Maryland |
6798 |
47-2887436 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Robert H. Bergdolt, Esq. DLA Piper LLP (US) 4141 Parklake Ave., Suite 300 Raleigh, North Carolina 27612 (919) 786-2000 |
Lauren B. Prevost, Esq. Seth K. Weiner, Esq. Morris, Manning & Martin, LLP 3343 Peachtree Road, NE 1600 Atlanta Financial Center Atlanta, Georgia 30326 (404) 504-7744 |
Robert W. Downes, Esq. Sullivan & Cromwell LLP 125 Broad Street New York, New York 10024 (212) 558-4000 |
Large Accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
| ||||||||
Title of each class of securities to be registered |
Amount to be registered |
Proposed maximum offering price per share |
Proposed maximum aggregate offering price |
Amount of registration fee | ||||
Class I Common Stock, $0.01 par value per share |
179,658,356(1) |
$9.22(2) |
$1,656,450,039(3) |
$180,719(4) | ||||
| ||||||||
|
(1) |
Represents the estimated maximum number of shares of Griffin-American Healthcare REIT IV, Inc. Class I common stock, $0.01 par value per share (“GAHR IV Class I Common Stock”), rounded up to the nearest share, to be issued in connection with the merger described herein based on the product of 193,889,872 shares of Griffin-American Healthcare REIT III, Inc. common stock, $0.01 par value per share (“GAHR III Common Stock”), outstanding as of July 9, 2021 multiplied by the exchange ratio of 0.9266 shares of GAHR IV Class I Common Stock for each share of GAHR III Common Stock. |
(2) |
There is no established market for the GAHR IV Class I Common Stock. On March 18, 2021, the board of directors of Griffin-American Healthcare REIT IV, Inc. approved an estimated per share net asset value of the GAHR IV Class I Common Stock of $9.22. |
(3) |
Estimated solely for purposes of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”), and calculated pursuant to Rule 457(f)(2) under the Securities Act. |
(4) |
Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $109.10 per $1,000,000 of the proposed maximum aggregate offering price. |
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1. | GAHR III Merger Proposal: |
2. | GAHR III Charter Amendment Proposals: |
(a) | GAHR III Charter Amendment Proposal (Merger Agreement): “Roll-Up Transactions”, which proposal we refer to as the “GAHR III Charter Amendment Proposal (Merger Agreement).” |
(b) | GAHR III Charter Amendment Proposal (AHI Acquisition): |
3. | Adjournment of the GAHR III Special Meeting: |
1. | GAHR IV Merger Proposal: |
2. | GAHR IV Charter Amendment Proposals: |
(a) | removal of certain limitations relating to (i) suitability of stockholders and (ii) collection of an internalization fee, which proposal we refer to as the “GAHR IV Charter Amendment Proposal (Merger Agreement)”; |
(b) | removal or revision of certain limitations required by the North American Securities Administrators Association and other conforming and ministerial changes; and |
(c) | revisions in order to bring the GAHR IV charter more in line with those of publicly-listed companies. |
3. | Election of Directors one-year term expiring at the 2022 Annual Meeting of Stockholders of GAHR IV and until his or her successor is duly elected and qualifies. |
4. | Ratification of Auditors |
5. | Adjournment of the GAHR IV Annual Meeting: |
• | “AHI Acquisition” are to the series of transactions pursuant to which, among other things, GAHR III has agreed to acquire a newly formed entity that owns substantially all of the business and operations of one of its co-sponsors, American Healthcare Investors, including all of the equity interests in (i) GAHR III Advisor, and (ii) GAHR IV Advisor, such that following the consummation of the AHI Acquisition, GAHR III will become self-managed and (if the Mergers do not occur) GAHR IV will become indirectly managed by GAHR III, and following the consummation of the Mergers, the surviving company will be an entirely self-managed company. Certain working capital of American Healthcare Investors will not be transferred in the AHI Acquisition and therefore will be retained by American Healthcare Investors and may be distributed to the members of American Healthcare Investors if unused. |
• | “AHI Principals” are to Jeffrey T. Hanson, Danny Prosky and Mathieu B. Streiff, collectively; |
• | “American Healthcare Investors” are to American Healthcare Investors, LLC, the co-sponsor (along with Griffin Capital) of each of GAHR III and GAHR IV; |
• | “Code” are to the Internal Revenue Code of 1986, as amended; |
• | “Combined Company” are to GAHR IV immediately following the consummation of the Mergers; |
• | “COVID-19” are to the current novel coronavirus; |
• | “DRULPA” are to the Delaware Revised Uniform Limited Partnership Act; |
• | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
• | “Exchange Ratio” are to 0.9266 shares of GAHR IV Class I Common Stock per share of GAHR III Common Stock; |
• | “GAHR III” are to Griffin-American Healthcare REIT III, Inc., a Maryland corporation; |
• | “GAHR III Advisor” are to Griffin-American Healthcare REIT III Advisor, a Delaware limited liability company and the external advisor of GAHR III; |
• | “GAHR III Advisory Agreement” are to the Advisory Agreement, dated as of February 26, 2014, by and among GAHR III, GAHR III Operating Partnership and GAHR III Advisor, as amended by the Amendment to Advisory Agreement, dated February 22, 2021; |
• | “GAHR III Board” are to the board of directors of GAHR III; |
• | “GAHR III Bylaws” are to the bylaws of GAHR III as in effect on the date of this joint proxy statement/prospectus; |
• | “GAHR III Charter” are to the charter of GAHR III as in effect on the date of this joint proxy statement/prospectus; |
• | “GAHR III Charter Amendment” are to, collectively, the GAHR III Charter Amendment (Merger Agreement) and the GAHR III Charter Amendment (AHI Acquisition); |
• | “GAHR III Charter Amendment (Merger Agreement)” are to the proposed amendments to the GAHR III Charter to remove the provisions related to Roll-Up Transactions; |
• | “GAHR III Charter Amendment (AHI Acquisition)” are to the proposed amendments to the GAHR III Charter to remove the limitations relating to (i) collection of an internalization fee and (ii) acquisition of an asset from GAHR III’s sponsor, external advisor, any GAHR III director or any affiliate thereof in excess of the asset’s current appraised value; |
• | “GAHR III Class I OP Unit” are to a GAHR III OP Unit entitling the holder thereof to the rights of a holder of a “Partnership Class I Unit” as provided in the GAHR III Partnership Agreement; |
• | “GAHR III Common Stock” are to the common stock, $0.01 par value per share, of GAHR III; |
• | “GAHR III DRIP” are to the amended and restated distribution reinvestment plan of GAHR III; |
• | “GAHR III Incentive Plan” are to the Griffin-American Healthcare REIT III, Inc. 2013 Incentive Plan; |
• | “GAHR III OP Units” are to units of partnership interests in GAHR III Operating Partnership; |
• | “GAHR III Operating Partnership” are to Griffin-American Healthcare REIT III Holdings, LP, a Delaware limited partnership and the operating partnership of GAHR III; |
• | “GAHR III Parties” are to GAHR III and GAHR III Operating Partnership; |
• | “GAHR III Partnership Agreement” are to the Agreement of Limited Partnership of GAHR III Operating Partnership, dated as of January 11, 2013, as amended through the date hereof; |
• | “GAHR III Special Committee” are to the special committee of the GAHR III Board, comprised solely of independent directors, that was formed by the GAHR III Board in connection with the investigation and analysis of certain strategic alternatives that may be available to GAHR III, including the Mergers and the other transactions contemplated by the Merger Agreement; |
• | “GAHR III Special Meeting” are to the special meeting of GAHR III stockholders to be held via virtual webcast on [ |
• | “GAHR IV” are to Griffin-American Healthcare REIT IV, Inc., a Maryland corporation; |
• | “GAHR IV Advisor” are to Griffin-American Healthcare REIT IV Advisor, LLC, a Delaware limited liability company and the external advisor of GAHR IV; |
• | “GAHR IV Advisory Agreement” are to the Advisory Agreement, dated as of February 16, 2016, by and among GAHR IV, GAHR IV Operating Partnership and GAHR IV Advisor, as amended by the Amendment to Advisory Agreement, dated June 23, 2021; |
• | “GAHR IV Annual Meeting” are to the annual meeting of GAHR IV stockholders to be held via virtual webcast on [ |
• | “GAHR IV Board” are to the board of directors of GAHR IV; |
• | “GAHR IV Bylaws” are to the bylaws of GAHR IV existing on the date of this joint proxy statement/prospectus; |
• | “GAHR IV Charter” are to the charter of GAHR IV existing on the date of this joint proxy statement/prospectus; |
• | “GAHR IV Charter Amendment (Merger Agreement)” are to the proposed amendments to the GAHR IV Charter to remove certain limitations relating to (i) suitability of stockholders and (ii) collection of an internalization fee; |
• | “GAHR IV Charter Amendment” are to, collectively, the GAHR IV Charter Amendment (Merger Agreement) and the proposed amendments to the GAHR IV Charter for the (i) removal or revision of certain limitations required by the North American Securities Administrators Association and other conforming or ministerial changes and (ii) revisions in order to bring the GAHR IV Charter more in line with those of publicly-listed companies; |
• | “GAHR IV Class I Common Stock” are to the Class I common stock, $0.01 par value per share, of GAHR IV; |
• | “GAHR IV Class T Common Stock” are to the Class T common stock, $0.01 par value per share, of GAHR IV; |
• | “GAHR IV Common Stock” are to the GAHR IV Class I Common Stock and the GAHR IV Class T Common Stock, collectively; |
• | “GAHR IV DRIP” are to the amended and restated distribution reinvestment plan of GAHR IV; |
• | “GAHR IV Incentive Plan” are to the Griffin-American Healthcare REIT IV, Inc. 2015 Incentive Plan; |
• | “GAHR IV OP Units” are to units of partnership interest in GAHR IV Operating Partnership; |
• | “GAHR IV Operating Partnership” are to Griffin-American Healthcare REIT IV Holdings, LP, a Delaware limited partnership and the operating partnership of GAHR IV; |
• | “GAHR IV Parties” are to GAHR IV, GAHR IV Operating Partnership and Merger Sub; |
• | “GAHR IV Partnership Agreement” are to the Amended and Restated Agreement of Limited Partnership of GAHR IV Operating Partnership, dated as of February 16, 2016, as amended through the date hereof; |
• | “GAHR IV Special Committee” are to the special committee of the GAHR IV Board, comprised solely of independent directors, that was formed by the GAHR IV Board in connection with the investigation and analysis of certain strategic alternatives that may be available to GAHR IV, including the Mergers and the other transactions contemplated by the Merger Agreement; |
• | “Griffin Capital” are to Griffin Capital Company, LLC, the co-sponsor (along with American Healthcare Investors) of each of GAHR III and GAHR IV; |
• | “Griffin Capital Securities” are to Griffin Capital Securities, LLC, the dealer manager to each of GAHR III and GAHR IV; |
• | “Gross investment value” are to total acquisition costs and subsequent capital expenditures that pertain to GAHR III’s or GAHR IV’s pro-rata ownership; |
• | “HoldCo” are to Griffin-American Strategic Holdings, LLC, an affiliate of the Sponsors; |
• | “Investment Company Act” are to the Investment Company Act of 1940, as amended; |
• | “IRS” are to the Internal Revenue Service; |
• | “Merger Agreement” are to the Agreement and Plan of Merger, dated as of June 23, 2021, by and among GAHR IV, GAHR IV Operating Partnership, Merger Sub, GAHR III and GAHR III Operating Partnership; |
• | “Merger Sub” are to Continental Merger Sub, LLC, a Maryland limited liability company and wholly owned subsidiary of GAHR IV; |
• | “Mergers” are to the REIT Merger and the Partnership Merger, collectively; |
• | “MGCL” are to the Maryland General Corporation Law; |
• | “MLLCA” are to the Maryland Limited Liability Company Act; |
• | “NASAA REIT Guidelines” are to the NASAA Statement of Policy Regarding Real Estate Investment Trusts; |
• | “NAV” are to the net asset value of an entity; |
• | “Outside Date” are to March 23, 2022; |
• | “Partnership Merger” are to the merger of GAHR IV Operating Partnership with and into GAHR III Operating Partnership; |
• | “REIT” are to a real estate investment trust; |
• | “REIT Merger” are to the merger of GAHR III with and into Merger Sub, as a result of which Merger Sub will survive as a wholly owned subsidiary of GAHR IV, pursuant to the Merger Agreement; |
• | “Roll-Up Transactions” are to certain transactions restricted by the GAHR III Charter involving the acquisition, merger, conversion or consolidation either directly or indirectly of GAHR III and the issuance to GAHR III stockholders of securities of a partnership, real estate investment trust, corporation, trust or similar entity that would be created or would survive such transaction (a “Roll-Up Entity”); |
• | “SDAT” are to the State Department of Assessments and Taxation of the State of Maryland; |
• | “SEC” are to the U.S. Securities and Exchange Commission; |
• | “Securities Act” are to the Securities Act of 1933, as amended; |
• | “Sponsors” are to American Healthcare Investors and Griffin Capital, collectively; |
• | “Stanger” are to Robert A. Stanger & Co., Inc., the financial advisor to the GAHR III Special Committee; |
• | “TRS” are to a taxable REIT subsidiary; and |
• | “Truist Securities” are to Truist Securities, Inc., the financial advisor to the GAHR IV Special Committee. |
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Q: |
What are the proposed Mergers? |
A: | The GAHR III Board and the GAHR IV Board are recommending the Mergers to combine into a single company. GAHR IV, GAHR IV Operating Partnership, Merger Sub, GAHR III and GAHR III Operating Partnership have entered into the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. The REIT Merger will be voted upon by the stockholders of both GAHR III and GAHR IV. If approved, (i) GAHR III will merge with and into Merger Sub, with Merger Sub surviving the REIT Merger as a wholly owned subsidiary of GAHR IV and (ii) GAHR IV Operating Partnership will merge with and into GAHR III Operating Partnership, with GAHR III Operating Partnership being the surviving entity. In accordance with the applicable provisions of the MGCL and the MLLCA, the separate existence of GAHR III will cease at the effective time of the REIT Merger and in accordance with the applicable provisions of the DRULPA, the separate existence of GAHR IV Operating Partnership will cease at the effective time of the Partnership Merger. |
Q: |
What will happen in the proposed Mergers? |
A: | At the effective time of the REIT Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of GAHR III Common Stock will be converted automatically into the right to receive 0.9266 shares of GAHR IV Class I Common Stock, subject to the treatment of fractional shares in accordance with the Merger Agreement. Based on the number of shares of GAHR IV Common Stock and GAHR III Common Stock outstanding on July 9, 2021, former GAHR III stockholders will own approximately 68.7% of the issued and outstanding shares of GAHR IV Common Stock following the REIT Merger. See “The Merger Agreement—Consideration to be Received in the Mergers” beginning on page 242 for additional information. |
Q: |
Why am I receiving this joint proxy statement/prospectus? |
A: | The GAHR III Board is using this joint proxy statement/prospectus to solicit proxies of GAHR III stockholders in connection with the GAHR III Special Meeting and the GAHR IV Board is using this joint proxy statement/prospectus to solicit proxies of GAHR IV stockholders in connection with the GAHR IV Annual Meeting. In addition, GAHR IV is using this joint proxy statement/prospectus as a prospectus for GAHR III stockholders because GAHR IV will issue shares of GAHR IV Common Stock to former GAHR III stockholders as consideration for the REIT Merger. |
Q: |
Why is the GAHR III Charter Amendment proposed? |
A: | The GAHR III Charter presently contains substantive and procedural requirements for certain transactions involving the acquisition, merger, conversion or consolidation of GAHR III and the issuance of securities of the entity surviving such transaction to the former holders of GAHR III Common Stock. The GAHR III Charter Amendment (Merger Agreement), if adopted, would delete from the GAHR III Charter the restrictions and requirements related to such Roll-Up Transactions (and the associated definitions in the GAHR III Charter). |
Q: |
Why is the GAHR IV Charter Amendment proposed? |
A: | The GAHR IV Charter currently imposes certain suitability and minimum investment requirements on investors in GAHR IV Common Stock in accordance with the NASAA REIT Guidelines. The GAHR IV Charter Amendment removes these requirements, which generally will provide stockholders with greater ability to sell shares as prospective buyers would no longer be subject to the financial suitability standards imposed by the NASAA REIT Guidelines. In addition, the removal of these provisions would eliminate any minimum initial cash investment amounts or minimum subsequent cash investment amounts for stockholders. Furthermore, the removal of these provisions eliminates the requirement that Griffin Capital Securities or anyone selling GAHR IV Common Stock on GAHR IV’s behalf make a determination that the purchase of GAHR IV Common Stock is a suitable and appropriate investment for the prospective stockholder (although GAHR IV is not currently selling shares). Rather, prospective stockholders or their financial advisors, or both, would determine for themselves whether an investment in GAHR IV is a suitable and appropriate investment. The removal of these requirements will also clarify that there are no suitability or minimum investment requirements applicable to the issuance of GAHR IV Class I Common Stock in the REIT Merger. |
Q: |
Am I being asked to vote on any other proposals at the GAHR III Special Meeting in addition to the GAHR III Merger Proposal and GAHR III Charter Amendment Proposals or at the GAHR IV Annual Meeting in addition to the GAHR IV Merger Proposal and GAHR IV Charter Amendment Proposals? |
A: | Yes. |
• | To elect five directors to the GAHR IV Board, each to hold office for a one-year term expiring at the 2022 Annual Meeting of Stockholders of GAHR IV and until his or her successor is duly elected and qualifies; |
• | To ratify the appointment of Deloitte & Touche LLP (“Deloitte & Touche”) as GAHR IV’s independent registered public accounting firm for the year ending December 31, 2021; and |
• | To approve any adjournments of the GAHR IV Annual Meeting for the purposes of soliciting additional proxies if there are not sufficient votes at the meeting to approve the GAHR IV Merger Proposal or any of the GAHR IV Charter Amendment Proposals, if necessary or appropriate, as determined by the chair of the GAHR IV Annual Meeting. In the event of an adjournment, the meeting would be adjourned to another date, time or location (whether via webcast or physical location) as determined by the GAHR IV Board. |
Q: |
How does the GAHR III Board recommend that GAHR III stockholders vote? |
A: | The GAHR III Board recommends that GAHR III stockholders vote “FOR” “FOR” “FOR” |
Q: |
How does the GAHR IV Board recommend that GAHR IV stockholders vote? |
A: | The GAHR IV Board recommends that GAHR IV stockholders vote “FOR” “FOR” FOR ALL FOR “FOR” |
Q: |
Are GAHR III and GAHR IV permitted to pay distributions prior to the closing of the REIT Merger? |
A: | Yes, the Merger Agreement permits the declaration and payment by GAHR III of any distribution that is reasonably necessary to maintain GAHR III’s REIT qualification and/or to avoid or reduce the imposition of any entity level income or excise tax under the Code. Similarly, the Merger Agreement permits the declaration and payment by GAHR IV of any distribution that is reasonably necessary to maintain GAHR IV’s REIT qualification and/or to avoid or reduce the imposition of any entity level income or excise tax under the Code. For further information regarding the declaration and payment of distributions by GAHR III and GAHR IV prior to the effective time of the REIT Merger, see “Distributions” on page 240. |
