Business Context and Reporting Period
This Form 8-K filing by Griffin-American Healthcare REIT IV, Inc. (American Healthcare REIT, Inc.) reports a material event occurring on July 30, 2018. The registrant is an emerging growth company incorporated in Maryland.
Key Financial Metrics and Transaction Details
- Acquisition Price: $23,500,000 (contract purchase price) plus closing costs.
- 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 acquisition fee of approximately $529,000 (2.25% of purchase price) was paid. An additional contingent advisor payment of approximately $529,000 (2.25%) has been accrued, subject to conditions.
- Property Metrics: The acquired asset, Edmonds MOB, is a two-story, multi-tenant medical office building with approximately 55,000 square feet of gross leasable area.
- Occupancy: 100% leased to nine tenants.
Material Changes
The primary material change is the expansion of the company's portfolio through the acquisition of Edmonds MOB from an unaffiliated third party, Edmonds Professional Center, 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: Major tenants include Virginia Mason Health System (approx. 60% of building) and Swedish Health Services (approx. 12%).
- Services: The facility supports diverse medical services including podiatry, physical therapy, ophthalmology, family medicine, surgery, cardiology, and pharmacy.
- Contingencies: Future cash outflows are contingent upon the satisfaction of conditions required to release the accrued advisor payment.
Investor Verification Checklist
- Verify the specific terms and interest rates of the borrowings under the revolving lines of credit used to finance the acquisition.
- Confirm the specific conditions required to trigger the contingent advisor payment of $529,000.
- Review the lease expiration dates for the major tenants (Virginia Mason Health System and Swedish Health Services) to assess long-term occupancy stability.
- Assess the impact of the acquisition on the company's overall leverage ratios and liquidity position.