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Sila Realty Trust, Inc. (SILA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered steady operational growth: Rental revenue rose to $49.4M, diluted EPS was $0.21, and Cash NOI increased to $42.8M; AFFO per diluted share was $0.56 .
  • Results modestly beat Wall Street: EPS topped consensus by $0.02*, and total revenue edged past consensus by ~$0.1M*, supported by acquisitions and 1.2% same-store Cash NOI growth . Consensus came from S&P Global; see Estimates Context.
  • Balance sheet remains robust with $476.7M of liquidity, Net Debt/EBITDAre of 3.9x, and a 71% AFFO payout ratio; Board authorized a 3-year $75M buyback and maintained the $0.40 quarterly dividend .
  • Strategic catalysts: $87M of Q3 acquisitions (Southlake MOB/ASC and two Reunion Novus IRFs), an additional Dover land purchase, and a pipeline including an awarded ~$43M deal expected to close in early 2026 .

What Went Well and What Went Wrong

What Went Well

  • Cash NOI grew 4.9% YoY and 2.2% QoQ, driven by acquisitions and same-store growth, partially offset by Stoughton carrying costs during demolition .
  • Portfolio leasing execution: 90% of 2025 expirations renewed; Washington Regional Medical Center will replace CHS under a 17.5-year lease, with a CHS termination payment expected in Q4 .
  • Liquidity and tenant health: $476.7M liquidity; reporting obligors up to 75.8% with weighted average EBITDA rent coverage of 6.19x, underpinned by a high-coverage tenant added via lease assignment .

Direct quotes:

  • “Cash NOI was $42.8 million…increase of 4.9% from $40.8 million in the Third Quarter of 2024…Same-Store Cash NOI growth of 1.2%” .
  • “We have successfully renewed 90% of our 2025 Lease Expirations…Washington Regional will assume the entire facility…17 and a half years” .
  • “Total liquidity exceeding $476 million…EBITDA Rent Coverage Ratio of 6.19 times” .

What Went Wrong

  • AFFO per share decreased 0.8% YoY, primarily due to higher interest expense from swaps entered at year-end 2024, despite acquisition benefits and mezzanine interest income .
  • Stoughton demo impacts: demolition costs incurred and carry costs remain until completion; expected to decrease to ~$35K/month into 2026, and further reductions anticipated after tax appeals .
  • Minor vacancy events: an Alexandria, LA tenant vacated (15.6K sq ft, ~0.3% of ABR); Palm Desert CA building shows 0% leased status in portfolio table detail .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Rental Revenue ($USD ‘000s)46,118 48,256 48,544 49,421
Net Income ($USD ‘000s)11,935 7,898 8,598 11,609
Diluted EPS ($)0.21 0.14 0.15 0.21
FFO per diluted share ($)0.54 0.52 0.54 0.56
Core FFO per diluted share ($)0.55 0.53 0.54 0.56
AFFO per diluted share ($)0.57 0.53 0.54 0.56
Cash NOI ($USD ‘000s)40,812 41,183 41,889 42,825

Segment / mix and tenants:

SegmentABR Mix (%)Notes
Medical Outpatient Building (MOB)35.7% Triple/absolute net 99.9% of ABR
Inpatient Rehabilitation Facility (IRF)33.9% IRF coverage 4.04x
Surgical & Specialty Facilities30.4% Surgical/Specialty coverage 5.33x

KPIs (Q3 2025):

KPIValue
Leased rate (excl. out-of-service)99.1%
Weighted avg remaining lease term9.7 years
Same-store Cash NOI growth1.2% (YoY)
Liquidity$476.7M
Net Debt/EBITDAre3.9x
Interest coverage4.7x
AFFO payout ratio71.0%
Tenant EBITDA rent coverage6.19x (reporting obligors)
Investment grade or affiliate27.0% of ABR

Estimates vs Actual (Q3 2025):

MetricConsensusActual
Diluted EPS ($)0.19*0.21
Total Revenue ($USD)$49.73M*$49.85M
# of EPS estimates2*—
# of Revenue estimates2*—

Bolded beats/misses:

  • EPS: actual $0.21 vs $0.19 consensus → beat by $0.02*.
  • Total revenue: actual $49.85M vs $49.73M consensus → beat by ~$0.12M*.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
G&A expenseFY 2025$22.5–$23.5M “Low end, if not slightly below” the range Lowered/Better
Net Debt/EBITDA targetOngoing4.5–5.5x target Reaffirmed; current at 3.9x Maintained
DividendQ4 2025$0.40 per quarter $0.40 per quarter (payable Dec 4, 2025) Maintained
Acquisition cap rates2026 outlookPrior commentary: mid-6% to mid-7% range (context) Expect targeted cap rate to tighten with looser monetary policy Tightening
Stoughton carry costsInto 2026~$75K/month near year-end ~$35K/month into 2026; expect further reduction post tax appeals Lowering carry

