Business Context and Reporting Period
This Form 8-K Current Report was filed by Griffin-American Healthcare REIT IV, Inc. on July 3, 2018, covering events occurring on July 1, 2018. The registrant is an emerging growth company operating as a Real Estate Investment Trust (REIT) focused on senior housing facilities.
Key Financial Metrics and Transaction Details
- Acquisition Price: $19,500,000 (plus closing costs) for Pinnacle Beaumont ALF.
- 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 $434,000 (2.25% of purchase price) was paid. An additional contingent fee of approximately $434,000 (2.25%) has been accrued, subject to conditions.
- Property Metrics: 61,000 square feet of gross leasable area; 79 units; 83.6% occupancy rate.
- Ownership Structure: Acquired through GAHC4 Pinnacle SH JV, LLC, in which the registrant owns an approximate 98% interest.
Material Changes
The primary material change is the expansion of the company's portfolio through the acquisition of Pinnacle Beaumont ALF in Beaumont, Texas. The facility offers assisted living and memory care services and is operated under a "RIDEA" structure permitted by the REIT Investment Diversification and Empowerment Act of 2007.
Outlook, Risks, and Contingencies
The filing notes a contingent advisor payment of approximately $434,000 that is subject to the satisfaction of certain conditions. The acquisition was announced via a press release issued by American Healthcare Investors, LLC, a co-sponsor and managing member of the advisor. No specific forward-looking guidance or new risk factors were detailed in this specific report beyond the standard contingencies associated with the acquisition.
Key Facts for Investor Verification
- Verify the specific terms and conditions attached to the accrued contingent advisor fee of $434,000.
- Confirm the impact of the new debt utilized from the revolving lines of credit on the company's overall leverage ratios.
- Review the press release (Exhibit 99.1) for additional strategic context regarding the acquisition.
- Assess the performance of the new 79-unit facility relative to the company's existing portfolio metrics.