Business Context and Reporting Period
This Form 8-K was filed by Griffin-American Healthcare REIT IV, Inc. (referred to in the request as American Healthcare REIT, Inc.) on June 7, 2018. The registrant is an emerging growth company incorporated in Maryland. The filing reports the entry into a material definitive agreement to acquire a portfolio of skilled nursing facilities.
Key Financial Metrics and Transaction Details
- Transaction Type: Purchase and Sale Agreement for real property and operating interests.
- Contract Purchase Price: $88,200,000, plus closing costs.
- Deposit: $5,250,000 (non-refundable after the due diligence period).
- Asset Scope: Eight skilled nursing facilities located in Missouri (Kansas City, Salisbury, Florissant, Sedalia, Milan, Trenton, Moberly, and St. Elizabeth).
- Physical Metrics: Approximately 384,000 square feet of gross leasable area and 1,112 licensed beds.
- Occupancy: 100% occupied at the time of acquisition.
- Financing Source: Funds from the initial public offering and debt financing.
Material Changes and Transaction Terms
The filing details the execution of a Purchase Agreement with multiple sellers and operators, guaranteed by TLG II, L.L.P. Key terms include:
- Due Diligence: A 45-day period from the effective date.
- Closing Timeline: Expected 30 days after the due diligence period, with a hard "Outside Date" of September 30, 2018, subject to extensions.
- Termination Rights: The registrant may terminate for any reason during the due diligence period with a full deposit refund. If conditions are not met by the Outside Date, the registrant may extend the date or terminate with a refund.
- Remedies: In the event of a material breach by sellers, the registrant may seek specific performance or terminate and recover the deposit plus interest. In the event of a registrant breach, sellers may retain the deposit as liquidated damages.
- Lease Structure: Closing is conditioned on the execution of a master lease with a new master tenant (RC Tier Properties, L.L.C.).
Outlook, Risks, and Management Commentary
Management anticipates closing the acquisition in the third quarter of 2018 but explicitly states there is no assurance that the closing will occur within this timeframe or at all. The transaction is subject to substantial conditions, including the satisfaction of covenants, representations, and warranties by both parties. The registrant also anticipates paying an acquisition fee to its affiliated advisor based on the purchase price.
Investor Verification Checklist
- Verify the status of the 45-day due diligence period and whether it has expired.
- Confirm if the $5,250,000 deposit has been paid and its current refundability status.
- Check for the execution of the master lease with RC Tier Properties, L.L.C., a condition precedent to closing.
- Monitor the progress of financing from the initial public offering and debt sources.
- Review any subsequent filings regarding the extension or termination of the Outside Date (September 30, 2018).