Q: |
What is the status of the GAHR III DRIP and share repurchase plan and the GAHR IV DRIP and share repurchase plan? |
A: | GAHR III COVID-19 pandemic has had on GAHR III’s business operations, the GAHR III Board authorized the suspension of all stockholder distributions upon the completion of the payment of distributions payable to stockholders of record on or prior to the close of business on May 31, 2020. As a result, the GAHR III Board also approved the suspension of the GAHR III DRIP. Also on May 29, 2020, the GAHR III Board suspended the GAHR III share repurchase plan with respect to all share repurchase requests received after May 31, 2020, including repurchases resulting from the death or qualifying disability of stockholders. On April 22, 2021, the GAHR III Board announced its decision to reinstate stockholder distributions and declared a daily distribution to GAHR III stockholders of record as of the close of business on each day of the period commencing on June 1, 2021 and ending June 30, 2021. The GAHR III Board then subsequently authorized a daily distribution to GAHR III stockholders of record as of the close of business on each day of the period commencing on July 1, 2021 and ending July 31, 2021. However, the GAHR III DRIP and the GAHR III share repurchase plan remain suspended. |
Q: |
What fees will GAHR III Advisor and GAHR IV Advisor receive in connection with the Mergers? |
A: | No fees will be paid to GAHR III Advisor or GAHR IV Advisor in connection with the Mergers. For more information regarding the compensation to be paid in connection with the AHI Acquisition, see the section entitled “The AHI Acquisition.” |
Q: |
How do I attend the stockholder meetings? |
A: | GAHR III |
Q: |
Who can vote at the stockholder meetings? |
A: | GAHR III |
Q: |
What constitutes a quorum? |
A: | GAHR III non-votes are treated as being present at the GAHR III Special Meeting for purposes of determining whether a quorum is present. |
Q: |
What vote is required to approve each proposal at the GAHR III Special Meeting and GAHR IV Annual Meeting? |
A: | GAHR III |
Q: |
Are there other transactions that stockholders should be aware of? |
A: | Yes. On June 23, 2021, GAHR III and GAHR III Operating Partnership entered into a Contribution Agreement (the “Contribution Agreement”) with Griffin Capital; American Healthcare Investors; Platform Healthcare Investor T-II, LLC, which is indirectly owned by Colony Capital, Inc. (now known as Digital Bridge Group, Inc. (NYSE: DBRG)), or Colony Capital; Flaherty Trust, dated September 25, 1997, as amended; Jeffrey T. Hanson; Danny Prosky; and Mathieu B. Streiff, pursuant to which, among other things, GAHR III has agreed to acquire a newly formed entity that owns substantially all of the business and operations of one of its co-sponsors, American Healthcare Investors, including all of the equity interests in (i) GAHR III Advisor, and (ii) GAHR IV Advisor, such that following the consummation of the AHI Acquisition, GAHR III will become self-managed and (if the Mergers do not occur) GAHR IV will become indirectly managed by GAHR III, and following the consummation of the Mergers, the surviving company will be an entirely self-managed company. Consideration in the form of GAHR III OP Units will be paid to HoldCo in the AHI Acquisition, and HoldCo will then distribute such GAHR III OP Units to its members. If all distributions of the GAHR III OP Units to be issued in connection with the AHI Acquisition are made to the ultimate owners of HoldCo, then of the GAHR III OP Units to be issued in connection with the AHI Acquisition, 12.076% will be issued to Mr. Hanson (or entities owned or managed by him), 12.076% will be issued to Mr. Prosky (or entities owned or managed by him), 12.076% will be issued to Mr. Streiff (or entities owned or managed by him), 34.739% will be issued to Colony Capital, 6.033% will be issued to Flaherty Trust and 23.000% will be issued to Griffin Capital. In addition, Messrs. Hanson, Prosky and Streiff (or entities owned or managed by them) and Flaherty Trust may be entitled to receive future earnout consideration paid to American Healthcare Investors based on sponsorship of a future investment fund. For more information regarding the consideration to be paid in connection with the AHI Acquisition, see the section entitled “The AHI Acquisition.” The AHI Acquisition is expected to close immediately prior to the consummation of the Mergers. The closing of the AHI Acquisition is subject to the satisfaction or waiver of various closing conditions, and therefore we cannot assure you that closing of the AHI Acquisition is guaranteed. |
Q: |
Do any of GAHR III’s or GAHR IV’s executive officers or directors have interests in the Mergers that differ from those of their stockholders? |
A: | GAHR III |
stockholders vote “FOR” “FOR” “FOR” |
Q: |
When are the Mergers expected to be completed? |
A: | GAHR III and GAHR IV expect to complete the Mergers as soon as reasonably practicable following satisfaction of all of the required conditions set forth in the Merger Agreement. If GAHR III stockholders approve the REIT Merger and the GAHR III Charter Amendment (Merger Agreement) at the GAHR III Special Meeting (without the need for any adjournment), GAHR IV stockholders approve the REIT Merger and the GAHR IV Charter Amendment (Merger Agreement) at the GAHR IV Annual Meeting (without the need for any adjournment), and if the other conditions to closing the Mergers are satisfied or waived at the time of the GAHR III Special Meeting and the GAHR IV Annual Meeting, it is currently expected that the Mergers will be completed in October 2021 or by no later than the fourth quarter of 2021. However, there is no guarantee that the conditions to the Mergers will be satisfied or waived or that the Mergers will close on the expected timeline or at all. GAHR III and GAHR IV have a mutual right to terminate the Merger Agreement if the Mergers are not completed by the Outside Date. See “The Merger Agreement—Conditions to Completion of the Mergers” beginning on page 257. |
Q: |
What happens if the Mergers do not occur? |
A: | If the Mergers do not occur, GAHR III stockholders will not receive shares of GAHR IV Class I Common Stock equal to the Exchange Ratio in respect of their shares of GAHR III Common Stock. Instead, GAHR III and GAHR IV will remain as independent companies. |
Q: |
What are the anticipated U.S. federal income tax consequences to me of the proposed REIT Merger? |
A: | The REIT Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and the closing of the REIT Merger is conditioned on the receipt by each of GAHR III and GAHR IV of an opinion of tax counsel to that effect. Assuming the REIT Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, a holder of shares of GAHR III Common Stock generally will not recognize gain or loss for U.S. federal income tax purposes upon the receipt of GAHR IV Class I Common Stock in exchange for shares of GAHR III Common Stock in connection with the REIT Merger. |
Q: |
If the REIT Merger is consummated, what do I need to do to receive shares of GAHR IV Class I Common Stock in exchange for my GAHR III Common Stock? |
A: | As soon as practicable following the effective time of the REIT Merger, the transfer agent in connection with the REIT Merger will record on the stock records of GAHR IV the issuance of shares of GAHR IV Class I Common Stock to each former holder of shares of GAHR III Common Stock (including any fractional shares thereof). As a result, if the REIT Merger is consummated, you will automatically receive, in uncertificated book-entry form, the shares of GAHR IV Common Stock issuable to you as merger consideration without your taking any further action. |
Q: |
Will the shares of GAHR IV Common Stock be publicly traded? |
A: | Shares of GAHR IV Common Stock are not publicly traded. At this time, management of GAHR IV is targeting a listing of the Combined Company’s shares on a national securities exchange by the end of 2022, subject to the closing of the Mergers and the AHI Acquisition, as well as market conditions. However, there are currently no definitive plans for such a listing, and no assurances can be made that such a listing will occur by the end of 2022, or at all. |
Q: |
Are GAHR III stockholders entitled to dissenters’ or appraisal rights? |
A: | GAHR III stockholders are not entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL in connection with the REIT Merger. |
Q: |
How will my rights as a stockholder of the Combined Company following the REIT Merger differ from my current rights as a GAHR III stockholder? |
A: | Prior to the completion of the REIT Merger, GAHR III will file the GAHR III Charter Amendment, a form of which is attached as Annex B to this joint proxy statement/prospectus, with the SDAT. Following completion of the REIT Merger, the rights of GAHR III stockholders who become stockholders of the Combined Company following the REIT Merger will be governed by the laws of the State of Maryland and the GAHR IV Charter and the GAHR IV Bylaws. For a summary of certain differences between the rights of GAHR III stockholders and GAHR IV stockholders, see “Comparison of Rights of GAHR III Stockholders and GAHR IV Stockholders” beginning on page 282. |
Q: |
What do I need to do now? |
A: | After you have carefully read this joint proxy statement/prospectus, please authorize a proxy to vote your shares of GAHR III Common Stock and/or GAHR IV Common Stock as soon as possible so that your shares will be represented at the GAHR III Special Meeting or GAHR IV Annual Meeting, as applicable. Submitting a proxy will in no way limit your right to vote at the applicable stockholder meeting if you later decide to attend and vote at the meeting via virtual webcast. |
Q: |
Are there any risks that I should consider in deciding whether to vote “FOR” the proposals to be considered at the stockholder meetings? |
A: | Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 30. |
Q: |
How do I vote? |
A: | GAHR III |
• | Internet |
• | Telephone |
• | Prepaid Mail |
• | Internet |
• | Telephone |
• | Prepaid Mail |
Q: |
How will my proxy be voted? |
A: | GAHR III |
Q: |
What if I abstain or fail to vote? |
A: | GAHR III |
Q: |
May I revoke my proxy or change my vote after I have delivered my proxy? |
A: | Yes. You may revoke your proxy or change your vote at any time before your proxy is voted at the GAHR III Special Meeting or the GAHR IV Annual Meeting, as applicable. For information on how to revoke your proxy or change your vote, see “The GAHR III Special Meeting—Revocation of Proxies or Voting Instructions” beginning on page 154 and “The GAHR IV Annual Meeting —Revocation of Proxies or Voting Instructions” beginning on page 162. |
Q: |
Who will be the chair of each stockholder meeting? |
A: | GAHR III |
Q: |
Why did I receive more than one set of voting materials for the GAHR III Special Meeting or the GAHR IV Annual Meeting? |
A: | You may receive more than one set of voting materials for the GAHR III Special Meeting and/or the GAHR IV Annual Meeting, as applicable, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares of GAHR III Common Stock or GAHR IV Common Stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold your shares of GAHR III Common Stock or GAHR IV Common Stock. If you are a holder of record and your shares of GAHR III Common Stock or GAHR IV Common Stock are registered in more than one name, you may receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive or, if available, please submit your proxy by telephone or over the Internet. |
Q: |
Will a proxy solicitor be used? |
A: | Yes. Each of GAHR III and GAHR IV has contracted with Broadridge Financial Solutions, Inc. (“BFS”) to assist the applicable company in the distribution of proxy materials and the solicitation of proxies. GAHR III and GAHR IV expect to pay BFS approximately $692,000 and $295,000, respectively, to solicit proxies plus other fees and expenses for other services related to this proxy solicitation, including the review of proxy materials, dissemination |
of brokers’ search cards, distribution of proxy materials, operating online and telephone voting systems and receipt of executed proxies. GAHR III and GAHR IV will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket |
Q: |
Who can answer my questions? |
A: | If you have any questions about the Mergers or how to submit your proxy, or need additional copies of this joint proxy statement/prospectus, the enclosed proxy card or voting instructions, you should contact: |
If you are a GAHR III stockholder: | If you are a GAHR IV stockholder: | |
Broadridge Financial Solutions, Inc. 51 Mercedes Way Edgewood, New York 11717 Call toll free: 1 (855) 928-4498 |
Broadridge Financial Solutions, Inc. 51 Mercedes Way Edgewood, New York 11717 Call toll free: 1 (855) 976-3325 | |
• | The Exchange Ratio payable in connection with the REIT Merger is fixed and will not be adjusted in the event of any change in the relative values of GAHR III or GAHR IV. |
• | Completion of the Mergers is subject to many conditions and if these conditions are not satisfied or waived, the Mergers will not be completed, which could result in the expenditure of significant unrecoverable transaction costs. |
• | Failure to complete the Mergers could negatively impact the future business and financial results of GAHR III and/or GAHR IV. |
• | The pendency of the Mergers, including as a result of the restrictions on the operation of GAHR III’s and GAHR IV’s businesses during the period between signing the Merger Agreement and the completion of the Mergers, could adversely affect the business and operations of GAHR III, GAHR IV or both. |
• | Some of the directors and executive officers of each of GAHR III and GAHR IV have interests in seeing the Mergers completed that are different from, or in addition to, those of GAHR III stockholders or GAHR IV stockholders, as applicable. |
• | GAHR III is seeking approval of its stockholders of the GAHR III Charter Amendment, which would remove substantive and procedural protections relating to Roll-Up Transactions such as the REIT Merger. |
• | The REIT Merger and GAHR III Charter Amendment are each subject to approval by GAHR III stockholders and the REIT Merger and GAHR IV Charter Amendment are each subject to approval by GAHR IV stockholders. |
• | The Merger Agreement prohibits each of GAHR III and GAHR IV from soliciting proposals after June 23, 2021, and places conditions on each of GAHR III’s and GAHR IV’s ability to accept a Superior Proposal, which may adversely affect GAHR III stockholders or GAHR IV stockholders, as applicable. |
• | GAHR III and GAHR IV each expect to incur substantial expenses related to the Mergers. |
• | GAHR III and GAHR IV stockholders will own a smaller percentage of a larger company. |
• | Litigation challenging the Mergers may increase transaction costs and prevent the Mergers from becoming effective within the expected timeframe. |
• | If and when the Combined Company completes a liquidity event, the market value ascribed to the shares of common stock of the Combined Company upon the liquidity event may be significantly lower than the estimated per share NAV of GAHR III Common Stock and GAHR IV Common Stock considered by the respective boards of directors and special committees in approving and recommending the Mergers. |
(1) | the GAHR III Merger Proposal; |
(2) | the GAHR III Charter Amendment Proposals; and |
(3) | the GAHR III Adjournment Proposal, if necessary or appropriate as determined by the chair of the GAHR III Special Meeting. |
(1) | the GAHR IV Merger Proposal; |
(2) | the GAHR IV Charter Amendment Proposals; |
(3) | the election of five directors to the GAHR IV Board, each to hold office for a one-year term expiring at the 2022 Annual Meeting of Stockholders of GAHR IV and until his or her successor is duly elected and qualifies; |
(4) | the ratification of the appointment of Deloitte & Touche as GAHR IV’s independent registered public accounting firm for the year ending December 31, 2021; and |
(5) | the GAHR IV Adjournment Proposal, if necessary or appropriate as determined by the chair of the GAHR IV Annual Meeting. |
• | all consents, authorizations, orders or approvals of each governmental authority necessary for the consummation of the Mergers having been obtained; |
• | approval of the REIT Merger and the GAHR III Charter Amendment (Merger Agreement) by GAHR III stockholders and approval of the REIT Merger and the GAHR IV Charter Amendment (Merger Agreement) by GAHR IV stockholders having been obtained, and the GAHR III Charter Amendment (Merger Agreement) and the GAHR IV Charter Amendment (Merger Agreement) having become effective pursuant to the MGCL; |
• | receipt of opinions of counsel concerning certain tax matters; |
• | the absence of any judgment, injunction, order or decree issued by any governmental authority of competent jurisdiction prohibiting the consummation of the Mergers, and the absence of any law enacted, entered, promulgated or enforced by any governmental authority after the date of the Merger Agreement prohibiting, restraining, enjoining or making illegal the consummation of the Mergers or the other transactions contemplated by the Merger Agreement; |
• | the registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, having been declared effective and there being no stop order suspending such effectiveness or proceedings for such purpose initiated by the SEC that have not been withdrawn; and |
• | the truth and accuracy of the representations and warranties of each party made in the Merger Agreement as of the closing, subject to certain materiality standards. |
• | the REIT Merger has not occurred on or before the Outside Date; |
• | there is any final, non-appealable order issued by a governmental authority of competent jurisdiction that permanently restrains or otherwise prohibits the transactions contemplated by the Merger Agreement; or |
• | if the approval of GAHR III stockholders of the REIT Merger and the GAHR III Charter Amendment (Merger Agreement) has not been obtained at the GAHR III Special Meeting or if the approval of GAHR IV stockholders of the REIT Merger and the GAHR IV Charter Amendment (Merger Agreement) has not been obtained at the GAHR IV Annual Meeting. |
• | if any of the GAHR IV Parties breaches any of its representations or warranties or fails to perform any of its obligations, covenants or other agreements set forth in the Merger Agreement, which breach or failure to perform (A) would result in a failure of GAHR IV to satisfy certain closing conditions, and (B) cannot be cured or, if curable, is not cured by GAHR IV by the earlier of 20 days following written notice of such breach or failure from GAHR III to GAHR IV and two business days before the Outside Date; |
• | if GAHR III has accepted a Superior Proposal at any time prior to obtaining the necessary approvals of GAHR III stockholders in accordance with the provisions of the Merger Agreement; |
• | if, at any time prior to obtaining the necessary approvals of GAHR IV stockholders, (A) the GAHR IV Board or any committee thereof has made a GAHR IV Adverse Recommendation Change (as such term is defined under the heading “The Merger Agreement—Covenants and Agreements—No Solicitation; Change in Recommendation with a Competing Proposal or Intervening Event”), or (B) if GAHR IV shall have materially violated any of its obligations described in “The Merger Agreement—Covenants and Agreements—No Solicitation; Change in Recommendation with a Competing Proposal or Intervening Event.” |
• | if any of the GAHR III Parties breaches any of its representations or warranties or fails to perform any of its obligations, covenants or other agreements set forth in the Merger Agreement, which breach or failure to perform (A) would result in a failure of GAHR III to satisfy certain closing conditions, and (B) cannot be cured or, if curable, is not cured by GAHR III by the earlier of 20 days following written notice of such breach or failure from GAHR IV to GAHR III and two business days before the Outside Date; |
