Generation Income Properties Inc.

Q4 2022 Earnings Conference Call


spk_0: good morning ladies and gentlemen and welcome to the generation income properties fourth quarter and fiscal year twenty twenty two earnings conference call at this time all line seven placed in a listen only mode please note that today's conference call is being recorded replay information is included in our march seventeenth press release which can be found on the investor relations section of the company's website at gee i p r e i t dot com along with the fourth quarter and fiscal year earnings release after the speakers prepared remarks there will be a question and answer period if you would like to ask a question please press star one on your telephone keypad i will now turn the conference over to the company's chief of staff emily cues motto
spk_1: thank you operator and good morning everyone i am joined this morning by david sobelman steve executive officer in alison davies chief financial officer david will provide an overview of the companies growth strategy business and capital markets activities twenty two many to milestones and a twenty twenty three outlook alison more we view our quarterly and year and financial results and balance sheets today's conference call includes forward looking statements and projections that reflect the company's current views with respect to among other things are pipeline and planned acquisition activity anticipate good market size expected consolidation in the industry future events and financial performance these forward looking statements are subject to the inherent uncertainties in predicting future results and conditions certain factors could cause actual results to differ materially from those projected and these forward looking statements new risks and uncertainties arise over times and it is not possible for the company to predict those events or how they may affect dense therefore you should not place undue reliance on these forward looking statements during this call we may refer to ssl core as eso es eso and core a ssl which are each non gaap financial measures reconciliations of net in terms the most comparable gap measure to these non gaap measures can be found in our earnings release or in the investor presentation available on our website we ask that you refer to our most recent filings with the fcc for important factors that could cause actual results to differ materially suddenly forward looking statements and projections including the risk factors included in our form ten k for the twenty twenty two fiscal year to be filed with the as easy as such it is important to note that management's comments include time sensitive information that may only be accurate as of today's date tuesday march twenty eighth twenty twenty three following management's prepare comments the called the open for your questions we request that you ask only one question and one follow up to allow ample time for everyone to ask questions if time permits we welcome you to reach you to ask additional questions with that i will now turn the call over to our chief executive officer david sobelman
spk_2: thank you i'm really good morning everyone and thank you for joining generation income properties year and earnings call and a few minutes allison davies or cfl will be reviewing our financial results for twenty twenty two until then i'm happy to report that our patients prove to be a good strategy for shareholders as we're now showing meaningful size of the net least market leaning more towards our favor and pricing of assets as expected to allow us to more actively grow our company however before we retail some of the milestones we accomplished or first full calendar year as as as that company let us remind you of how gee i p r differentiates itself from it's now at least read pierce as or name suggests we not only generate income but we think generationally that translates into having an investment philosophy that puts the underlying real estate first this increases the likelihood of both renewals with the current tenants and the ability to efficiently reach
spk_3: tennant and asset
spk_2: this protects or downside risk as well as gifts or shareholders the best chance to have stabilized and hopefully increasing rents from our property's additionally to create value for shareholders and stabilized assets we seek out new at least properties that are typically overlooked by the majority of investors by targeting short term least
spk_4: properties
spk_2: by focusing on this segment of the markets were able to purchase assets at what is traditionally a higher temperature than the same assets with over ten years remaining this coupled with are active management of our portfolio allows us to increase value in the assets by recognizing rental rate increases quicker extending the least terms of our assets and gaining a deeper understanding of the specific sites performance as we all know twenty twenty to put an end to what was it's ever increasing bull market pertaining to that least valuations public read suffers last year as they continue to today but in the face of a tremendous adversity we believe that gee i pr is whether in these challenges well while the spike in interest rates led to the ultimate dislocation between sellers pricing expectations and or underwritten valuation of assets and made us pause or acquisitions beginning in april twenty twenty two we were by no means stagnant in our efforts to grow the company some of the milestones we achieve last year included a hundred percent rang collection we averaged three point five percent same property rent growth year over year or large portfolio refinance resulting in all debt for the portfolio been fixed at approximately thirty five percent lower interest rates than today's rates are twenty five million dollar debt commitment from american momentum bank remains in place and has a zero balance in order to opportunistically
spk_5: use when needed
spk_2: our hands on an asset management and relational approach that we value proved to be beneficial with the increase in direct communication with our tenants we added additional experience and governance to our accounting team by hiring a fifteen year read accounting professional as our new see so in addition to our first full time corporate controller and we qualified as a real as defined by the i rs which has been a goal of our since or artists or inception so the questions that most people will have as it pertains to are short term and long term goals is how does gee i pr grow subsequent a year and measures twenty twenty three has proven to be somewhat of a launching pad so the company weird one tenant mer shipping sold over in their space before they vacated which provides us the opportunity opportunity to negotiate to it's final form a lease with the department of defense fund a contractor at an increased rental rates which we hope to execute in the near term additionally we have executed an engagement agreement with baird one of the premier middle market investment banks to advise the company on implementing gross strategies and various forms lastly we recently signed a contract to purchase a retail asset occupied by an investment grade credit tenants at a capri that correlates with today's interest rates and is directly in line with our overall value investments he says of well located high credit and shorter term that least properties the portfolio remains stable and we are as an and as or investment thesis lends itself to consistently contemplating