Business Context and Reporting Period
Company: Griffin-American Healthcare REIT IV, Inc. (Emerging Growth Company)
Filing Type: Form 8-K (Current Report)
Date of Report: August 2, 2017
Event: Entry into Material Definitive Agreements for the acquisition of the Central Florida Senior Housing Portfolio.
Key Financial Metrics and Transaction Details
| Metric | Value |
|---|---|
| Total Aggregate Contract Purchase Price | $117,500,000 (plus closing costs) |
| Spring Haven Portfolio Price | $70,000,000 |
| Bayside Portfolio Price | $47,500,000 |
| Total Units Acquired | 1,140 units |
| Gross Leasable Area | Approx. 541,000 square feet |
| Current Occupancy Rate | Approx. 84% |
| Required Deposits | $1,787,234 (Spring Haven) and $1,212,766 (Bayside) |
Note: The filing does not provide revenue, profit, cash flow, or margin data for the registrant or the target portfolio.
Material Changes and Transaction Structure
- Acquisition Scope: Purchase of nine senior housing facilities located in Lakeland, Sanford, Spring Hill, Winter Haven, Bradenton, Brooksville, Lake Placid, and Pinellas Park, Florida.
- Services: Facilities offer assisted living, independent living, and memory care services.
- Operational Structure: Post-acquisition operations will utilize a "RIDEA" (REIT Investment Diversification and Empowerment Act of 2007) structure.
- Financing: Intended to be funded via the company's initial public offering (IPO) proceeds and debt financing.
- Related Party Costs: An acquisition fee based on the purchase price is anticipated to be paid to the affiliated advisor.
Key Contract Terms
- Due Diligence: 45-day period from the effective date.
- Closing Date: Targeted for October 1, 2017, with a hard stop of November 1, 2017, subject to conditions.
- Escrow: A portion of the purchase price will be held in escrow for 18 months post-closing to cover Seller Indemnifiable Damages.
- Termination Rights: The registrant retains the right to terminate for any reason during the due diligence period with a full deposit refund. Sellers may retain deposits as liquidated damages if the registrant defaults prior to closing.
- Occupancy Threshold: The registrant may terminate if the average monthly occupancy rate falls below a specified threshold prior to the end of the due diligence period.
Guidance, Outlook, and Risks
- Outlook: Management anticipates closing in the fourth quarter of 2017 but explicitly states no assurance that the closing will occur within this timeframe or at all.
- Risks: The transaction is subject to substantial conditions to closing, including the satisfaction of due diligence requirements and the removal of monetary liens by sellers.
- Contingencies: Closing is contingent on the successful execution of the Purchase Agreements and the availability of financing from the IPO and debt markets.
Investor Verification Checklist
- Verify the final closing date and whether the transaction closed by November 1, 2017.
- Confirm the actual funding sources (IPO proceeds vs. debt) utilized for the $117.5 million purchase.
- Review the final occupancy rates and rent rolls delivered at the end of the due diligence period to ensure they met the threshold requirements.
- Check for any subsequent filings regarding the payment of the acquisition fee to the affiliated advisor.
- Monitor for any escrow releases or claims regarding Seller Indemnifiable Damages during the 18-month post-closing period.