• | if GAHR IV has accepted a Superior Proposal at any time prior to obtaining the necessary approvals of GAHR IV stockholders in accordance with the provisions of the Merger Agreement; or |
• | if, at any time prior to obtaining the necessary approvals of GAHR III stockholders, (A) the GAHR III Board or any committee thereof has made a GAHR III Adverse Recommendation Change (as such term is defined under the heading “The Merger Agreement—Covenants and Agreements—No Solicitation; Change in Recommendation with a Competing Proposal or Intervening Event”), or (B) if GAHR III shall have materially violated any of its obligations described in “The Merger Agreement—Covenants and Agreements—No Solicitation; Change in Recommendation with a Competing Proposal or Intervening Event.” |
As of March 31, 2021 |
||||||||||||||||||||||||
Historical |
Pro Forma Adjustments |
|||||||||||||||||||||||
GAHR III |
NewCo |
GAHR IV |
AHI Acquisition |
REIT Merger |
Pro Forma Combined Company |
|||||||||||||||||||
Balance Sheet Data: |
||||||||||||||||||||||||
Real estate investments, net |
$ |
2,409,943,000 |
$ |
— |
$ |
917,513,000 |
$ |
— |
$ |
176,886,000 |
$ |
3,504,342,000 |
||||||||||||
Total assets |
$ |
3,230,026,000 |
$ |
4,340,000 |
$ |
1,086,640,000 |
$ |
133,808,000 |
$ |
169,586,000 |
$ |
4,624,400,000 |
||||||||||||
Mortgage loans payable, net |
$ |
912,883,000 |
$ |
— |
$ |
17,708,000 |
$ |
— |
$ |
1,123,000 |
$ |
931,714,000 |
||||||||||||
Lines of credit and term loans |
$ |
842,234,000 |
$ |
— |
$ |
481,400,000 |
$ |
— |
$ |
— |
$ |
1,323,634,000 |
||||||||||||
Total liabilities |
$ |
2,171,571,000 |
$ |
6,792,000 |
$ |
542,916,000 |
$ |
(833,000 |
) |
$ |
12,296,000 |
$ |
2,732,742,000 |
|||||||||||
Redeemable noncontrolling interests |
$ |
40,382,000 |
$ |
— |
$ |
2,623,000 |
$ |
17,930,000 |
$ |
2,089,000 |
$ |
63,024,000 |
||||||||||||
Total stockholders’ equity |
$ |
853,978,000 |
$ |
(2,452,000 |
) |
$ |
540,468,000 |
$ |
46,695,000 |
$ |
170,193,000 |
$ |
1,608,882,000 |
|||||||||||
Noncontrolling interests |
$ |
164,095,000 |
$ |
— |
$ |
633,000 |
$ |
70,016,000 |
$ |
(14,992,000 |
) |
$ |
219,752,000 |
|||||||||||
Total equity |
$ |
1,018,073,000 |
$ |
(2,452,000 |
) |
$ |
541,101,000 |
$ |
116,711,000 |
$ |
155,201,000 |
$ |
1,828,634,000 |
|||||||||||
For the Three Months Ended March 31, 2021 |
||||||||||||||||||||||||
Historical |
Pro Forma Adjustments |
|||||||||||||||||||||||
GAHR III |
NewCo |
GAHR IV |
AHI Acquisition |
REIT Merger |
Pro Forma Combined Company |
|||||||||||||||||||
Statement of Operations Data: |
||||||||||||||||||||||||
Total revenues and grant income |
$ |
291,278,000 |
$ |
11,186,000 |
$ |
37,841,000 |
$ |
(8,053,000 |
) |
$ |
(3,554,000 |
) |
$ |
328,698,000 |
||||||||||
Net (loss) income |
$ |
(16,273,000 |
) |
$ |
4,365,000 |
$ |
(4,008,000 |
) |
$ |
(859,000 |
) |
$ |
289,000 |
$ |
(16,486,000 |
) | ||||||||
Net (loss) income attributable to controlling interest |
$ |
(11,847,000 |
) |
$ |
1,994,000 |
$ |
(3,744,000 |
) |
$ |
2,128,000 |
$ |
(532,000 |
) |
$ |
(12,001,000 |
) | ||||||||
For the Year Ended December 31, 2020 |
||||||||||||||||||||||||
Historical |
Pro Forma Adjustments |
|||||||||||||||||||||||
GAHR III |
NewCo |
GAHR IV |
AHI Acquisition |
REIT Merger |
Pro Forma Combined Company |
|||||||||||||||||||
Statement of Operations Data: |
||||||||||||||||||||||||
Total revenues and grant income |
$ |
1,244,301,000 |
$ |
38,618,000 |
$ |
155,119,000 |
$ |
(25,435,000 |
) |
$ |
(14,894,000 |
) |
$ |
1,397,709,000 |
||||||||||
Net income (loss) |
$ |
8,863,000 |
$ |
12,457,000 |
$ |
(18,942,000 |
) |
$ |
2,932,000 |
$ |
(22,042,000 |
) |
$ |
(16,732,000 |
) | |||||||||
Net income (loss) attributable to controlling interest |
$ | 2,163,000 | $ | 4,135,000 | $ | (18,057,000 | ) | $ | 9,958,000 | $ | (18,452,000 | ) | $ | (20,253,000 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Amount |
Amount |
|||||||||||||||
Distributions paid in cash |
$ | 26,997,000 | $ | 62,612,000 | ||||||||||||
Distributions reinvested |
21,861,000 | 55,440,000 | ||||||||||||||
|
|
|
|
|||||||||||||
Total distributions |
$ | 48,858,000 | $ | 118,052,000 | ||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
Cash flows from operations |
$ | 48,858,000 | 100 | % | $ | 117,454,000 | 99.5 | % | ||||||||
Proceeds borrowings |
— | — | 598,000 | 0.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total sources |
$ | 48,858,000 | 100 | % | $ | 118,052,000 | 100 | % | ||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Amount |
Amount |
|||||||||||||||
Distributions paid in cash |
$ | 17,837,000 | $ | 20,905,000 | ||||||||||||
Distributions reinvested |
19,862,000 | 25,533,000 | ||||||||||||||
|
|
|
|
|||||||||||||
Total distributions |
$ | 37,699,000 | $ | 46,438,000 | ||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
Cash flows from operations |
$ | 35,495,000 | 94.2 | % | $ | 39,540,000 | 85.1 | % | ||||||||
Proceeds from borrowings |
2,204,000 | 5.8 | 1,502,000 | 3.3 | ||||||||||||
Offering proceeds |
— | — | 5,396,000 | 11.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total sources |
$ | 37,699,000 | 100 | % | $ | 46,438,000 | 100 | % | ||||||||
|
|
|
|
|
|
|
|
• | The Exchange Ratio payable in connection with the REIT Merger is fixed and will not be adjusted in the event of any change in the relative values of GAHR III or GAHR IV. |
• | Completion of the Mergers is subject to many conditions and if these conditions are not satisfied or waived, the Merger will not be completed, which could result in the expenditure of significant unrecoverable transaction costs. |
• | Failure to complete the Mergers could negatively impact the future business and financial results of GAHR III and/or GAHR IV. |
• | The pendency of the Mergers, including as a result of the restrictions on the operation of GAHR III’s and GAHR IV’s businesses during the period between signing the Merger Agreement and the completion of the Mergers, could adversely affect the business and operations of GAHR III, GAHR IV or both. |
• | Some of the directors and executive officers of each of GAHR III and GAHR IV have interests in seeing the Mergers completed that are different from, or in addition to, those of GAHR III stockholders or GAHR IV stockholders, as applicable. |
• | GAHR III is seeking approval of its stockholders of the GAHR III Charter Amendment (Merger Agreement), which would remove substantive and procedural protections relating to Roll-Up Transactions such as the REIT Merger. |
• | The REIT Merger and GAHR III Charter Amendment (Merger Agreement) are each subject to approval by GAHR III stockholders and the REIT Merger and GAHR IV Charter Amendment (Merger Agreement) are each subject to approval by GAHR IV stockholders. |
• | The Merger Agreement prohibits each of GAHR III and GAHR IV from soliciting proposals after June 23, 2021, and places conditions on each of GAHR III’s and GAHR IV’s ability to accept a Superior Proposal, which may adversely affect GAHR III stockholders or GAHR IV stockholders, as applicable. |
• | GAHR III and GAHR IV each expect to incur substantial expenses related to the Mergers. |
• | GAHR III and GAHR IV stockholders will own a smaller percentage of a larger company. |
• | Litigation challenging the Mergers may increase transaction costs and prevent the Mergers from becoming effective within the expected timeframe. |
• | If and when the Combined Company completes a liquidity event, the market value ascribed to the shares of common stock of the Combined Company upon the liquidity event may be significantly lower than the estimated per share NAV of GAHR III Common Stock and GAHR IV Common Stock considered by the respective boards of directors and special committees in approving and recommending the Mergers. |
• | Assuming the AHI Acquisition is consummated, the Combined Company will be newly self-managed. |
• | The Combined Company will have substantial indebtedness upon completion of the Mergers. |
• | The Combined Company may need to incur additional indebtedness in the future. |
• | Following the consummation of the Mergers, the Combined Company may assume certain potential and unknown liabilities relating to GAHR III. |
• | The historical and unaudited pro forma combined financial information included elsewhere in this joint proxy statement/prospectus may not be representative of the Combined Company’s results following the effective time of the Mergers and, accordingly, GAHR III stockholders and GAHR IV stockholders have limited financial information on which to evaluate the Combined Company. |
• | The Combined Company will incur adverse tax consequences if, prior to the Mergers, GAHR III or GAHR IV, as applicable, failed to qualify as a REIT for U.S. federal income tax purposes. |
• | If the REIT Merger does not qualify as a tax-free reorganization, there will be adverse tax consequences. |
• | The Combined Company will depend on key personnel for its future success, and the loss of key personnel or inability to attract and retain personnel could harm the Combined Company’s business. |
• | There is no public market for shares of GAHR IV Common Stock, making it difficult for stockholders to sell their shares. |
• | Distributions paid using borrowings or other sources in anticipation of cash flows may negatively impact the value of GAHR IV stockholders’ investment. |
• | The estimated value per share of GAHR IV Common Stock may not accurately reflect the fair value of GAHR IV’s assets and liabilities. |
• | In light of the adverse impact of the COVID-19 pandemic on GAHR IV’s business operations and cash flows, GAHR IV reduced distribution payments to GAHR IV stockholders and suspended its share repurchase plan, and there is no assurance as to when GAHR IV will be able to increase the amount of distributions to GAHR IV stockholders or reinstate its share repurchase plan, if at all. |
• | GAHR IV has rights to terminate its management agreements with third-party operators for GAHR IV’s senior housing and senior housing — RIDEA facilities under any circumstances; however, any inability to replace or delay in replacing third-party operators as the managers of such facilities could have a material adverse effect on GAHR IV. |
• | GAHR IV may incur additional costs in re-leasing properties, which could adversely affect GAHR IV’s cash flows. |
• | Several potential events, GAHR IV’s ability to issue preferred stock and the percentage limit on shares of GAHR IV Common Stock that any person may own could cause GAHR IV stockholders’ investment in GAHR IV to be diluted or prevent a sale of GAHR IV Common Stock. |
• | GAHR IV stockholders’ ability to control GAHR IV’s operations is severely limited. |
• | If GAHR IV becomes subject to registration under the Investment Company Act, GAHR IV may not be able to continue its business. |
• | GAHR IV is an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. |
• | The Combined Company will incur adverse tax consequences if, prior to the Mergers, GAHR III or GAHR IV, as applicable, failed to qualify as a REIT for U.S. federal income tax purposes. |
• | If the REIT Merger does not qualify as a tax-free reorganization, there will be adverse tax consequences. |
• | changes in the respective businesses, operations, assets, liabilities and prospects of GAHR III or GAHR IV; |
• | changes in the estimated per share NAV of either the shares of GAHR III Common Stock or GAHR IV Common Stock; |
• | interest rates, general market and economic conditions and other factors generally affecting the businesses of GAHR III or GAHR IV; |
• | federal, state and local legislation, governmental regulation and legal developments in the businesses in which GAHR III or GAHR IV operate; |
• | dissident stockholder activity, including any stockholder litigation challenging the Mergers; |
• | other factors beyond the control of GAHR III and GAHR IV, including those described or referred to elsewhere in this “Risk Factors” section; and |
• | acquisitions, dispositions or new development opportunities. |
• | (i) GAHR III being required, under certain circumstances in which the Merger Agreement is terminated, to pay to GAHR IV a termination fee of $50,654,000 and reimbursement of expenses incurred by GAHR IV in connection with the Mergers of up to $4,000,000, and (ii) GAHR IV being required, under certain circumstances in which the Merger Agreement is terminated, to pay to GAHR III a termination fee of $23,028,000 and reimbursement of expenses incurred by GAHR III in connection with the Mergers of up to $4,000,000; |
• | each of GAHR III and GAHR IV having to bear certain costs incurred by it relating to the Mergers, such as legal, accounting, financial advisor, filing, printing and mailing fees; and |
• | the diversion of each of GAHR III and GAHR IV management’s focus and resources from operational matters and other strategic opportunities while working to implement the Mergers. |
• | vulnerability of the Combined Company to general adverse economic and industry conditions; |
• | limiting the Combined Company’s ability to obtain additional financing to fund future working capital, acquisitions, capital expenditures and other general corporate requirements; |
• | requiring the use of a substantial portion of the Combined Company’s cash flow from operations for the payment of principal and interest on its indebtedness, thereby reducing its ability to use its cash flow to fund working capital, acquisitions, capital expenditures and general corporate requirements; |
• | limiting the Combined Company’s flexibility in planning for, or reacting to, changes in its business and its industry; |
• | putting the Combined Company at a disadvantage compared to its competitors with less indebtedness; and |
• | limiting the Combined Company’s ability to access capital markets. |
• | it would be subject to U.S. federal corporate income tax on its net income for the years it did not qualify for taxation as a REIT (and, for such years, would not be allowed a deduction for dividends paid to stockholders in computing its taxable income); |
• | it could be subject to the federal alternative minimum tax for taxable years prior to January 1, 2018 and possibly increased state and local taxes for such periods; |
• | unless it is entitled to relief under applicable statutory provisions, neither it nor any “successor” company could elect to be taxed as a REIT until the fifth taxable year following the year during which it was disqualified; and |
• | for five years following re-election of REIT status, upon a taxable disposition of an asset owned as of such re-election, it could be subject to corporate level tax with respect to any built-in gain inherent in such asset at the time of re-election. |
• | a stockholder would be able to resell his or her shares at GAHR IV’s updated estimated per share NAV; |
• | a stockholder would ultimately realize distributions per share equal to GAHR IV’s updated estimated per share NAV upon liquidation of GAHR IV’s assets and settlement of GAHR IV’s liabilities or a sale of GAHR IV; |
• | shares of GAHR IV Common Stock would trade at GAHR IV’s updated estimated per share NAV on a national securities exchange; |
• | an independent third-party appraiser or other third-party valuation firm, other than the third-party valuation firm engaged by the GAHR IV Board to assist in its determination of the updated estimated per share NAV, would agree with GAHR IV’s estimated per share NAV; or |
• | the methodology used to estimate GAHR IV’s updated per share NAV would be acceptable to FINRA or comply with reporting requirements under the Employee Retirement Income Security Act of 1974, the Code, other applicable law, or the applicable provisions of a retirement plan or individual retirement account, or IRA. |
• | poor economic times may result in defaults by tenants of GAHR IV’s properties due to bankruptcy, lack of liquidity or operational failures. GAHR IV has provided an insignificant number of rent concessions, and may continue to provide rent concessions, tenant improvement expenditures or reduced rental rates to maintain or increase occupancy levels; |
• | fluctuations in property values as a result of increases or decreases in supply and demand, occupancies and rental rates may cause the properties that GAHR IV owns to decrease in value. Consequently, GAHR IV may not be able to recover the carrying amount of GAHR IV’s properties, which may require GAHR IV to recognize an impairment charge or record a loss on sale in earnings; |
• | reduced values of GAHR IV’s properties may limit GAHR IV’s ability to dispose of assets at attractive prices or to obtain debt financing secured by GAHR IV’s properties and may reduce the availability of unsecured loans; |
• | constricted access to credit may result in tenant defaults or non-renewals under leases; |
• | layoffs may lead to a lower demand for medical services and cause vacancies to increase, and a lack of future population and job growth may make it difficult to maintain or increase occupancy levels; |
• | future disruptions in the financial markets, deterioration in economic conditions or a public health crisis, such as the COVID-19 pandemic, have resulted, and may continue to result, in lower occupancy in GAHR IV’s facilities, increased vacancy rates for commercial real estate due to generally lower demand for rentable space, as well as an oversupply of rentable space; |
• | governmental actions and initiatives, including risks associated with the impact of a prolonged government shutdown or budgetary reductions or impasses; and |
• | increased insurance premiums, real estate taxes or utilities or other expenses may reduce funds available for distribution or, to the extent such increases are passed through to tenants, may lead to tenant defaults. Also, any such increased expenses may make it difficult to increase rents to tenants on turnover, which may limit GAHR IV’s ability to increase its returns. |
• | future offerings of GAHR IV’s securities, including issuances pursuant to the GAHR IV DRIP and up to 200,000,000 shares of any class or series of preferred stock that the GAHR IV Board may authorize GAHR IV to issue; |
• | private issuances of GAHR IV’s securities to other investors, including institutional investors; |
• | issuances of GAHR IV’s securities pursuant to the GAHR IV Incentive Plan; or |
• | redemptions of units of limited partnership interest in GAHR IV Operating Partnership (or GAHR III Operating Partnership following the consummation of the Mergers) in exchange for shares of GAHR IV Common Stock. |
• | a merger, tender offer or proxy contest; |
• | assumption of control by a holder of a large block of GAHR IV’s securities; or |
• | removal of incumbent management. |
• | the election or removal of directors; |
• | the amendment of the GAHR IV Charter, except that the GAHR IV Board may amend the GAHR IV Charter without stockholder approval to change GAHR IV’s name or the name of other designation or the par value of any class or series of GAHR IV’s stock and the aggregate par value of GAHR IV’s stock, increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that GAHR IV has the authority to issue, or effect certain reverse stock splits; |
• | GAHR IV’s dissolution; and |
• | certain mergers, consolidations, conversions, statutory share exchanges and sales or other dispositions of all or substantially all of GAHR IV’s assets. |
• | any person who beneficially owns, directly or indirectly, 10.0% or more of the voting power of the corporation’s outstanding voting stock, which is referred to as an “interested stockholder”; |
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was an interested stockholder; or |
• | an affiliate of an interested stockholder. |
• | the Federal Anti-Kickback Statute, which prohibits, among other things, the offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, the referral of any item or service reimbursed by state or federal healthcare programs; |
