Q2 2025 Sila Realty Trust Inc Earnings Call
I will now turn the conference over to your host. May ask senior vice president of capital markets and investor relations for sale. You may begin
Good morning and welcome to CEO realy trust's, second quarter 2025 earnings conference call yesterday evening. We issued our earnings release in supplement which are available on the investor relations section of our website and investors.c.the.
With me today are Michael seeden president and chief executive officer K, neily Executive, Vice President, and Chief Financial Officer, and Chris flowhouse, Executive Vice, President and chief investment officer.
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
A 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 second quarter, earnings release and our earnings supplement, both of which can be found on the investor relations section of our website. And in the form AK, we file with the SEC with that. I will now turn the call over to our president and chief executive officer. Michael seed.
Thank you miles and good morning to everyone. Thank you for taking the time to join our call today.
Our team delivered another positive quarter of results driven by quality operating fundamentals and our ability to remain steadfast in our commitment to our proven capital allocation strategy.
Well, macroeconomic and legislative uncertainty remain top of mind.
Seal is portfolio continues to fire on all cylinders.
With a strong average i-bidder coverage ratio of 5.31 times.
A portfolio weighted average remaining lease term of 9 and a half years.
Meaningful, annual contractual rent growth of 2.2%.
And over 568 million in liquidity, our resilient portfolio in enviable capital position provides stability to deliver solid earnings growth. And reinforces our ability to maintain a healthy dividend for our shareholders.
On top of our robust operating performance.
We remain emboldened by our focus on necessity-based Healthcare Solutions.
Focusing on operators, that deliver better outcomes for patients in convenient locations at an affordable price.
Despite the headlines in various healthcare related, proposals coming from Capitol Hill,
Adults.
Provide this with confidence in our ability to continue to grow over the long term with the Partnerships of our established and resilient tendency.
With the passing and signing into law of the 1. Big beautiful, bill act.
There are uncertainties as it pertains to health care and how the bill will ultimately affect all aspects of the healthcare delivery system.
However, many of our tenants across the healthcare Continuum of Care, provide us with payer mix information when reporting Financial results.
Of the tenants that report.
Medicaid reimbursement is only a very small fraction of the revenue base.
This limited exposure by our tenants to Medicaid. And consequently, our portfolio is largely due to the types of Health Care Facilities that we invest in the services being provided and the markets in which they reside.
In the second quarter, we remain focused on our accretive and thoughtful Capital allocation strategy.
In April, we closed on the off-market, acquisition of our new Dover, Healthcare facility assets. The only inpatient Rehabilitation facility in Kent County, in 1 of only 4 in the state of Delaware,
the facility is leased to a joint venture between 2, best in-class, operators, Bay, health,
A very strong and successful investment grade, rated health system and the second largest in the state.
And Pam health or Pam 1 of the nation's largest and leading providers of post-acute healthcare services.
This facility constructed in 2019.
Reached stabilization more rapidly than any other Pam facility in the company's history and remains very highly utilized.
With such high demand and little competition. In the market, comes an opportunity to expand the facility, which we are currently discussing with the existing Tenney,
Subsequent to quarter end. We closed on a 2 property Mo portfolio in South Lake, Texas.
these properties benefit from strong, operational synergies as Physicians, who practice at the traditional Mo routinely performed surgery at the outpatient surgery center
Creating a unique referral and Care pathway between the 2 buildings.
All 3 of these facilities fit very well within the Seal of mold.
And we are excited to embed them within our operating platform.
Beyond these 3 transactions. We are currently under exclusive Loi on over 70 million of new. Net lease Healthcare transactions that are currently going through. The typical pre-acquisition due diligence process.
The ultimate acquisition of these properties is subject to our due diligence and closing process. However should they occur?
We currently would anticipate. They would close in or around the third quarter.
Beyond our most recent Free Net lease Acquisitions. Made, we also utilized our share of purchase program to execute on over 7 million dollars of share of purchases during the quarter.
