Company completed its acquisition of three hospitals from Healthcare Realty Trust for total of $68.1 million. The three rehabilitation hospitals cover 200,746 square feet in total and are located in Mesa, AZ; Altoona, PA; and Mechanicsburg, PA. Each hospital is leased to HealthSouth Corporation with remaining lease terms of 8 years; 4 years; and 4 years, respectively, with 4, 2, and 2 additional five-year renewal options, respectively. The acquisition was funded primarily using a portion of the proceeds from the Company’s initial public offering and the remainder from funds obtained from the Company’s revolving credit facility.

Completed Acquisitions Subsequent to December 31, 2016

• During the first quarter of 2017 the Company closed the acquisition of six facilities encompassing 120,725 square feet of leasable space for a combined purchase price of $33.5 million. Refer to the summary information in the table below.

Q1 2017 Completed Acquisition Summary Table
Property		City		State		Purchase Price		Square Feet		Cap Rate1
Geisinger		Lewisburg		PA		$7,300,000		28,480		7.30%
Las Cruces		Las Cruces		NM		$4,880,000		15,761		7.25%
Prescott		Prescott		AZ		$4,500,000		12,000		8.08%
SLHVI		Clermont		FL		$5,225,000		18,152		7.00%
SWFNA		Cape Coral		FL		$7,250,000		25,814		7.33%
NOMS		Sandusky		OH		$4,343,300		20,518		7.49%

¹ Cap rates calculated based on current lease terms and do not give effect to future rent escalations.

These acquisitions were funded using funds obtained from the Company’s revolving credit facility and from its available funds.

Pending Acquisitions Subsequent to December 31, 2016

• The Company has three pending acquisitions under contract with a combined purchase price of $75.1 million, encompassing 165,629 square feet of leasable space. Refer to the summary information in the table below.

Pending Acquisition Summary Table
Property		City		State		Purchase Price		Square Feet		Cap Rate1
NOMS		Sandusky		OH		$1,063,300		5,055		7.69%
GBRH		Great Bend		KS		$24,500,000		63,978		8.75%
OCOM		Oklahoma City		OK		$49,500,000		96,596		7.12%

¹ Cap rates calculated based on current lease terms and do not give effect to future rent escalations.

The Company intends to fund these three pending acquisitions using the revolving credit facility or other available cash and expects the acquisitions to be completed during the second quarter of 2017.

Leasing Review

• At December 31, 2016, the Company’s total portfolio included 31 buildings leased to 18 tenants.
• Total gross leasable area across the Company’s portfolio was approximately 664,879 square feet as of December 31, 2016 with an overall occupancy rate of 100%.
• The average lease term remaining for the entire portfolio was 12 years at December 31, 2016 with an average annual base rent of $23.17 per square foot.

Balance Sheet Summary

• The Company’s cash and cash equivalents balance was $19.7 million as of December 31, 2016, compared to $9.2 million as of December 31, 2015.
• The Company’s gross investment in real estate as of December 31, 2016 was $206.6 million (including approximately $7 million of intangible assets acquired, net of intangible liabilities acquired) compared to $56.1 million as of December 31, 2015.
• The Company’s total debt, which includes third party debt (net of unamortized deferred financing costs) and related party debt, was $66.5 million as of December 31, 2016, compared to $63.9 million as of December 31, 2015. The Company’s weighted-average interest rate and term of its debt was 4.29% and 6.04 years, respectively, as of December 31, 2016, compared to 6.67% and 4.06 years, respectively, as of December 31, 2015.
• As noted above, during the fourth quarter of 2016 the Company reached an initial agreement on a $75 million secured credit facility plus a $125 million accordion feature, for a total initial credit commitment of $200 million. The secured credit facility was amended on March 3, 2017 to include $200 million of base borrowing capacity plus an accordion feature of up to $50 million, for a total credit facility capacity of $250 million.

Earnings Call

The Company will hold its fourth quarter 2016 conference call later today, March 27, 2017, at 11:00 a.m. Eastern Time. Shareholders and other interested parties may listen to a simultaneous webcast of the conference call on the Internet via the “Investor Relations” section of GMRE’s website at www.globalmedicalreit.com or by clicking on the conference call link http://globalmedicalreit.equisolvewebcast.com/q4-2016, or they may participate in the conference call by dialing 1-877-407-3948 and referencing Global Medical REIT. An audio replay of the conference call will be posted on the Company’s website.

About Global Medical REIT Inc.

Global Medical REIT Inc. is a Maryland corporation engaged primarily in the acquisition of licensed, state-of-the-art, purpose-built healthcare facilities and the leasing of these facilities to leading clinical operators with dominant market share. The Company intends to produce increasing, reliable rental revenue by expanding its portfolio, and leasing its healthcare facilities to market-leading operators under long-term triple-net leases. The Company’s management team has significant healthcare, real estate and public real estate investment trust, or REIT, experience and has long-established relationships with a wide range of healthcare providers. The Company intends to elect to be taxed as a REIT for U.S. federal income tax purposes commencing with its contemplated taxable year ending December 31, 2016.