Executive Summary

Q3 2023 revenue was $2.589M, down 8.9% year over year (Q3 2022: $2.841M) and up 2.9% sequentially (Q2 2023: $2.516M) . EPS deteriorated to $(0.88) vs $(0.80) YoY and $(0.40) QoQ, reflecting elevated operating costs and restructuring expenses .
NOI rose to $1.871M (+26% YoY; +9% QoQ), but EBITDA collapsed to $39K as management restructuring expense of $1.453M weighed on GAAP results .
Retail and flex property revenues grew YoY despite the prior sale of the Clemson hotel; total hotel revenue was $0 in Q3 (disposed asset), a key driver of YoY revenue decline .
Portfolio health strengthened: total percent leased improved to 97.5% (from 96.5% YoY), while weighted average mortgage payable interest rate rose to 4.5% (Q2: 4.3%) amid higher rates .
Wall Street consensus (S&P Global) was unavailable; therefore, no beat/miss determination vs estimates can be made (consensus unavailable from S&P Global).

What Went Well and What Went Wrong

What Went Well

Same Property NOI increased to $1.696M from $1.527M YoY, signaling resilient core operations despite asset sales .
Occupancy expanded: retail leased 96.9% (vs 94.8% YoY) and flex leased 99.2% (vs 94.6% YoY); total leased 97.5% (vs 96.5% YoY), supporting rent roll stability .
Retail and flex revenues increased YoY to $1.930M and $0.658M, respectively, offsetting the lost hotel contribution post-sale .
Management tone (prior quarter) emphasized robust leasing: “Robust leasing activity… increased our portfolio-wide occupancy to 96.7 percent,” highlighting sustained demand in the Southeast footprint .

What Went Wrong

EBITDA fell to $38,617 from $1,004,000 YoY and $1,079,858 QoQ, driven by $1.453M management restructuring expense and continued professional fees .
GAAP net loss widened to $(1.946)M (vs $(1.744)M YoY; $(0.862)M QoQ), with loss per share at $(0.88) vs $(0.80) YoY and $(0.40) QoQ .
AFFO deteriorated to $(1.104)M from $(0.242)M YoY and $74.6K QoQ, pressured by capital expenditures and non-cash adjustments .
Dividend was not paid in Q3 (vs $0.16 in Q3 2022 and $0.08 in Q2 2023), removing an income support for common shareholders .

Financial Results

Metric	Q3 2022	Q2 2023	Q3 2023
Revenue ($USD)	$2,841,073	$2,515,901	$2,588,740
Net Loss ($USD)	$(1,744,134)	$(861,899)	$(1,946,360)
EPS (GAAP, basic & diluted) ($USD)	$(0.80)	$(0.40)	$(0.88)
NOI ($USD)	$1,488,336	$1,721,310	$1,871,210
EBITDA ($USD)	$1,003,820	$1,079,858	$38,617
EBITDA Margin (%)	35.3% (derived from above)	42.9% (derived from above)	1.5% (derived from above)

Segment revenue breakdown

Segment Revenue	Q3 2022	Q2 2023	Q3 2023
Retail center property revenues ($USD)	$1,850,797	$1,903,769	$1,930,494
Flex center property revenues ($USD)	$610,967	$612,132	$658,246
Hotel property revenues ($USD)	$379,309	$362,851	$0

FFO and AFFO

Metric	Q3 2022	Q2 2023	Q3 2023
FFO ($USD)	$96,382	$305,467	$(796,696)
AFFO ($USD)	$(241,602)	$74,573	$(1,103,624)

KPIs and portfolio metrics

KPI	Q3 2022	Q2 2023	Q3 2023
Total percent leased (%)	96.5%	96.8%	97.5%
Retail percent leased (%)	94.8%	97.5%	96.9%
Flex percent leased (%)	94.6%	94.9%	99.2%
WALT – Retail (years)	N/A	5.20	5.18
WALT – Flex (years)	N/A	2.24	2.50
WALT – Total (years)	N/A	4.44	4.50
Weighted avg mortgage maturity (years)	N/A	6.00	5.73
Weighted avg mortgage payable interest rate (%)	4.1%	4.3%	4.5%
Dividends paid per common share ($USD)	$0.16	$0.08	$0.00

Guidance Changes

No formal guidance was disclosed in Q3 2023 materials; no revenue, margin, OpEx, OI&E, tax rate, or segment guidance provided –.

