Understanding the Risks

An investment in Griffin-American Healthcare REIT IV involves a high degree of risk. Investors should purchase shares of our common stock only if they can afford a complete loss of their investment. Investors should carefully consider the information set forth in the “Risk Factors” section of the prospectus for a discussion of material risk factors relevant to an investment in our common stock, including but not limited to, the following:

  • There is no public market for the shares of our common stock. Shares of our common stock cannot be readily sold and there are significant restrictions on the ownership, transferability and repurchase of shares of our common stock. If you are able to sell your shares of our common stock, you likely would have to sell them at a substantial discount.
  • We have limited operating history and financing sources. Therefore, you may not be able to adequately evaluate our ability to achieve our investment objectives.
  • This is a “blind pool” offering because we have not identified all of the real estate or real estate-related investments to acquire with the net proceeds from this offering. As a result, you will not be able to evaluate the economic merits of our future investments prior to their purchase. We may be unable to invest the net proceeds from this offering on acceptable terms to investors, or at all.
  • We have paid distributions from cash flows from operations and the net proceeds of this offering. Until we generate operating cash flows sufficient to pay distributions to you, we may pay distributions from the net proceeds of this offering or from borrowings in anticipation of future cash flows. We may also be required to sell assets or issue new securities for cash in order to pay distributions. We have not established any limit on the amount of net offering proceeds or borrowings that may be used to fund distributions other than those limits imposed by our organizational documents and Maryland law, and it is likely that we will use net offering proceeds to fund a portion of our initial years of distributions and that such distributions will represent a return of capital. Any such actions could reduce the amount of capital we ultimately invest in assets and negatively impact the amount of income available for future distributions.
  • We have incurred substantial debt, which could hinder our ability to pay distributions to you or could decrease the value of your investment if the income from, or the value of, the property securing our debt declines.
  • This is a “best efforts” offering. If we raise substantially less than the maximum offering, we may not be able to invest in a diverse portfolio of real estate and real estate-related investments, and the value of your investment may fluctuate more widely with the performance of specific investments.
  • We rely on our advisor and its affiliates for our day-to-day operations and the selection of our investments. We pay substantial fees to our advisor and its affiliates for these services, including compensation that may be required to be paid to our advisor even if our advisor is terminated as a result of poor performance, and the agreements governing these fees were not all negotiated at arm’s-length. In addition, fees payable to our dealer manager and our advisor in our organizational stage are based upon the gross offering proceeds and not on our properties’ performance. Such agreements may require us to pay more than we would if we were only using unaffiliated third parties and may not solely reflect your interests as a stockholder of our company.
  • Many of our officers also are managing directors, officers and/or employees of one of our co-sponsors and other affiliated entities. As a result, our officers will face conflicts of interest, including significant conflicts in allocating time and investment opportunities among us and similar programs sponsored by one of our co-sponsors or its affiliates.
  • If we do not maintain our qualification as a REIT, we would be subject to federal income tax at regular corporate rates, which would adversely affect our operations and our ability to pay distributions to you.
  • This is a fixed price offering. The offering price for shares of our common stock beginning on April 11, 2018 is based on our estimated net asset value per share as determined by our board of directors on April 6, 2018 plus, in the case of any shares offered pursuant to our primary offering, any applicable per share up-front selling commissions and dealer manager fees other than those funded by our advisor. This offering price may not accurately represent the current value of our assets at any particular time.
  • We are not obligated, through our charter or otherwise, to effectuate a liquidity event, and we may not effect a liquidity event within our targeted time frame of five years after the completion of our offering stage, or at all. If we do not effect a liquidity event, you may have to hold your investment in shares of our common stock for an indefinite period of time.