Business Context and Reporting Period
This Form 8-K Current Report was filed by Grubb & Ellis Healthcare REIT, Inc. (also referred to as Healthcare Realty Trust Inc in metadata) on March 25, 2008. The report details the completion of a real estate acquisition and the associated financing arrangements executed on that date.
Key Financial Metrics and Transaction Details
- Acquisition: Purchased the Cypress Station Medical Office Building in Houston, Texas, for a total price of $11,200,000 plus closing costs.
- Financing Structure:
- Secured loan from National City Bank: $7,300,000.
- Borrowings under secured revolving line of credit (LaSalle Bank and KeyBank): $4,500,000.
- Transaction Costs: An acquisition fee of $336,000 (3.0% of the purchase price) was paid to the Advisor and its affiliate.
- Debt Terms (National City Loan):
- Interest Rate: LIBOR + 1.75% (capped at the maximum lawful rate).
- Maturity: September 1, 2011, with options for two consecutive 12-month extensions.
- Guaranty: The registrant provided a limited guaranty of payment up to $730,000 plus accrued interest and enforcement costs.
Material Changes
The primary material change reported is the addition of the Cypress Station property to the company's portfolio and the corresponding increase in debt obligations. The filing does not provide comparative financial data (e.g., revenue, profit, or cash flow) for the prior period as this is a transaction-specific report rather than a periodic financial statement.
Outlook, Risks, and Contingencies
- Financial Statements: The registrant stated it is not practical to provide required financial statements or pro forma information at this time; these will be filed as an amendment within 71 days of the filing deadline.
- Regulation FD: A press release regarding the acquisition was issued on March 31, 2008, and is incorporated by reference.
- Risks: The loan agreement includes standard covenants, representations, and indemnities. Default triggers include late payments (subject to a 5.0% late charge) and default interest rates up to 5.0% over the corporate market rate.
Investor Verification Checklist
- Verify the pro forma financial impact of the $11.2 million acquisition once the amendment is filed.
- Review the specific terms of the LaSalle/KeyBank revolving line of credit to understand remaining capacity and covenants.
- Confirm the occupancy status and lease terms of the Cypress Station Medical Office Building to assess immediate cash flow generation.
- Monitor the upcoming filing for the required financial statements and pro forma data.