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  • Writer's pictureRealFacts Editorial Team

Sila Realty Trust Shares Surge After NYSE Debut

Sila sign

Sila Realty Trust, a healthcare-focused net lease REIT, made a strong debut on the New York Stock Exchange (NYSE) on Thursday, with shares soaring by 19% on the first day of trading. As reported by Ciara Long of Bisnow, the share price closed at $22.70, highlighting significant investor interest.

Sila Realty Trust boasts a $2.1 billion portfolio of healthcare properties, targeting assets net-leased to reputable healthcare operators like Baylor Scott & White and the Cleveland Clinic Foundation. CEO Michael Seton emphasized the strategic advantage of being publicly traded, noting that it will enable the company to access capital markets for future growth.

“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,” Seton said in a statement.

With a robust financial foundation, Sila launched its public trading with $590 million in liquidity and $500 million available under its revolving credit facility. Seton highlighted Sila's conservative leverage ratio of 20%, significantly lower than the typical REIT leverage of 40% to 50%, positioning the company favorably amidst concerns about REIT debt loads.

“Obviously, leverage works very well going up, not great coming down. So we've never had that issue,” Seton explained in an interview with Yahoo Finance.

At the end of the first quarter, Sila reported a weighted average lease rate of 99.2% with an average term of 8.4 years. More than two-thirds of its tenants, guarantors, or affiliates have rated or investment-grade-rated credit, ensuring stable cash flows and financial reliability.

Founded in 2014, Sila Realty Trust initially diversified into tech assets but has since refocused on healthcare properties. The divestment of its data centers culminated in a $1.3 billion sale in 2021. The strategic shift towards healthcare properties aligns with the current investor demand, which remains robust for healthcare REITs compared to other commercial property types.

Investor returns for healthcare REITs were flat through April, as per Nareit data, contrasting with the negative returns of over 9% for all equity REITs. Seton remarked on the reduced competition in the market, positioning Sila for continued growth and targeting an enterprise value of $3 billion.

Following the initial rally, Sila Realty shares, trading under the ticker SILA, maintained their gains with a relatively stable performance on Friday. The strong debut and strategic positioning indicate promising growth prospects for the REIT in the healthcare real estate sector.


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