Griffin-American Healthcare REIT IV Reports Third Quarter 2018 Results
IRVINE, Calif (Nov. 15, 2018) – Griffin-American Healthcare REIT IV, Inc., today announced operating results for the company’s third quarter ended Sept. 30, 2018.
“Griffin-American Healthcare REIT IV continues to enjoy strong financial and portfolio performance as demonstrated in our third quarter 2018 results,” said Jeff Hanson, chairman and chief executive officer. “We continue to identify and acquire accretive properties for our fast-growing portfolio, which has more than doubled in size during the past year to more than $800 million1 with approximately $212 million2 in additional acquisitions pending in our pipeline.”
Chief financial officer Brian Peay added, “The Griffin-American Healthcare REIT IV portfolio continues to perform exceptionally well, with continued high occupancy, long remaining lease terms, and very strong year-over-year growth in key financial metrics, including net operating income, funds from operations and modified funds from operations.”
Third Quarter 2018 Highlights
- Modified funds from operations, as defined by the Institute for Portfolio Alternatives, or the IPA, attributable to controlling interest, or MFFO, equaled approximately $6.6 million for the quarter ended Sept. 30, 2018, representing year-over-year growth of approximately 78.7 percent compared to MFFO of approximately $3.7 million during the third 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 approximately $7.3 million for the quarter ended Sept. 30, 2018, compared to FFO of approximately $4.2 million for the third quarter 2017, representing year-over-year growth of approximately 73.8 percent. (Please see financial reconciliation tables and notes at the end of this release for more information regarding FFO.)
- Net operating income, or NOI, totaled approximately $11.1 million for the quarter ended Sept. 30, 2018, representing an increase of approximately 73.7 percent over third quarter 2017 NOI of approximately $6.4 million. (Please see financial reconciliation tables and notes at the end of this release for more information regarding NOI.)
- Net loss during the quarter equaled approximately $1.7 million compared to net income of $754,000 during the third quarter 2017. (Please see financial reconciliation tables and notes at the end of this release for more information regarding net loss/income.)
- As of Sept. 30, 2018, the company’s non-RIDEA3 property portfolio achieved a leased percentage of 95.5 percent and weighted average remaining lease term of 9.5 years. The company’s portfolio of senior housing – RIDEA facilities achieved a leased percentage of 76.7 percent. Portfolio leverage4 was 28.4 percent.
- The company completed third quarter acquisitions totaling approximately $178.4 million, based on contract purchase price, comprised of three medical office buildings, an eight-building skilled nursing facility portfolio and two senior housing facilities operating under RIDEA management structures.
- On Sept. 28, 2018, the company entered into an amendment with Bank of America, N.A., as administrative agent, and the subsidiary guarantors and lenders, on its existing $200 million revolving line of credit and term loan to expand its borrowing capacity by $150 million, to a maximum principal amount of $350 million.
- The company declared and paid daily distributions equal to $0.60 per share annualized to its stockholders of record for the third 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 the company’s common stock of $9.65 as of Dec. 31, 2017.5
- Subsequent to the close of the third quarter 2018, the company completed the acquisition of a 6 percent interest in a joint venture that owns approximately 97 percent of Trilogy Investors, LLC (“Trilogy”), for $48 million in cash, based on an estimated gross enterprise value of $93.2 million less the pro rata share of debt in the joint venture. Trilogy is a leading owner-operator of purpose-built integrated senior healthcare campuses throughout the states of Indiana, Ohio, Michigan and Kentucky.
- As of Nov. 15, 2018, the company’s portfolio consisted of 58 medical office buildings, senior housing facilities and skilled nursing facilities located in 20 states comprised of approximately 3.4 million square feet of gross leasable area, as well as an interest in a joint venture which owns or operates a portfolio of integrated senior health campuses and ancillary businesses, acquired for an aggregate contract purchase price of approximately $807.6 million. Additionally, the company is currently pursuing approximately $211.6 million in additional pending acquisitions2 which would result in a total portfolio of approximately 96 healthcare buildings located in 21 states comprised of approximately 4.6 million square feet of gross leasable area upon the successful completion of these potential acquisitions.
1 Based on aggregate contract purchase price as of Nov. 15, 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 Oct. 20, 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, or SEC, on April 9, 2018 for additional information.