• | the Federal Physician Self-Referral Prohibition, which, subject to specific exceptions, restricts physicians from making referrals for specifically designated health services for which payment may be made under federal healthcare programs to an entity with which the physician, or an immediate family member, has a financial relationship; |
• | the False Claims Act, which prohibits any person from knowingly presenting false or fraudulent claims for payment to the federal government, including claims paid by the Medicare and Medicaid programs; |
• | the Civil Monetary Penalties Law, which authorizes the United States Department of Health & Human Services to impose monetary penalties or exclusion from participating in state or federal healthcare programs for certain fraudulent acts; |
• | the Health Insurance Portability and Accountability Act of 1996, as amended, or HIPAA, Fraud Statute, which makes it a federal crime to defraud any health benefit plan, including private payors; and |
• | the Exclusions Law, which authorizes the United States Department of Health & Human Services to exclude someone from participating in state or federal healthcare programs for certain fraudulent acts. |
• | changes in the demand for and methods of delivering healthcare services; |
• | changes in third-party reimbursement policies; |
• | significant unused capacity in certain areas, which has created substantial competition for patients among healthcare providers in those areas; |
• | increased expense for uninsured patients; |
• | increased competition among healthcare providers; |
• | increased liability insurance expense; |
• | continued pressure by private and governmental payers to reduce payments to providers of services; |
• | increased scrutiny of billing, referral and other practices by federal and state authorities; |
• | changes in federal and state healthcare program payment models; |
• | increased emphasis on compliance with privacy and security requirements related to personal health information; and |
• | increased instability in the Health Insurance Exchange market and lack of access to insurance plans participating in the exchange. |
• | an obligation to refund amounts previously paid to GAHR IV, its tenants or its operators pursuant to the Medicare or Medicaid programs or from private payors, in amounts that could be material to GAHR IV’s business; |
• | state or federal agencies imposing fines, penalties and other sanctions on GAHR IV, its tenants or its operators; |
• | loss of GAHR IV’s right, GAHR IV’s tenants’ right or GAHR IV’s operators’ right to participate in the Medicare or Medicaid programs or one or more private payor networks; |
• | an increase in private litigation against GAHR IV, its tenants or its operators; and |
• | damage to GAHR IV’s reputation in various markets. |
• | GAHR IV may share decision-making authority with its joint venture partners regarding certain major decisions affecting the ownership or operation of the joint venture and the joint venture property, such as, but not limited to, (i) additional capital contribution requirements, (ii) obtaining, refinancing or paying off debt and (iii) obtaining consent prior to the sale or transfer of GAHR IV’s interest in the joint venture to a third party, which may prevent GAHR IV from taking actions that are opposed by its joint venture partners; |
• | GAHR IV’s joint venture partners might become bankrupt and such proceedings could have an adverse impact on the operation of the partnership or joint venture; and |
• | the activities of a joint venture could adversely affect GAHR IV’s ability to maintain its qualification as a REIT. |
• | their investment is consistent with their fiduciary obligations under ERISA and the Code; |
• | their investment is made in accordance with the documents and instruments governing the Benefit Plan or IRA, including any investment policy; |
• | their investment satisfies the prudence and diversification requirements of ERISA; |
• | their investment will not impair the liquidity of the Benefit Plan or IRA; |
• | their investment will not produce UBTI for the Benefit Plan or IRA; and |
• | they will be able to value the assets of the Benefit Plan or IRA annually in accordance with ERISA, the Code and the applicable provisions of the Benefit Plan or IRA. |
• | the satisfaction or waiver of conditions to the Mergers set forth in the Merger Agreement, including the approval by GAHR III stockholders of the GAHR III Merger Proposal and the GAHR III Charter Amendment Proposal (Merger Agreement) and the approval by GAHR IV stockholders of the GAHR IV Merger Proposal and the GAHR IV Charter Amendment Proposal (Merger Agreement); |
• | the risk that the Mergers or other transactions contemplated by the Merger Agreement may not be completed in the expected time frame or at all; |
• | the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | the availability of, and ability of the Combined Company to engage in, suitable investment or disposition opportunities; |
• | risks related to the implementation of the Self-Administration Transaction; |
• | the ability of the Combined Company to achieve the expected cost synergies or to engage in any liquidity event or public offering; |
• | the ability of the Combined Company to maintain its qualification as a REIT due to economic, market, legal, tax or other considerations; |
• | the impact of the COVID-19 pandemic on the operations and financial condition of GAHR III and GAHR IV and the real estate industries in which they operate, including with respect to occupancy rates, rent deferrals and the financial condition of their respective tenants; |
• | general financial and economic conditions, including prevailing interest rates and the availability of financing and capital, which may be affected by government responses to the COVID-19 pandemic; and |
• | those additional risks and factors discussed in reports filed with the SEC, by GAHR III and GAHR IV from time to time, including those discussed under the heading “Risk Factors” in this joint proxy statement/prospectus. |
Real Estate Investments(1) |
Location |
Reportable Segment |
GLA (Sq Ft) |
Date Acquired |
Aggregate Contract Purchase Price |
Leased Percentage(2) |
||||||||||||||
Auburn MOB |
Auburn, CA |
Medical Office | 19,000 | 06/28/16 | $ | 5,450,000 | 100 | % | ||||||||||||
Pottsville MOB |
Pottsville, PA |
Medical Office | 36,000 | 09/16/16 | 9,150,000 | 100 | % | |||||||||||||
Charlottesville MOB |
Charlottesville, VA |
Medical Office | 74,000 | 09/22/16 | 20,120,000 | 100 | % | |||||||||||||
Rochester Hills MOB |
Rochester Hills, MI |
Medical Office | 30,000 | 09/29/16 | 8,300,000 | 87.1 | % | |||||||||||||
Cullman MOB III |
Cullman, AL |
Medical Office | 52,000 | 09/30/16 | 16,650,000 | 100 | % | |||||||||||||
Iron MOB Portfolio |
Cullman and Sylacauga, AL |
Medical Office | 208,000 | 10/13/16 | 31,000,000 | 97.3 | % | |||||||||||||
Mint Hill MOB |
Mint Hill, NC |
Medical Office | 58,000 | 11/14/16 | 21,000,000 | 100 | % | |||||||||||||
Lafayette Assisted Living Portfolio |
Lafayette, LA |
Senior Housing — RIDEA | 80,000 | 12/01/16 | 16,750,000 | 57.2 | % | |||||||||||||
Evendale MOB |
Evendale, OH |
Medical Office | 66,000 | 12/13/16 | 10,400,000 | 74.5 | % | |||||||||||||
Battle Creek MOB |
Battle Creek, MI |
Medical Office | 46,000 | 03/10/17 | 7,300,000 | 78.9 | % | |||||||||||||
Reno MOB |
Reno, NV |
Medical Office | 191,000 | 03/13/17 | 66,250,000 | 87.2 | % | |||||||||||||
Athens MOB Portfolio |
Athens, GA |
Medical Office | 69,000 | 05/18/17 | 19,750,000 | 98.7 | % | |||||||||||||
SW Illinois Senior Housing Portfolio |
Columbia, Millstadt, Red Bud and Waterloo, IL |
Senior Housing | 191,000 | 05/22/17 | 31,800,000 | 100 | % | |||||||||||||
Lawrenceville MOB |
Lawrenceville, GA |
Medical Office | 31,000 | 06/12/17 | 11,275,000 | 100 | % | |||||||||||||
Northern California Senior Housing Portfolio |
Belmont, Fairfield, Menlo Park and Sacramento, CA |
Senior Housing — RIDEA | 135,000 | 06/28/17 | 45,800,000 | 50.9 | % | |||||||||||||
Roseburg MOB |
Roseburg, OR |
Medical Office | 62,000 | 06/29/17 | 23,200,000 | 100 | % | |||||||||||||
Fairfield County MOB Portfolio |
Stratford and Trumbull, CT |
Medical Office | 80,000 | 09/29/17 | 15,395,000 | 94.0 | % | |||||||||||||
Central Florida Senior Housing Portfolio |
Bradenton, Brooksville, Lake Placid, Lakeland, Pinellas Park, Sanford, Spring Hill and Winter Haven, FL |
Senior Housing — RIDEA | 899,000 | 11/01/17 | 109,500,000 | 69.3 | % | |||||||||||||
Central Wisconsin Senior Care Portfolio |
Sun Prairie and Waunakee, WI |
Skilled Nursing | 236,000 | 03/01/18 | 22,600,000 | 100 | % | |||||||||||||
Sauk Prairie MOB |
Prairie du Sac, WI |
Medical Office | 55,000 | 04/09/18 | 19,500,000 | 100 | % | |||||||||||||
Surprise MOB |
Surprise, AZ |
Medical Office | 34,000 | 04/27/18 | 11,650,000 | 94.1 | % | |||||||||||||
Southfield MOB |
Southfield, MI |
Medical Office | 85,000 | 05/11/18 | 16,200,000 | 81.8 | % | |||||||||||||
Pinnacle Beaumont ALF |
Beaumont, TX |
Senior Housing — RIDEA | 61,000 | 07/01/18 | 19,500,000 | 62.7 | % | |||||||||||||
Grand Junction MOB |
Grand Junction, CO |
Medical Office | 83,000 | 07/06/18 | 31,500,000 | 100 | % |
Real Estate Investments(1) |
Location |
Reportable Segment |
GLA (Sq Ft) |
Date Acquired |
Aggregate Contract Purchase Price |
Leased Percentage(2) |
||||||||||||||
Edmonds MOB |
Edmonds, WA |
Medical Office | 55,000 | 07/30/18 | $ | 23,500,000 | 96.9 | % | ||||||||||||
Pinnacle Warrenton ALF |
Warrenton, MO |
Senior Housing — RIDEA | 34,000 | 08/01/18 | 8,100,000 | 80.9 | % | |||||||||||||
Glendale MOB |
Glendale, WI |
Medical Office | 43,000 | 08/13/18 | 7,600,000 | 70.5 | % | |||||||||||||
Missouri SNF Portfolio |
Florissant, Kansas City, Milan, Moberly, Salisbury, Sedalia, St. Elizabeth and Trenton, MO |
Skilled Nursing | 385,000 | 09/28/18 | 88,200,000 | 100 | % | |||||||||||||
Flemington MOB Portfolio |
Flemington, NJ |
Medical Office | 49,000 | 11/29/18 | 16,950,000 | 91.1 | % | |||||||||||||
Lawrenceville MOB II |
Lawrenceville, GA |
Medical Office | 45,000 | 12/19/18 | 9,999,000 | 100 | % | |||||||||||||
Mill Creek MOB |
Mill Creek, WA |
Medical Office | 22,000 | 12/21/18 | 8,250,000 | 100 | % | |||||||||||||
Modesto MOB |
Modesto, CA |
Medical Office | 58,000 | 12/28/18 | 16,000,000 | 100 | % | |||||||||||||
Michigan ALF Portfolio |
Grand Rapids, Holland, Howell, Lansing and Wyoming, MI |
Senior Housing | 328,000 | |
12/28/18 and 05/01/19 |
|
70,000,000 | 100 | % | |||||||||||
Lithonia MOB |
Lithonia, GA |
Medical Office | 40,000 | 03/05/19 | 10,600,000 | 84.1 | % | |||||||||||||
West Des Moines SNF |
West Des Moines, IA |
Skilled Nursing | 39,000 | 03/24/19 | 7,000,000 | 100 | % | |||||||||||||
Great Nord MOB Portfolio |
Tinley Park, IL; Chesterton and Crown Point, IN; and Plymouth, MN |
Medical Office | 143,000 | 04/08/19 | 44,000,000 | 93.8 | % | |||||||||||||
Overland Park MOB |
Overland Park, KS |
Medical Office | 76,000 | 08/05/19 | 29,833,000 | 96.0 | % | |||||||||||||
Blue Badger MOB |
Marysville, OH |
Medical Office | 34,000 | 08/09/19 | 13,650,000 | 100 | % | |||||||||||||
Bloomington MOB |
Bloomington, IL |
Medical Office | 45,000 | 08/13/19 | 18,200,000 | 100 | % | |||||||||||||
Memphis MOB |
Memphis, TN |
Medical Office | 27,000 | 08/15/19 | 8,700,000 | 100 | % | |||||||||||||
Haverhill MOB |
Haverhill, MA |
Medical Office | 64,000 | 08/27/19 | 15,500,000 | 100 | % | |||||||||||||
Fresno MOB |
Fresno, CA |
Medical Office | 32,000 | 10/30/19 | 10,000,000 | 92.7 | % | |||||||||||||
Colorado Foothills MOB Portfolio |
Arvada, Centennial and Colorado Springs, CO |
Medical Office | 131,000 | 11/19/19 | 31,200,000 | 84.4 | % | |||||||||||||
Catalina West Haven ALF |
West Haven, UT |
Senior Housing — RIDEA | 66,000 | 01/01/20 | 12,799,000 | 63.7 | % | |||||||||||||
Louisiana Senior Housing Portfolio |
Gonzales, Monroe, New Iberia, Shreveport and Slidell, LA |
Senior Housing — RIDEA | 177,000 | 01/03/20 | 34,000,000 | 73.5 | % | |||||||||||||
Catalina Madera ALF |
Madera, CA |
Senior Housing — RIDEA | 97,000 | 01/31/20 | 18,260,000 | 77.8 | % | |||||||||||||
|
|
|
|
|||||||||||||||||
Total/weighted average(3) |
4,871,000 | $ | 1,092,381,000 | 95.7 | % | |||||||||||||||
|
|
|
|
|
|
(1) | GAHR IV owns 100% of its properties as of March 31, 2021, with the exception of Central Florida Senior Housing Portfolio, Pinnacle Beaumont ALF, Pinnacle Warrenton ALF, Catalina West Haven ALF, Louisiana Senior Housing Portfolio and Catalina Madera ALF. |
(2) | Leased percentage includes all leased space of the respective acquisition including master leases, except for GAHR IV’s senior housing — RIDEA facilities where leased percentage represents resident occupancy on the available units of the RIDEA facilities. |
(3) | Total portfolio weighted average leased percentage excludes GAHR IV’s senior housing — RIDEA facilities. |
Year |
Number of Expiring Leases |
Total Square Feet of Expiring Leases |
% of Leased Area Represented by Expiring Leases |
Annual Base Rent of Expiring Leases |
% of Total Annual Base Rent Represented by Expiring Leases(1) |
|||||||||||||||
2021 |
33 | 73,000 | 2.3 | % | $ | 1,581,000 | 2.2 | % | ||||||||||||
2022 |
40 | 243,000 | 7.7 | 5,994,000 | 8.1 | |||||||||||||||
2023 |
39 | 243,000 | 7.7 | 6,219,000 | 8.5 | |||||||||||||||
2024 |
37 | 272,000 | 8.5 | 6,438,000 | 8.8 | |||||||||||||||
2025 |
31 | 283,000 | 8.9 | 7,009,000 | 9.6 | |||||||||||||||
2026 |
17 | 72,000 | 2.3 | 1,879,000 | 2.6 | |||||||||||||||
2027 |
15 | 120,000 | 3.8 | 3,301,000 | 4.4 | |||||||||||||||
2028 |
19 | 217,000 | 6.8 | 5,229,000 | 7.1 | |||||||||||||||
2029 |
20 | 211,000 | 6.5 | 6,268,000 | 8.4 | |||||||||||||||
2030 |
8 | 81,000 | 2.6 | 2,520,000 | 3.4 | |||||||||||||||
Thereafter |
22 | 1,365,000 | 42.9 | 26,819,000 | 36.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
281 | 3,180,000 | 100 | % | $ | 73,257,000 | 100 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Amount is based on the total annual contractual base rent expiring in the applicable year, based on leases in effect as of March 31, 2021. |
• | to preserve, protect and return stockholders’ capital contributions; |
• | to pay regular cash distributions; and |
• | to realize growth in the value of its investments upon the ultimate sale of such investments. |
• | Quality. |
• | Location. |
• | Market; Supply and Demand. |
• | Predictable Capital Needs. |
• | Cash Flows. |
• | medical office buildings; |
• | skilled nursing facilities; |
• | senior housing facilities; |
• | healthcare-related facilities operated utilizing a RIDEA structure; |
• | hospitals; |
• | long-term acute care facilities; |
• | surgery centers; |
• | memory care facilities; |
• | specialty medical and diagnostic service facilities; |
• | laboratories and research facilities; |
• | pharmaceutical and medical supply manufacturing facilities; and |
• | offices leased to tenants in healthcare-related industries. |
• | plans and specifications; |
• | environmental reports (generally a minimum of a Phase I investigation); |
• | building condition reports; |
• | surveys; |
• | evidence of marketable title subject to such liens and encumbrances as are acceptable to the GAHR IV Advisor; |
• | audited financial statements covering recent operations of real properties having operating histories unless such statements are not required to be filed with the SEC and delivered to stockholders; |
• | title insurance policies; and |
• | liability insurance policies. |
Tenant |
Annualized Base Rent/ NOI(1) |
Percentage of Annualized Base Rent/NOI |
Real Estate Investment |
Reportable Segment |
GLA (Sq Ft) |
Lease Expiration Date |
||||||||||||||
RC Tier Properties, LLC |
$ | 7,937,000 | 11.2 | % | Missouri SNF Portfolio | Skilled Nursing |
385,000 | 09/30/33 |
(1) | Amount is based on contractual base rent from leases in effect as of March 31, 2021 for GAHR IV’s non-RIDEA properties and annualized NOI for our senior housing — RIDEA facilities. The loss of this tenant or its inability to pay rent could have a material adverse effect on GAHR IV’s business and results of operations. |
• | a majority of GAHR IV’s directors, including a majority of its independent directors, not otherwise interested in such transaction, approves the transaction as being fair and reasonable to GAHR IV; and |
• | the investment by GAHR IV and such affiliates are on substantially the same terms and conditions. |
• | diversification benefits exist associated with disposing of the investment and rebalancing GAHR IV’s investment portfolio; |
• | an opportunity arises to pursue a more attractive investment; |
• | in the judgment of the GAHR IV Advisor, the value of the investment might decline; |
• | with respect to properties, a major tenant involuntarily liquidates or is in default under its lease; |
• | the investment was acquired as part of a portfolio acquisition and does not meet GAHR IV’s general acquisition criteria; |
• | an opportunity exists to enhance overall investment returns by raising capital through sale of the investment; or |
• | in the judgment of the GAHR IV Advisor, the sale of the investment is in the best interest of GAHR IV’s stockholders. |
• | make investments in unimproved property or indebtedness secured by a deed of trust or mortgage loans on unimproved property in excess of 10.0% of GAHR IV’s total assets (as used herein, “unimproved property” means any investment with the following characteristics: (a) an equity interest in real property which was not acquired for the purpose of producing rental or other operating income; (b) has no development or construction in process on such land; and (c) no development or construction on such land is planned to commence within one year); |
• | invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with GAHR IV’s ordinary business of investing in real estate assets; |
• | invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title; |
• | make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property except for those mortgage loans insured or guaranteed by a government or government agency. In cases where a majority of GAHR IV’s independent directors determines, and in all cases in which the transaction is with any of GAHR IV’s directors, the GAHR IV Advisor, one of its co-sponsors or any of their respective affiliates, such appraisal shall be obtained from an independent appraiser. GAHR IV will maintain such appraisal in its records for at least five years and it will be available for stockholder inspection and duplication. GAHR IV will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage; |
• | make or invest in mortgage loans on any one property if the aggregate amount of all mortgage loans on such property, including GAHR IV’s loan, would exceed an amount equal to 85.0% of the appraised value of such property as determined by appraisal unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria; however, the GAHR IV Board has adopted a policy more restrictive than the GAHR IV Charter limitation that limits the aggregate amount of all mortgage loans outstanding on the property, including GAHR IV’s loan, to 75.0% of the appraised value of the property; |
• | make or invest in mortgage loans that are subordinate to any lien or other indebtedness of any of GAHR IV’s directors, the GAHR IV Advisor, one of its co-sponsors or any of GAHR IV’s affiliates; |
• | issue equity securities redeemable solely at the option of the holder (this limitation, however, does not limit or prohibit the operation of GAHR IV’s share repurchase plan); |
• | issue debt securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is anticipated to be sufficient to properly service that higher level of debt; |
• | issue equity securities on a deferred payment basis or other similar arrangement; |
• | issue options or warrants to purchase shares of GAHR IV’s stock to the GAHR IV Advisor, any of GAHR IV’s directors, one of its co-sponsors or any of their respective affiliates except on the same terms, if any, as the options or warrants are sold to the general public; options or warrants may be issued to persons other than GAHR IV’s directors, the GAHR IV Advisor, its co-sponsors or any of their respective affiliates, but not at exercise prices less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of GAHR IV’s independent directors has a market value less than the value of such options or warrants on the date of grant; |
