Executive Summary

Q2 2025 results showed solid top-line growth and stable FFO/AFFO despite higher interest and transition costs: rental revenue rose 10.7% year over year to $37.9M, FFO was $14.3M ($0.20/share and unit), and AFFO was $16.6M ($0.23/share and unit) .
The Board appointed Mark Decker, Jr. as CEO, reaffirmed FY25 AFFO/share guidance of $0.89–$0.93, and continued balance sheet work to refinance the $350M Term Loan A and extend the revolver, targeting completion in Q4 2025 .
Portfolio KPIs remain resilient: 94.5% occupancy, $117.5M ABR, WALT 5.6 years; leverage 47.2%, net debt/annualized adj. EBITDAre 6.8x, fixed-charge coverage 2.63x .
Dividend was right-sized to $0.15/share for Q2 to bring FAD payout <80%, and Q3 dividend was declared at $0.75/share post 1-for-5 reverse split (equates to $0.15 pre-split), enhancing internal capital for growth .
Near-term stock catalysts: successful refinancing, trajectory of occupancy/lease-up (Beaumont fully occupied; East Orange recovery), capital recycling, and strategic acquisitions at attractive cap rates .

What Went Well and What Went Wrong

What Went Well

Re-tenanting and stabilization milestones: CHRISTUS Health fully occupied the 84,674 sq ft Beaumont, TX facility in May 2025 on a 15-year triple-net lease (first-year base rent $2.9M, 2.5% annual escalators), driving run-rate improvement into Q3 .
Accretive acquisitions at high yields: GMRE completed a $69.6M five-property medical portfolio at a 9.0% cap rate, adding differentiated assets at discounts to replacement cost and below-market rents (30%+ upside potential discussed) .
Guidance and balance sheet visibility: Reaffirmed FY25 AFFO/share guidance ($0.89–$0.93); management expects to refinance Term Loan A and extend the revolver in Q4 2025 without significant adverse changes to terms (subject to conditions) .

Management quotes:

“We have an outstanding niche and I look forward to honing that further and driving results for all our stakeholders…” – Mark Decker, Jr. .
“We are not anticipating any significant adverse changes to the financial terms of the credit facility and expect to complete these transactions during the fourth quarter of 2025.” .
“The dividend reduction is expected to generate approximately $17,000,000 per year that can be allocated to our best ideas.” – CFO .

What Went Wrong

Occupancy dipped sequentially to 94.5% due to a lease expiration (Aurora, IL) and Prospect’s rejection of the master lease at East Orange, NJ; lease-up plan underway with direct tenants and the adjacent hospital operator .
Higher operating costs: total expenses increased to $37.5M in Q2 (vs $32.8M prior year) driven by CEO succession-related G&A and acquisition-related costs; interest expense rose to $8.0M on higher borrowings .
GAAP EPS remained negative: net loss to common stockholders of $0.8M (−$0.01/share), though improved versus prior-year loss (−$0.05/share) .

Financial Results

Sequential trend – Q4 2024 to Q2 2025

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenue ($USD Millions)	$35.16	$34.62	$37.97
Net Income to Common ($USD Millions)	$1.37	$2.10	$(0.80)
Diluted EPS ($USD)	$0.02	$0.03	$(0.01)
Interest Expense ($USD Millions)	$7.57	$7.17	$8.01
G&A Expense ($USD Millions)	$7.71	$3.62	$6.03
FFO per Share & Unit ($USD)	$0.22	$0.20	$0.20
AFFO per Share & Unit ($USD)	$0.22	$0.22	$0.23

Year-over-year – Q2 2024 vs Q2 2025

Metric	Q2 2024	Q2 2025
Rental Revenue ($USD Millions)	$34.21	$37.88
Total Revenue ($USD Millions)	$34.24	$37.97
Net Income to Common ($USD Millions)	$(3.15)	$(0.80)
Diluted EPS ($USD)	$(0.05)	$(0.01)
Interest Expense ($USD Millions)	$6.99	$8.01
FFO per Share & Unit ($USD)	$0.20	$0.20
AFFO per Share & Unit ($USD)	$0.22	$0.23

KPIs and balance sheet metrics

KPI	Q1 2025	Q2 2025
Occupancy (%)	95.6%	94.5%
Annualized Base Rent ($USD Millions)	$113.4	$117.5
Weighted Average Lease Term (years)	5.6	5.6
Weighted Avg Interest Rate	3.84%	4.09%
Leverage Ratio (%)	46.1%	47.2%
Net Debt / Annualized Adjusted EBITDAre (x)	7.0x	6.8x
Fixed-Charge Coverage (x)	2.68	2.63
Borrowing Capacity ($USD Millions)	$187	$177
Total Gross Debt ($USD Millions)	$681.36	$716.76

Estimate comparisons (S&P Global; nearest available forward consensus)

Metric	Q2 2025 Actual	Q3 2025 Consensus
Primary EPS (GAAP) ($USD)	$(0.01)	$0.045*
Total Revenue ($USD Millions)	$37.97	$38.15*
FFO / Share (REIT) ($USD)	$0.20	$1.04857*

