Business Context and Reporting Period
This Form 8-K is filed by Griffin-American Healthcare REIT IV, Inc. (American Healthcare REIT, Inc.) on November 30, 2016. The filing reports the entry into a material definitive agreement and the subsequent acquisition of the Lafayette Assisted Living Portfolio, consisting of two senior housing facilities in Lafayette, Louisiana.
Key Financial Metrics and Transaction Details
- Acquisition Price: $16,750,000 plus closing costs.
- Financing: Funded via cash proceeds from the initial public offering and borrowings under a revolving line of credit with Bank of America, N.A. and KeyBank, National Association.
- Advisor Fees: A base acquisition fee of approximately $377,000 (2.25% of purchase price) was paid. An additional contingent advisor payment of approximately $377,000 (2.25%) has been accrued, subject to conditions.
- Asset Details: The portfolio includes approximately 80,000 square feet of gross leasable area and 107 units offering assisted living, independent living, and memory care services.
- Occupancy: The facilities were 100% occupied at the time of acquisition.
Material Changes
The filing details a Sixth Amendment to the Asset Purchase Agreements dated November 30, 2016. This amendment revised Section 6.3 regarding prorations and extended the closing date to December 1, 2016. The acquisition was completed on December 1, 2016, from unaffiliated third parties (Hannie Development, Inc. and Cedar Crest, LLC).
Outlook, Risks, and Contingencies
The filing notes a contingent advisor payment of approximately $377,000 that is subject to the satisfaction of certain conditions. No specific forward-looking guidance or risk factors beyond the standard contingencies of the acquisition agreement are detailed in this specific report.
Investor Verification Checklist
- Verify the terms of the Sixth Amendment to the Asset Purchase Agreements (Exhibit 10.1) regarding prorations.
- Confirm the specific conditions required to trigger the contingent advisor payment of $377,000.
- Review the press release dated December 6, 2016 (Exhibit 99.1) for additional management commentary.
- Assess the impact of the new debt incurred under the revolving line of credit on the company's overall leverage.