Business Context and Reporting Period
This Form 8-K is filed by Griffin-American Healthcare REIT IV, Inc. (the "Registrant") for the period ending May 26, 2016. The filing reports the entry into a material definitive agreement for the acquisition of a medical office building and a material modification to the rights of security holders regarding share reclassification.
Key Financial Metrics
The filing does not provide consolidated revenue, profit, cash flow, or margin data for the Registrant. Specific financial details related to the reported transaction include:
- Acquisition Price: $5,450,000 plus closing costs.
- Initial Deposit: $100,000 (non-refundable except in limited circumstances).
- Property Size: Approximately 19,000 square feet.
- Occupancy: 100% triple net leased to The Regents of the University of California (UC Davis Medical Group).
- Financing Source: Funds raised through the Registrant's initial public offering.
Material Changes and Transactions
Real Estate Acquisition: On May 24, 2016, American Healthcare Investors, LLC (AHI), the Registrant's co-sponsor, entered into a purchase agreement to acquire the Auburn MOB in Auburn, California. The agreement was subsequently assigned to GAHC4 Auburn CA MOB, LLC, a wholly-owned subsidiary of the Registrant. The transaction includes a 33-day due diligence period and a target closing within 30 days following the expiration of that period.
Share Reclassification: On May 25, 2016, the Registrant filed Articles Supplementary to reclassify a portion of its Class T common stock as Class I common stock. While voting rights are similar, Class I Shareholders hold exclusive voting rights on amendments altering only their contract rights and have no voting rights on amendments affecting other share classes.
Outlook, Risks, and Management Commentary
Outlook: Management anticipates closing the Auburn MOB acquisition in the second quarter of 2016. An acquisition fee based on the purchase price is expected to be paid to the advisor or its affiliates.
Risks and Contingencies: The filing explicitly states that no assurance can be given that the closing will occur within the anticipated timeframe or at all. The acquisition is subject to substantial conditions to closing, including the successful completion of the due diligence period.
Investor Verification Checklist
- Verify the successful completion of the 33-day due diligence period for the Auburn MOB acquisition.
- Confirm the final closing date and whether the transaction proceeds as anticipated in Q2 2016.
- Review the specific terms of the acquisition fee payable to the advisor as detailed in the IPO prospectus.
- Monitor the status of the initial public offering to ensure sufficient funds are available to finance the $5.45 million purchase.
- Examine the Articles Supplementary (Exhibit 3.1) for the precise number of shares reclassified from Class T to Class I.