• | engage in investment activities that would cause GAHR IV to be classified as an investment company under the Investment Company Act; |
• | make any investment that is inconsistent with GAHR IV’s objectives of qualifying and remaining qualified as a REIT unless and until the GAHR IV Board determines, in its sole discretion, that REIT qualification is not in its best interest; |
• | engage in securities trading or engage in the business of underwriting or the agency distribution of securities issued by other persons; |
• | acquire interests or securities in any entity holding investments or engaging in activities prohibited by the GAHR IV Charter except for investments in which GAHR IV holds a non-controlling interest and investments in entities having securities listed on a national securities exchange; |
• | make investments in commercial mortgage-backed securities in excess of 10.0% of GAHR IV’s total assets; or |
• | make investments in equity securities of public or private real estate companies in excess of 10.0% of GAHR IV’s total assets. |
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Distributions paid in cash |
$ | 17,837,000 | $ | 20,905,000 | ||||||||||||
Distributions reinvested |
19,862,000 | 25,533,000 | ||||||||||||||
|
|
|
|
|||||||||||||
$ | 37,699,000 | $ | 46,438,000 | |||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
Cash flows from operations |
$ | 35,495,000 | 94.2 | % | $ | 39,540,000 | 85.1 | % | ||||||||
Proceeds from borrowings |
2,204,000 | 5.8 | 1,502,000 | 3.3 | ||||||||||||
Offering proceeds |
— | — | 5,396,000 | 11.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 37,699,000 | 100 | % | $ | 46,438,000 | 100 | % | |||||||||
|
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|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Distributions paid in cash |
$ | 17,837,000 | $ | 20,905,000 | ||||||||||||
Distributions reinvested |
19,862,000 | 25,533,000 | ||||||||||||||
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|
|
|
|||||||||||||
$ | 37,699,000 | $ | 46,438,000 | |||||||||||||
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|
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Sources of distributions: |
||||||||||||||||
FFO attributable to controlling interest |
$ | 37,699,000 | 100 | % | $ | 30,109,000 | 64.8 | % | ||||||||
Offering proceeds |
— | — | 13,053,000 | 28.1 | ||||||||||||
Proceeds from borrowings |
— | — | 3,276,000 | 7.1 | ||||||||||||
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|
|
|
|
|||||||||
$ | 37,699,000 | 100 | % | $ | 46,438,000 | 100 | % | |||||||||
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Name |
Age* |
Position | ||
Jeffrey T. Hanson |
50 | Chief Executive Officer and Chairman of the Board of Directors | ||
Danny Prosky |
56 | President and Chief Operating Officer | ||
Brian S. Peay |
56 | Chief Financial Officer | ||
Mathieu B. Streiff |
46 | Executive Vice President and General Counsel | ||
Stefan K.L. Oh |
50 | Executive Vice President of Acquisitions | ||
Cora Lo |
46 | Secretary and Assistant General Counsel | ||
Richard S. Welch |
50 | Director | ||
Brian J. Flornes |
57 | Independent Director | ||
Dianne Hurley |
58 | Independent Director | ||
Wilbur H. Smith III |
49 | Independent Director |
Name |
Age* |
Position | ||
Kenny Lin |
45 | Vice President, Accounting & Finance | ||
Wendie Newman |
58 | Vice President of Asset Management | ||
Gabriel M. Willhite |
40 | Assistant General Counsel – Transactions |
• | A majority of our directors are independent directors. Each director is an equal participant in decisions made by the full GAHR IV Board. In addition, all matters that relate to our co-sponsors, the GAHR IV Advisor or any of their affiliates must be approved by a majority of our independent directors. The audit committee and the GAHR IV Special Committee are comprised entirely of independent directors. |
• | Each of our directors is elected annually by our stockholders. |
• | Annual Retainer. |
• | Special Committee Fees. |
• | Meeting Fees. |
• | Equity Compensation. re-election each year, provided that such person is an independent director as of the date of his or her re-election and continually served as an independent director during such period. Additionally, on July 1, 2020, GAHR IV granted each of its independent directors an additional 5,000 restricted shares of GAHR IV Class T Common Stock pursuant to the GAHR IV Incentive Plan in consideration of their past services rendered. The restricted shares vest as to 20.0% of the shares on the date of grant and on each anniversary thereafter over four years from the date of grant. |
• | Other Compensation. out-of-pocket |
Name |
Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
Jeffrey T. Hanson(3) |
— | — | — | — | — | — | — | |||||||||||||||||||||
Richard S. Welch(3) |
— | — | — | — | — | — | — | |||||||||||||||||||||
Brian J. Flornes |
190,000 | 71,500 | — | — | — | 14,000 | (4) | 275,500 | ||||||||||||||||||||
Dianne Hurley |
220,000 | 71,500 | — | — | — | 16,000 | (4) | 307,500 | ||||||||||||||||||||
Wilbur H. Smith III |
188,500 | 71,500 | — | — | — | 16,000 | (4) | 276,000 |
(1) | Consists of the amounts described below: |
Director |
Role |
Annual Retainer ($) |
Meeting Fees ($) |
Additional Special Payments ($) | ||||||||
Hanson |
Chairman of the Board of Directors |
— | — | — | ||||||||
Welch |
Director |
— | — | — | ||||||||
Flornes |
Member, Audit and Special Committees |
65,000 | 24,000 | 101,000(a) | ||||||||
Hurley |
Chairwoman, Audit and Special Committees |
75,000 | 24,000 | 121,000(a) | ||||||||
Smith |
Member, Audit and Special Committees |
65,000 | 22,500 | 101,000(a) |
(a) | Comprised of the initial and monthly retainer fees paid to members of the special committee. |
(2) | The amounts in this column represent the grant date fair value of the awards granted for the year ended December 31, 2020, as determined in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation |
Director |
Grant Date |
Number of Shares of GAHR IV Restricted Class T Common Stock |
Full Grant Date Fair Value of Award ($) |
|||||||||
Hanson |
— | — | — | |||||||||
Welch |
— | — | — | |||||||||
Flornes |
06/09/20 and 07/01/20 | 7,500 | 71,500 | |||||||||
Hurley |
06/09/20 and 07/01/20 | 7,500 | 71,500 | |||||||||
Smith |
06/09/20 and 07/01/20 | 7,500 | 71,500 |
Director |
Number of Nonvested Shares of GAHR IV Restricted Class T Common Stock |
|||
Hanson |
— | |||
Welch |
— | |||
Flornes |
15,000 | |||
Hurley |
15,000 | |||
Smith |
15,000 |
(3) | Mr. Hanson and Mr. Welch are not independent directors. |
(4) | Amounts reflect the dollar value of distributions paid in connection with the stock awards granted to GAHR IV’s independent directors. |
Name of Beneficial Owner(1) |
Number of Shares of Class T Common Stock Beneficially Owned |
Percentage of All Class T Common Stock |
Number of Shares of Class I Common Stock Beneficially Owned |
Percentage of All Class I Common Stock |
||||||||||||
Jeffrey T. Hanson |
67,081 | (2) | * | 63,155 | 1.12 | % | ||||||||||
Brian S. Peay |
— | — | % | 3,230 | * | |||||||||||
Richard S. Welch |
— | — | % | — | — | % | ||||||||||
Brian J. Flornes |
35,000 | * | — | — | % | |||||||||||
Dianne Hurley |
39,070 | * | — | — | % | |||||||||||
Wilbur H. Smith III |
40,670 | * | — | — | % | |||||||||||
All directors and executive officers as a group (10 persons) |
280,546 | (2) | * | 254,495 | 4.49 | % |
* | Represents less than 1.0% of the outstanding GAHR IV Common Stock. |
(1) | For purposes of calculating the percentage beneficially owned, the number of shares of GAHR IV Common Stock deemed outstanding includes (a) 76,069,129 shares of GAHR IV Class T Common Stock or 5,662,132 shares of GAHR IV Class I Common Stock outstanding, as applicable, as of July 9, 2021, and (b) shares of GAHR IV Common Stock issuable pursuant to options held by the respective person or group that may be exercised within |
60 days following July 9, 2021. Beneficial ownership is determined in accordance with the rules of the SEC that deem shares of stock to be beneficially owned by any person or group who has or shares voting and investment power with respect to such shares of stock. |
(2) | Includes 20,833 shares of GAHR IV Class T Common Stock owned by the GAHR IV Advisor, which is 75.0% owned and managed by wholly owned subsidiaries of American Healthcare Investors. Messrs. Hanson, Prosky and Streiff are managing directors of American Healthcare Investors and as such, may be deemed to be the beneficial owners of such common stock. Each of Messrs. Hanson, Prosky and Streiff disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. The GAHR IV Advisor also owns 208 Class T partnership units of the GAHR IV Operating Partnership. |
12 months ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Operating expenses as a percentage of average invested assets |
1.2 | % | 1.2 | % | 1.2 | % | ||||||
Operating expenses as a percentage of net income |
38.1 | % | 37.2 | % | 28.3 | % |
December 31, |
||||||||
Fee |
2020 |
2019 |
||||||
Asset management fees |
$ | 814,000 | $ | 768,000 | ||||
Property management fees |
117,000 | 145,000 | ||||||
Acquisition and development fees |
64,000 | 5,000 | ||||||
Construction management fees |
33,000 | 65,000 | ||||||
Operating expenses |
10,000 | 12,000 | ||||||
Lease commissions |
8,000 | 21,000 | ||||||
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|
|
|
|||||
Total |
$ | 1,046,000 | $ | 1,016,000 | ||||
|
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|
Plan Category |
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights |
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance |
|||||||||
Equity compensation plans approved by security holders(1) |
— | — | 3,895,000 | |||||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
— | — | 3,895,000 | |||||||||
|
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|
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(1) | Through December 31, 2020, GAHR IV granted an aggregate of 15,000 restricted shares of GAHR IV Class T Common Stock, as defined in its incentive plan, to each of GAHR IV’s independent directors in connection with their initial election and re-election to the GAHR IV Board, of which 20.0% vested on the grant date and 20.0% will vest on each of the first four anniversaries of the date of grant. In addition, through December 31, 2020, GAHR IV granted an aggregate of 20,000 restricted shares of GAHR IV Class T Common Stock, as defined in its incentive plan, to each of GAHR IV’s independent directors in consideration for their past services rendered. These restricted shares of GAHR IV Class T Common Stock vest under the same period described above. Prior to April 5, 2019, the fair value of each share at the date of grant was based on the then most recent price paid to acquire one share of GAHR IV Class T Common Stock in GAHR IV’s initial offering; effective April 5, 2019, the fair value of each share at the date of grant was estimated at the most recent estimated per share NAV approved and established by the GAHR IV Board; and with respect to the initial 20.0% of restricted shares of GAHR IV Class T Common Stock that vested on the date of grant, expensed as compensation immediately, and with respect to the remaining restricted shares of GAHR IV Class T Common Stock, amortized over the period from the service inception date to the vesting date for each vesting tranche (i.e., on a tranche by tranche basis) using the accelerated attribution method. Restricted shares of GAHR IV Class T Common Stock may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. Such restrictions expire upon vesting. Restricted shares of GAHR IV Class T Common Stock have full voting rights and rights to distributions. Such shares are not shown in the chart above as they are deemed outstanding shares of GAHR IV Common Stock; however, such grants reduce the number of securities remaining available for future issuance. |
Expected Maturity Date |
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2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
Fair Value |
|||||||||||||||||||||||||
Fixed-rate debt - principal payments |
$ | 469,000 | $ | 651,000 | $ | 680,000 | $ | 711,000 | $ | 5,878,000 | $ | 10,239,000 | $ | 18,628,000 | $ | 20,785,000 | ||||||||||||||||
Weighted average interest rate on maturing fixed-rate debt |
4.48 | % | 4.49 | % | 4.49 | % | 4.50 | % | 3.85 | % | 3.83 | % | 3.93 | % | — | |||||||||||||||||
Variable-rate debt - principal payments |
$ | 481,400,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 481,400,000 | $ | 481,716,000 | ||||||||||||||||
Weighted average interest rate on maturing variable-rate debt (based on rates in effect as of March 31, 2021) |
2.08 | % | — | % | — | % | — | % | — | % | — | % | 2.08 | % | — |
• | Except as otherwise described in the prospectus for the GAHR IV Initial Offering, GAHR IV will not accept goods or services from its co-sponsors, the GAHR IV Advisor and directors or their respective affiliates unless |
a majority of GAHR IV’s directors, including a majority of its independent directors, not otherwise interested in the transactions, approve such transactions as fair and reasonable to GAHR IV and on terms and conditions not less favorable to GAHR IV than those available from unaffiliated third parties. |
• | GAHR IV will not purchase or lease any asset (including any property) in which one of its co-sponsors, the GAHR IV Advisor, any of its directors or any of their respective affiliates has an interest without a determination by a majority of GAHR IV’s directors, including a majority of its independent directors, not otherwise interested in such transaction, that such transaction is fair and reasonable to GAHR IV and at a price to GAHR IV no greater than the cost of the property to such co-sponsor, the GAHR IV Advisor, such director or directors or any such affiliate, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will GAHR IV acquire any such asset at an amount in excess of its appraised value. GAHR IV will not sell or lease assets to one of its co-sponsors, the GAHR IV Advisor, any of its directors or any of their respective affiliates unless a majority of GAHR IV’s directors, including a majority of its independent directors, not otherwise interested in the transaction, determine the transaction is fair and reasonable to GAHR IV, which determination will be supported by an appraisal obtained from a qualified, independent appraiser selected by a majority of GAHR IV’s independent directors. |
• | GAHR IV will not make any loans to one of its co-sponsors, the GAHR IV Advisor, any of GAHR IV’s directors or any of their respective affiliates except mortgage loans in which an appraisal is obtained from an independent appraiser and loans, if any, to a wholly owned subsidiary. In addition, any loans made to GAHR IV by one of its co-sponsors, the GAHR IV Advisor, GAHR IV’s directors or any of their respective affiliates must be approved by a majority of GAHR IV’s directors, including a majority of its independent directors, not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to GAHR IV than comparable loans between unaffiliated parties. |
• | The GAHR IV Advisor and its affiliates will be entitled to reimbursement, at cost, for actual expenses incurred by them on GAHR IV’s behalf or on behalf of joint ventures in which GAHR IV is a joint venture partner, subject to the limitation that the GAHR IV Advisor and its affiliates are not entitled to reimbursement of operating expenses, generally, to the extent that they exceed the greater of 2.0% of our average invested assets or 25.0% of GAHR IV’s net income, unless GAHR IV’s independent directors determine that such excess expenses are justified based on unusual and nonrecurring factors which they deem sufficient. |
Real Estate Investments(1) |
Location |
Reportable Segment |
GLA (Sq Ft) |
Aggregate Contract Purchase Price |
Leased Percentage(2) |
|||||||||||
DeKalb Professional Center |
Lithonia, GA | Medical Office | 19,000 | $ | 2,830,000 | 81.2 | % | |||||||||
Country Club MOB |
Stockbridge, GA | Medical Office | 17,000 | 2,775,000 | 100 | % | ||||||||||
Acworth Medical Complex |
Acworth, GA | Medical Office | 39,000 | 6,525,000 | 82.7 | % | ||||||||||
Wichita KS MOB |
Wichita, KS | Medical Office | 39,000 | 8,800,000 | 94.1 | % | ||||||||||
Delta Valley ALF Portfolio |
Springdale, AR; and Batesville and Cleveland, MS |
Senior Housing | 127,000 | 21,450,000 | 100 | % | ||||||||||
Lee’s Summit MO MOB |
Lee’s Summit, MO | Medical Office | 39,000 | 6,750,000 | 100 | % | ||||||||||
Carolina Commons MOB |
Indian Land, SC | Medical Office | 58,000 | 12,000,000 | 74.0 | % | ||||||||||
Mount Olympia MOB Portfolio |
Mount Dora, FL; and Olympia Fields, IL |
Medical Office | 23,000 | 9,900,000 | 100 | % | ||||||||||
Southlake TX Hospital(3) |
Southlake, TX | Hospital | 142,000 | 128,000,000 | 100 | % | ||||||||||
East Texas MOB Portfolio |
Longview and Marshall, TX |
Medical Office | 393,000 | 68,500,000 | 96.4 | % | ||||||||||
Premier MOB |
Novi, MI | Medical Office | 45,000 | 12,025,000 | 91.2 | % | ||||||||||
Independence MOB Portfolio |
Southgate, KY; Somerville, MA; Morristown and Verona, NJ; and Bronx, NY |
Medical Office | 477,000 | 135,000,000 | 95.8 | % | ||||||||||
King of Prussia PA MOB |
King of Prussia, PA | Medical Office | 72,000 | 18,500,000 | 66.5 | % | ||||||||||
North Carolina ALF Portfolio |
Clemmons, Garner Huntersville, Matthews, Mooresville, Raleigh and Wake Forest, NC |
Senior Housing — RIDEA |
272,000 | 113,856,000 | 51.5 | % | ||||||||||
Orange Star Medical Portfolio |
Durango, CO; and Friendswood, Keller and Wharton, TX |
Medical Office and Hospital |
183,000 | 57,650,000 | 98.5 | % | ||||||||||
Kingwood MOB Portfolio |
Kingwood, TX | Medical Office | 43,000 | 14,949,000 | 100 | % | ||||||||||
Mt. Juliet TN MOB |
Mount Juliet, TN | Medical Office | 46,000 | 13,000,000 | 75.2 | % | ||||||||||
Homewood AL MOB |
Homewood, AL | Medical Office | 30,000 | 7,444,000 | 43.1 | % | ||||||||||
Paoli PA Medical Plaza |
Paoli, PA | Medical Office | 99,000 | 24,820,000 | 89.7 | % | ||||||||||
Glen Burnie MD MOB |
Glen Burnie, MD | Medical Office | 77,000 | 18,650,000 | 86.1 | % | ||||||||||
Marietta GA MOB |
Marietta, GA | Medical Office | 41,000 | 13,050,000 | 100 | % | ||||||||||
Mountain Crest Senior Housing Portfolio |
Elkhart, Hobart, LaPorte and Mishawaka, IN; and Niles, MI |
Senior Housing — RIDEA |
585,000 | 75,035,000 | 72.2 | % | ||||||||||
Mount Dora Medical Center |
Mount Dora, FL | Medical Office | 51,000 | 16,300,000 | 19.5 | % | ||||||||||
Nebraska Senior Housing Portfolio |
Bennington and Omaha, NE |
Senior Housing — RIDEA |
282,000 | 66,000,000 | 59.2 | % |
Real Estate Investments(1) |
Location |
Reportable Segment |
GLA (Sq Ft) |
Aggregate Contract Purchase Price |
Leased Percentage(2) |
|||||||||||||||
Pennsylvania Senior Housing Portfolio |
|
Bethlehem, Boyertown and York, PA |
|
|
Senior Housing — RIDEA |
|
260,000 | $ | 87,500,000 | 77.4 | % | |||||||||
Southern Illinois MOB Portfolio |
Waterloo, IL | Medical Office | 41,000 | 12,712,000 | 82.1 | % | ||||||||||||||
Napa Medical Center |
Napa, CA | Medical Office | 65,000 | 15,700,000 | 90.5 | % | ||||||||||||||
Chesterfield Corporate Plaza |
Chesterfield, MO | Medical Office | 226,000 | 36,000,000 | 97.9 | % | ||||||||||||||
Richmond VA ALF |
North Chesterfield, VA | |
Senior Housing — RIDEA |
|
210,000 | 64,000,000 | 87.6 | % | ||||||||||||
Crown Senior Care Portfolio(4) |
|
Peel, Isle of Man; and Aberdeen, Felixstowe, Salisbury and St. Albans, UK |
|
Senior Housing | 155,000 | 68,085,000 | 100 | % | ||||||||||||
Washington DC SNF |
Washington, D.C. | Skilled Nursing | 134,000 | 40,000,000 | 100 | % | ||||||||||||||
Trilogy(5) |
IN, KY, MI and OH | |
Integrated Senior Health Campuses |
|
8,541,000 | 1,732,058,000 | 67.6 | % | ||||||||||||
Stockbridge GA MOB II |
