Business Context and Reporting Period
This Form 8-K is filed by Griffin-American Healthcare REIT IV, Inc. (American Healthcare REIT, Inc.) for the period ending September 28, 2016. The filing reports on the authorization of daily distributions and the acquisition of two medical office buildings (MOBs) in late September 2016.
Key Financial Metrics and Transactions
Distributions
- Daily Rate: $0.001643836 per share for Class T and Class I stockholders.
- Period: October 1, 2016, through December 31, 2016.
- Payment Terms: Aggregated and paid monthly in arrears (November, December, January) in cash or reinvested shares.
Acquisitions
| Property | Location | Price | Financing | Advisor Fees |
|---|---|---|---|---|
| Rochester Hills MOB | Rochester Hills, MI | $8,300,000 | $3,968,000 assumed loan; remainder from IPO cash | $187,000 base + $187,000 contingent |
| Cullman MOB III | Cullman, AL | $16,650,000 | $12,000,000 revolver draw; remainder from IPO cash | $375,000 base + $375,000 contingent |
Material Changes and Property Details
The company expanded its portfolio with two new assets:
- Rochester Hills MOB: A 30,000 sq. ft. two-story building, 93% leased to seven tenants including William Beaumont Hospital. Services include dialysis, imaging, and surgery.
- Cullman MOB III: A 52,000 sq. ft. three-story building, 100% leased to two tenants including Cullman Regional Medical Center. Services include family medicine, orthopaedics, and a pharmacy.
The filing does not provide comparative financial metrics (revenue, profit, cash flow, or margins) for the prior period as this is a current event report rather than a periodic financial statement.
Outlook, Risks, and Contingencies
- Contingent Payments: The company has accrued for contingent advisor payments totaling approximately $562,000 ($187,000 + $375,000) subject to the satisfaction of certain conditions.
- Liquidity: Distributions are payable only from legally available funds. Acquisitions were funded via a mix of assumed debt, revolving credit facilities, and IPO proceeds.
- Management Commentary: A press release issued on October 4, 2016, by co-sponsor American Healthcare Investors, LLC, announced these acquisitions.
Investor Verification Checklist
- Verify the exact amount of cash proceeds remaining from the initial public offering used to fund the acquisitions.
- Confirm the specific conditions required to trigger the accrued contingent advisor payments.
- Review the terms of the revolving line of credit with Bank of America and KeyBank utilized for the Cullman MOB III acquisition.
- Check the lease expiration dates for the major tenants (William Beaumont Hospital and Cullman Regional Medical Center) to assess long-term occupancy stability.