Business Context and Reporting Period
This Form 8-K was filed by Griffin-American Healthcare REIT IV, Inc. (referred to in metadata as American Healthcare REIT, Inc.) on July 6, 2018. The registrant is an emerging growth company incorporated in Maryland. The report details a specific acquisition event occurring on the filing date.
Key Financial Metrics and Transaction Details
- Acquisition Price: $31,500,000 contract purchase price plus closing costs.
- 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 $709,000 (2.25% of purchase price) was paid. An additional contingent fee of approximately $709,000 (2.25%) has been accrued, subject to conditions.
- Asset Details: Grand Junction MOB, a multi-tenant medical office building in Grand Junction, Colorado.
- Property Size: Approximately 83,000 square feet of gross leasable area.
- Occupancy: 100% leased.
Material Changes
The primary material change is the expansion of the company's portfolio through the acquisition of the Grand Junction MOB from an unaffiliated third party, Grand Junction Medical Center LLC. The filing does not provide comparative financial data (revenue, profit, or cash flow) for the prior period as this is a current event report rather than a periodic financial statement.
Outlook, Risks, and Management Commentary
Management highlighted the property's diverse tenant base, including Colorado West Healthcare System and its subsidiaries, Urological Associates of Western Colorado, P.C., and Western Orthopedics & Sports Medicine, P.C. The facility supports various medical services including urology, orthopedics, and surgery. A press release regarding the acquisition was issued on July 9, 2018, and is attached as Exhibit 99.1. The filing notes the contingent nature of a portion of the advisor fee, which represents a potential future cash outflow dependent on satisfaction of certain conditions.
Investor Verification Checklist
- Verify the specific terms and interest rates of the borrowings under the revolving lines of credit used to finance the acquisition.
- Confirm the specific conditions required to trigger the payment of the accrued $709,000 contingent advisor fee.
- Review the lease agreements with the primary tenants (Colorado West Healthcare System, etc.) to understand lease terms and expiration dates.
- Assess the impact of the new debt on the company's overall leverage ratios and liquidity position.