Stockbridge, GA | Medical Office | 46,000 | 8,000,000 | 79.3 | % | ||||||||||||||
Marietta GA MOB II |
Marietta, GA | Medical Office | 22,000 | 5,800,000 | 61.7 | % | ||||||||||||||
Naperville MOB |
Naperville, IL | Medical Office | 69,000 | 17,385,000 | 83.2 | % | ||||||||||||||
Lakeview IN Medical Plaza(6) |
Indianapolis, IN | Medical Office | 163,000 | 20,000,000 | 89.9 | % | ||||||||||||||
Pennsylvania Senior Housing Portfolio II |
Palmyra, PA | |
Senior Housing — RIDEA |
|
125,000 | 27,500,000 | 91.6 | % | ||||||||||||
Snellville GA MOB |
Snellville, GA | Medical Office | 42,000 | 8,300,000 | 93.4 | % | ||||||||||||||
Lakebrook Medical Center |
Westbrook, CT | Medical Office | 25,000 | 6,150,000 | 76.4 | % | ||||||||||||||
Stockbridge GA MOB III |
Stockbridge, GA | Medical Office | 43,000 | 10,300,000 | 90.7 | % | ||||||||||||||
Joplin MO MOB |
Joplin, MO | Medical Office | 85,000 | 11,600,000 | 86.5 | % | ||||||||||||||
Austell GA MOB |
Austell, GA | Medical Office | 39,000 | 12,600,000 | 100 | % | ||||||||||||||
Middletown OH MOB |
Middletown, OH | Medical Office | 103,000 | 19,300,000 | 84.7 | % | ||||||||||||||
Fox Grape SNF Portfolio |
|
Braintree, Brighton, Duxbury, Hingham and Quincy, MA |
|
Skilled Nursing | 349,000 | 79,500,000 | 100 | % | ||||||||||||
Voorhees NJ MOB |
Voorhees, NJ | Medical Office | 48,000 | 11,300,000 | 75.9 | % | ||||||||||||||
Norwich CT MOB Portfolio |
Norwich, CT | Medical Office | 56,000 | 15,600,000 | 87.4 | % | ||||||||||||||
New London CT MOB |
New London, CT | Medical Office | 27,000 | 4,850,000 | 97.9 | % | ||||||||||||||
Middletown OH MOB II |
Middletown, OH | Medical Office | 32,000 | 4,600,000 | 71.0 | % | ||||||||||||||
|
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|
|||||||||||||||||
Total/weighted average(7) |
14,105,000 | $ | 3,172,649,000 | 91.7 | % | |||||||||||||||
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|
(1) | GAHR III owns 100% of its properties as of March 31, 2021, with the exception of Southlake TX Hospital, Trilogy and Lakeview IN Medical Plaza. |
(2) | Leased percentage includes all leased space of the respective property including master leases, except for GAHR III’s senior housing — RIDEA facilities and integrated senior health campuses where leased percentage represents resident occupancy on the available units of the RIDEA facilities or integrated senior health campuses. |
(3) | On April 7, 2020, GAHR III sold a 9.4% membership interest in a consolidated limited liability company that owns Southlake TX Hospital to an unaffiliated third party for a contract purchase price of $11,000,000. |
(4) | GAHR III acquired six senior housing facilities comprising Crown Senior Care Portfolio for an aggregate net contract purchase price of £44,526,000. |
(5) | On December 1, 2015, GAHR III completed the acquisition of Trilogy, the parent company of Trilogy Health Services, LLC, through GAHR III’s majority-owned subsidiary, Trilogy REIT Holdings, LLC, or Trilogy REIT |
Holdings. Trilogy REIT Holdings acquired Trilogy for a purchase price based on a total company valuation of approximately $1,125,000,000. GAHR III’s effective ownership of Trilogy was approximately 67.6% at the time of acquisition and GAHR III’s portion of the purchase price was approximately $760,356,000. NorthStar Healthcare Income, Inc. and GAHR IV each currently own a minority interest in Trilogy REIT Holdings. Since December 1, 2015, GAHR III has expanded the Trilogy portfolio by investing in development projects and campus expansions and the acquisition of additional campuses, land parcels for development and a pharmaceutical business through GAHR III’s majority-owned subsidiary, Trilogy Investors, LLC. As of March 31, 2021, GAHR III’s effective ownership in Trilogy was approximately 67.6%. |
(6) | On January 21, 2016, GAHR III completed the acquisition of Lakeview IN Medical Plaza, pursuant to a joint venture with an affiliate of Cornerstone Companies, Inc., an unaffiliated third party. GAHR III’s effective ownership of the joint venture is 86.0%. |
(7) | Total portfolio weighted average leased percentage excludes GAHR III’s senior housing — RIDEA facilities and integrated senior health campuses. |
Year |
Number of Expiring Leases |
Total Square Feet of Expiring Leases |
% of Leased Area Represented by Expiring Leases |
Annual Base Rent of Expiring Leases(1) |
% of Total Annual Base Rent Represented by Expiring Leases(1) |
|||||||||||||||
2021 |
66 | 241,000 | 6.8 | % | $ | 4,993,000 | 4.8 | % | ||||||||||||
2022 |
65 | 335,000 | 9.5 | 7,951,000 | 7.6 | |||||||||||||||
2023 |
61 | 306,000 | 8.7 | 7,720,000 | 7.4 | |||||||||||||||
2024 |
49 | 348,000 | 9.9 | 7,577,000 | 7.3 | |||||||||||||||
2025 |
41 | 410,000 | 11.7 | 11,239,000 | 10.8 | |||||||||||||||
2026 |
23 | 143,000 | 4.1 | 3,071,000 | 2.9 | |||||||||||||||
2027 |
20 | 176,000 | 5.0 | 4,621,000 | 4.4 | |||||||||||||||
2028 |
12 | 184,000 | 5.2 | 7,073,000 | 6.8 | |||||||||||||||
2029 |
9 | 262,000 | 7.4 | 5,415,000 | 5.2 | |||||||||||||||
2030 |
17 | 243,000 | 6.9 | 8,802,000 | 8.4 | |||||||||||||||
Thereafter |
24 | 875,000 | 24.8 | 35,858,000 | 34.4 | |||||||||||||||
|
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|
|
|
|
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Total |
387 | 3,523,000 | 100 | % | $ | 104,320,000 | 100 | % | ||||||||||||
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(1) | Amount is based on the total annual contractual base rent expiring in the applicable year, based on leases in effect as of March 31, 2021. |
• | to preserve, protect and return its stockholders’ capital contributions; |
• | to pay regular cash distributions; and |
• | to realize growth in the value of its investments upon its ultimate sale of such investments. |
• | Quality. |
• | Location. |
• | Market; Supply and Demand. |
• | Predictable Capital Needs. |
• | Cash Flows. |
• | medical office buildings; |
• | hospitals; |
• | skilled nursing facilities; |
• | senior housing facilities; |
• | healthcare-related facilities operated utilizing a RIDEA structure; |
• | long-term acute care facilities; |
• | surgery centers; |
• | memory care facilities; |
• | specialty medical and diagnostic service facilities; |
• | laboratories and research facilities; |
• | pharmaceutical and medical supply manufacturing facilities; and |
• | offices leased to tenants in healthcare-related industries. |
• | plans and specifications; |
• | environmental reports (generally a minimum of a Phase I investigation); |
• | building condition reports; |
• | surveys; |
• | evidence of marketable title subject to such liens and encumbrances as are acceptable to the GAHR III Advisor; |
• | audited financial statements covering recent operations of real properties having operating histories unless such statements are not required to be filed with the SEC and delivered to stockholders; |
• | title insurance policies; and |
• | liability insurance policies. |
• | a majority of its directors, including a majority of its independent directors, not otherwise interested in such transaction, approves the transaction as being fair and reasonable to GAHR III; and |
• | the investment by GAHR III and such affiliates are on substantially the same terms and conditions. |
• | diversification benefits exist associated with disposing of the investment and rebalancing GAHR III’s investment portfolio; |
• | an opportunity arises to pursue a more attractive investment; |
• | in the judgment of the GAHR III Advisor, the value of the investment might decline; |
• | with respect to properties, a major tenant involuntarily liquidates or is in default under its lease; |
• | the investment was acquired as part of a portfolio acquisition and does not meet GAHR III’s general acquisition criteria; |
• | an opportunity exists to enhance overall investment returns by raising capital through sale of the investment; or |
• | in the judgment of the GAHR III Advisor, the sale of the investment is in the best interest of GAHR III’s stockholders. |
• | make investments in unimproved property or indebtedness secured by a deed of trust or mortgage loans on unimproved property in excess of 10.0% of its total assets (as used herein, “unimproved property” means any investment with the following characteristics: (a) an equity interest in real property which was not acquired for the purpose of producing rental or other operating income; (b) has no development or construction in process on such land; and (c) no development or construction on such land is planned to commence within one year); |
• | invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with its ordinary business of investing in real estate assets; |
• | invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title; |
• | make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property except for those mortgage loans insured or guaranteed by a government or government agency. In cases where a majority of GAHR III’s independent directors determines, and in all cases in which the transaction is with any of its directors, the GAHR III Advisor, one of its co-sponsors or any of their respective affiliates, such appraisal shall be obtained from an independent appraiser. GAHR III will maintain such appraisal in its records for at least five years and it will be available for stockholder inspection and duplication. GAHR III will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage; |
• | make or invest in mortgage loans on any one property if the aggregate amount of all mortgage loans on such property, including GAHR III’s loan, would exceed an amount equal to 85.0% of the appraised value of such property as determined by appraisal unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria; however, the GAHR III Board has adopted a policy more restrictive than GAHR III’s charter limitation that limits the aggregate amount of all mortgage loans outstanding on the property, including GAHR III’s loan, to 75.0% of the appraised value of the property; |
• | make or invest in mortgage loans that are subordinate to any lien or other indebtedness of any of GAHR III’s directors, the GAHR III Advisor, one of its co-sponsors or any of its affiliates; |
• | issue equity securities redeemable solely at the option of the holder (this limitation, however, does not limit or prohibit the operation of GAHR III’s share repurchase plan); |
• | issue debt securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is anticipated to be sufficient to properly service that higher level of debt; |
• | issue equity securities on a deferred payment basis or other similar arrangement; |
• | issue options or warrants to purchase shares of GAHR III’s stock to the GAHR III Advisor, any of its directors, one of its co-sponsors or any of their respective affiliates except on the same terms, if any, as the options or warrants are sold to the general public; options or warrants may be issued to persons other than its directors, the GAHR III Advisor, its co-sponsors or any of their respective affiliates, but not at exercise prices less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of its independent directors has a market value less than the value of such options or warrants on the date of grant; |
• | engage in investment activities that would cause GAHR III to be classified as an investment company under the Investment Company Act; |
• | make any investment that is inconsistent with GAHR III’s objectives of qualifying and remaining qualified as a REIT unless and until the GAHR III Board determines, in its sole discretion, that REIT qualification is not in GAHR III’s best interest; |
• | engage in securities trading or engage in the business of underwriting or the agency distribution of securities issued by other persons; |
• | acquire interests or securities in any entity holding investments or engaging in activities prohibited by GAHR III’s charter except for investments in which it holds a non-controlling interest and investments in entities having securities listed on a national securities exchange; |
• | make investments in commercial mortgage-backed securities in excess of 10.0% of GAHR III’s total assets; or |
• | make investments in equity securities of public or private real estate companies in excess of 10.0% of GAHR III’s total assets. |
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Distributions paid in cash |
$ | 26,997,000 | $ | 62,612,000 | ||||||||||||
Distributions reinvested |
21,861,000 | 55,440,000 | ||||||||||||||
|
|
|
|
|||||||||||||
$ | 48,858,000 | $ | 118,052,000 | |||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
Cash flows from operations |
$ | 48,858,000 | 100 | % | $ | 117,454,000 | 99.5 | % | ||||||||
Proceeds from borrowings |
— | — | 598,000 | 0.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 48,858,000 | 100 | % | $ | 118,052,000 | 100 | % | |||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Distributions paid in cash |
$ | 26,997,000 | $ | 62,612,000 | ||||||||||||
Distributions reinvested |
21,861,000 | 55,440,000 | ||||||||||||||
|
|
|
|
|||||||||||||
$ | 48,858,000 | $ | 118,052,000 | |||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
FFO attributable to controlling interest |
$ | 48,858,000 | 100 | % | $ | 91,159,000 | 77.2 | % | ||||||||
Proceeds from borrowings |
— | — | 26,893,000 | 22.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 48,858,000 | 100 | % | $ | 118,052,000 | 100 | % | |||||||||
|
|
|
|
|
|
|
|
• | Annual Retainer. |
• | Special Committee Fees. |
• | Meeting Fees. |
• | Equity Compensation. re-election each year, provided that such person is an |
independent director as of the date of his or her re-election and continually served as an independent director during such period. The restricted shares vest as to 20.0% of the shares on the date of grant and on each of the first four anniversaries of the grant date. |
• | Other Compensation. out-of-pocket |
Name |
Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
Jeffrey T. Hanson(3) |
— | — | — | — | — | — | — | |||||||||||||||||||||
Danny Prosky(3) |
— | — | — | — | — | — | — | |||||||||||||||||||||
Harold H. Greene |
224,000 | 23,500 | — | — | — | 13,000 | (4) | 260,500 | ||||||||||||||||||||
Gerald W. Robinson |
195,000 | 23,500 | — | — | — | 10,500 | (4) | 229,000 | ||||||||||||||||||||
J. Grayson Sanders |
195,000 | 23,500 | — | — | — | 10,500 | (4) | 229,000 |
(1) | Consists of the amounts described below: |
Director |
Role |
Annual Retainer ($) |
Meeting Fees ($) |
Additional Special Payments ($) |
||||||||||
Hanson |
Chairman of the Board of Directors |
— | — | — | ||||||||||
Prosky |
Director |
— | — | — | ||||||||||
Greene |
Chairman, Audit and Special Committees |
85,000 | 24,000 | 115,000 | (a) | |||||||||
Robinson |
Member, Audit and Special Committees |
75,000 | 24,000 | 96,000 | (a) | |||||||||
Sanders |
Member, Audit and Special Committees |
75,000 | 24,000 | 96,000 | (a) |
(a) | Comprised of the initial and monthly retainer fees paid to members of the special committee. |
(2) | The amounts in this column represent the aggregate grant date fair value of the awards granted for the year ended December 31, 2020, as determined in accordance with ASC Topic 718. |
Director |
Grant Date |
Number of Shares of GAHR III Restricted Common Stock |
Full Grant Date Fair Value of Award ($) |
|||||||||
Hanson |
— | — | — | |||||||||
Prosky |
— | — | — | |||||||||
Greene |
6/10/20 | 2,500 | 23,500 | |||||||||
Robinson |
6/10/20 | 2,500 | 23,500 | |||||||||
Sanders |
6/10/20 | 2,500 | 23,500 |
Director |
Number of Nonvested Shares of GAHR III Restricted Common Stock |
|||
Hanson |
— | |||
Prosky |
— | |||
Greene |
11,000 | |||
Robinson |
11,000 | |||
Sanders |
11,000 |
(3) | Mr. Hanson and Mr. Prosky are not independent directors. |
(4) | Amounts reflect the dollar value of distributions paid in connection with the stock awards granted to GAHR III’s independent directors. |
Name of Beneficial Owner(1) |
Number of Shares of Common Stock Beneficially Owned |
Percentage of Common Stock |
||||||
Jeffrey T. Hanson |
308,202 | (2) | * | |||||
Brian S. Peay |
— | — | ||||||
Danny Prosky |
243,970 | (2) | * | |||||
Harold H. Greene |
68,866 | * | ||||||
Gerald W. Robinson |
45,000 | * | ||||||
J. Grayson Sanders |
45,342 | * | ||||||
All directors and executive officers as a group (9 persons) |
911,859 | (2) | * |
* | Represents less than 1.0% of the outstanding GAHR III Common Stock. |
(1) | For purposes of calculating the percentage beneficially owned, the number of shares of GAHR III Common Stock deemed outstanding includes (a) 193,889,872 shares of GAHR III Common Stock outstanding as of July 9, 2021, and (b) shares of GAHR III Common Stock issuable pursuant to options held by the respective person or group that may be exercised within 60 days following July 9, 2021. Beneficial ownership is determined in accordance with the rules of the SEC that deem shares of stock to be beneficially owned by any person or group who has or shares voting and investment power with respect to such shares of stock. |
(2) | Includes 22,222 shares of GAHR III Common Stock owned by the GAHR III Advisor, which is 75% owned and managed by wholly owned subsidiaries of American Healthcare Investors. Messrs. Hanson, Prosky and Streiff are managing directors of American Healthcare Investors and as such, may be deemed to be the beneficial owners of such GAHR III Common Stock. Each of Messrs. Hanson, Prosky and Streiff disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. The GAHR III Advisor also owns 222 units of the GAHR III Operating Partnership. |
12 Months Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Operating expenses as a percentage of average invested assets |
1.0 | % | 0.9 | % | 0.9 | % | ||||||
Operating expenses as a percentage of net income |
22.1 | % | 18.9 | % | 19.1 | % |
December 31, |
||||||||
Fee |
2020 |
2019 |
||||||
Asset and property management fees |
$ | 7,155,000 | $ | 1,991,000 | ||||
Development fees |
743,000 | — | ||||||
Construction management fees |
91,000 | 175,000 | ||||||
Lease commissions |
27,000 | 143,000 | ||||||
Operating expenses |
10,000 | 12,000 | ||||||
|
|
|
|
|||||
$ | 8,026,000 | $ | 2,321,000 | |||||
|
|
|
|
Plan Category |
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights |
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance |
|||||||||
Equity compensation plans approved by security holders(1) |
— | — | 1,865,000 | |||||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
— | — | 1,865,000 | |||||||||
|
|
|
|
|
|
(1) | Through December 31, 2020, GAHR III granted an aggregate of 60,000 restricted shares of GAHR III Common Stock, as defined in the incentive plan, to GAHR III’s independent directors in connection with their initial election or re-election to the GAHR III Board, of which 20.0% vested on the grant date and 20.0% will vest on each of the first four anniversaries of the date of grant. In addition, through December 31, 2020, GAHR III granted an aggregate of 75,000 restricted shares of GAHR III Common Stock, as defined in the incentive plan, to GAHR III’s independent directors in consideration for their past services rendered. These restricted shares of GAHR III Common Stock vest under the same period described above. Prior to October 5, 2016, the fair value of each share at the date of grant was estimated at $10.00 based on the then most recent price paid to acquire one share of GAHR III Common Stock in GAHR III’s initial offering; effective October 5, 2016, the fair value of each share at the date of grant was estimated at the updated estimated per share NAV approved and established by the GAHR III Board; and with respect to the initial 20.0% of restricted shares of GAHR III Common Stock that vested on the date of grant, expensed as compensation immediately, and with respect to the remaining restricted shares of GAHR III Common Stock, amortized over the period from the service inception date to the vesting date for each vesting tranche (i.e., on a tranche by tranche basis) using the accelerated attribution method. Restricted shares of GAHR III Common Stock may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. Such restrictions expire upon vesting. Restricted shares of GAHR III Common Stock have full voting rights and rights to distributions. Such shares are not shown in the chart above as they are deemed outstanding shares of GAHR III Common Stock; however, such grants reduce the number of securities remaining available for future issuance. |
