Greetings, welcome to the Chiron Real Estate first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Steve Swett, of Investor Relations. Please go ahead. Thank you. Good morning, everyone, and welcome to Global Medical REIT's first quarter 2023 earnings conference call. On the call today are Jeff Busch, Chief Executive Officer, Alfonzo Leon, Chief Investment Officer, and Bob Kiernan, Chief Financial Officer. Please note the use of forward-looking statements by the company on this conference call. Statements made on this call may include statements which are not historical facts and are considered forward-looking. The company intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is making this statement for purposes of complying with those safe harbor provisions. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond the company's control, including, without limitation, those contained in the company's 10-K for the year ended December 31st, 2022, and its other SEC filings. The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, on this call, the company may refer to certain non-GAAP financial measures such as funds from operations, adjusted funds from operations, EBITDAre, and adjusted EBITDAre. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's earnings release and in filings with the SEC. Additional information may be found on the investor relations page of the company's website at www.globalmedicalreit.com. I would now like to turn the call over to Jeff Busch, Chief Executive Officer of Global Medical REIT. Jeff? Thank you, Steve. Good morning, and thank you for joining our first quarter 2023 earnings call. Our high-quality portfolio of needs-based healthcare facilities continues to produce excellent results. At the end of the first quarter, our portfolio occupancy was 97%, up from 96.5% at year-end, with a weighted average lease term of six years. Year-over-year, we achieved a 13.7% increase in total revenue, driven primarily by our acquisition activity in the first half of 2022. For the first quarter, reflecting the impact of rising interest rates, our net income attributable to common shareholders was $673,000, or $0.01 per share, compared to $2.7 million, or $0.04 per share in the first quarter of 2022. Note that our net income in the first quarter of 2023 included a $485,000 gain on the sale of an investment property. FFO in the first quarter was $0.22 per share and unit, down $0.01 from the prior year quarter. Our AFFO was $0.23 per share and unit, also down $0.01 from the first quarter last year. With regards to acquisitions, we continue to look for properties that meet our investment criteria and our underwriting standards. Subsequent to quarter end, in April, we closed on one acquisition for two medical office buildings in Redding, California, for $6.7 million. This acquisition was primarily funded by our issuance of OP units that were priced at $11 per unit. This type of transaction works well for us as we can use our advantage like OP units and our availability of liquidity to unlock opportunities and solve sellers' needs. Turning to dispositions. As we have mentioned previously, we are looking to identify properties that we could sell as a means to reduce our outstanding debt in preparation for when the market conditions improve. We are currently targeting approximately $90 million of sales at a weighted average cap rate of between 6% and 6.5%. In the first quarter, we closed on one sale for $4.4 million and have another $76 million under contract or letter of intent to sell. This is an important strategic goal of us. If we can generate $90 million of proceeds from the sales, we would reduce our leverage to within our target range of 40%-45% and reduce our variable rate debt by more than 50%. Overall, I am pleased with our first quarter results and want to thank the entire team for their hard work and contributions to our results. With that, I turn the call over to Alfonzo to discuss our investment activity and current acquisition market conditions in more detail. Thank you, Jeff. The transaction market for our target medical facilities remains slow as buyers and sellers continue to adapt to higher interest rates and the bid-ask spread remains wide. We continue to see a large number of opportunities, remain disciplined and adhering to our underwriting standards. During the first quarter, we did not buy any properties. I am pleased to note that subsequent to quarter end in April, as Jeff mentioned, we closed on the purchase of two medical office buildings in Redding, California for a purchase price of $6.7 million. This was primarily financed by our issuance of OP units at a per unit price of $11. We continue to engage with a variety of physician groups and corporate sellers and expect that opportunities will arise as some owners could be forced to sell if they're unable to refinance their mortgages. In addition, we continue to review ways to diversify our revenue sources, such as development, financing and joint venture opportunities. Regarding efforts to reduce our leverage, in the first quarter, we sold one medical office building located in Jacksonville, Florida, receiving gross proceeds of $4.4 million, resulting in a gain of half a million dollars. As Jeff discussed, we continue to target dispositions of approximately $90 million at a cap rate between 6% and 6.5%, and we are pleased with the level of investor interest we are seeing. Given the uncertainty