Metric	Period	Previous Guidance	Current Guidance	Change
N/A	N/A	N/A	N/A	N/A

Earnings Call Themes & Trends

No Q3 2023 earnings call transcript was available in the document corpus; attempts to locate and read a full transcript yielded no results. We searched for MDRR earnings call transcripts and found general listings but not a transcript suitable for full-read and citation . As a result, themes below reflect verifiable disclosures from Q1/Q2/Q3 primary documents.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Occupancy/Leasing	Q1: “Robust leasing activity… increased our portfolio-wide occupancy to 96.7%” ; Q2: total leased 96.8%	Total leased 97.5% (retail 96.9%, flex 99.2%)	Improving occupancy, strong leasing across retail/flex
Portfolio mix (Hotel disposition)	Q1/Q2: Hotel revenues present in prior periods due to disposed Clemson hotel	Hotel revenue $0 (disposed)	Transition to pure retail/flex income base
Costs/Restructuring	Q1: Elevated legal/professional fees tied to strategic alternatives	Management restructuring expense $1.453M; legal/professional fees $0.238M	Cost spike in Q3; one-time restructuring impacts
Interest rates/Capital	Weighted avg mortgage rate rising: Q1 4.1% → Q2 4.3%	4.5% in Q3	Higher debt service burden amid rising rates

Management Commentary

“Robust leasing activity late in 2022 and year-to-date in 2023 have… increased our portfolio-wide occupancy to 96.7 percent.” – Thomas E. Messier, CEO (Q1 press release) .
“We are seeing continued interest in our properties from both new tenants, and from existing tenants electing to renew their leases.” – Thomas E. Messier, CEO (Q1 press release) .

Q&A Highlights

No Q3 2023 earnings call transcript was found for MDRR; therefore, Q&A themes, clarifications, and tone cannot be assessed from primary sources for this quarter .

Estimates Context

Wall Street consensus estimates (S&P Global) were unavailable for Q3 2023 due to retrieval limits; as a result, we cannot assess beats/misses versus consensus (consensus unavailable from S&P Global).

Key Takeaways for Investors

Core operations resilient: Same Property NOI increased to $1.696M, supported by strong occupancy and retail/flex leasing, even as total revenue declined YoY due to hotel sale .
One-time costs masked operating strength: Management restructuring expense ($1.453M) and professional fees compressed EBITDA to $39K and widened GAAP losses; expect normalized run-rate to improve absent these charges .
Portfolio quality improving: Retail/flex revenues grew YoY; flex occupancy reached 99.2%, suggesting pricing power and future rent roll stability .
Higher interest costs are a headwind: Weighted average mortgage rate rose to 4.5% (from 4.3% in Q2 and 4.1% in Q1), elevating interest expense and pressuring AFFO .
Dividend pause signals capital preservation: No dividend in Q3 vs $0.08 in Q2 and $0.16 in Q3 2022; monitor policy as restructuring concludes and AFFO trajectory stabilizes .
Near-term trading: Watch for updates on cost actions and leasing wins; removal of one-time expenses could catalyze EBITDA rebound and sentiment shift.
Medium-term thesis: With hotel divestiture complete and strong occupancy, MDRR’s retail/flex focus may deliver steadier NOI; balance sheet costs and capital allocation (dividends, capex) will drive AFFO normalization .

Medalist Diversified REIT, Inc. (MDRR)·Q3 2023 Earnings Summary