Medalist Diversified REIT Reports $9.74M Revenue Decline, Achieves Operational Turnaround

Medalist Diversified REIT, Inc. reported total revenues of $9.74 million for the fiscal year ending December 31, 2024, a decrease of approximately 5.2% from $10.27 million in 2023. The decline was primarily attributed to reduced revenues from retail center properties, particularly following the sale of the Hanover Square Property, which accounted for a significant portion of the revenue drop. Retail center revenues fell to $6.62 million, down from $7.54 million in the previous year. In contrast, revenues from flex center properties increased to $2.75 million, up from $2.50 million, while single-tenant net lease (STNL) properties generated $359,894, a notable increase from $226,260 in 2023.

The company experienced a significant operational turnaround, achieving an operating income of $3.73 million in 2024, compared to an operating loss of $997,164 in 2023. This improvement was bolstered by a gain of $2.82 million from the sale of the Hanover Square Property and a reduction in management restructuring expenses, which had previously burdened the financials. Total operating expenses decreased to $8.72 million from $11.27 million, reflecting lower costs associated with asset management following the termination of the external management agreement in July 2023.

Strategically, Medalist has focused on expanding its STNL property portfolio, with recent acquisitions including the Citibank Property in March 2024 for $2.4 million and the Buffalo Wild Wings Property in January 2024 for $2.62 million. These acquisitions were financed through the issuance of operating partnership units, reflecting a shift towards internal management and investment strategies. The company also plans to continue evaluating options for creating stand-alone STNL properties from its existing portfolio.

As of December 31, 2024, Medalist owned a total of ten properties, including four retail, three flex-industrial, and three STNL properties, with a total occupancy rate of 100% for several key assets. The company has also reported a total cash and restricted cash balance of $6.07 million, up from $3.81 million in the previous year, indicating improved liquidity. Looking ahead, Medalist aims to leverage its existing portfolio while exploring further acquisitions to enhance its market position and financial performance.

The outlook for Medalist remains cautiously optimistic, with management emphasizing the importance of maintaining REIT status and meeting distribution requirements. The company is focused on managing its debt levels and ensuring compliance with financial covenants, particularly in light of the current high-interest rate environment. Future growth will depend on the successful execution of its acquisition strategy and the ability to generate consistent cash flows from its diversified property portfolio.