• | Except as otherwise described in GAHR III’s prospectus for the GAHR III Initial Offering, GAHR III will not accept goods or services from its co-sponsors, the GAHR III Advisor and directors or their respective affiliates unless a majority of GAHR III’s directors, including a majority of its independent directors, not otherwise interested in the transactions, approve such transactions as fair and reasonable to GAHR III and on terms and conditions not less favorable to GAHR III than those available from unaffiliated third parties. |
• | GAHR III will not purchase or lease any asset (including any property) in which one of its co-sponsors, the GAHR III Advisor, any of its directors or any of their respective affiliates has an interest without a determination by a majority of GAHR III’s directors, including a majority of its independent directors, not otherwise interested in such transaction, that such transaction is fair and reasonable to GAHR III and at a price to GAHR III no greater than the cost of the property to such co-sponsor, the GAHR III Advisor, such director or directors or any such affiliate, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will GAHR III acquire any such asset at an amount in excess of its appraised value. GAHR III will not sell or lease assets to one of its co-sponsors, the GAHR III Advisor, any of its directors or any of their respective affiliates unless a majority of GAHR III’s directors, including a majority of its independent directors, not otherwise interested in the transaction, determine the transaction is fair and reasonable to GAHR III, which determination will be supported by an appraisal obtained from a qualified, independent appraiser selected by a majority of GAHR III’s independent directors. |
• | GAHR III will not make any loans to one of its co-sponsors, the GAHR III Advisor, any of its directors or any of their respective affiliates except mortgage loans in which an appraisal is obtained from an independent appraiser and loans, if any, to a wholly owned subsidiary. In addition, any loans made to GAHR III by one of its co-sponsors, the GAHR III Advisor, GAHR III’s directors or any of their respective affiliates must be approved by a majority of GAHR III’s directors, including a majority of its independent directors, not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to GAHR III than comparable loans between unaffiliated parties. |
• | The GAHR III Advisor and its affiliates will be entitled to reimbursement, at cost, for actual expenses incurred by them on GAHR III’s behalf or on behalf of joint ventures in which GAHR III’s is a joint venture partner, subject to the limitation that GAHR III Advisor and its affiliates are not entitled to reimbursement of operating expenses, generally, to the extent that they exceed the greater of 2.0% of GAHR III’s average invested assets or 25.0% of GAHR III’s net income, unless GAHR III’s independent directors determined that such excess expenses were justified based on unusual and nonrecurring factors which they deem sufficient. |
Expected Maturity Date |
||||||||||||||||||||||||||||||||
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
Fair Value |
|||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Debt security held-to-maturity |
$ | — | $ | — | $ | — | $ | — | $ | 93,433,000 | $ | — | $ | 93,433,000 | $ | 93,973,000 | ||||||||||||||||
Weighted average interest rate on maturing fixed-rate debt security |
— | % | — | % | — | % | — | % | 4.24 | % | — | % | 4.24 | % | — | |||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Fixed-rate debt - principal payments |
$ | 10,743,000 | $ | 63,255,000 | $ | 30,331,000 | $ | 67,208,000 | $ | 18,015,000 | $ | 552,172,000 | $ | 741,724,000 | $ | 702,462,000 | ||||||||||||||||
Weighted average interest rate on maturing fixed-rate debt |
3.52 | % | 4.10 | % | 4.03 | % | 3.63 | % | 3.54 | % | 3.37 | % | 3.49 | % | — | |||||||||||||||||
Variable-rate debt - principal payments |
$ | 19,868,000 | $ | 560,500,000 | $ | 358,017,000 | $ | 92,083,000 | $ | 4,679,000 | $ | — | $ | 1,035,147,000 | $ | 1,036,956,000 | ||||||||||||||||
Weighted average interest rate on maturing variable-rate debt (based on rates in effect as of March 31, 2021) |
2.50 | % | 2.66 | % | 2.91 | % | 3.76 | % | 2.62 | % | — | % | 2.85 | % | — |
Name |
Age |
Position(s) | ||
Jeffrey T. Hanson |
50 | Executive Chairman of the Board of Directors | ||
Brian J. Flornes |
57 | Independent Director | ||
Harold H. Greene |
82 | Independent Director | ||
Dianne Hurley |
58 | Independent Director | ||
Gerald W. Robinson |
73 | Independent Director | ||
J. Grayson Sanders |
81 | Independent Director | ||
Wilbur H. Smith III |
49 | Independent Director | ||
Danny Prosky |
56 | President, Chief Executive Officer and Director | ||
Mathieu B. Streiff |
46 | Chief Operating Officer and Director |
Name |
Age |
Position(s) | ||
Jeffrey T. Hanson |
50 | Executive Chairman of the Board of Directors | ||
Danny Prosky |
56 | President and Chief Executive Officer | ||
Brian S. Peay |
56 | Chief Financial Officer | ||
Mathieu B. Streiff |
46 | Chief Operating Officer | ||
Stefan K. L. Oh |
50 | Executive Vice President – Acquisitions | ||
Gabriel M. Willhite |
40 | Executive Vice President, General Counsel | ||
Cora Lo |
46 | Secretary and Assistant General Counsel |
• | Internet |
• | Telephone |
• | Prepaid Mail |
• | delivering, before the GAHR III Special Meeting commences, to GAHR III’s Secretary (at GAHR III’s executive offices at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612) a signed written notice of revocation bearing a later date than the proxy, stating that the proxy is revoked; |
• | delivering, before the GAHR III Special Meeting commences, to GAHR III’s Secretary (at GAHR III’s executive offices at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612), a properly executed proxy relating to the same shares of GAHR III Common Stock that bears a later date than the previous proxy; |
• | duly submitting a subsequently dated proxy relating to the same shares of GAHR III Common Stock by telephone or via the Internet before [ |
• | attending the GAHR III Special Meeting online via live webcast and voting such shares during the GAHR III Special Meeting as described above. |
• | Internet |
• | Telephone |
• | Prepaid Mail |
• | delivering, before the GAHR IV Annual Meeting commences, to GAHR IV’s Secretary (at GAHR IV’s executive offices at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612) a signed written notice of revocation bearing a later date than the proxy, stating that the proxy is revoked; |
• | delivering, before the GAHR IV Annual Meeting commences, to GAHR IV’s Secretary (at GAHR IV’s executive offices at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612), a properly executed proxy relating to the same shares of GAHR IV Common Stock that bears a later date than the previous proxy; |
• | duly submitting a subsequently dated proxy relating to the same shares of GAHR IV Common Stock by telephone or via the Internet before [ |
• | attending the GAHR IV Annual Meeting online via live webcast and voting such shares during the GAHR IV Annual Meeting as described above. |
• | Delete the requirement that all shares of stock be fully paid and nonassessable when issued. Although GAHR IV has no present intention of doing so, the MGCL permits a corporation to issue stock in exchange for future payment or stock that is assessable. |
• | Delete the NASAA REIT Guidelines limitations on the voting rights which may be afforded to classes of common stock and preferred stock, respectively, in a private offering. This change would provide the GAHR IV Board more flexibility in determining what terms and rights of a new class or series of stock, including voting rights, would be in the best interests of GAHR IV at the time of issuance. The change may increase the possible dilutive effect of potential future private issuances of stock. |
• | Delete the NASAA REIT Guidelines prohibition on distributions in kind to provide GAHR IV more flexibility with respect to distributions. |
• | Delete the NASAA REIT Guidelines provision specifying that GAHR IV will not issue stock certificates unless otherwise provided by the GAHR IV Board, as the issuance of stock certificates is a matter normally addressed by listed companies in their bylaws. |
• | Delete the NASAA REIT Guidelines restrictions on share repurchases which GAHR IV believes are uncommon in public company charters and which reduce flexibility. |
• | Delete the NASAA REIT Guidelines requirements related to distribution reinvestment plans that establish disclosure and withdrawal rights which GAHR IV believes are uncommon in public company charters. |
• | Delete the NASAA REIT Guidelines requirement that the GAHR IV Board be comprised of at least three directors. Under the MGCL, the GAHR IV Board may be comprised of as few as one director. Also remove the requirement that a majority of the GAHR IV Board consist of independent directors (as defined by the NASAA REIT Guidelines). Stock exchange rules would require that a majority of the GAHR IV directors be independent in order for GAHR IV to list shares of GAHR IV Common Stock, and GAHR IV believes that the applicable stock exchange definition of independence provides an appropriate definition of independence for a publicly listed company. Removing the definition required by the NASAA REIT Guidelines will eliminate any possibility of conflict between such definition and the stock exchange definition. |
• | Delete the NASAA REIT Guidelines requirement that the independent directors nominate replacements for vacancies among the independent director positions, which GAHR IV believes is an uncommon requirement in public company charters. |
• | Delete the NASAA REIT Guidelines requirements that each director have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage GAHR IV’s assets and that at least one independent director have at least three years of relevant real estate experience. GAHR IV believes that the GAHR IV Board, in consideration of the many characteristics that may make a nominee a valuable addition to the GAHR IV Board, should have discretion in the nomination of directors. |
• | Delete the NASAA REIT Guidelines requirement that a majority of the members of all committees (even ad hoc committees) be independent directors as such requirement is more stringent than stock exchange rules with respect to committee composition. |
• | Delete the NASAA REIT Guidelines requirement that each director hold office for one year, until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies. Pursuant to the MGCL, unless a corporation’s board of directors is classified (which the GAHR IV Board is not) or the terms of any class or series of stock pursuant to which directors are elected provide otherwise, directors hold office until the next annual meeting of stockholders and until their successors are duly elected and qualify. |
• | Delete the NASAA REIT Guidelines statement that directors serve in a fiduciary capacity and have fiduciary duties. Under the MGCL, each director has a duty to act in good faith, with a reasonable belief that his or her action is in the corporation’s best interests and with the care of an ordinarily prudent person in a like position under similar circumstances. |
• | Delete the NASAA REIT Guidelines requirement that the issuance of preferred stock be approved by a majority of the independent directors in order to provide more flexibility to the GAHR IV Board in connection with potential future issuances of preferred stock. |
• | Replace the NASAA REIT Guidelines provisions related to the appointment of, supervision of and payment of enumerated fees to an external advisor with a provision simply permitting the GAHR IV Board to authorize the execution of and performance by GAHR IV of one or more agreements with any external advisor or manager. |
• | Delete the statement providing that the NASAA REIT Guidelines would control in the event the GAHR IV Board determined they conflicted with any non-mandatory provision of the MGCL. This provision should no longer be necessary as a result of the deletion of the various NASAA REIT Guidelines provisions. |
• | Delete the requirement that a majority of independent directors approve GAHR IV Board actions to which certain NASAA REIT Guidelines applied, given that the sections of the GAHR IV Charter pertaining to such NASAA REIT Guidelines are being removed. |
• | Delete the NASAA REIT Guidelines provisions (a) requiring review of GAHR IV’s investment policies, (b) prohibiting certain joint ventures and investments in equity securities, (c) restricting certain other investments that GAHR IV may make (including investments in certain mortgage loans and unimproved property), (d) limiting GAHR IV’s ability to incur indebtedness in excess of 300% of net assets unless certain conditions are satisfied and (e) limiting GAHR IV’s ability to issue certain securities (including equity securities on a deferred-payment basis or other similar arrangement, debt securities in the absence of adequate cash flow to cover debt service and equity securities redeemable solely at the option of the holder) as GAHR IV believes that these provisions are not customarily included in the charters of publicly listed companies and could unnecessarily restrict the GAHR IV Board from managing the business and affairs of GAHR IV in a manner it believes to be in GAHR IV’s best interests. |
• | Delete the NASAA REIT Guidelines provisions relating to affiliated transactions. Under the MGCL, a transaction between a corporation and any of its directors or any other entity in which any of its directors is a director or has a material financial interest is subject to voidability unless the transaction is approved by the affirmative vote of a majority of disinterested directors or a majority of the votes cast by disinterested stockholders or is fair and reasonable to the corporation. |
• | Delete the NASAA REIT Guidelines requirement that an annual meeting of stockholders be held no less than 30 days after delivery of GAHR IV’s annual report as GAHR IV does not believe that these provisions are customarily included in the charters of publicly listed companies and believes that the GAHR IV Board should have maximum flexibility in setting GAHR IV’s annual meeting date subject to applicable laws and regulations. |
• | Delete the NASAA REIT Guidelines requirement that a director receive the affirmative vote of the holders a majority of the shares present, in person or by proxy, at a meeting in order to be elected. GAHR IV believes it is advisable to delete this provision because it creates a possibility that no nominee would be elected to fill a director seat. If no nominee for a director seat receives the vote of a majority of shares present because, for example, many stockholders abstain, then the previously elected director will continue to serve as a “holdover” director. In addition, there can be significant costs and delays to GAHR IV when soliciting stockholder votes, which may be greater under the current majority voting standard. If the deletion of this provision from the GAHR IV Charter is approved, GAHR IV intends to revise the related provision of the GAHR IV Bylaws so that, consistent with the default standard under the MGCL, a plurality of all the votes cast at a meeting at which a quorum is present would be sufficient to elect a director. |
• | Delete the NASAA REIT Guidelines requirement that a special meeting of stockholders be called upon the request of the stockholders entitled to cast at least 10% of the votes entitled to be cast on any matter that may |
properly be considered at a meeting of stockholders. Under the MGCL, the percentage required to call a meeting can be, and for publicly listed companies often is, as high as a majority. By approving the deletion of this provision from the GAHR IV Charter, you effectively will be permitting the GAHR IV Board to set the threshold for a special meeting request by GAHR IV’s stockholders in its discretion and without stockholder approval through the GAHR IV Bylaws. |
• | Delete the provisions related to notice of stockholder meetings and quorum at such meetings. The GAHR IV Bylaws include provisions that govern notices of and quorum at stockholder meetings. |
• | Delete the NASAA REIT Guidelines requirements related to stockholder approval of certain matters as the MGCL already requires stockholder approval for such matters. |
• | Delete the NASAA REIT Guidelines restrictions on voting of shares held by the GAHR IV Advisor, any of the GAHR IV directors and any of their affiliates regarding the removal of the GAHR IV Advisor or any of the GAHR IV directors or a transaction with the GAHR IV Advisor, any of the GAHR IV directors or any of their affiliates, as GAHR IV does not believe that these provisions are customarily included in the charters of publicly listed companies. |
• | Delete the NASAA REIT Guidelines requirements related to inspection rights as the MGCL already grants inspection rights. The inspection rights provided by the MGCL to all stockholder are more limited than the rights under the NASAA REIT Guidelines. |
• | Delete the NASAA REIT Guidelines requirement that GAHR IV provide a copy of its stockholder list to any stockholder upon request. The MGCL requires only that a stockholder list be provided to one or more persons who together are, and for at least six months have been, stockholders of record of at least 5% of the outstanding shares of stock of any class of stock of the corporation. |
• | Delete the NASAA REIT Guidelines requirement that an annual report be provided to each stockholder within 120 days after the end of the fiscal year. The MGCL requires that an annual statement of affairs, including a balance sheet and a financial statement of operations, be submitted at the annual meeting of stockholders and made available for inspection within 20 days thereafter. |
• | Delete the NASAA REIT Guidelines restrictions on exculpation and indemnification of, and advance of expenses to, directors and officers and instead provide for exculpation, indemnification and advance of expenses to the maximum extent permitted by Maryland law, which GAHR IV believes is common for public companies (including REITs) formed under Maryland law and which GAHR IV believes will enhance its ability to attract and retain directors and officers. |
• | Delete the NASAA REIT Guidelines restrictions on roll-up transactions, which would otherwise cease to be applicable one year following listing. |
• | Provide that, upon the listing of a class of common stock for trading on a national securities exchange or such later date not to exceed 12 months from the date of listing as approved by the GAHR IV Board, each share of the class or classes of common stock that are not so listed will automatically and without any action on the part of the holder thereof convert into a number of shares of the listed class of common stock equal to a fraction, the numerator of which is the net asset value allocable to the shares of the applicable non-listed class of common stock and the denominator of which is the net asset value allocable to the shares of the listed class of common stock. |
• | Clarify that, unless the terms and conditions of the agreements and undertakings entered into with an excepted holder in connection with the establishment of an excepted holder limit for such excepted holder provide otherwise, the GAHR IV Board may reduce the excepted holder limit for an excepted holder at any time after the excepted holder no longer owns shares in excess of the aggregate share ownership limit or common share ownership limit generally applicable to all stockholders. |