We noticed a significant enough dislocation in our public market, share price, and private market valuations to make the decision to use excess cash on hand to capture accretion and value for shareholders.
As conveyed previously and demonstrated, this quarter share, repurchases are a tool in our toolbox that we can use if we deem their to be dislocation in our share price.
That being said, our bias remains pointed towards growth through Acquisitions of physical property.
Finally, I'm happy to report that we have arrived at a strategic Vision in solution for our Stoughton asset.
after exploring many options over the past months,
we deemed that the course allowing for the highest value for our shareholders is to demolish, the building and entitle the land for separate use.
The demolition of the building will halt, a majority of the expense leakage and is expected to be completed around the end of this year.
With the removal of the Stoughton asset from service. Our portfolio lease percentage increased to 99.2%
seis advantages were on full display this quarter.
And creative transactions while using excess cash to execute on, strategic, share repurchases.
While there is still much noise and uncertainty within the healthcare landscape today.
Our creative Capital, allocation decisions. This quarter are a testament to our focus on delivering the best value for shareholders, over the long term.
I will now turn to K to discuss our financial performance.
Thank you, Michael, and good morning everyone. I am pleased to report positive Trends in our financial results which stem from the various accretive transactions. We have recently made
for the second quarter of 2025. We reported cach noi of 41.9 million compared to 41.27% increase from the first quarter of 2025.
This increase was primarily driven by our Knoxville Healthcare facility in Dover Healthcare facility, acquisitions.
Compared to the second quarter of 2024 cash. Noi was up, 5% driven by our acquisition activity, over the previous year and our same store cach, noi growth of 1.5%.
This was partially offset by a cash net. Operating loss on the stoen healthcare facility due to its vacancy when compared to the prior year, when we were still receiving some rent.
Note that with the Demolition of stoen underway, we have removed the asset from the same store pool.
Our afo was 54 cents per diluted share for the second quarter for a 1.7% increase from the first quarter of 2025.
This was driven by the cash. Noi drivers mentioned previously along with the lower GNA driven by customary first quarter, audit AMA, accounting fees.
Slightly offset by higher interest expense largely driven by acquisition activity.
Compared to the second quarter of last year, our total afso decreased by 2.7%, largely driven by an increase in interest expense related to acquisition activity and the replacement of certain swaps. At the end of last year, partially offset by interest income received on our mezzanine loans, and the previously mentioned cash and Andy items,
additionally, interest income from our money market account decreased from the prior year, due to using a portion of those funds toward our modified Dutch auction tender offer. Last year, decreasing the amount of weighted average shares outstanding. As a result, there was no reduction in affo per share compared to the second quarter of last year.
As Michael mentioned, we executed on over 7.3 million of strategic share repurchases at an average price of approximately $249 per share.
We believe this execution was a creative to both earnings and to nav and we use excess cash flows from operations to fund these repurchases.
We may continue to execute repurchases with excess cash on hand, depending on other Capital deployment priorities.
The board recently approved. A 3-year share repurchase program for share. Repurchases up to 75 million with no more than 25 million of repurchases in any 12-month period that said, we prefer to use our balance sheet capacity, and liquidity position for the Acquisitions of assets that fit within the Seal of strategy. Net lease assets that are creative to both earnings and the quality of the portfolio.
The strength of the portfolio was once again, demonstrated through the collection of financial reporting at, either the tenant or guarantor level of 73.4% of our portfolio. ABR. Our reporting, Tenney maintained a strong ebad arm. Coverage ratio of 5.31 times up from 4.64 times in the second quarter of 2024.
Notably our Mo and Earth coverages have increased by 2.26 times and 73 * year-over-year respectively. And we now have 40% of our Tenney, that is associated with an investment grade rated tenant, guarantor or affiliate up from 36.4% at the same time last year.
The significant and improving coverages that the majority of our tenants in guarantors, possess further bolsters, our confidence in our ability, to grow earnings through cycles and over the long term.
