Sila Realty Trust, Inc.

Good morning and welcome to CELA Realty Trust third quarter 2024 earnings conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. I will now turn the conference over to your host, Myles Callahan, Senior Vice President of Capital Markets and Investor Relations for CELA. You may begin.

Good morning, and thank you for joining us today to discuss CELA Realty Trust's financial results for the third quarter of 2024. This morning, we issued our third quarter earnings release and earnings supplement, which are available on the investor relations section of our website at investors.celarealtytrust.com. With me today are Michael Seaton, President and Chief Executive Officer, Kay Neely, Executive Vice President and Chief Financial Officer, and Chris Flohaus, Executive Vice President and Chief Investment Officer. We will begin with prepared remarks and then open the call to questions. Before we begin, I would like to remind you that today's comments will include forward-looking statements under federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as statements about expected financial performance, are also forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause a material difference in our results compared to these forward-looking statements is contained in our SEC filings. Please note that on today's call, we will be referring to non-GAAP measures. You can find the reconciliation of these historical non-GAAP measures to the most directly comparable GAAP measures in our third quarter earnings release and in our earnings supplement, both of which can be found on the investor relations section of our website and in the form 8K we filed with the SEC this morning. With that, I will now turn the call over to our President and Chief Executive Officer, Michael Seeney.

Thank you, Myles. Good morning, and welcome to Cielo Realty Trust third quarter 2024 earnings call. I would like to thank our shareholders, analysts, and all others interested in the company for taking the time to join us today. I would first like to thank everyone for your well wishes during and after Hurricane Helene and Hurricane Milton. All of our employees remained safe during the storms, and SEALIS properties in the affected areas in Florida and Georgia experienced no material damage. Our thoughts remain with those who are less fortunate, as many communities continue their efforts of cleaning up and rebuilding after the devastation that these storms left behind. I will begin with market observations and highlights for the third quarter. I will then turn the call over to Chris Flohaus, our Chief Investment Officer, to discuss our acquisitions, dispositions, and portfolio performance, and have him share some observations on what we are seeing in the acquisition market. Kay Neely, our Chief Financial Officer, will then discuss our third quarter financial performance. I will wrap up our prepared remarks with a few closing comments before opening the call to questions. We are very excited about the prospects of CELA's investment thesis of investing in high-quality healthcare properties over the continuum of care for years to come. The silver tsunami is upon us, as all baby boomers will be 65 years or older by the year 2030. Five thousand people are hitting the 80-year milestone every single day in the United States. These demographics mean higher volumes of patients and higher acuity cases for healthcare facilities, which we believe translates into higher revenues for healthcare operators and consequently more durable income streams for the healthcare properties which CELA owns and endeavors to acquire. Construction has been very limited in the market, and many new construction projects have been shelved, as the economics of such projects don't work based upon construction costs. However, we are seeing opportunities to provide bespoke capital solutions in certain circumstances where all of the various factors come together and create a compelling business case for a new facility with healthcare system alliance that will serve a specific market demographic. By definition, limits on new construction make existing healthcare real estate more valuable, benefiting, CELA's existing $2 billion plus portfolio. As most of you know, we listed CELA Realty Trust on the New York Stock Exchange on June 13th, 2024. As a net lease REIT focused on institutional quality healthcare properties, we believe we offer REIT investors the best of both worlds. Participation in the large and defensive healthcare sector while receiving the benefits of a triple net lease structure, including longer lease terms, and an appropriately conservative financial profile of the company. In the third quarter, we continued to execute our strategy of investing exclusively in high-quality healthcare properties, focusing specifically on medical outpatient buildings, inpatient rehab facilities, and surgical and specialty facilities with a thoughtful and disciplined approach. At quarter end, our portfolio was well diversified with 136 properties in 65 markets, primarily in the smile states across the southern half of the United States. By design, our portfolio remains highly diversified geographically and across our targeted healthcare asset types. In the third quarter, we reported cash NOI of $40.8 million and AFFO of $31.7 million or 57 cents per diluted share. This was an increase from the 39.9 million of cash NOI and 30.8 million of AFFO reported during the second quarter of 2024. Kay will expand more on our third quarter results and financial trends later in this call. It was a busy and productive third quarter overall. We completed several accretive transactions including an acquisition and two dispositions, and renewed and extended the lease terms on numerous leases. We also announced a share repurchase program and concluded a tender offer buying approximately $50 million of our outstanding shares at what we believe is a highly accretive price point to the intrinsic value of the company. Turning to acquisitions, In late July, we acquired a leading inpatient rehabilitation facility in Fort Smith, Arkansas, for approximately $28.4 million. This property is in the sweet spot of our investment strategy, being a market-leading facility in a high-growth Sunbelt region and is 100% leased to a joint venture between one of the nation's leading operators in the rehab space and a leading local hospital system. Subsequent to the quarter end, on November 5th, 2024, we closed on two mezzanine loans for the development of an inpatient rehabilitation hospital and a behavioral healthcare facility in Lynchburg, Virginia. To date, this brings our total acquisition volume and development loan investments to over $181 million, and further expands our already highly diversified, high-quality portfolio. and builds on our future pipeline opportunities. Chris will further discuss the details of these transactions and investment opportunities. During the third quarter, we closed on the sale of two vacant properties formerly leased to Genesis Care, leaving only two remaining vacant former Genesis Care properties, which Chris will discuss later in the call. Additionally, as previously disclosed, The company owns one property located in Massachusetts, formerly leased to an affiliate of Steward Healthcare System, which filed for bankruptcy in May of 2024. On August 12th, 2024, we entered into a contract to sell this property. However, on November 4th, 2024, as disclosed in an 8K we filed with the SEC on November 5th, the sales contract was terminated by the prospective buyer. It is our intention to either sell or lease the property as expeditiously as possible. Even before CELA became a publicly traded company, we have provided shareholders with best-in-class comprehensive disclosures, financial reporting, and transparent communication. We continue to make even further enhancements to our disclosures based on the events taking place at the company and feedback received from the investment community. For example, this quarter we expanded our public disclosures on EBITDARM coverage ratios to demonstrate the strength of our tenants and guarantors. You will find this disclosure in our earnings supplement, which is on the investor relations section of our website and in the form 8K we filed with the SEC this morning. We hope you find the information we provide through our earnings release, earnings supplement, SEC filings, and other forms of communication helpful and easy to understand. All told, I am very proud of our team this quarter and year as we continue to execute on our business plan, both thoughtfully and strategically, and have positioned CELA for a strong close to 2024. Now Chris will provide more detail on our portfolio positioning and the healthcare real estate acquisition market.