We’ve positioned ourselves very well to be a high-growth net lease REIT and we’re following through on our promises to grow the company in a prudent manner. When the capital markets and timing of acquisitions put us in the best position to take advantage of what we believe to be a prodigious buying opportunity we will be confident in our choices to reenter the market for GIPR to capitalize on our opportunities. With that, I’m pleased to present Allison Davies, GIPR CFO, for her final update.
Allison Davies: Thank you, David. Last night, we issued a press release announcing our financial and operating results for the quarter. Total revenue from operations was $1.9 million as compared to $1.5 million in the prior year, primarily driven by rental income from the Modiv portfolio. Operating expenses for the quarter were $3.1 million, a $1 million increase compared to the same period last year, primarily due to an increase in depreciation and amortization expense from the assets acquired in addition to an increase in interest expense from the financing of the Modiv portfolio. Net operating income was $1.4 million as compared to $1.2 million during the same period last year, primarily driven by rental income from the acquisition of the Modiv portfolio.
Net loss attributable to both the common stockholders for the quarter was $1.8 million as compared to $639,000 for the same period last year, which is directly related to the income attributable to non-controlling interest of our new preferred equity partners. After adjusting for non-cash income and expenses, core AFFO was a loss of $29,000 as compared to income of $358,000 in the prior year, primarily related to an increase in interest expense previously discussed and offset by non-cash adjustment last year for the write-off of deferred financing costs. We believe our balance sheet is in good condition to continue to withstand the market uncertainty specific to commercial real estate that we’re experiencing. We have a healthy cash balance in our next mortgage maturity is and until 2024.
And finally, before I leave, I too would express my gratitude to GIPR and the Board of Directors. Thank you for the opportunity to be a part of this amazing company and team. While I’m looking forward to my next chapter, I will always appreciate my time at Generation Income Properties. Thank you, Dave.
David Sobelman : Thank you, Allison. With that, please open the call for questions.
Q – Michael Diana: Hi. Thank you. So Dave, you mentioned that the pipeline was very strong. Could you just give us some indication that like how many properties you’re looking at? And I know there’s always a lot going on behind the scenes.
David Sobelman : Yes, Michael, you’re right. I’ll give you some context of how we been looking at acquisitions through our investment committee. From January of 2022 to roughly July of — or August of 2023, we looked at about $2.3 billion in assets, and that was about 300 properties. And so we’re telling you that because we want to show that we have access to a tremendous inventory, potential inventory of net lease properties that fit our investment thesis. Of those 300 properties that we looked at over that period, we sent out offers on about $140 million worth, and we bought nothing because we couldn’t come to terms with the sellers of those properties. Therein lies our patients to purchase assets at the right price at the right time.
And so motive was the right properties, right portfolio of properties and at the right price at the right time. And our pipeline continues to be extremely robust, well above where we are now as a company in terms of number of assets and we feel like we can execute really well when the timing is right for that.
Michael Diana: Okay. Okay. Thanks. The dividend coverage of the dividend. Could you comment on that? And also how, if any, that would change if you redeem the preferred for common stock?
David Sobelman : Yes. Dividend coverage is of primary importance to us. We’re really looking at two main factors that are priorities for us going forward. One is coverage, like you mentioned. The other is adding assets altogether. And those correlate specifically with each other. So we need to continue adding assets in order to have 100% coverage. I can tell you, though, that the motive transaction did allow us to trend higher to 100% dividend coverage. So we’re really confident that additional acquisitions will allow us to cover in the future. And just to reiterate this point that is of utmost importance to us.
Michael Diana: Okay. And what would be the impact of redeeming the preferred for common.
David Sobelman: Yes. Redeeming the preferred like we stated — we stated — I’m sorry, like we stated in our remarks – sorry, we are just getting some feedback there. We are — as we grow the portfolio base, the motive transaction was a prime example of how to meaningfully grow that dividend coverage. And so it allowed us to kind of prove to ourselves that we will have an increase in potential float of about 100% and also, it will be a 20% reduction after the redemption of the preferred.
Michael Diana: Okay. Great. Thank you.
Operator: This concludes the Q&A portion of today’s call. I will now turn the call back over to Mr. Sobelman for final comments.
David Sobelman: Thanks, everyone. We appreciate you listening into GIPR’s earnings call, and have a great week.
Operator: You may now disconnect your lines at this time. Thank you for your participation.
