Sila Realty Trust’s Earnings Call Highlights Growth and Strategy

Sila Realty Trust, Inc. ((SILA)) has held its Q2 earnings call. Read on for the main highlights of the call.

Sila Realty Trust’s recent earnings call conveyed a generally positive sentiment, highlighting the company’s robust financial performance and strategic growth initiatives. Despite facing some challenges, such as the demolition of the Stoughton asset and a decline in AFFO due to increased interest expenses, the company remains optimistic about its growth trajectory. The management expressed confidence in their strategic share repurchase program and their ability to maintain a high portfolio occupancy rate, supported by a strong liquidity position.

Strong Financial Performance

Sila Realty Trust reported a cash NOI of $41.9 million, marking a 1.7% increase from the first quarter of 2025 and a 5% rise from the second quarter of 2024. This growth was primarily driven by acquisition activities and a same-store cash NOI growth of 1.5%, underscoring the company’s effective financial strategies.

Successful Acquisitions

The company has successfully closed approximately $75 million of high-quality acquisitions year-to-date, with over $70 million of properties under exclusive letters of intent. Notable acquisitions include the Dover Healthcare facility and a two-property medical office building portfolio in Southlake, Texas, reflecting Sila’s strategic expansion in the healthcare sector.

High Portfolio Occupancy

Sila Realty Trust’s portfolio lease percentage increased to an impressive 99.2%, driven by strong leasing momentum and positive rent spreads on renewals. This high occupancy rate highlights the company’s effective asset management and leasing strategies.

Strong Liquidity and Capital Position

The company ended the quarter with $568.8 million in liquidity and a net debt-to-EBITDAre ratio of 3.6x. With an AFFO payout ratio of 74%, Sila Realty Trust demonstrates a solid capital position, providing a strong foundation for future growth.

Strategic Share Repurchase Program

During the quarter, Sila executed over $7 million in share repurchases at an average price of $24.09 per share. The Board has approved a three-year share repurchase program for up to $75 million, reflecting the company’s commitment to enhancing shareholder value.

Stoughton Asset Demolition

The demolition of the Stoughton asset is underway due to vacancy, with completion expected by the end of the year. While this results in a cash net operating loss, it is part of the company’s strategy to optimize its portfolio.

AFFO Decline Year-Over-Year

Sila Realty Trust reported a 2.7% year-over-year decline in AFFO, primarily due to increased interest expenses related to acquisition activities. Despite this, the company continues to focus on strategic growth and value creation.

Tenant Bankruptcy

Landmark Hospitals, a tenant operating long-term acute care hospitals, is currently in bankruptcy. However, they have remained current on rent obligations, and the property continues to perform well, mitigating potential risks to Sila’s portfolio.

Forward-Looking Guidance

Looking ahead, Sila Realty Trust remains focused on necessity-based healthcare solutions, leveraging its strong balance sheet to pursue growth opportunities. The company aims to maintain its impressive EBITDARM coverage ratio of 5.31x and a portfolio weighted average remaining lease term of 9.5 years. With a robust dividend payout ratio of 74% and ongoing strategic acquisitions, Sila is well-positioned for continued success.

In summary, Sila Realty Trust’s earnings call reflects a positive outlook, with strong financial performance and strategic initiatives driving growth. Despite some challenges, the company’s robust liquidity position, high portfolio occupancy, and strategic share repurchase program underscore its commitment to enhancing shareholder value and pursuing sustainable growth.