Business Context and Reporting Period
This Form 8-K Current Report was filed by Grubb & Ellis Healthcare REIT, Inc. (also referred to as Healthcare Realty Trust Inc in metadata) on March 6, 2008. The filing reports the completion of a real estate acquisition and the associated financing arrangements.
Key Financial Metrics and Transaction Details
- Acquisition Price: $8,650,000 for the Fort Road Medical Building in St. Paul, Minnesota.
- Financing Structure:
- Secured Loan: $5,800,000 from LaSalle Bank National Association.
- Revolving Line of Credit: $3,000,000 drawn from a facility with LaSalle and KeyBank National Association.
- Acquisition Fee: $260,000 (3.0% of purchase price) paid to the Advisor and its affiliate.
- Debt Terms:
- Maturity: March 6, 2011 (extendable for two consecutive 12-month periods).
- Interest Rate: Fixed at 4.70% per annum via an interest rate swap agreement.
- Guaranty: Parent company guarantees payment up to $2,900,000 plus interest and enforcement costs.
Material Changes
The primary material change is the addition of the Fort Road Medical Building to the company's portfolio. The transaction involved amendments to the original purchase agreement to extend the due diligence period and adjust the timing of lease document delivery. The company's debt load increased by $8,800,000 ($5.8M new loan + $3.0M line of credit draw) to fund the acquisition.
Outlook, Risks, and Contingencies
- Financial Statements: The filing states it is not practical to provide required financial statements or pro forma information at this time; these will be filed as an amendment within 71 days of the filing deadline.
- Default Provisions: The loan agreement includes a late charge of 4.0% on missed payments and a default interest rate of 4.0% per annum plus the floating rate.
- Regulatory Disclosure: A press release regarding the acquisition was issued on March 12, 2008, under Regulation FD.
Investor Verification Checklist
- Verify the pro forma financial impact of the $8.65M acquisition once the amendment is filed.
- Confirm the status of the Medical Office and Apartment Lease Agreements mentioned in the Second Amendment.
- Review the terms of the $80,000,000 revolving line of credit to assess remaining liquidity capacity.
- Monitor the extension conditions for the March 2011 loan maturity.