of equity markets as well as current equity values and their effect on our cost of capital, we are unable to predict when our acquisition activity will pick up and therefore no longer have a target amount of acquisitions for 2023. However, we continue to remain active in the market and will be able to hit the ground running once our cost of capital improves. In the meantime, the stability of our diversified portfolio of quality medical office and our available liquidity allows us to be patient. We have been through cycles such as this before and know that the transaction market takes time to adapt. We will continue to source opportunities that make sense and potentially use some competitive advantages such as scale, access to capital and OP unit deal structures where we can. I'd like now to turn the call over to Bob to discuss our financial results. Bob. Thank you, Alfonzo. GMRE's portfolio continues to produce consistent and solid results. At the end of the first quarter 2023, our portfolio consisted of gross investments in real estate of $1.5 billion and included 4.9 million sq ft of total leasable square feet, 97% occupancy, six years of weighted average lease term, 4.1x rent coverage with 2.1% weighted average contractual rent escalations. In the first quarter, we achieved a 13.7% year-over-year increase in total revenues to $36.2 million, driven primarily by our acquisition activity since the comparable prior year period. On a same-store basis, excluding cash basis leases, our first quarter revenues were up $257,000, or 1% compared to the first quarter of 2022. Our total expenses for the first quarter of 2023 were $34.5 million compared to $27.6 million in the prior year quarter. The increase was primarily due to higher interest costs due to increases in both market interest rates and average debt balances, along with higher operating depreciation and amortization expenses due to our larger portfolio. Our interest expense in the first quarter was $8.3 million compared to $4.8 million in the comparable quarter of last year, reflecting higher average debt balances in 2023, as well as an increase in our average borrowing rate from 2.87% in the first quarter of 2022 to 4.27% during the first quarter of 2023. G&A expenses for the first quarter of 2023 were $3.8 million compared to $4.2 million in the first quarter of 2022. Within our current quarter G&A expenses, note that our stock compensation costs of approximately $700,000 in the quarter included the impact of some equity forfeitures and our cash G&A costs are $3.1 million. Looking ahead, we expect our G&A expenses over the remainder of 2023 to increase and range between $4.3 million and $4.5 million on a quarterly basis. Our operating expenses for the first quarter were $7.5 million compared to $5.4 million in the prior year quarter, with the increase in these expenses primarily driven by the growth in our portfolio. Regarding these first quarter 2023 expenses, $5.2 million related to net leases, where the company recognized a comparable amount of expense recovery revenue and $1.5 million related to gross leases. Net income attributable to common stockholders for the first quarter of 2023 was $673,000 or $0.01 per share, compared to $2.7 million or $0.04 per share in the first quarter of 2022. Net income for the first quarter of 2023 included a gain on sale of an investment property of $485,000. FFO in the first quarter was $15.1 million or $0.22 per share in unit compared to $16 million or $0.23 per share in unit in the first quarter of 2022. AFFO in the first quarter was $16 million or $0.23 per share in unit compared to $16.8 million or $0.24 per share in unit in the first quarter of 2022. Moving on to the balance sheet. As of March 31, 2023, our gross investment in real estate was $1.5 billion, which is up $113 million from a year earlier, reflecting our debt investment activity. At March 31, 2023, we had $701 million of gross debt. Our leverage ratio was 47.4%, and our weighted average interest rate was 4.28%. As of quarter end, the weighted average remaining term of our debt was 3.7 years. Approximately 80% of our debt is fixed rate debt, and the current unutilized borrowing capacity under the credit facility is $245 million. We did not issue any shares of common stock under our ATM in the first quarter or to date in the second quarter of this year. Importantly, as Jeff noted, we plan to use the proceeds from our targeted dispositions to repay amounts on our revolver and reduce our overall leverage to our target range of between 40% and 45%. With respect to our investment portfolio and our 2023 lease expirations, we are pleased with our progress on renewals. Based on our activity to date, currently are projecting to retain between 85% and 90% of the 363,000 sq ft that we've noted as expiring this year. Additionally, we executed new leases on previously vacant space that increased our occupancy by 28,000 sq ft in the quarter. Currently, we are expecting that our occupancy during 2023 will be above 96% throughout the year. Regarding capital expenditures on the portfolio, during the first quarter, our cash spend was approximately $800,000, but we're expecting that to pick up as the year progresses. Consistent with our comments during our last call, we continue to project approximately $6 million in capital expenditures and $4 million in tenant improvements, primarily associated with lease renewals and lease up to be completed during 2023. While current market conditions remain uncertain, our portfolio remains strong and we have ample liquidity available to us. We believe we are well positioned to continue to execute our growth strategy over time as conditions normalize. This concludes our prepared remarks. Operator, please open the call for questions. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment please while we pull for questions. Our first question will come from the line of Juan Sanabria with BMO Capital Markets. Please proceed. Hi. Good morning, and thank you for the time. Bob or Alfonzo or for the team, I guess, just curious if you could expand a little bit on the expected occupancy throughout the year. You guys improved it to 97% in the first quarter, but it sounds like maybe that's ticking down. Is there any kind of material move-outs we should be aware of or any impact from watchlist tenants? Yeah. Hi, Juan, this is Bob. You know, relative to the trend, I think it's a matter of timing with respect to, you know, the lease expiration activity that's coming up later in the year is more weighted towards the third and fourth quarters. As we look at the trends this year, we have, you know, pick up from the lease-up activity in the first quarter. Again, as we project out the rest of the year, there are some, you know, there are some expirations that will be coming up that, again, will migrate into vacancy from a retention perspective. Lease-up activity, you know, again, will flow with that to, again, as our current forecast is that we expect to be above that 96% for, you know, for the, for the full year. No, there's not any, you know, particular, you know, watchlist tenant or anything in particular that's, as of currently, that we're seeing as impacting that number. Okay. Then just on the investments, or transactions market, just curious on where's that bid ask spread, where are the assets that you'd be looking to buy transacting at? As part of that, I mean, I'm a little surprised that the dispositions you feel like you can execute in the low sixes. Would that be indicative of also the assets you're trying to buy? Seems like there's a, maybe a bit of a complication there. Juan, no. We do a lot of add all the time. It happens consistently every year. Tenants who come in at, you know, that we underwrite really well at three or four-year leases then renew for a 10-year lease. A lot of strong credit health systems come in, pretty much mostly every year or big credits and buy out the operator because of a consolidation. A lot of added value. Usually when we find a property, it tends to be a higher cap rate because of the hard work we do. Also it's unusual. Most of the groups that buy right now buy very easy to underwrite. Like, you know, there's nothing you have to fix in the underwriting. We buy properties that may have a little more underwriting issues that we have to work out or credit issues that we wanna add something to. Not credit issues of not being able to pay, but areas that we wanna add to more security on. We do a lot of work in the underwriting and a lot of work in the buying. That's why we get our 7.8 cap average out there. The general market will buy a good percentage of our property in the low 6s because that's once we sort of I call it institutionalized by making it easier to understand. They don't want to go into anything that's really difficult to work out. Our properties could sell at a pretty good premium to, you know, what we bought them at. That's one of the major elements of what we bring to the table at GMRE. You could see us consistently. I mean, our tenants are paying the rent, our tenants are renewing. I'm quite confident of, you know, strong renewals. It has to do with a much deeper hands-on due diligence, much deeper digging out the properties we like. Okay. Just to confirm that, I think you said you had some LOIs on, like $70 million-plus. Yeah. Those are in the low sixes? Just to confirm. Yeah. Contract. We have contracts in LOIs, one is in the low fives. What we buy tends to add value and become more institutional after we take it over. We make it into long-term leases. We often buy something with a short, then we get it into a longer lease. There's just things we do to add value in our proposition. When we're selling, we're gonna be selling the low sixes, but we're coming back and buying in the high sevens to eights again. A nice arbitrage. Thank you. Yep. Our next question comes from the line of Robert Stevenson with Janney Montgomery Scott. Please proceed. Good morning, guys. Just to follow up, Jeff or Alfonzo, is that 7.5%-8%, is that where you guys would be seeing acquisitions these days? Is that where the cap rate is on the quality assets that you guys would be buying in the market today if you were? I'll first answer. Our cost of capital is too high right now. We have to be accretive. I've always said we have to be some level of accretiveness. Right now it would be hard for us to buy 7.5% - 8%, unless it's OP units and unless, like the last deal we had, they took the OP units at a premium. Because of the tax advantage, sometimes they're willing to add a couple of dollars into the OP units. Where the stock is trading right now, where the debt is going, there's two beliefs I have is cap rates are gonna go up because they naturally have to go up. I've been through a few of these cycles. I'm actually one of the rare people who borrowed my first set