Community Healthcare Trust Incorporated (NYSE:CHCT) Q4 2022 Earnings Call Transcript

Dave Rodgers : Great. Appreciate that. And then the last question, maybe a little more nuanced. Obviously, Tim is instrumental in kind of sourcing your acquisitions and the relationships that he has and something obviously investors are going to focus on as well. So curious if you can give us a little bit more detail on just kind of the breadth of the relationships across the company that you guys have with the partners and in creating new partners just to assuage any potential fears obviously of Tim not being there for some period of time.

Dave Dupuy : Yeah. No, I appreciate that. I understand that. What I would say is over the last four years, Tim has very intentionally added to the team. And so we have a VP of Investments who isn’t — doesn’t join these calls but is very engaged in our business development activities. It’s really him and Tim Meyer and myself that are — have these relationships, and they are spread across the organization. But we’re very focused and continue to see a lot of activity from an acquisition standpoint. And listen, as a company that is a growth-oriented company as we are, where AFFO growth and FFO growth are critical, we’ve just been very focused on making sure that those relationships that you highlight are institutionalized. And to Tim’s credit, he’s done a good job of getting us all involved in that process.

And so while there’s absolutely a gap, and we definitely want Tim to come back as soon as he can, I feel like we are in a situation where we continue to be engaged with the folks that we’ve historically been engaged with, that have been good at providing opportunities for acquisitions for us. And I really — hopefully, everyone sees, we continue to see — be very busy from an acquisition standpoint and from a pipeline building standpoint in the business. And so that, I think, will continue. And I think it’s going to be up to us to fill that void, but I think we’ve got the right team in place that can do that.

Dave Rodgers : Okay, thank you.

Dave Dupuy : Thank you, Dave.

Operator: The next question comes from Steve Sakwa of Evercore ISI. Please go ahead.

Steve Sakwa : Yeah. Thanks, good morning. Dave, yeah, please send our what best wishes to Tim and hope he’s back.

Dave Dupuy : Thanks, Steve.

Steve Sakwa : So a lot of my questions have been asked. I just wanted to maybe focus back on the leasing, and you talked about the 93%. I’m just curious, for the leases that are kind of turning over in ’23 and maybe ’24, what sort of pricing power you guys see on the renewals or on the new leasing front. I’m just trying to get a better handle on contractual rent bumps and what happens as leases turn or rents kind of going up, down, flat on, say, the ’23 and potential ’24 expirations.

Dave Dupuy : Steve, thanks for the question. I appreciate it and understand that. What we’re seeing is it’s very market specific in terms of whether those rates are going up or coming down slightly. But it’s — I would also say that, in general, it’s about consistent. We aren’t seeing in our markets a significant difference between where our lease rates are and where the market lease rates are in general across all of our markets. So we’re seeing some where we’re getting better rates. We’re seeing some where we’re getting lower rates. But it’s just very market specific. And frankly, some of the dynamics that — and building specific, too. And so that’s why we’re investing in our buildings to try to get those buildings ready for new tenants.

And so it’s a — I would say it’s, in general, I don’t think we’re seeing any significant variance one way or the other. I don’t think we’ve got incredible pricing power in our buildings, but I don’t think we’re seeing a significant — any significant roll downs. It’s basically market is where we’re at.