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Global Medical REIT
-6.75%
Real estate / REIT Net-lease medical office
Risks
We are dependent on our tenants for our revenues. Our tenants face a wide range of business risks, including economic, competitive, government reimbursement and regulatory risks, any of which could cause our tenants to be unable to pay rent to us.
We finance most of our portfolio with debt from our credit facility. We are subject to the risks associated with floating-rate debt, including the potential of an increase in our interest expense, borrowing capacity limitations and covenant restrictions.
Our assets are concentrated in healthcare-related facilities, making us more economically vulnerable to specific industry-related risks than if our assets were diversified across different industries.
The inability of any of our significant tenants to pay rent to us could have a disproportionate negative affect on our business.
Most of our healthcare facilities are occupied by a single tenant, and we may have difficulty finding suitable replacement tenants in the event of a tenant default or non-renewal of our leases, especially for our healthcare facilities located in smaller markets.
Our and our tenants’ businesses could be materially and adversely affected in the case of a resurgence of the COVID-19 pandemic or a new outbreak of a COVID-19 variant or a different virus.
We have significant geographic concentration in a small number of states, including Texas, Florida, Ohio, Oklahoma, Pennsylvania, Arizona, and Illinois. Economic and other conditions that negatively affect those states and our tenants in those states could have a greater effect on our revenues than if our properties were more geographically diverse.
We rely on external sources of capital to fund future capital needs, and, if we encounter difficulty in obtaining such capital, we may not be able to make future acquisitions necessary to grow our business or meet maturing obligations.
Subject to certain requirements under Maryland law and REIT requirements, the Board has sole discretion to determine if we will pay distributions and the amount and frequency of such distributions, and past distribution amounts may not be indicative of future distribution amounts.
Failure to remain qualified as a REIT would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distributions to our stockholders.
1. Interest rate fluctuations: Interest rate fluctuations can affect Global Medical REIT's financial performance and ability to acquire, finance, and develop more medical real estate assets.
2. Regulatory environment: As a publicly-traded REIT, Global Medical REIT is subject to regulations and laws governing REITs. Changes in the regulatory environment could have a negative impact on its operations.
3. Competition: Global Medical REIT faces competition from other health care real estate companies, which could lead to pricing pressure or difficulty in acquiring assets.
4. Leverage risk: Global Medical REIT finances its acquisitions using debt, which increases the company's exposure to leverage risk. If the company is unable to service its debts, it could lead to insolvency or bankruptcy.
5. Property risk: As a REIT that owns medical real estate, Global Medical REIT is exposed to property risk including occupancy levels, tenant credit risk, and obsolescence.
6. Risk of inadequate diversification: Global Medical REIT has a concentration risk related to its real estate portfolio and a reliance on a single tenant tenant might expose the company to excessive risk.
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