cik0001567925-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-42129

SILA REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)


Maryland						46-1854011
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

1001 Water Street, Suite 800 Tampa, FL 33602						(813) 287-0101
(Address of Principal Executive Offices; Zip Code)						(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.01 par value per share

SILA

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2024, there were 55,018,168 shares of common stock of Sila Realty Trust, Inc. outstanding.

SILA REALTY TRUST, INC.

(A Maryland Corporation)

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION (Unaudited)	3
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023	4
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
PART II.	OTHER INFORMATION	34
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	36
Item 6.	Exhibits	37

SIGNATURES

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements.

SILA REALTY TRUST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	(Unaudited)
	June 30, 2024		December 31, 2023
ASSETS
Real estate:
Land	$	166,130	$	157,821
Buildings and improvements, less accumulated depreciation of $251,413 and $227,156, respectively	1,556,570		1,470,831

Total real estate, net	1,722,700		1,628,652
Cash and cash equivalents	86,971		202,019
Intangible assets, less accumulated amortization of $112,069 and $102,456, respectively	133,071		134,999
Goodwill	17,700		17,700


Right-of-use assets	36,027		36,384
Other assets	85,128		79,825

Total assets	$	2,081,597	$	2,099,579
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Credit facility, net of deferred financing costs of $3,699 and $1,847, respectively	$	521,301	$	523,153
Accounts payable and other liabilities	38,742		30,381
Intangible liabilities, less accumulated amortization of $8,131 and $7,417, respectively	7,699		10,452


Lease liabilities	40,944		41,158

Total liabilities	608,686		605,144
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding	—		—
Common stock, $0.01 par value per share, 510,000,000 shares authorized; 61,670,830 and 61,154,404(1) shares issued, respectively; 57,216,478 and 56,983,564(1) shares outstanding, respectively	572		570
Additional paid-in capital	2,048,406		2,044,450
Distributions in excess of accumulated earnings	(593,423)		(567,188)
Accumulated other comprehensive income	17,356		16,603
Total stockholders’ equity	1,472,911		1,494,435
Total liabilities and stockholders’ equity	$	2,081,597	$	2,099,579

(1) Retroactively adjusted for the effects of the Reverse Stock Split (see Note 1—"Organization and Business Operations" for additional information).

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SILA REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except share data and per share amounts)
(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue:
Rental revenue	$	43,554	$	44,965	$	94,193	$	94,609
Expenses:
Rental expenses	5,849		4,873		11,403		9,723
Listing-related expenses	2,924		—		2,980		—
General and administrative expenses	5,347		5,547		13,521		11,650


Depreciation and amortization	20,246		18,803		39,144		37,355


Impairment losses	418		6,364		418		6,708
Total operating expenses	34,784		35,587		67,466		65,436
Gain on real estate dispositions	—		—		76		21

Interest and other income	1,051		141		3,292		147
Interest expense	5,193		5,664		10,487		11,286


Net income attributable to common stockholders	$	4,628	$	3,855	$	19,608	$	18,055
Other comprehensive (loss) income - unrealized (loss) gain on interest rate swaps, net	(2,115)		7,382		753		(882)
Comprehensive income attributable to common stockholders	$	2,513	$	11,237	$	20,361	$	17,173
Weighted average number of common shares outstanding:
Basic(1)	57,230,472		56,744,341		57,171,756		56,692,674
Diluted(1)	57,601,204		57,208,783		57,574,634		57,155,224
Net income per common share attributable to common stockholders:

Basic(1)	$	0.08	$	0.07	$	0.34	$	0.32



Diluted(1)	$	0.08	$	0.07	$	0.34	$	0.32


Distributions declared per common share(1)	$	0.40	$	0.40	$	0.80	$	0.80

(1) Retroactively adjusted for the effects of the Reverse Stock Split (see Note 1—"Organization and Business Operations" for additional information).

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SILA REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share data)
(Unaudited)


	Common Stock
	No. of Shares(1)	Par Value(1)		Additional Paid-in Capital(1)		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance, March 31, 2024	57,223,648	$	572	$	2,047,457	$	(574,993)	$	19,471	$	1,492,507
Issuance of common stock under the distribution reinvestment plan	133,059	1		3,981		—		—		3,982

Stock-based compensation	—	—		1,163		—		—		1,163



Repurchase of common stock	(140,229)	(1)		(4,195)		—		—		(4,196)
Distributions to common stockholders	—	—		—		(23,058)		—		(23,058)
Other comprehensive loss	—	—		—		—		(2,115)		(2,115)
Net income	—	—		—		4,628		—		4,628
Balance, June 30, 2024	57,216,478	$	572	$	2,048,406	$	(593,423)	$	17,356	$	1,472,911


	Common Stock
	No. of Shares(1)	Par Value(1)		Additional Paid-in Capital(1)		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance, December 31, 2023	56,983,564	$	570	$	2,044,450	$	(567,188)	$	16,603	$	1,494,435
Issuance of common stock under the distribution reinvestment plan	333,402	3		9,976		—		—		9,979
Vesting of restricted stock	183,024	—		—		—		—		—
Stock-based compensation	—	2		2,485		—		—		2,487

Other offering costs	—	—		(26)		—		—		(26)

Repurchase of common stock	(283,512)	(3)		(8,479)		—		—		(8,482)
Distributions to common stockholders	—	—		—		(45,843)		—		(45,843)
Other comprehensive income	—	—		—		—		753		753
Net income	—	—		—		19,608		—		19,608
Balance, June 30, 2024	57,216,478	$	572	$	2,048,406	$	(593,423)	$	17,356	$	1,472,911

(1) Retroactively adjusted for the effects of the Reverse Stock Split (see Note 1—"Organization and Business Operations" for additional information).

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SILA REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share data)
(Unaudited)

Common Stock

No. of

Shares(1)

Par

Value

SEC Form 10-Q filed by Sila Realty Trust Inc.