Chiron Real Estate Inc. (XRN) stock intrinsic value fair value estimate & owner earnings analysis

Chiron Real Estate (formerly Global Medical REIT) owns 189 healthcare buildings, about 5.1 million leasable square feet, in 35 states. Annualized base rent is $118.8 million: 72% from medical office buildings, 16.5% from inpatient rehabilitation hospitals and the rest from surgical, acute-care and other facilities. Most buildings are leased to a single tenant on triple-net leases, so tenants pay most operating costs. About 96% of space is leased. The largest tenants are LifePoint Health (6.8% of rent), Encompass Health (6.3%) and Memorial Health System (5.0%). The company changed its name in February 2026 and did a one-for-five reverse stock split in September 2025; all per-share figures here are on the post-split basis. How we measure earnings. We start from operating cash flow, then remove working-capital swings and stock compensation, and deduct the cost of keeping buildings competitive (capital spending on existing properties and leasing commissions). Money spent buying new buildings is treated as optional growth and is not deducted. Depreciation and the amortization of acquired leases are non-cash and are added back, but they matter for the growth path below. The result was $3.72 per share (counting shares plus operating-partnership units) in 2025, $3.12 in 2024 and $4.21 in 2023, down from about $5.0 in 2022. The decline came from higher interest costs and from maintenance and leasing spending rising from about $5 million in 2022 to $13 million in 2025 (and $19 million in 2024). We use 2023 to 2025 as the normal level, because 2021 and 2022 reflect interest rates that no longer apply. Owner earnings grew 19% in 2025 against 2024. We assume no growth in year 1, which is below that rate. The 2025 rebound followed an unusually heavy 2024 leasing-commission year, and nothing in the filings supports repeating it. Two adjustments to the 2025 level. First, the company fixed the interest rate on its $350 million Term Loan A at a base rate of 1.36% through April 2026. New swaps that replace it fix the rate at 3.24% to 3.32% through 2029 to 2031. That adds roughly $6.7 million a year of interest, about $0.46 per share, and it is a signed contract, so it is deducted from the earnings level. Second, the roughly $5.8 million a year paid to preferred shareholders ranks ahead of common shareholders and is not deducted in operating cash flow, so we deduct it (about $0.40 per share). That gives about $2.85 per share of owner earnings to common shareholders. We did not subtract the company's debt separately; its interest is already in cash flow. Net borrowings under the credit facility were $652.7 million at year-end 2025. Base case, about $38 per share. Earnings stay flat at about $2.85 for ten years, with no credit for acquisitions, market growth or rate cuts, because none is secured. Rent escalators are written into the leases, but we did not credit them because their size is not disclosed in the filing and capital spending has been rising. After year ten, earnings persist but decline about 3% a year, because the buildings age, the leases roll over and the company has recorded property write-downs, including $13.0 million in 2025 and $1.7 million in 2024. Bear case, about $18.75 per share. Leases covering 21% of rent expire in 2026 and 2027 (7.4% and 13.7%). Many are single-tenant medical buildings in smaller markets that are hard to re-let. We assume about a tenth of rent is lost for good and re-leasing costs rise by about $5 million a year, and that $150 million of Term Loan B, whose 2.54% swap ends in January 2028, refinances at higher rates. Owner earnings fall to about $1.54 per share, then decline about 5% a year after year ten. Leverage is the reason this case is severe. Bull case, about $50.75 per share. Leases renew on the terms already visible, and contractual escalators lift owner earnings 2% a year net of capital spending for ten years, then a 1% annual decline. This is the company's own lever, not a market recovery. What would make us wrong. The company's most recent quarterly results (first half of 2026) show operating cash flow up 4% ($35.9 million versus $34.4 million) and revenue up 7%, but that period includes only one quarter at the new swap rates. We could not confirm the size of the rent escalators from the filing. A run of renewals at higher rents, or rising leasing costs, would move the value in either direction. The company has been repurchasing shares ($6.0 million in 2025), which would raise per-share values if continued.