Sila Realty Trust, Inc. Begins Trading on the New York Stock Exchange

Rhea-AI Summary

Sila Realty Trust, a net lease real estate investment trust (REIT), has officially begun trading on the New York Stock Exchange under the ticker symbol SILA. The company, which specializes in high-quality healthcare properties, marked the occasion by ringing The Opening Bell at the NYSE. With a portfolio valued at over $2.1 billion and a net debt leverage ratio of approximately 20.5%, Sila aims to leverage this public listing to expand its diverse array of healthcare assets. The company boasts a strong financial position with $590 million in liquidity and $500 million available under its revolving credit facility. Sila's portfolio includes 137 properties with a high occupancy rate of 99.2% and a weighted average lease term of 8.4 years. The company’s strategic focus on net leased assets and institutional-quality properties positions it advantageously in the growing healthcare sector. Executives emphasize that becoming publicly traded will facilitate access to capital markets, fostering further growth and enhancing shareholder value.

Positive

• Sila Realty Trust began trading on the NYSE, enhancing visibility and access to capital markets.
• Portfolio valued at over $2.1 billion, indicating a strong asset base.
• High-quality tenant base including reputable healthcare operators like Cleveland Clinic Foundation.
• Maintains liquidity of $590 million, ensuring strong financial flexibility.
• Net debt leverage ratio stands at approximately 20.5%, indicating controlled debt levels.
• 137 high-quality properties with a high occupancy rate of 99.2%.
• Weighted average lease term of 8.4 years provides long-term revenue stability.
• Focus on healthcare properties in high-demand markets, positioning well for sector growth.
• Strong balance sheet with $500 million available under revolving credit facility.
• Experienced management team and robust platform for growth.

Negative

• The direct listing model may pose risks, as it forgoes the traditional IPO capital raise.
• High dependency on the healthcare sector, which can be affected by regulatory changes.
• The net debt leverage ratio of 20.5% still implies some level of debt risk.
• Potential for increased competition in the high-demand healthcare property market.
• Market volatility could impact stock performance, especially as a newly listed company.

Insights

Financial Analyst

Sila Realty Trust's direct listing on the NYSE is significant as it provides the company with access to equity capital markets, enhancing its financial flexibility. This is especially important as Sila operates in the healthcare sector, which has shown resilience and growth potential. With approximately $590 million in liquidity and a $2.1 billion portfolio, Sila is well-positioned to attract investor interest. Its net debt leverage ratio of 20.5% is relatively low, indicating a strong balance sheet. This strategic move allows them to bypass the traditional IPO route, which can be expensive and time-consuming. Investors should consider the long-term potential of Sila's focus on net lease healthcare properties, which tend to have stable cash flows due to longer lease terms and high occupancy rates.

Healthcare Market Analyst

Sila Realty Trust’s entry as the only net lease REIT focusing solely on healthcare properties provides a unique value proposition. The healthcare sector is experiencing demographic tailwinds, such as an aging population driving demand for healthcare services. Sila’s portfolio includes high-quality assets with a weighted average lease rate of 99.2% and a notable percentage of tenants with investment-grade credit. This mitigates risks and provides stable rental income. Furthermore, Sila's disciplined capital allocation strategy and focus on high-demand markets ensure they can sustain growth even in economically constrained environments. Retail investors should appreciate the added security that comes with investing in a specialized REIT with robust lease agreements and a strong tenant base.

REIT Specialist

As a net lease REIT, Sila Realty Trust offers specific advantages, such as longer lease terms averaging 8.4 years and a high occupancy rate. Net lease REITs often provide more predictable income streams, which can be less volatile than other real estate investments. Sila’s strategy to invest in healthcare properties aligns well with the sector's growth and stability. The company's strong governance and stockholder-first approach further enhance its appeal. Investors should note the potential for dividend growth, given the company’s prudent payout ratio and financial strength. The successful NYSE listing not only validates Sila’s business model but also opens opportunities for future growth, making it a compelling addition to a diversified REIT portfolio.

Enters Public Markets as a Net Lease REIT Focused Solely on High-Quality Healthcare Properties

TAMPA, Fla.--(BUSINESS WIRE)-- Sila Realty Trust, Inc. (NYSE: SILA) (“Sila”, the “Company”, “we” or “us”), a net lease real estate investment trust (“REIT”) with a strategic investment focus on the significant, growing, and resilient healthcare sector, today announced that its shares of common stock have been listed and commenced trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “SILA.” The Company celebrated its direct listing by ringing The Opening Bell at the NYSE.

“Becoming a publicly traded company listed on the New York Stock Exchange marks a great milestone for Sila Realty Trust,” stated Michael A. Seton, President and Chief Executive Officer of the Company. “This achievement would not be possible without the diligent work of our outstanding team, our tenants, and our longtime stockholders who have supported us through the years.

“We strongly believe that our existing institutional quality and diverse portfolio of healthcare properties, along with our strategy of investing in net leased assets to leading operators along the continuum of the healthcare delivery system, provides investors with a differentiated opportunity in the REIT space. Becoming publicly traded on the NYSE will provide the Company with future access to scale capital through the public equity markets, which, we believe, will allow the Company to further grow its robust and diverse portfolio of healthcare assets, and, consequently, enhance value to our stockholders.”