Similar to our tendency Sila remains in a strong, fiscal State, as evidenced by our balance sheet position, ending the quarter with 568.8 million of liquidity and net debt to ibida re of 3.6 times.
Payable on September 4th 2025.
As we've said in the past we believe maintaining a strong balance sheet is low to moderate leverage, ample liquidity and financial flexibility is fundamental to being a resilient and sustainable Reit.
This type of environment with economic and legislative unknown. Still looming over the market is precisely why we continue to position the company in a place, which can withstand and perhaps even take advantage of disruption.
Today, we remain committed to external growth in a prudent manner, making sure acquisitions align with our strategy, and that they are accretive and sustainable.
This thoughtful approach combined, with our tenants robust, operational. Performance allows us to remain confident in our Capital, allocation philosophy, and the maintenance of the dividend, over the long run.
I will now turn the call over to Chris to share details on our portfolio activity.
Thank you Kay and good morning everyone. We have had another great few months filled with successful, net lease, Acquisitions that fit our investment criteria, strong, leasing momentum and the continual building of our acquisition pipeline. Our newly acquired do health care facility which had the most successful start of any Pam Health property and the company's history is a prime example of an asset that fits well within the Sila investment strategy, a newer and highly utilized facility. In a market with significant barriers to entry,
Both The Limited competition and consistently High utilization allows for an expansion opportunity which we are currently discussing with the tendency and look forward to Bringing to fruition in the near term.
This opportunity came to us as an off-market deal via private owner in our existing relationship with Pam Health, highlighting Seal's, unique ability to find and transact on a creative deals through our strong relationships that are not available to the rest of the market.
Subsequent to the end, we closed on a two-property medical outpatient building portfolio for approximately $16.2 million. Both properties are well-located and highly utilized, with at least two operators owned in part by investment-grade affiliates. The operational synergies due to their complementary uses and proximity to each other offer a unique dynamic that further enhances the tenancy that would have otherwise fit well within our portfolio on their own.
The portfolio is comprised of a medical outpatient building lease to GI Alliance the largest independent provider of gastroenterology services in the United States. Along with an Ambulatory Surgery Center leads to a joint venture between Baylor, Scott and White Health. A subsidiary of tenet Healthcare and a high-performing Physician Group.
This portfolio is located in South Lake. Texas and affluent suburb of Dallas with compelling demographics in approximately 2 miles. From the 302 bed, Baylor, Scott and White Medical Center. Enhancing the referral base even further. Like our recently acquired Dover asset, these 2 properties are accredited to the quality of the portfolio and are the types of opportunities we'll continue to pursue.
Year to date, we have closed approximately $75 million of high-quality acquisitions and currently have over $70 million of properties under exclusive LOI.
On top of the success, we continue to have on the acquisition front. We continue to experience strong leasing momentum in the second quarter. We executed a total of 3 renewals Towing, approximately 56,000, square feet, all of, which were at positive rent. Spreads, we are diligently working with the few remaining tenants, who leases expired in 2025, all of which are expected to renew. We're proactively working with our tenants on all of our 2026 expirations. We also continue to make progress on the funding of our mezzanine loans, for the development of a brand new 60,000 square foot, inpatient Rehabilitation facility and a 60,000 square foot Behavioral Healthcare facility. Since our update last quarter, we have received the origination fee and begun funding. The development of the behavioral facility as previously disclosed. We expect both mezzanine loans to be completely funded by the end of the third quarter.
These lines provide the company with strong risk, adjusted returns during the development period, while creating future pipeline opportunities, with purchase options for cila for each facility upon completion of construction.
Seles philosophy of investing in net lease necessity based Healthcare infrastructure. Run by operators, that deliver positive outcomes in convenient locations remains unchanged.
All along the healthcare Continuum and are largely priced within a, within a 6 and a half to 7 and a half percent cap rate range.