of money at 12% to do a development. I understand that the market sort of adjusts to the prices. You know, right now to buy something at a lower price when I see it going higher is sort of silly. Two, our cost of capital is really high. I do see, you know, once we hit a piece where the cost of capital between equity and debt is there, that we get back into the market, and it may even be [ACAPS] that we're buying because there will be an adjustment phase. There is a market out there. Okay. Just in terms of market cap rates, I mean, you know, excluding whether or not you would buy it or not, but stuff in that quality, is that an eight, a nine? Where are market cap rates today for good quality assets that you would want in the portfolio? Alfonzo? Sure. Yeah. It's a spectrum. For the types of facilities that we've acquired historically, I mean those are trading in the mid to high sevens. I mean, there are some situations where we're seeing things in the low eights and even mid eights, but that's rarer. The market has definitely moved considerably. Right now, you know, what's considered core assets with really high credit health systems, I mean, that stuff is trading in the low sixes. There have been some examples of stuff trading through a six. You know, for example, the property that we have under contract, that's sub six. There has to be a combination of term and credit to get that kind of pricing. I would say the bulk of transactions thus far this year that are on the core side of the spectrum are trading in that low six cap range. The inventory that we've pursued historically, that's trading north of a seven and towards the mid to high end of the seven cap range. Okay, 'cause that's helpful because I was just trying to triangulate there between what potential acquisitions would yield versus where your stock is yielding on at the $9 stock price, which I think is like, call it an 8.25%-ish, versus reducing debt. I guess with that, Jeff, I mean, how do you and the board thinking about the trade-off between reducing leverage with disposition proceeds versus buying back the stock if it's at $9 or $8, you know, in that type of price range, the compellingness of those two options or doing some sort of mix? Yeah. You know, buying back the stock is just not good for a company like us that's looking for growth, looking to get more size of our, you know, of our stock price so that couple of things, you get better multiples. The larger you are. I haven't given up on the trend, when we're just delayed to keep growing and get a better multiple by getting size, get a better interest rate by getting size, you know, getting the rating agencies coming in and all that. Essentially, I'd rather pay down the debt right now, than buy back stock. Now, I'm not saying my stock is getting too low, where you're just crazy to buy it, not buy it back. You know, it's a crazy world. I'm not leaving that out. Really, the main focus of the company this year is repositioning ourselves for 2024, where I believe there'll be, you know, the rates will start to come down. You know, I'm just projecting myself and what I read, but, you know, the rates will start to come down. I think that as soon as the Fed really stops, you know, raising. Each time the Fed, literally, there was a feeling that the Fed's gonna stop raising and possibly bring it down, our stock shot up several times. It happens historically. In the recent historically, shot up in towards the 11s and even towards the 12 not that long ago. I think when we come back to a normal number, which will be there, we could get back into the buying, growing. Right now, I wanna reduce debt, reduce the floating debt, get our leverage in order. When we start buying again, I like to buy for more equity than debt to keep us very focused on reducing our debt in the company going forward. I wanna have deals that are mostly equity out there and with some debt, but mostly equity at a higher percentage to keep reducing the debt. Okay, that's helpful. Then Bob, if I'm looking at it and doing my math correctly, I think your lines at SOFR plus 150. Call it six and a quarter, six and a half, depending on the day, which is roughly in line where the expected disposition proceeds are being. There shouldn't be really any sort of earnings impact from the dispositions at this point. That's fair, Rob. Yeah. Okay. Last one for me. You guys talked earlier about 85%-90% expected retention on the 2023 rollover. That implies sort of 35,000-40,000 sq ft not renewed. Is that one or two bigger tenants not renewing or a bunch of little 3,000 sq ft, 5,000 sq ft, 7,000 sq ft guys that encompass those 66 leases that are expiring this year? It's more of a lot of smaller ones than any individually significant tenant that's making up that delta. I think with that forecast that we've said, and it's consistent with what we talked about in our Q4 call, I think, you know, we are obviously looking at opportunities to improve on that and to, again, do better than what, you know, what we're forecasting. I think that's how we're looking at it today. It is predominantly a lot of smaller leases, 5,000 sq ft, 10,000 sq ft, 15,000 sq ft, you know, individually that make up those ins and outs. Okay. Are those the 5,000 sq ft-15,000 sq ft? Are those easier for you guys to lease to find a replacement tenant for than the bigger leases, or are people wanting the entire building type of thing? If you had an empty