Griffin-American Healthcare REIT IV Reports Second Quarter 2018 Results
ST. LOUIS (August 14, 2018) – Griffin-American Healthcare REIT IV, Inc., today announced operating results for the company’s second quarter ended June 30, 2018.
“Griffin-American Healthcare REIT IV built on its exceptional first quarter results with an excellent second quarter of 2018, during which we recorded strong performance throughout our portfolio, which continues to grow at a rapid rate,” said Jeff Hanson, chairman and chief executive officer. “Including acquisitions completed subsequent to the close of the quarter, our portfolio has expanded to 50 healthcare properties acquired for an aggregate contract purchase price of $626.3 million,1 and we have more than $400 million2 of additional pending acquisitions that we intend to complete in the coming months.”
Chief financial officer Brian Peay added, “We continue to successfully build-out our portfolio with accretive properties that perform well. As such, our portfolio continued to enjoy high occupancy through the second quarter, strong average remaining lease term, low portfolio leverage, and triple digit growth in key performance metrics, including modified funds from operations, funds from operations and net operating income.”
Second Quarter 2018 Highlights
- Modified funds from operations, as defined by the Institute for Portfolio Alternatives, or IPA, attributable to controlling interest, or MFFO, equaled $6.2 million for the quarter ended June 30, 2018, representing year-over-year growth of approximately 111.6 percent compared to MFFO of $2.9 million during the second quarter 2017. (Please see financial reconciliation tables 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 $6.9 million for the quarter ended June 30, 2018, representing year-over-year growth of approximately 122.9 percent compared to FFO of $3.1 million during the second quarter 2017. (Please see financial reconciliation tables and notes at the end of this release for more information regarding FFO.)
- Net loss during the quarter was $958,000 compared to net income of $621,000 during the second 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/income.)
- Net operating income, or NOI, totaled $9.7 million for the quarter ended June 30, 2018, representing an increase of approximately 111.3 percent over second quarter 2017 NOI of $4.6 million. (Please see financial reconciliation tables and notes at the end of this release for more information regarding NOI.)
- As of June 30, 2018, the company’s non-RIDEA3 property portfolio achieved a leased percentage of 95.1 percent and weighted average remaining lease term of 8.8 years. The company’s portfolio of senior housing —RIDEA facilities achieved a leased percentage of 76.5 percent. Portfolio leverage4 was 15.6 percent.
- The company completed the acquisition of three medical office buildings during the quarter for an aggregate purchase price of approximately $47.4 million.
- The company declared and paid daily distributions equal to $0.60 per share annualized to its stockholders of record for the second 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. The annualized distribution rate is equal to 5.97 percent for Class T stockholders and 6.22 percent for Class I stockholders who purchased their shares subsequent to April 9, 2018, when share purchase prices for investors were adjusted to $10.05 per share for Class T shares and $9.65 per share for Class I shares. Share prices were adjusted following the approval by the company’s board of directors of an estimated per share net asset value of its common stock of $9.65 as of Dec. 31, 2017.5 Subsequent Events
- Subsequent to the close of the second quarter 2018, the company completed property acquisitions totaling approximately $90.2 million, comprised of three medical office buildings and two senior housing-RIDEA facilities. As of Aug. 14, 2018, the company’s portfolio consisted of 50 medical office buildings, senior housing facilities and skilled nursing facilities located in 20 states comprised of approximately 3.0 million square feet of gross leasable area, acquired for an aggregate contract purchase price of approximately $626.3 million. Additionally, the company is currently pursuing approximately $404.7 million in additional pending acquisitions,2 which would result in a total portfolio of approximately 98 healthcare buildings located in 22 states comprised of approximately 4.7 million square feet of gross leasable area upon the successful completion of these potential acquisitions.
1 Based on aggregate contract purchase price as of Aug. 14, 2018.
2 Comprised of prospective real estate acquisitions for which the company has executed letters of intent and/or purchase and sale agreements as of Aug. 9, 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.
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 Total debt divided by total market value of real estate. Total market value equals the aggregate contract purchase price paid for investments or, for investments appraised subsequent to the date of purchase, the aggregate value reported in the most recent independent appraisals of such investments.
5 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.