As we look forward, our team members remains focused on sourcing high-quality investment opportunities that fit well, within the sea standard, this concludes our prepared remarks, we will now move on to your questions.
Thank you, ladies and gentlemen, we will now begin the question and answer session. Should you have a question please? Press the star followed by the 1 on your touchtone phone, you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process? Please press the star followed by the
If you are using a speaker-phone, please leave the handset. Before pressing any Keys 1 moment, please for your first question.
Your first question comes from Nate Crosset from BNP. Please go ahead.
Hey, good morning.
Uh just on the 70 million. Louis can you kind of tell us, you know what types of assets are those? Um you know, what is the pricing kind of look like that we should expect.
And just outside, what's under L? I would like kind of look like for the back half of this year.
Sure, um Nate uh, this is Michael, thank you for joining today.
As we mentioned we have um 7 million dollars of uh additional property under exclusive Loi. Uh in addition to that, I'll just mention to you. We have a number a number of interesting uh opportunities as well that we're looking at, that could be possibilities for now and your end.
Particularly those properties that are under uh acquisition uh that we're doing the due diligence on that were mentioned, are consistent with the property types that we currently own.
From a cap rate perspective, the cap rate uh guidance that we have given uh has been generally speaking from the low 6 is to the mid 7th in this uh these this these particular properties fall into more of the upper-end range of what I described. Um, in terms of cap rate, I would also mention, um, the least duration on those properties is very long and we'll have a very beneficial effect to our remaining average lease term in the overall portfolio and also have lease escalators that are consistent and generally speaking with what's also in the portfolio.
Okay. Uh, just just so I heard it, right, it's 70 million, right? It's not 7.
Oh, I apologize. Yes, slightly over 70 million dollars. Correct. Okay, okay, okay okay. Yes yeah, this is a difference. Um, can you just maybe I guess you kind of change the buyback too, right to be 3 years. I think it's what capital 25 million a year.
No, just given your comments on pricing for this 70. How do you view?
I don't know, maxing out to 25. I'm back this year.
As we mentioned historically we view the share of purchase option to be a tool in the toolbox. And as mentioned, we acquired a little bit over 7 million dollars worth of our shares at an average price of uh, just over $24.24 and 9 cents per share. Uh, in the quarter, uh, we had previously the board had previously approved up to 25 million in share of purchases uh, for a 12-month period. And so what the board has now approved is up to 75 million in share of purchase over a 3-year period, capped at 25 million per year. And so as we see an opportunity, uh, potentially, uh, with the share price being dislocated from private Market values, uh, we will consider that. Um, we did mention our bias is to of
Grow the portfolio. What? I just also want to mention to you about the sheriff purchases that did occur in the quarter. Um, those, oh occurred at a level that we believe, uh, is well over 150 basis points in disconnect, between private Market values relative to where we, uh, saw the value of the company at the time we were purchased those share. So pretty significant differential um, of any of our intrinsic value the way we see it relative to where we bought those shares.
Okay, uh no, that's helpful. Um, just the last 1. Is there anything
On, uh, the watch list or tenant issue that we should be tracking or be aware of.
I would say nothing, nothing material. Um, I would just mention, um, just from a watch perspective, we address Stodden as, you know, on this call, I would I would consider that to be on the watch list, but we've got a very clear strategy around that, and I would also mention, uh, which we did publicly disclosed that, um, Landmark hospitals of which we own 1 property, they're a elac operator is in bankruptcy still, however, they've been current on all of our, uh, all of their obligations to us which is really just rent, uh, During the period of the bankruptcy and our particular property continues to perform very well and cover its rent. And we are hopeful in anticipating that they may emerge from bankruptcy. I would say roughly over the next 60 days and uh, with either potentially a recapitalized sponsor, uh, or with a new sponsor of that property. But we feel good about, uh,
The lease that exists there in terms of that being continued to be assumed and in place.
Okay, thank you. I'll leave it there.
Thank you, Nate.
The next question comes from Michael Lewis from truist security. Please go ahead.
