Chiron Real Estate (XRN) Q3 2024 earnings summary

Executive summary

• Portfolio occupancy at quarter-end was 96.1% with a weighted average lease term of 5.6 years and a rent coverage ratio of 4.6x.

• Net income attributable to common shareholders was $1.8 million ($0.03/share), down from $3.1 million ($0.05/share) year-over-year.

• Rental revenue for Q3 2024 was $34.2 million, down 3.7% year-over-year, mainly due to lower occupancy and tenants on cash basis accounting.

• Major acquisition activity included closing on a 15-property portfolio for $80.3 million and entering contracts for a $69.6 million five-property portfolio at a 9.0% cap rate, expected to close in 2025.

• Steward Health Care bankruptcy led to lease rejection; a new 15-year lease with CHRISTUS Health at Beaumont Facility will commence rent in March or April 2025.

Financial highlights

• Total revenues for Q3 2024 were $34.3 million, down from $35.5 million in Q3 2023.

• FFO for Q3 2024 was $13.7 million ($0.19/share), down from $15.3 million ($0.22/share) year-over-year; AFFO was $15.3 million ($0.22/share), compared to $16.5 million ($0.23/share) in Q3 2023.

• Nine-month 2024 net loss attributable to common stockholders was $0.6 million, compared to net income of $15.6 million in 2023, reflecting a $1.6 million loss on property sales.

• Dividends per share of common stock were $0.21 for Q3 2024 and $0.63 for the nine months ended September 30, 2024.

• Weighted average shares and units outstanding for Q3 2024 was 71.2 million.

Outlook and guidance

• Management expects to complete the $69.6 million five-property acquisition in two tranches during the first half of 2025, subject to customary conditions.

• Projected 2024 capital expenditures are $12–$14 million.

• Quarterly G&A expenses are expected to remain in the $4.4–$4.6 million range.

• Retention rate for 2024 lease expirations is trending toward 85%.

• Management anticipates continued pressure from elevated interest rates and healthcare wage inflation, but expects demographic trends and outpatient care shifts to support long-term demand.