Sila Realty Trust Reports 47% Decline in Net Income to $7.9 Million in Q1 2025

Sila Realty Trust, Inc. reported a net income of $7.9 million for the first quarter of 2025, a decline of 47% compared to $15.0 million in the same period of 2024. The company's rental revenue also decreased by 4.7%, totaling $48.3 million, down from $50.6 million year-over-year. This decline was attributed to a significant drop in non-same store rental revenue, which fell by 49.6% due to lease termination income recognized in the prior year and properties sold since January 1, 2024. The company’s same store rental revenue, however, showed a slight increase of 1.7%, reflecting improved leasing activity and annual rent escalations.

In terms of expenses, Sila Realty's total operating expenses rose to $33.3 million, a 1.9% increase from $32.7 million in the previous year. This rise was primarily driven by a 15.7% increase in same store rental expenses, largely due to higher operating costs. Notably, the company recorded impairment losses of $3.5 million related to the Stoughton Healthcare Facility, which was impacted by a lease termination. General and administrative expenses decreased significantly by 30.3%, reflecting cost-cutting measures following executive departures and reduced stock-based compensation.

Strategically, Sila Realty made a notable acquisition during the quarter, purchasing a healthcare property in Knoxville for approximately $35.3 million. This acquisition was part of the company's ongoing strategy to invest in high-quality healthcare facilities, which it believes will generate stable income streams. As of March 31, 2025, the company owned 136 real estate properties, maintaining a high occupancy rate of 96.0%. The company also reported a total asset value of $2.0 billion, with total liabilities increasing to $633.2 million, primarily due to a rise in its credit facility obligations.

Looking ahead, Sila Realty's management expressed confidence in its ability to navigate current economic challenges, including rising interest rates and inflation. The company has hedged a significant portion of its debt, with 94% fixed through interest rate swaps, which mitigates exposure to interest rate fluctuations. The company anticipates that its recent listing on the New York Stock Exchange will enhance liquidity and provide additional capital for future investments. Sila Realty plans to continue focusing on strategic acquisitions and maintaining its REIT status by distributing at least 90% of its taxable income to shareholders.