Overview

Medalist Diversified REIT Inc. is a Maryland corporation formed in 2015 that operates as a real estate investment trust (REIT). The company serves as the general partner of Medalist Diversified Holdings, LP and focuses on acquiring, repositioning, renovating, leasing and managing income-producing properties.

As of March 31, 2025, Medalist’s portfolio consisted of 12 properties, including:

• 5 retail center properties
• 3 flex center properties
• 5 single-tenant net lease (STNL) properties

The company’s primary focus is on managing its legacy portfolio of retail and flex-industrial properties in secondary and tertiary markets, expanding its STNL property portfolio, and acting as a sponsor of Delaware Statutory Trust (DST) investment offerings.

First Quarter 2025 Highlights

• Acquired the United Rentals Property and Buffalo Wild Wings Property through the issuance of OP Units
• Redeemed all of the company’s outstanding mandatorily redeemable preferred stock
• Entered into an expanded $4 million line of credit with Wells Fargo Bank, which was later terminated in anticipation of a new credit relationship
• Filed a new $100 million shelf registration statement to issue common stock

Reporting Segments

Medalist reports its operations in three segments: retail center properties, flex center properties, and STNL properties.

Financial Performance

Revenues for the first quarter of 2025 were $2.32 million, a decrease of $250,000 from the prior year period. This was primarily due to the sale of the Hanover Square Shopping Center and decreased occupancy at the Lancer Center and Salisbury Marketplace properties, partially offset by increased STNL revenues.

Adjusted Net Operating Income (a non-GAAP measure) decreased by $219,315 for the retail center properties, $46,035 for the flex center properties, and increased by $76,456 for the STNL properties compared to the prior year period. The decreases were mainly due to lower occupancy, increased operating expenses, and the sale of the Hanover Square property.

Operating expenses increased by $290,237, primarily due to higher share-based compensation, a loss on impairment, and increased corporate general and administrative costs. This resulted in an operating loss of $552,516 for the quarter, compared to operating income of $2.76 million in the prior year period.

Interest expense decreased by $303,732, mainly from the redemption of the mandatorily redeemable preferred stock. Net loss for the quarter was $1.03 million, compared to net income of $1.93 million in the prior year period.

Funds from Operations (FFO), a non-GAAP measure, decreased to $10,247 from $178,453 in the prior year period. Adjusted Funds from Operations (AFFO), another non-GAAP measure, decreased to $217,422 from $229,611 in the prior year period.

Liquidity and Capital Resources

As of March 31, 2025, Medalist had $4.24 million in cash and cash equivalents and $4 million in borrowing capacity under its Expanded Wells Fargo Line of Credit, which was later terminated. The company plans to meet its future liquidity needs through a combination of cash on hand, potential property dispositions, and operating cash flows.

Outlook

Medalist faces risks from economic conditions, including inflation, high interest rates, and potential worsening economic conditions that could impact its tenants and property operations. The company also faces risks related to international trade policies and tariffs that could affect its retail tenants. Medalist will continue to focus on managing its legacy portfolio, expanding its STNL portfolio, and seeking new credit relationships to support its growth.