potential risks are thirteen assets are well positioned in their specific markets and the tenants performance of these locations is providing them with ample revenue you to continue paying the rent as originally planned the distribution between asset classes is currently to forty six percent retail seventy percent industrial and thirty six percent office we believe that a diversified high credit portfolio will be able to weather markets well lol we're not providing guidance for twenty twenty three we hope we're clearly can saying that we are be patient lol working diligently to not only add value to our current portfolio but also to externally grow by traditional acquisitions contributions to our successful up program or proven joint venture jv structure as well as keeping our options open for alternative opportunities i and our board believe that gee i p r has set the proverbial table to capitalize on our long term value investing strategy that has been working well since our inception it will not come without some bumps in the road as we're all experiencing now but as charlie munger vice chairman of berkshire hathaway has stated in the past i think the record shows the advantage of a peculiar mindset not seeking action for it's own sake but instead combining extreme patients with extreme decisiveness with that i'm pleased to introduce my colleague gee i p r csl allison davies
spk_6: thank you david my first saw yeah see i see our have an eventful to say the least lion adjusting to working with a small yet highly productive team i can honestly say that my time here has been very fulfilling and fruitful that towards growth for the company is becoming increasingly clear and i'm honored to be a part of the story
spk_1: last night we a see the press release announcing our financial and operating results for the three and twelve months ended december thirty first twenty two that cast provided by operations for the year was five hundred and eighty four thousand dollars as compared to that tattoos and operations as one hundred and seventy three thousand dollars and twenty one same property and ally and
spk_6: three by seven percent and rent growth was three point one percent this is driven by are resilient real estate portfolio with high credit quality tenants we believe our tenant base and the well located real estate assets that comprise our portfolio can't see ip are relatively insulated from sifting economic headwinds and potential impacts from future pandemics nothing demonstrates is better than our portfolio is occupancy and rent collections remaining steady at one hundred percent throughout the code that nineteen christ
spk_7: as and three twenty two
spk_1: trp are ended twenty two with occupancy of one hundred percent and a weighted average least term a five point three years we had one lease expire in january twenty three and have no expiration stay the remainder of the year
spk_6: this represents seven percent of current annualized a threat and as david mentioned earlier we are finalizing a lease with the high quality department of defense contractor and higher rents which clearly proves our ability to execute vip our strategy next has used in investing activities for the year and it was thirteen point three million dollars as compared to three point nine million dollars and twenty one as a result of our acquisition activity over the last two years neither the sales one asset net cash generated by financing activities for the years and it's december thirty first twenty two and twenty one where for
spk_1: five point eight million dollars and thirteen point six million dollars respectively highlighting our ability to raise capital even and is challenging market the refinance of the majority of our mortgage loans and april has certainly to this and us well considering the continued interest rate hikes additionally with limited debt maturities and twenty three we can continue to
spk_6: focus on building our portfolio with that i will turn the call back to david
spk_8: thanks allison
spk_9: with that
spk_8: when the call for course
spk_0: thank you we will be conducting your question and answer session if you would like to ask a question please press star wars on your telephone keeper for confirmation tone when the kids are line is in the question que you may press start to if you would like to remove your question from the que for participants using speaker equipment it may be necessary to pick up your handset before pressing the store keys
spk_10: or first question today comes from gotta have made up of yeah
spk_11: please proceed with your question
spk_12: thank you good morning
spk_13: and first question i wanted to ask you what on the seven and regency he thought about finalising a deal with the already on faster than a little provide some color on the time in the new guy that says that do to be finalized and
spk_14: the defendant to move in
spk_8: good morning we are very close to executing the lease on that we feel really confident transaction will have an hour and direct communication with of perspective ten a regular basis almost weekly
spk_9: and now we feel like
spk_12: as this cycle as as of getting that finalists
spk_2: but in question the provide some color on the acquisition that you have under contract and color on the carpet and how you're looking to finance or that decision oh sure we'd deserve safe side overland park kansas
spk_4: the calf raises roughly seven point seven percent
spk_9: will be funding is fifty percent debt fifty percent equity
spk_15: he probably using some jp equity like you mentioned as they are gross strategies
spk_12: and so i so i guess for the dead
spk_8: visiting the they would be
spk_16: yeah that's a great question
spk_2: we're
spk_8: as definitely in the sixers right now
spk_9: yeah we're hoping to lot better than as soon as possible as we all now interest rates were dead
spk_12: moving targets these days notice and and lastly
spk_8: can you provide some color on what's your expectation is to cover your common dividends
spk_4: yes it's absolutely a goal of ours were doing everything in our power
spk_12: teachers have that happen as soon as possible and that that is one hundred percent a priority for us
spk_8: to thank you for taking my questions
spk_0: thank you as a reminder if you'd like to ask a question please press star one on your telephone keypad
spk_17: or next question comes from michael diana of maxim group received your question
spk_18: davis
spk_19: i can you hear me
spk_18: yes against or get a good
spk_6: yeah so quarter over quarter the
spk_20: the rental revenue was down was that because of the exploration of the lease
spk_21: quarter of a quarter yes that would that would be related to
spk_22: the expiration of the least that actually happening one day out there that would be part of like you want results
spk_19: america
spk_20: and then the the interest expense was assume what's what did that really made my to we have a images no guarantees the expense that we ain't her heart as
spk_6: david said carry or started says
spk_23: agreement to
spk_24: it's a it's a guaranteed the expensive so little bit are march six months every quarter
spk_0: oh great thank you as an additional reminder if you like to ask a question please press star one on your telephone keypad
spk_8: there appears to be no additional questions at this time i would like to out your awkward
spk_0: the you operator as thank you for listening to this generation income property

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.