building, that would be easier to lease than a bunch of 5,000 blocks. The little ones. Yeah. The little ones have more turnover because they haven't had as much investment in them as the big ones. The indications from our big ones is, you know, right now we're doing very well, and we're doing very well into 2024. Many of them are even talking to us now on the big side. On the little side, yeah, you could replace those easier. They also leave easier 'cause when you have a full building, they put a lot of money into their full building, and it makes it very difficult economically to really move. Okay. Whereas for a smaller one, economically, it's much easier to move. So you can. We have some multi-buy tenants now, a little bit more than we had before. We expect to get them leased up, and we expect to stay within the target range that we set. Okay. That's helpful, guys. Thank you. Appreciate the time. Our next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Please proceed. Great. Good morning, everybody. Apologies if any of this has been covered. The line dropped a little bit ago. I'm just curious on the disposition front and sort of these deals you're seeing in that low 6%, even sub 6% range. Who are the active buyers, you know, that are. You know, what types of buyers are paying for deals, you know, in sort of that, you know, low 6%, sub 6% range today? It's the private equity buyers. [crosstalk] For the most part. You know, in some instances, they're the net lease REITs, but for the most part, it's the private equity buyers. Got it. Any sense You know, how much leverage they're putting on deals today? My sense of it is, they're getting. There is a decision that they're making whether or not or how much interest only they wanna have. They are able to get 70%, but you don't get a lot of interest only term with that. Some are choosing lower, 50%. Some have a strategy of even lower or even some are coming in with a lot of equity with the thought of refinancing later. For the most part, everyone's sort of shooting for that 50%-60%. Got it. No, that's helpful. Just curious, given sort of the progress you've made at this point on the disposition front, are you still evaluating joint venture opportunities? Does it make sense to have a vehicle in place to the extent you're in a position that, you know, there are attractive deals that come up and that would be a better vehicle maybe to execute, you know, through and limit the amount of equity that you're putting into deals? Sure. I mean, those conversations are ongoing. You know, we've been having those conversations, for the past three, four months. You know, it takes a while to put these things together and, we're still, early in that process. It's something that we're definitely entertaining and, having active discussions on that front. Just last one for me. You know, on the OP unit front, you know, given you've kinda changed your, you know, tone a little bit on the acquisition side for this year, recognize the cost of capital isn't as favorable as it was at one point last year. What are those conversations like on potential OP unit deals? I mean, are, you know, sellers receptive to doing OP unit deals? Can you give a little bit of flavor of, you know, the willingness? Sure. -of sellers to take OP units? It, you know, I find it hard to predict. It seems that I'm inclined to think that in this environment, there's gonna be more interest and more demand for transacting with us with OP units as evidenced by the fact that we just did a transaction with OP units. It ultimately comes down to very unique and idiosyncratic decisions and context of the seller. It's a wealth management strategy for them. There's no situation is the same is what I'm trying to say. I am inclined to think that, right now the 1031 exchange market is not what it was before, and the financing is more difficult for these sellers. I don't think it's something that's gonna be that's gonna happen quickly, but I would expect to see some more transactions, given the fact that, you know, it's a very seamless transaction, and, one that, you know, makes sense for these doctors, that are looking to, you know, find a tax strategy that works for them. I mean, thus far, it's not been, there has been no clear trend. Is there any deal size that you're seeing available in the market, that you're targeting today? We continue looking, for the same types of deals that we've bought in the past. I'm not sure I totally understood the question. I guess. Given the nature of OP units, I'm just curious if those are, you know, smaller deals today that are more attractive or, you know, as you said, more consistent maybe with what you've done historically? It would be more consistent with what we've done historically. I mean, to the extent that there's an opportunity to transact, larger deals with OP units, I mean, of course we would be interested in doing that, but it's, those tend to be more rare. Historically, it's been the smaller $5 million, $10 million deal where the physicians have a very low tax basis, and they're attracted to the OP unit structure for that reason. Understood. Thanks for taking the questions. Yes. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. There are no further questions at this time. I'd like to turn the call back to management for closing remarks. I'd like to thank everybody for joining us, and have a good day. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.