Business Context and Reporting Period
This Form 8-K is filed by Griffin-American Healthcare REIT IV, Inc. (American Healthcare REIT, Inc.) on March 7, 2017. The report details material definitive agreements regarding a pending acquisition, the declaration of quarterly distributions, and the completion of a recent property acquisition.
Key Financial Metrics and Transactions
- Reno MOB Acquisition: Pending purchase of a leasehold interest in Reno, Nevada, for $66,250,000 plus closing costs. An amendment to the purchase agreement was executed on March 8, 2017.
- Battle Creek MOB Acquisition: Completed acquisition on March 10, 2017, for $7,300,000 plus closing costs. The property is a 46,000 square foot medical office building in Michigan, approximately 97% leased.
- Financing: The Battle Creek MOB acquisition was financed using cash on hand.
- Advisor Fees: A base acquisition fee of approximately $164,000 (2.25% of purchase price) was paid for the Battle Creek deal. An additional contingent fee of approximately $164,000 has been accrued.
- Distributions: Daily distributions authorized for Class T and Class I stockholders at a rate of $0.001643836 per share for the period April 1, 2017, through June 30, 2017.
Material Changes and Agreements
The filing reports a First Amendment to the Reno MOB Purchase Agreement. Key changes include:
- Clarification of the seller's representation regarding Dignity Health's original guaranty of ground lessor obligations.
- Clarification of Off-Site Improvements defined in the ground lease.
- Seller obligation to provide proof of payment of certain fees prior to closing.
- Notice that the registrant does not elect to assume service contracts except as set forth in the amendment.
Outlook, Risks, and Management Commentary
The filing does not provide forward-looking guidance, risk factors, or management commentary beyond the specific transaction details. The Reno MOB transaction remains subject to the terms of the amended agreement. Distributions are payable only from legally available funds.
Investor Verification Checklist
- Verify the closing status and final terms of the Reno MOB acquisition following the March 8, 2017 amendment.
- Confirm the impact of the $7.3 million cash outflow for the Battle Creek MOB on the company's liquidity position.
- Review the specific conditions required to trigger the payment of the accrued $164,000 contingent advisor fee.
- Monitor the occupancy and lease terms of the newly acquired Battle Creek MOB, currently 97% leased to nine tenants.