Physicians Realty Trust (NYSE:DOC) Q4 2022 Earnings Call Transcript

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John Thomas : Dave, those are all great questions. Hope is not a strategy or we not depend upon RFPs to find assets or work with health systems. Those tend to be auction type processes where there’s always some low bidder that you don’t want to compete with. Not that we couldn’t. And so I think the 200 million is active discussions with health systems. Last year when both supply chain and inflation was going up, you couldn’t get a construction, a contractor to give you a quote on contract to build a building that was good for more than a day. I mean, historically you get a bid and 90 days later, 180 days later, it was still a good number. So last year, a lot of the projects we’re working on are still there and that’s the confidence in that $200 million number is some of those projects that are carrying over, and we the health system that positions, we’re waiting on some stability, stabilization in the construction, and also the timeline with supply chain and other things that are beyond everybody’s control.

And so, numbers are coming in today, we’re proceeding with some projects that we thought would begins construction in the fourth quarter, but the tenant, the capital, us, the contractors, all have more stability today than we had three months ago. And frankly, that’s going to create much more long-term value for us by that short delay in those — on those projects. So we’ll be breaking ground in the next 30 days on projects that we’ve been working on for a couple of years. So we feel really confident in that number going forward and we see a lot of more opportunity in that space.

Dave Rodgers: All right, great. Thank you.

Operator: Your next question comes from Steven Valiquette with Barclays. Please go ahead.

Steven Valiquette: Great. Thanks. Good morning, everybody. So, I guess not to get too granular on the same-store OpEx that was up 9.8% in the fourth quarter, but I guess to flip the narrative around here a little bit with the one-time insurance cause that you mentioned you absorbed in the fourth quarter that makes the favorable 0.5% sequential decline in OpEx, I should be little more impressive. So I guess with the assumption that the insurance costs were probably up sequentially in 4Q versus 3Q just remind us, which cost categories actually improved the most sequentially. And then also, were there any seasonal factors worth mentioning one way or the other that may impact that favorable sequential comparison on the OpEx? Thanks.

Mark Theine: Yeah, Steven. This is Mark. Thanks for pointing that out. I should have mentioned that earlier, but we’ve done a great job sequentially keeping our operating expenses actually declined a little bit. Contributing to that sequential change utilities was a large contributor quarter-over-quarter and actually a decrease in holding that relatively flat and same with general maintenance category there, year-over-year those were — those two categories were up about 700,000 and 600,000. But quarter-over-quarter, we did a great job with our asset management team to keep those flat. I think we’re also seeing the results of some of our ESG efforts in the utility expense from LED upgrades things like that, where we’ve made wise capital investments, and we’re starting to see that reduction in the operating expenses from some of those projects that we completed this year.

Steven Valiquette: Okay. And you mentioned that you don’t normally do those sequential comparisons, but again, I guess the reason why you don’t do that as they’re just some seasonality factors that just mucks that out sometimes, just curious any reminders on any seasonal factors on sequential comparisons either 4Q to 1Q, or just any other times throughout the year as far as any obvious ones that stick out?

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