Sila Realty Trust, Inc. Q4 FY2024 earnings call

• Michael Seton highlighted a positive Q4 2024, noting the company listed on the NYSE in June 2024 and outperformed the S&P and RMZ on a total return basis. The revolving line of credit was recast to $600 million with oversubscription. They had successful lease renewals, including a long-term extension with Post Acute Medical. They resolved Genesis Care and Stewart bankruptcy issues. - Chris Flouhouse discussed lease renewals totaling over 1.1 million square feet, extending WALT to 9.7 years. They resolved former Genesis Care properties by selling one and leasing the other. They closed on ~$164 million of acquisitions in 2024, including mezzanine loans for healthcare facility developments. - Kay Neely talked about cash NOI and AFFO figures, capital markets activity including a new $600 million revolving credit agreement, distribution change to quarterly, and the balance sheet strength with a net debt to EBITDAre ratio of 3.3 times at year-end.

In the fourth quarter, Sila Realty Trust, Inc.'s portfolio showed improved EBITDARM coverage ratios. The portfolio EBITDARM coverage ratio improved to 5.3 times. They executed over one million square feet of lease renewals and extensions for the portfolio, extending the weighted average lease term (WALT) to 9.7 years at year-end. In 2024, they acquired over $164 million of accretive investments. Cash NOI for the fourth quarter was $41 million, down from $42.8 million in the same period of 2023. For the year ended 2024, cash NOI was $168.6 million, a 3.6% decrease from 2023. AFFO for the fourth quarter was $30.2 million, compared to $32.7 million in the same period of 2023. For the year ended 2024, AFFO was $131.1 million, a decrease of $0.01 per diluted share from 2023.

• Target to grow the enterprise value roughly between 7.5% and 15% per annum. - Focus on disciplined acquisitions of accretive assets in the healthcare real estate sector. - Mezzanine loans for healthcare facility developments are expected to be fully funded by the end of Q2 2025, with interest income to be recorded. - Target leverage range of 4.5 times to 5.5 times net debt to EBITDAre, with a net debt to EBITDAre ratio of 3.3 times at year-end.

• Higher for longer interest rates may present challenges for competitors but also create opportunities for Sila Realty Trust, Inc. - Uncertainty around inflation, interest rates, and geopolitical tensions. - Potential challenges with the Stoughton facility if not sold or leased quickly, affecting portfolio performance.

Q: Nate Crossett asked about 2025 guide and mix between loans and acquisitions.

A: Michael Seton and Chris Flouhouse discussed that the majority of transactions in 2025 will be acquisitions, with mezzanine loans providing mid-teens returns during the funded period.

Q: Robert Stevenson asked about post-acute extension timing and Stoughton facility.

A: Michael Seton said post-acute extension was due to proactivity and seeking certainty. Regarding Stoughton, the facility has flexibility for residential or healthcare use.

Q: Michael Lewis asked about timing of mezz loan investments and coverage ratios.

A: Michael Seton said mezz loans will be fully funded by end of Q2 2025 with interest income recorded. On coverage ratios, some operators dance around the two times threshold due to financial reporting timing and cyclical healthcare factors.