Griffin-American Healthcare REIT IV Reports First Quarter 2018 Results
IRVINE, Calif. (May 15, 2018) – Griffin-American Healthcare REIT IV, Inc. today announced operating results for the company’s first quarter ended March 31, 2018.
“Griffin-American Healthcare REIT IV enjoyed an excellent first quarter, with continued growth in our portfolio and across a number of important financial and performance metrics,” said Jeff Hanson, chairman and chief executive officer. “Additionally, the company recently announced a strong initial estimated per share net asset value of its common stock of $9.65 calculated as of December 31, 2017, which demonstrated aggregate portfolio growth of 11.3 percent compared to the aggregate contract purchase price of the company’s property acquisitions.1 Needless to say, we are very pleased with the recent performance of Griffin-American Healthcare REIT IV.”
Chief financial officer Brian Peay added, “As our first quarter 2018 results demonstrate, Griffin-American Healthcare REIT IV is performing very well, with significant growth in modified funds from operations, funds from operations and net operating income. Additionally, we experienced year-over-year expansion in portfolio leased percentage and weighted average remaining lease term, while lowering our portfolio leverage2 to just 15 percent.”
First Quarter 2018 Highlights
- Modified funds from operations, as defined by the Institute for Portfolio Alternatives, or IPA, attributable to controlling interest, or MFFO, equaled approximately $4.4 million for the quarter ended March 31, 2018, representing year-over-year growth of approximately 214.2 percent compared to MFFO of approximately $1.4 million during the first quarter 2017. (Please see financial reconciliation table and notes at the end of this release for more information regarding MFFO.)
- Funds from operations, as defined by the National Association of Real Estate Investment Trusts, or NAREIT, attributable to controlling interest, or FFO, equaled approximately $5.0 million for the quarter ended March 31, 2018, compared to FFO of approximately $1.6 million for the first quarter 2017, representing year-over-year growth of approximately 204.9 percent. (Please see financial reconciliation tables and notes at the end of this release for more information regarding FFO.)
- Net loss during the quarter was approximately $(2.2) million compared to an approximate net loss of $(85,000) during the first quarter 2017. Net loss is due largely to depreciation and amortization expense of our properties, a non-cash item, in accordance with accounting principles generally accepted in the United States of America, or GAAP. (Please see financial reconciliation tables and notes at the end of this release for more information regarding net loss.)
- Net operating income, or NOI, totaled approximately $8.3 million for the quarter ended March 31, 2018, representing an increase of approximately 188.2 percent over first quarter 2017 NOI of approximately $2.9 million. (Please see financial reconciliation tables and notes at the end of this release for more information regarding NOI.)
- As of March 31, 2018, the company’s non-RIDEA3 property portfolio achieved a leased percentage of 95.6 percent and weighted average remaining lease term of 9.4 years. The company’s portfolio of senior housing – RIDEA facilities achieved a leased percentage of 76.3 percent. Portfolio leverage2 was 15.1 percent.
- The company completed the acquisition of the two-property Central Wisconsin Senior Care Portfolio for $22.6 million.
- The company declared and paid daily distributions equal to $0.60 per share annualized to its stockholders of record for the first quarter 2018, equal to an annualized distribution rate of 6.0 percent for Class T stockholders and 6.51 percent for Class I stockholders, assuming a purchase price of $10.00 per share for Class T shares and $9.21 per share for Class I shares.
Subsequent Events
- On April 9, 2018, the company’s board of directors unanimously approved and established an estimated per share net asset value, or NAV, of its common stock of $9.65 calculated as of Dec. 31, 2017, which demonstrated aggregate portfolio growth of 11.3 percent compared to the aggregate contract purchase price of the company’s property acquisitions. Consistent with the IPA’s practice guideline regarding valuations of publicly registered non-listed REITs, the valuation upon which the NAV was based does not include a portfolio premium that may accrue in a typical real estate valuation process conducted for transaction purposes, nor does it reflect an enterprise value.
- Subsequent to the close of the first quarter 2018, the company completed property acquisitions totaling approximately $47.4 million, comprised of three medical office buildings. As of May 15, 2018, the company had completed the acquisition of a 2.7 million-square-foot portfolio comprised of 45 medical office buildings, senior housing facilities and skilled nursing facilities located in 16 states for an aggregate contract purchase price of approximately $536.1 million. Additionally, the company is currently pursuing approximately $204.7 million in additional pending acquisitions4 which would result in a total portfolio of approximately 63 healthcare buildings located in 20 states comprised of approximately 3.5 million square feet of gross leasable area upon the successful completion of these potential acquisitions.
1 Please refer to the company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on April 9, 2018 for additional information.
2 Total debt divided by aggregate contract purchase price of real estate investments as of March 31, 2018.
3 The operation of healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 is commonly referred to as a “RIDEA” structure.
4 Comprised of prospective real estate acquisitions for which the company has executed letters of intent and/or purchase and sale agreements as of April 15, 2018. These prospective acquisitions are subject to substantial closing conditions and the satisfaction of other requirements as detailed in the agreements. Accordingly, the closing of some or all of these pending transactions may not occur.