Uh, great, thank you on on Stalin. Um, I would have thought demolition would have been really quick, although, I guess, um, we're getting close to the end closer to the end of the year than I, than I realized. Um, any sense on how long it would take to entitle it and have that uh, land ready to go to market for sale?
I'm Michael, thank you for joining today. Um, the demolition, uh, takes some time because it's about 180,000 square foot building. I would also tell you that, um, you know, just going to the market and getting bids to do such a fairly large project, which is the demolition of this, um, has taken some time. Um, we certainly wish it was a shorter time frame. Um, I would also mention, uh, there is asbestos in the building, so the asbestos in the building, some of it will be removed prior to the demolition. Um, so it will take, I'm giving you a rough time frame. We mentioned uh, it should be completed towards the year end as we are starting now. Um, you know, it is about a call it 5-ish 455 a month process. Um, in terms of entitlement, we've actually been working and talking to various Partners on the entitlement. I would also mentioned to you that we have had uh multiple occasions of direct.
Direct dialogue with the town of Stoughton at various levels about entitling the property. And uh those have gone those conversations have gone very positively because the town of Stodden would like to have some, I would say revitalization of that property. Uh, from what it was, it's a large land parcel, but the entitlement process, uh, will take sometime. We think it may take us into 2026, uh but I would tell you the reason we are taking this tact first and foremost demolition to reduce the carry costs on the building, which will be I think we said majority it's going to be substantially reduced in terms of those carry costs that we've disclosed uh per month really to just substantially real estate taxes. As that building is taken down. In addition to that, um, the value that we will realize that we expect to realize I should say uh from Simply selling it today. As is
To, uh, an entitled property, uh, is going to be, uh, what we believe will be significantly greater and benefit our shareholders.
Great. And then on the stock repurchases, you know, how do you measure your, your cost of equity or the value of those free purchases, when you compare it versus acquisition yields? Because, you know, you repurchase that 24 dollars, that's that 25 today. I think, you know, by our message, you're still a a materially better.
Better yield on the buybacks than on acquisitions, although I realized, you know, the acquisitions, um, will have growth and some permanency. But I guess the question is, you know, how do you measure it and decide to do the buyback versus the acquisitions? Um, given, you know, your stock is still discounted.
BuyBacks obviously are just a economic play and uh, we're not getting the benefit of that growth that diversification of the portfolio. And the way we are evaluating it is, we want to see a disconnect. I would say relative to what we view any to be or the intrinsic value of the company of at least 100. And as I mentioned, this was well over 150 basis points relative to where the private Market trade is. So your correct in saying, um, share BuyBacks, um, from a economic perspective, um, or advantageous to the company and increase our nav and therefore shareholder value. We agree with that. And that's why the board approved, um, this program and we'll use it selectively and um, when we think it's appropriate. So I think that our approach is really a combination of the 2 with our, you know, cash available that we've got
Okay. Um, the core portfolio is 99% at least. Are there any um, of the any lease expirations or anything? That looks like it might change that in the near term, anything you see on the horizon.
Yes, let me, let me say that. Um, we've done a fantastic job. Uh, so far this year with our 2025 lease expirations and we expect to renew, uh, all. But 1 of our scheduled 2025 lease expirations also mentioned that for 2026, the way we see it. Today, we have been in touch with every tenant who expires in 2026 and we are optimistic that we are going to be able to, uh, renew all of those tenants as we sit here today. Obviously things can change. But we're optimistic about 2026, which has about 3.8% of our ABR expiring this year, by the way, it was about 4.6% of our ABR expiring. We had 1 Tennent, um, that we don't expect to renew it accounts for about 8,000 square feet uh of the portfolio. So relatively small of our total over over uh over uh 5 million square foot portfolio.
Um, in terms of other vacancies this year, uh, we had 1 Tennent, uh, relatively small in a building in Tucson. It's a multi-tenant building. It was a doctor who, apparently, by the way became ill, uh, from Co related, uh, you know, challenges, uh, he paid all of his rent through last year. The lease remained in place this year, and it was only about 2,000 feet.
