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5.9% Yielding Global Medical REIT Is An Under-The-Radar Buy

Mar. 08, 2021 9:33 PM ETGlobal Medical REIT Inc. (GMRE)17 Comments


  • GMRE is executing well in the current environment, demonstrating both top- and bottom-line growth.
  • Its secondary market focus results in less competition, and it's set to grow with the trend of increasing off-campus healthcare delivery.
  • It also internalized its management last year, resulting in better alignment of interest with shareholders.

Healthcare REITs come in all shapes, sizes, and forms. While the "big boy" REITs like Welltower (WELL) and Ventas (VTR) get most of the attention, I see value in smaller, more nimble REITs, such as Global Medical REIT (NYSE:GMRE) that fall under the radar.

GMRE's share price has been relatively flat over the past 6 months, rising by just 4%, while the bigger healthcare REITs have rallied. I evaluate what makes GMRE a good buy at present, so let's get started.

(Source: Company website)

Why GMRE Is A Buy

Global Medical REIT is a net-lease healthcare REIT that focuses on sales and leasebacks with leading health systems and physicians groups in secondary markets. Its property types include MOBs (medical office buildings), inpatient rehab facilities, surgical hospitals, and acute care hospitals that are under long-term triple-net leases.

GMRE currently owns 139 properties that are leased to 115 tenants, with a gross real estate asset value of $1.14B. It also has a long weighted average lease term of 8.2 years with an average 2.1% annual rent escalations. As seen below, GMRE's properties are well-diversified geographically, with exposure to nearly all regions of the U.S.

(Source: January Investor Presentation)

GMRE demonstrated that it can continue profitable growth in the current environment, with Q4'20 FFO/share growing by 5% YoY, to $0.22, and AFFO/share growing by 15% YoY, to $0.24. I'm also encouraged by the 7.1% YoY increase in ABR (annual base rent) on renewed leases during the quarter, as this speaks to the continued desirability of its properties and locations.

I see GMRE's strategic focus on secondary markets as being a favorable one, as it is one of the few institutional players to do so. Community Healthcare Trust (CHCT) comes to mind as another such REIT with a similar focus. This results in far

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I'm a U.S. based financial writer with an MBA in Finance. I have over 14 years of investment experience, and generally focus on stocks that are more defensive in nature, with a medium to long-term horizon. My goal is to share useful and insightful knowledge and analysis with readers.  Contributing author for Hoya Capital Income Builder. 

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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