Business Context and Reporting Period
This Form 8-K is filed by Griffin-American Healthcare REIT IV, Inc. (American Healthcare REIT, Inc.) on December 13, 2016. The report details the acquisition of a medical office building and the authorization of quarterly distributions.
Key Financial Metrics and Transaction Details
- Acquisition Price: $10,400,000 plus closing costs for the Evendale MOB property.
- Financing: Funded via cash on hand and borrowings under revolving lines of credit with Bank of America, N.A. and KeyBank, National Association.
- Advisor Fees: A base fee of approximately $234,000 (2.25% of purchase price) was paid. An additional contingent fee of approximately $234,000 (2.25%) has been accrued.
- Property Metrics: 66,000 square feet, four-story building in Evendale, Ohio, currently 76.4% leased.
- Distribution Rate: $0.001643836 per share daily for Class T and Class I stockholders for the period January 1, 2017, through March 31, 2017.
Material Changes
The primary material change is the expansion of the company's portfolio through the acquisition of Evendale MOB from an unaffiliated third party, MPEQ Evendale MOB, LLC. The filing does not provide comparative financial data (revenue, profit, or cash flow) for the prior period as this is a current event report rather than a periodic financial statement.
Outlook, Risks, and Management Commentary
- Tenant Profile: The acquired property is leased to multiple tenants, including The Procter & Gamble Company, Laboratory Corporation of America Holdings, and LabOne of Ohio, Inc. (Quest Diagnostics).
- Service Mix: The facility supports ambulatory surgery, dental, diagnostic, general surgery, gynecology, laboratory, obstetrics, podiatry, and primary care.
- Distribution Payment: Distributions will be paid monthly in arrears (February, March, and April 2017) only from legally available funds.
- Risks: The filing notes that contingent advisor payments are subject to the satisfaction of certain conditions.
Investor Verification Checklist
- Verify the occupancy rate and lease expiration dates for the 76.4% leased space at Evendale MOB.
- Confirm the specific terms and interest rates of the borrowings under the revolving lines of credit used for financing.
- Review the conditions required to trigger the accrued contingent advisor payment of $234,000.
- Assess the impact of the acquisition on the company's overall leverage and liquidity ratios.