By the way that became uh, available this year, uh, 1 other property as well in California, uh, which accounted for slightly under 7,000 ft, uh, it was a Genesis care related facility. Uh, the Physicians couldn't really make the property work. They were a former Genesis care physicians and, um, that property. We had a hell of a security deposit. We've applied it to ongoing rent, but that building will be available for uh, sale or lease. So when I total all of that up, we had 8,000 of expiring lease, that we did not renew relatively small, obviously, for the year scheduled for this year.
And then from the perspective of getting space back uh I mentioned to doctor with a couple thousand feet of exposure and our multi-tenant Tucson building.
And then a whole building for slightly under 7,000 square feet, 6,900 square feet. Roughly speaking in the California Market.
Palm Desert, okay.
I appreciate all the detail. It's, uh, it's a small exposure. We'll call it, um, small. But, you know, I want to be transparent with you. We've been very successful overall, you know.
Yeah.
Yeah. So, uh, my final question and maybe this is a question as much for me as, as for you and and not easily answered. But you know, we see read sometimes that get, you know, an attractive cost of equity capital and are kind of Off to the Races and others that, you know, sometimes don't ever get that green light. You know, what do you think it is that you need to show to kind of get this cost of equity, you know where it should be and you know, our investors telling you directly what they what they would like to see or need to see
Again, that's a question for you as well as us, right? Um, what I would say, what I would say is, um,
You know, clearly folks don't know the company. Uh, initially because we didn't do an IPO, we did a direct listing, we did not want to dilute our shareholders, uh, because we didn't need to
um,
we needed to get a few quarters under our belt of steadiness. And I think when I'd like to think, when you look at the results of this quarter, um, you can see that we're doing all the right things, whether it's on the acquisition side, whether it's on the leasing side, um, whether it's as we're dealing with, you know, issues that have come up in Prior quarters, uh, like the stoen asset for instance or Genesis care last year.
Uh, I think we're really hitting our stride in terms of also, ability to grow the company, as you can hear the year to date Acquisitions. Uh, the post quarter closing that Chris referred to, as well as the properties, we have under contract. So I feel like, uh, over the next few quarters if we can demonstrate to the market, this consistency then, uh, we should see that recognition in our share price, which is what you're referring to.
From a numeric perspective. Um, after we acquire to the extent we're successful in meaning, we just get through deal, due diligence on this 70 million, we'll have the ability to acquire another hundred million dollars worth of property to just get to the very low end of
Our Target leverage range. Before we start thinking about raising Capital, so that's the 4 and a half times debt to ibida.
To get to the higher end of that range, which is 5.5 times debt to EBITDA, we can acquire again, after this $70 million, another $260 million. So, what I'm referring to in total is we have another $360 million of capital that we can use to either acquire property or buy back stock, whatever makes the most sense. It's probably a combination of the two, to the extent that our share price doesn't, you know, uh, we don't see, you know, some significant movement there to bring value to our shareholders. So,
Our goal is to get the share price up to grow the company. We do think we're a differentiated strategy in the healthcare and the net lease space. And we certainly want the investing Community to recognize that. Uh, so we think we've got all the right elements today. The portfolio is very strong where tremendously liquid today in terms of the capital that we have and we're just starting to hit our stride.
Sounds good to me. Thank you.
You're welcome. Thank you for joining Michael.
The next question comes from Rob Stevenson from Jenny.
Please go ahead.
Good morning, guys. Um, what is it going to cost you to demolish the Stone facility, and are those costs going to run through the income statement?
The cost will run as approximately 1.9 million and that's inclusive of any asbestos uh abatement that we have to do prior to the demolition. I'll let K address how it will be treated. Uh, from a financial perspective in terms of our balance sheet and income statement
Hey Ron. Um, so that amount will flow through it, you know, given the amount. Um you know it may have its own per se line item on our income statement as it comes through. Just depends how this is coming through over the next, you know, 4 or 5 months.
