Business Context and Reporting Period
This Form 8-K Current Report was filed by Griffin-American Healthcare REIT IV, Inc. on April 9, 2018. The registrant is an emerging growth company incorporated in Maryland. The filing reports a material acquisition event occurring on the date of the report.
Key Financial Metrics and Transaction Details
- Acquisition Price: $19,500,000 contract purchase price, plus closing costs.
- Financing Sources: Cash proceeds from the initial public offering (IPO) 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 $439,000 (2.25% of purchase price) was paid. An additional contingent advisor payment of approximately $439,000 (2.25% of purchase price) has been accrued, subject to certain conditions.
- Property Metrics: The acquired asset, Sauk Prairie MOB, is a two-story medical office building with approximately 55,000 square feet of gross leasable area.
- Occupancy: The property is currently 100% leased to six tenants.
Material Changes
The primary material change reported is the acquisition of Sauk Prairie MOB from an unaffiliated third party, Sauk Prairie MOB LLC. This transaction expands the company's portfolio with a fully leased asset in Prairie du Sac, Wisconsin. 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 Unusual Items
Management Commentary: The acquisition was announced via a press release issued by co-sponsor American Healthcare Investors, LLC on April 13, 2018. The property serves a diverse range of medical services including orthopedics, cardiology, and oncology.
Contingencies: The company has accrued a contingent advisor payment of approximately $439,000, which is payable only upon the satisfaction of certain conditions.
Risks: The filing does not explicitly detail new risks associated with this specific transaction beyond standard acquisition contingencies.
Investor Verification Checklist
- Verify the specific terms and conditions attached to the accrued contingent advisor payment of $439,000.
- Confirm the lease expiration dates and credit quality of the six tenants, including Sauk Prairie Healthcare, Inc., Dean Health Systems, Inc., and University of Wisconsin Medical Foundation, Inc.
- Review the terms of the revolving line of credit utilized for financing to understand interest rate exposure and covenants.
- Examine the full text of the press release attached as Exhibit 99.1 for additional strategic context.