We believe Sila is public company-ready with an experienced, cycle-tested management team. Together, the Company has amassed a diversified portfolio consisting of over $2.1 billion of high-quality properties associated with some of the largest and most reputable healthcare operators in the country, including Post Acute Medical, LLC; Baylor, Scott and White Health; Tenet Healthcare Corporation; and Cleveland Clinic Foundation.

Sila maintains a strong balance sheet with approximately $590 million in liquidity and a net debt leverage ratio of approximately 20.5%, as of March 31, 2024. With a disciplined and accretive approach to capital allocation and $500 million available under its revolving credit facility, Sila has the financial flexibility to pursue a direct listing on the NYSE rather than raising capital through a traditional initial public offering. We believe Sila’s strong financial position is a competitive advantage in executing its growth strategy in the current capital-constrained economic environment.

Sila enters the public markets as the only net lease REIT focused solely on high-demand healthcare properties. This is an important distinction that, we believe, allows Sila to benefit from tailwinds of the growing healthcare sector while delivering the portfolio metrics of net-lease REITs, including longer lease terms, lower leverage profiles, and higher portfolio occupancy. Sila focuses on properties in markets across the U.S. where favorable demographics, strong economies and healthcare demand are growing rapidly. Including our latest acquisition in May, Sila’s current portfolio consists of 137 high-quality properties, including medical outpatient buildings, inpatient rehabilitation facilities, and surgical and specialty facilities, that are critical to their operators and the communities which they serve. These relationships support a secure and diversified tenancy. As of March 31, 2024, the Company had an attractive weighted average lease rate of 99.2%, with 64.3% of its tenants, guarantors or affiliates having rated or investment grade rated credit. As a net lease REIT, Sila has longer lease terms with a weighted average remaining lease term of 8.4 years.

With a robust platform of dedicated in-house acquisition, credit and research underwriting, and investment management teams, we believe Sila has ample capacity to scale and grow to over $3 billion in enterprise value with its existing staff and platform.

The Company has long maintained a stockholder-first mentality and has a track record of stockholder-friendly initiatives, contracted rent escalators, attractive returns, and a commitment to strong corporate governance with a highly credentialed and diverse board of directors. Sila maintains an appropriate payout ratio for ample dividend coverage and opportunistic growth.

Mr. Seton concluded in describing the Company’s name and values, “The name Sila (pronounced See’-lah) translates from many languages into inspiring words such as strength, permanence, reflection, and unity – words that we strive to live up to each day for the benefit of our stockholders and our tenants.”

Wells Fargo Securities acted as financial advisor to the Company. Holland & Knight LLP served as general counsel to the Company. Venable LLP served as Maryland counsel and tax counsel to the Company.

About Sila Realty Trust, Inc.

Sila Realty Trust, Inc. is a net lease real estate investment trust headquartered in Tampa, Florida, with a strategic focus on investing in the significant, growing, and resilient healthcare sector of the U.S. economy. The Company invests in high quality healthcare facilities along the continuum of care, which, we believe, generate predictable, durable, and growing income streams. Our portfolio comprises high-quality tenants in geographically diverse facilities which are positioned to capitalize on the dynamic delivery of healthcare to patients. As of March 31, 2024, the Company owned 136 real estate properties and two undeveloped land parcels located in 64 markets across the U.S.

Forward-Looking Statements

Certain statements contained herein, other than historical fact, may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provided by the same. The forward-looking statements contained herein, including statements relating to the Company’s future access to capital, portfolio growth, enhanced stockholder value, and capacity and growth of its enterprise value, are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties. No forward-looking statement is intended to, nor shall it, serve as a guarantee of future performance. You can identify the forward-looking statements by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar terms and phrases. Forward-looking statements are subject to various risks and uncertainties and factors that could cause actual results to differ materially from the Company's expectations, and you should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company's control and could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events. Additional factors include those described under the section entitled Item 1A. "Risk Factors" of Part I of the Company's 2023 Annual Report on Form 10-K with the SEC, copies of which are available at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240613759413/en/

Investor Contact:

Miles Callahan, Senior Vice President of Capital Markets and Investor Relations

833-404-4107

IR@silarealtytrust.com

Source: Sila Realty Trust, Inc.

FAQ

When did Sila Realty Trust begin trading on the NYSE?

Sila Realty Trust began trading on the NYSE on the date mentioned in the press release.

Under what ticker symbol does Sila Realty Trust trade?

Sila Realty Trust trades under the ticker symbol SILA.

What is the focus of Sila Realty Trust's investment strategy?

Sila Realty Trust focuses on high-quality healthcare properties through net lease agreements.

What is the current value of Sila Realty Trust's portfolio?

Sila Realty Trust's portfolio is valued at over $2.1 billion.

How many properties are included in Sila Realty Trust's portfolio?

Sila Realty Trust's portfolio consists of 137 properties.

What is the occupancy rate of Sila Realty Trust's properties?

Sila Realty Trust has a high occupancy rate of 99.2%.

What is the weighted average lease term for Sila Realty Trust's properties?

The weighted average lease term for Sila Realty Trust's properties is 8.4 years.

How much liquidity does Sila Realty Trust have?

Sila Realty Trust has approximately $590 million in liquidity.

What is Sila Realty Trust's net debt leverage ratio?

Sila Realty Trust has a net debt leverage ratio of approximately 20.5%.

How much is available under Sila Realty Trust's revolving credit facility?

Sila Realty Trust has $500 million available under its revolving credit facility.