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3)Trend
Capital allocation: buybacks vs acquisitionsQ2: $7.3M buybacks at ~$24.9; bias toward accretive net-lease acquisitions Buyback program in place; bias still toward acquisitions; ATM established, no issuance Balanced, acquisitions favored
Stoughton demolitionQ2: ~$1.9M demo; carry costs to drop materially; entitlement to maximize value Carry cost trending down; demo costs added back to Core/AFFO; tax appeals planned Progressing to lower drag
Leasing/tenant transitionsQ2: 2025 expirations largely renewing 90% of 2025 expirations renewed; CHS termination payment expected; WRMC 17.5-year lease Positive spreads, quality upgrade
Pipeline and IRF focusQ1/Q2: Knoxville & Dover acquisitions; $70M+ LOIs; IRF/MOB focus $87M acquired (Southlake MOB/ASC; Novus IRFs); ~$43M awarded pipeline for early 2026 Consistent IRF/MOB tilt
Macro/policy (ACA subsidies)Q2: Limited Medicaid exposure; insulated in lower-cost settings Insulated from acute care; expect potential system stress if subsidies change Vigilant but insulated
Leverage capacityQ2: runway to 4.5–5.5x ND/EBITDA; $360M capacity post closings described ~$200–$220M capacity to midpoint of target range without equity Managed leverage flexibility

Management Commentary

  • CEO: “Both the Southlake and Reunion Novus transactions…demonstrate our laser focus on acquiring best-in-class Net Lease Healthcare Assets in markets with strong and growing demographics” .
  • CFO: “Our revolver provided nearly $450 million of available funds…total liquidity exceeding $476 million…Net Debt-to-EBITDA Ratio of 3.9 times…AFFO Payout Ratio of 71%” .
  • CEO on returns: incremental capital deployment typically “150 bps or better beyond our acquisition cash cap rates,” sometimes “300 bps” wide .

Q&A Highlights

  • CHS termination payment expected in Q4; WRMC lease commences Dec 1; payment “roughly speaking, a couple hundred thousand dollars” .
  • Stoughton carry costs declining from ~$75K/month to ~$35K/month into 2026; demo costs added back to Core/AFFO; pursue tax appeals to reduce further .
  • Leverage capacity: ~$200–$220M to reach ~5.0x ND/EBITDA midpoint without issuing equity; disciplined about accretive deployment .
  • Development/expansion returns: expansions often 150–300 bps above acquisition cap rates; short construction cycles (<12 months) and captive tenant dynamics .
  • ATM vs buyback: equity issuance viewed as dilutive at current levels; buybacks considered when dislocation to NAV/private-market is significant .

Estimates Context

  • Q3 2025 results modestly beat consensus: EPS $0.21 vs $0.19*, revenue $49.85M vs $49.73M*; only two estimates in each category*.
  • Given the beat and improving Cash NOI, modest upward adjustments to near-term EPS and revenue estimates may be warranted, tempered by higher interest expense run-rate from swaps .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Operational momentum: QoQ and YoY Cash NOI growth with 99.1% leased rate and 9.7-year WALT supports durable cash flows .
  • Balance sheet optionality: $476.7M liquidity and ND/EBITDAre 3.9x provide ~$200M+ capacity to fund accretive deals without near-term equity .
  • Strategic mix upgrade: IRF/MOB acquisitions with long-dated leases and strong operators, plus WRMC replacing CHS, enhance credit/term profile .
  • Near-term catalysts: Q4 inclusion of full-quarter contributions from August/September acquisitions; CHS termination payment; declining Stoughton carry costs .
  • Risk watch: Interest expense headwinds from swaps and policy uncertainty (ACA subsidies) are mitigated by lower-cost care focus and high rent coverage .
  • Capital deployment: Expect continued tilt toward acquisitions; buybacks remain opportunistic when valuation dislocation persists .
  • Dividend sustainability: 71% AFFO payout ratio and strong liquidity underpin maintained $0.40 quarterly dividend .

Sourcing and citations:

  • Q3 2025 8-K press release and supplemental: .
  • Q3 2025 earnings call transcript: .
  • Q2 2025 press release/transcript: .
  • Q1 2025 press release/supplemental: .