Values with asterisk retrieved from S&P Global. Note: S&P periods reflect current/forward consensus and may map differently to company-reported “total revenue” (S&P actual field for the period shows $37.20M alongside company total revenue $37.97M; company also disclosed rental revenue $37.88M and other income $0.09M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
AFFO per Share & Unit ($USD)	FY 2025	$0.89–$0.93	$0.89–$0.93	Maintained
Occupancy	FY 2025 (year-end)	—	>95% expected	Newly stated
Capex + Leasing Commissions ($USD)	FY 2025	—	$12M–$14M (full-year)	Newly stated
Common Dividend	Q1 2025	$0.21/share	—	—
Common Dividend	Q2 2025	—	$0.15/share; FAD payout <80%	Lowered vs Q1
Common Dividend	Q3 2025	—	$0.75/share post 1-for-5 reverse split (=$0.15 pre-split)	Maintained run-rate
Credit Facility – Term Loan A & Revolver	Refi timing	—	Expect refi and revolver extension in Q4 2025 (no significant adverse changes anticipated)	Newly stated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Balance sheet and refinancing	Introduced FY25 AFFO guidance; leverage 44.8%; swaps fix TL A at ~2.80%	Active lender discussions to refi $350M Term Loan A and extend revolver; aim for Q4’25 completion; management not anticipating adverse terms	Increasing visibility
Dividend policy/FAD coverage	FY24 dividends; Q1 dividend $0.21/share	Q2 dividend right-sized to $0.15/share; FAD coverage <80%; ~$17M/year freed for growth	Pivot to internal funding
Acquisitions and pricing	2024 portfolio at 8.0% cap; under contract for $69.6M at 9.0%	Completed $69.6M five-property portfolio at 9.0% cap; below-market rents, discount to replacement cost	Accretive activity sustained
Occupancy and lease-up	FY24 occupancy 96.4%; rent coverage 4.5x	Occupancy 94.5%; Beaumont fully re-tenanted (CHRISTUS); East Orange plan to 90%+ in 24–36 months	Short-term dip; medium-term recovery
Asset recycling	Q4: JV with Heitman; dispositions $60.7M	Plan $50–$100M of dispositions if pricing attractive; proceeds to debt paydown and new investments	Active rotation
Strategic priorities & leverage target	FY24/early FY25: introduce JV, keep leverage mid-40s%	CEO targeting sub-40% leverage or sub-6x net debt/EBITDAre over time; build maturity ladder	Shift to lower leverage over time

Management Commentary

Strategy and quality focus: “We’re going to be working very hard on producing better than average per share FFO growth… finding good properties that yield more… better risk adjusted return.” – CEO .
Leverage objectives: “Ideally… sub 40% or sub six times would be a great spot… stretch out our maturity ladder” – CEO .
Dividend reset rationale: “Rightsizing… dividend coverage went from 110%… to 79% on a FAD basis… ~$17M per year that can be allocated to our best ideas.” – CFO .
Occupancy outlook: “Think of us in that 95 and above range… bumpy but consistent re-leasing; Beaumont adds modest pickup in Q3 run-rate.” – COO & CFO .
Asset recycling plan: “Goal would be $50–$100M… likely a mix of debt repayment and new investments.” – CEO .

Q&A Highlights

Strategic priorities and asset recycling: Management prioritizes refinancing, capital recycling (selling low-yield/optimally priced assets and redeploying at higher cap rates), and portfolio review under new leadership .
Dispositions sizing and proceeds use: Targeting $50–$100M of dispositions, proceeds to debt reduction and selective new investments .
Leverage and capital structure: Medium-term target sub-40% leverage or sub-6x net debt/EBITDAre; preferred stock viewed more like equity; diversification into longer-tenor debt (e.g., insurance companies) over time .
Occupancy modeling: Beaumont occupancy adds Q3 run-rate; portfolio expected to end 2025 >95%; East Orange progressing toward 80–90% occupancy over time .
JV activity: Heitman JV remains disciplined; GMRE seeks to grow JV where aligned and explore capital structures leveraging GMRE’s underwriting in smaller opportunities .

Estimates Context

Street consensus for the current quarter (Q2 2025) was not available in S&P Global’s feed. Nearest forward quarter (Q3 2025) shows Primary EPS consensus mean of $0.045*, Revenue consensus mean of $38.15M*, and FFO/share consensus of $1.04857* (note: consensus definitions and post-split effects can differ from company-reported metrics).
Actual Q2 results: total revenue $37.97M and diluted EPS −$0.01 ; FFO/share and unit $0.20; AFFO/share and unit $0.23 .
Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

Rental revenue growth and AFFO/share expansion underscore portfolio resilience, with Beaumont rent commencement supporting H2 trajectory .
Balance sheet work is a key 2H’25 catalyst; timely, term-friendly refinancing of Term Loan A and revolver extension would reduce perceived 2026 rate/maturity risk .
Internal funding runway has improved post dividend reset (FAD payout <80%); expect continued asset recycling and selective acquisitions at mid-to-high single-digit cap rates .
Occupancy dip appears transitory; management targets >95% year-end occupancy with East Orange lease-up and Beaumont contributions .
Watch for G&A normalization ex-transition costs into H2, as Q2 reflected CEO succession-related expenses .
Estimate models should reflect higher interest expense and debt balances, but offset by acquisitions, re-tenanting uplift, and operating expense trends; reassess FY25 AFFO/share against reaffirmed $0.89–$0.93 guidance .
Post-announcement events (reverse split, $50M buyback) may influence trading dynamics and liquidity; monitor execution and capital allocation .

Supporting Press Releases (Q2 2025 and related)

Q2 2025 earnings release and supplemental furnished via 8-K; reaffirmed guidance and CEO appointment .
Reverse stock split (1-for-5) and $50M buyback approval (Aug 13, 2025) .
Q3 dividend declared ($0.75 post-split = $0.15 pre-split) (Sept 3, 2025) .

Note: All company-reported figures and commentary are sourced from GMRE’s Q2 2025 8-K, earnings supplemental, and earnings call transcript. Where consensus estimates are used, values are retrieved from S&P Global.

Global Medical REIT Inc. (GMRE)·Q2 2025 Earnings Summary