Um, but we consider that to be a, um, non-recurring unusual type expense. And so we would add that back for core or normalized FFO, which would also then, uh, flow through as an add back to AFO.
Okay. And can you remind us what the current carry costs are on a monthly or quarterly basis on that? And what you expect that to be once the demolition is complete
Yes.
So we had previously, um, I think said that we estimated roughly around 120,000 dollars a month and that will that has fluctuated a little bit. It was slightly less this quarter um just because of lumpiness of various repairs and maintenance, for example, um, just to keep the building, you know, safe, while it's while it's currently up. Um, those costs will ratchet down, you know, each month and then we believe the kind of run rate carry, which will really see the benefit of in 2026, when it's fully demolished to be around 20 to 25,000 a month.
Okay. All right. So that's material enough to put penny a share or so.
um, and then
Michael Oher Chris. What's the current thinking for entitlement there for sale for rent residential? Mixed use. What's your latest thinking? And what does the town want to see in your conversations with them?
Great question. Rob, I would tell you to to a degree of the world or oyster in terms of that. And the in the town views it that way as well. They want to see a a new building there. They want to see uh a use which fits in uh to the community there. Um, the highest and best use probably involves some kind of residential, meaning multi family. Um, it may or may not have a component of of call it. Some subsidized housing, it could just be Market rental, it could have a component of senior housing, the site itself is quite big. Um, so I would tell you, for us, we want to maximize value naturally. Um, from the town perspective, I think they see it. Uh, similarly, in terms of the use, uh, and just having a new attractive property there that they view to be kind of a Destination type location.
Okay, that's helpful and then K. If you do close the 70 million or possibly more of Acquisitions, um, in the coming months, how are you thinking about financing that over the intermediate term? I assume it gets put on the line initially but does it stay there until rates come down? Do you do something in 2025 with term loans? Or is there some other debt that looks attractive to you? At this point, how are you sort of thinking about, you know, beyond just a closing funding but the sort of more intermediate term funding.
Um, I think you know for now. Yes, we would use our revolver to fund the Acquisitions. Um you know, it remains to be seen what ultimately happens with interest rates as you know, that's a Hot Topic daily um with with uh, with the fed and the economy. Um but uh, since we don't have anything, um, and I think we talked about this last quarter a little bit robbed. We don't have any looming maturities. You know, we do think perhaps our next, um, form of debt would be longer term debt in a private placement, but I would not call that imminent.
And then, obviously, as our um,
You know as our leverage ticks up and if you know we do in fact like our share price, we you know, can can tap the equity markets. Um
To do ever as well. So um, but the revolver for the short to medium term
Okay. And then last 1 for me, Michael just curious as to what the thinking is of the board and putting that sort of 25 million, you know, whether or not it was in the 1 year program or now, on an annual basis on the 3-year program. Governor on the program, they worried that K and Miles were going to go wild on repos.
I, I think the board has a view that they would that that we have a unique platform here, um, that we are scaled to grow. Um, the board of course, is very supportive of the strategy. And there we we've seen obviously a pretty quiet Market just generally speaking in the commercial real estate market in in the capital markets right over the last 3 years and I think they view um, our business strategy to be very sound, um, and have a lot of legs to it. So I think the board wants to give the tools to us to be nimble, um, but they also want to see an opportunity to see this company grow,
Okay. Thanks, guys. I appreciate the time this morning.
Thank you for joining Rob.
There are no further questions at this time. I will now turn the call over to Michael Seton. Please continue.
I want to once again, extend my sincere, thanks to the entire team at, cos the hard work and dedication continue to drive our success, on our leadership, team and board of directors. We deeply appreciate the support of our shareholders, and we will do everything in our control to ensure that CLA remains a sound investment opportunity for both existing and future shareholders. Thank you all and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.