• | Clarify that the failure of GAHR IV to designate a charitable beneficiary or to appoint a trustee of a charitable trust before the automatic transfer to such charitable trust of shares the ownership of which would otherwise result in a violation of the restrictions on transfer and ownership of shares set forth in the GAHR IV Charter will not render the automatic transfer ineffective as long as GAHR IV subsequently makes such designation and appointment. |
• | Clarify that, if any of the restrictions on transfer and ownership of shares set forth in the GAHR IV Charter are determined to be invalid by any court, the validity of the remaining provisions will not be affected. |
• | As permitted by the MGCL and consistent with the charters of many exchange-traded REITs, provide that the removal of a director will require the affirmative vote of stockholders entitled to cast two-thirds, as opposed to a majority, of the votes entitled to be cast generally in the election of directors. |
• | Clarify that GAHR IV has the power, by resolution of the GAHR IV Board, to renounce any interest or expectancy of GAHR IV in, or in being offered an opportunity to participate in, business opportunities or classes or categories of business opportunities that are presented to GAHR IV or developed by or presented to one or more directors or officers of GAHR IV. |
• | Strategy — knowledge of GAHR IV’s business model, the formulation of corporate strategies, knowledge of key competitors and markets |
• | Relationships — understanding how to interact with investors, accountants, attorneys, management companies and markets in which GAHR IV operates; and |
• | Functional — understanding of finance matters, financial statements and auditing procedures, technical expertise, legal issues and marketing. |
Services |
2020 |
2019 |
||||||
Audit fees(1) |
$ | 819,000 | $ | 851,000 | ||||
Audit-related fees(2) |
23,000 | 2,000 | ||||||
Tax fees(3) |
262,000 | 235,000 | ||||||
All other fees |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | 1,104,000 | $ | 1,088,000 | ||||
|
|
|
|
(1) | Audit fees consist of fees related to the 2020 and 2019 audit of GAHR IV’s annual consolidated financial statements and reviews of GAHR IV’s quarterly consolidated financial statements. Audit fees also relate to statutory and regulatory audits, consents and other services related to filings with the SEC in the year the services were rendered. |
(2) | Audit-related fees relate to financial accounting and reporting consultations, assurance and related services in the year the services were rendered. |
(3) | Tax services consist of tax compliance and tax planning and advice in the year the services were rendered. |
MEMBERS OF THE AUDIT COMMITTEE: |
Dianne Hurley (Chairwoman) |
Brian J. Flornes |
Wilbur H. Smith III |
• | Healthcare real estate remains an attractive real estate asset class due, in part, to the demand driven by the aging U.S. population and increases in U.S. healthcare spending. |
• | The Combined Company provides greater scale and expanded asset diversification. |
• | The Combined Company will be more diversified geographically, thereby reducing the risks associated with regional downturns. |
• | The Combined Company will also have a more diverse tenant and operator base, further reducing risk. |
• | GAHR III believes that the Mergers will result in administrative efficiencies that will significantly decrease general and administrative costs, improve stockholder returns, and support future distributions. |
• | The Combined Company’s larger size should increase interest from institutional investors, which should enable the Combined Company to provide liquidity to stockholders and raise capital in the public markets at a lower cost. |
• | Publicly listed healthcare REITs have historically performed well, regularly trading at higher premiums to net asset value relative to REITs focused on other commercial asset classes. |
• | The AHI Acquisition allows the Combined Company to benefit from the public market’s preferred structure as self-managed REITs have historically traded at a premium relative to externally-managed REITs. |
• | The AHI Acquisition strengthens alignment of interests with certain key members of management and enhances long-term stability with a senior leadership team that possesses significant public market experience (including with publicly listed healthcare REITs). |
• | Unless waived, it is a condition to the closing of the AHI Acquisition that all of the conditions to the Merger Agreement have been satisfied and the Merger Agreement shall not have been terminated. Accordingly, if this condition is not satisfied or waived, the parties to the Contribution Agreement have the right, but not the obligation, to terminate the Contribution Agreement, and GAHR III would thus miss out on a number of expected benefits from the transaction, including the following: |
• | a significant reduction in general and administrative costs |
• | elimination of the conflicts that accompany an externally managed company |
• | improved reception from institutional investors if the Combined Company lists its shares on a national securities exchange, which may result in liquidity to existing stockholders. |
• | Largely on account of the factors listed above, the Combined Company’s shares may be more desirable to institutional investors, thus improving the Combined Company’s ability to execute a successful listing on a national securities exchange. |
• | The GAHR III Special Committee received an opinion from its financial advisor to the effect that, as of the date of the opinion, the consideration to be received by GAHR III in the Merger is fair from a financial point of view. See “The Mergers – Opinion of GAHR III Special Committee’s Financial Advisor.” |
• | The exchange ratio in the REIT Merger is fixed and will not be adjusted in the event of a decrease in the value of GAHR III Common Stock as compared to the value of GAHR IV Common Stock. |
• | If the GAHR III stockholders do not approve the REIT Merger at the GAHR III Special Meeting, the GAHR III Advisor will reimburse GAHR III for its expenses in pursuing the Mergers. |
• | GAHR III may abandon the Mergers if it receives a “superior proposal” and pays a termination fee to GAHR IV of $50,654,000 and reimburses GAHR IV for up to $4,000,000 of its expenses. |
• | GAHR IV may not abandon the Mergers to pursue a “superior proposal” unless it pays GAHR III a $23,028,000 termination fee and reimburses GAHR III for up to $4,000,000 of its expenses. |
• | There are no required government approvals as a condition to closing. |
• | The Merger Agreement permits GAHR III to resume the payment of monthly distributions in an annualized amount of up to $0.20 per share between signing the Merger Agreement and closing the Mergers. |
• | The REIT Merger is subject to the approval of a majority of the outstanding shares of GAHR III Common Stock. |
• | The REIT Merger is expected to qualify as a reorganization for U.S. federal income tax purposes, resulting in the receipt of shares of GAHR IV Common Stock on a tax-deferred basis. |
• | The Exchange Ratio is lower than what would have been obtained if the Exchange Ratio was based solely on the most recent NAV (which was as of September 30, 2020) of a share of GAHR III and a share of GAHR IV. |
• | On a standalone basis, the Mergers are expected to be dilutive from a cash flow perspective because medical office buildings, which are a larger component of GAHR IV’s portfolio than GAHR III’s, generally generate lower cash yields than skilled nursing facilities and senior housing. However, after giving effect to the AHI Acquisition and the Mergers, the cash flow of the Combined Company is expected to be more favorable than that of GAHR III. |
• | The Exchange Ratio is fixed and will not be adjusted in the event of an increase in the value of GAHR III Common Stock as compared to the value of GAHR IV Common Stock. |
• | The Merger Agreement prohibits GAHR III from soliciting superior proposals. |
• | A potential buyer of GAHR III may be deterred from making a superior proposal on account of the $50,654,000 termination fee (plus $4,000,000 expense reimbursement) that GAHR III would owe GAHR IV if GAHR III were to terminate the Merger Agreement in order to accept a superior proposal. |
• | Litigation could arise regarding the Mergers, which could divert management attention from operational matters and could cause GAHR III or the Combined Company to incur litigation expenses and liabilities. |
• | GAHR III and GAHR IV have incurred significant expenses in pursuit of the Mergers. |
• | GAHR III is subject to certain restrictions on its operations without GAHR IV’s consent between the signing of the Merger Agreement and the closing of the Mergers. However, such restrictions are not intended to impair or inhibit the ongoing operations of GAHR III. |
• | GAHR III and GAHR IV have common officers and their external advisors have common owners and employ many of the same personnel. Those officers and employees have interests with respect to the Mergers that differ from those of the stockholders of GAHR III (particularly on account of the pending AHI Acquisition) and thus there are inherent conflicts of interest that exist. See “The Mergers — Interests of GAHR III and GAHR IV Directors and Executive Officers in the Mergers.” |
• | healthcare real estate remains an attractive real estate asset class due, in part, to the demand driven by the aging U.S. population and increases in U.S. healthcare spending; |
• | the Combined Company provides greater scale and expanded asset diversification; |
• | the Combined Company will be more diversified geographically, thereby reducing the risks associated with regional downturns; |
• | the Combined Company will also have a more diverse tenant and operator base, further reducing risk; |
• | GAHR IV believes that the Mergers will result in administrative efficiencies that will significantly decrease general and administrative costs, improve stockholder returns, and support future distributions; |
• | the Combined Company’s larger size should increase interest from institutional investors, which should enable the Combined Company to provide liquidity to stockholders and raise capital in the public markets at a lower cost; |
• | publicly listed healthcare REITs have historically performed well, regularly trading at higher premiums to net asset value relative to REITs focused on other commercial asset classes; |
• | the AHI Acquisition allows the Combined Company to benefit from the public market’s preferred structure as self-managed REITs have historically traded at a premium relative to externally-managed REITs; |
• | the AHI Acquisition strengthens alignment of interests among the Combined Company and certain key members of management and enhances long-term stability with a senior leadership team that possesses significant public market experience (including with publicly listed healthcare REITs); |
• | the GAHR IV Board’s understanding of the business, operations, financial condition, earnings and prospects of GAHR IV; |
• | the Combined Company’s shares may be more desirable to institutional investors, thus improving the Combined Company’s ability to execute a successful listing on a national securities exchange and may provide liquidity to existing stockholders; |
• | the financial analyses reviewed and discussed with the GAHR IV Special Committee by representatives of Truist Securities, as well as the oral opinion of Truist Securities rendered to the GAHR IV Special Committee on June 23, 2021 (which was subsequently confirmed in writing by delivery of Truist Securities’ written |
opinion dated the same date) as to, as of June 23, 2021, the fairness, from a financial point of view, to GAHR IV of the Exchange Ratio in the REIT Merger pursuant to the Merger Agreement, whether or not the AHI Acquisition is consummated; |
• | the ability to complete the Mergers on the anticipated schedule (including the likelihood of receiving the GAHR IV stockholder approvals and the GAHR III stockholder approvals necessary to complete the Mergers) given the commitment of the parties to complete the Mergers pursuant to their respective obligations under the Merger Agreement; |
• | the efforts of the GAHR IV Special Committee to evaluate and negotiate, with the assistance of its legal counsel and financial advisor, the terms of the Merger Agreement and to make recommendations regarding the Merger Agreement to the GAHR IV Board; |
• | the Merger Agreement provides GAHR IV with the ability, under certain specified circumstances, to consider a competing acquisition, and provides the GAHR IV Special Committee with the ability, under certain specified circumstances, to make a GAHR IV Adverse Recommendation Change and/or terminate the Merger Agreement to enter into a definitive acquisition agreement that constitutes a Superior Proposal upon payment of the GAHR IV Termination Payment; |
• | the GAHR IV Termination Payment, payable by GAHR IV in certain circumstances, was viewed by the GAHR IV Special Committee and the GAHR IV Board, after consultation with their respective advisors, as reasonable and not likely to preclude any other party from making a competing acquisition proposal; |
• | the REIT Merger and the GAHR IV Charter Amendment are each subject to approval of the holders of a majority of the outstanding shares of GAHR IV Common Stock entitled to vote on the matter, and stockholders can reject the REIT Merger by voting against the REIT Merger for any reason; |
• | the GAHR IV Special Committee’s legal counsel and financial advisor provided advice and assistance to the GAHR IV Special Committee directly and regularly throughout the negotiation of the Merger Agreement; |
• | GAHR III is subject to certain restrictions on its operations without GAHR IV’s consent between the signing of the Merger Agreement and the closing of the Mergers. However, such restrictions are not intended to impair or inhibit the ongoing operations of GAHR III; |
• | the board of directors of the Combined Company will include a majority of independent directors; |
• | the Merger Agreement permits GAHR IV to pay monthly distributions in an annualized amount of up to $0.40 per share between the signing of the Merger Agreement and the closing of the Mergers; |
• | the REIT Merger is expected to qualify as a tax-free transaction to GAHR IV stockholders; |
• | the ability of GAHR IV to pursue other strategic alternatives or remain a standalone entity in the event of the failure to consummate the Mergers; |
• | the fact that GAHR III completed a pre-signing market check with the assistance of its legal counsel and financial advisor; |
• | the possibility that the AHI Acquisition will be completed prior to consummation of the Mergers and drive future cash accretion to stockholders; and |
• | the terms of the AHI Acquisition, including that 100% of the up-front purchase price in the AHI Acquisition will be paid in the form of units of GAHR III Operating Partnership (which would become the operating partnership of the Combined Company after the Mergers). |
• | the possible disruption to GAHR IV’s business that may result from the announcement and pendency of the Mergers; |
• | that, while GAHR IV expects that the Mergers will be consummated, there can be no assurance that all conditions to the parties’ obligations to consummate the Mergers will be satisfied, and, as a result, the Mergers may not be consummated; |
• | the effect of any failure to consummate the Mergers, including the possibility that GAHR IV may have to make the GAHR IV Termination Payment in certain specified circumstances and adverse stockholder reactions; |
• | that there has not been a public trading market for shares of GAHR IV Common Stock, and that GAHR IV stockholders cannot be sure of the market price of the shares of GAHR IV Common Stock being issued in the REIT Merger as consideration; |
• | GAHR III and GAHR IV have common officers and their external advisors have common owners and employ many of the same personnel. Those officers and employees have interests with respect to the Mergers that differ from those of the stockholders of GAHR IV and thus there are inherent conflicts of interest. See “The Mergers—Interests of GAHR III and GAHR IV Directors and Executive Officers in the Mergers”; |
• | the Merger Agreement prohibits GAHR IV from soliciting superior proposals; |
• | the terms of the Merger Agreement place limitations on the ability of GAHR IV to solicit, initiate or knowingly encourage or knowingly facilitate competing third-party proposals to acquire all, or a significant part, of GAHR IV; |
• | the fact that GAHR IV did not undertake a pre-signing market check; |
• | the right of GAHR III to terminate the Merger Agreement in order to accept a Superior Proposal, subject to certain conditions (including payment to GAHR IV of the GAHR III Termination Payment); |
• | the right of the GAHR III Special Committee to effect a GAHR III Adverse Recommendation Change, subject to certain conditions; |
• | certain restrictions in the Merger Agreement on the conduct of GAHR IV’s business between the date of the Merger Agreement and the consummation of the Mergers, which are not intended to impair or inhibit the ongoing operations of GAHR IV; |
• | the risk that the Mergers might not be completed in a timely manner or at all; |
• | that forecasts of future financial and operational results are necessarily estimates based on assumptions and may vary significantly from future performance; |
• | the potential risk of diverting management focus and resources from operational matters and other strategic opportunities while working to consummate the Mergers; and |
• | various other risks associated with the Mergers and the Combined Company described in the section entitled “Risk Factors” beginning on page 30 of this joint proxy statement/prospectus and the matters described in the section entitled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 73 of this joint proxy statement/prospectus. |
Acquirer |
Target |
Month/Year Announced | ||
Resource Real Estate Opportunity REIT, Inc. | Resource Real Estate, LLC | September 2020 | ||
Steadfast Apartment REIT, Inc. | Steadfast REIT Investments, LLC | September 2020 | ||
Preferred Apartment Communities, Inc. | Preferred Apartment Advisors, LLC | February 2020 | ||
Jernigan Capital, Inc. | JCap Advisors, LLC | December 2019 | ||
Broadstone Net Lease, Inc. | Broadstone Real Estate, LLC | November 2019 |
Acquirer |
Target |
Month/Year Announced | ||
Carey Watermark Investors 2, Inc. | Carey Lodging Advisors, LLC | October 2019 | ||
SmartStop Self Storage REIT, Inc. | SmartStop Storage Advisors, LLC | July 2019 | ||
Summit Industrial Income REIT | Sigma Asset Management | March 2019 | ||
Griffin Capital Essential Asset REIT, Inc. | Griffin Capital Real Estate Company, LLC | December 2018 | ||
New Senior Investment Group, Inc. | FIG LLC Affiliates | August 2018 | ||
Drive Shack, Inc. | FIG LLC Affiliates | December 2017 | ||
CIM Group | Cole Capital | November 2017 | ||
Bluerock Residential Growth REIT, Inc. | BRG Manager, LLC | August 2017 | ||
Phillips Edison Grocery Center REIT I, Inc. | Phillips Edison Limited Partnership | May 2017 | ||
JBG Smith Properties | JBG Companies | October 2016 | ||
Independence Realty Trust, Inc. | Subsidiary of RAIT Financial Trust | September 2016 | ||
C-III Capital Partners LLC | Resource America, Inc. | May 2016 | ||
Strategic Storage Trust, Inc. | Strategic Storage Holdings, LLC | September 2014 | ||
Silver Bay Realty Trust Corp. | PRCM Real Estate Advisors, LLC | August 2014 | ||
American Homes 4 Rent | American Homes 4 Rent Advisor, LLC | May 2013 | ||
Cole Credit Property Trust III, Inc. | Cole Holdings Corporation | March 2013 |
• | NOI — net operating income, which is calculated generally as revenue, less property operating expenses and replacement reserves. |
• | Net Cash Flows Before Debt Service - generally calculated as NOI, less total capital expenditures. |
Terminal Cap Rate Survey |
Discount Rate Survey |
|||||||||||||||||||||||
Low |
High |
Weighted Average |
Low |
High |
Weighted Average |
|||||||||||||||||||
Medical Office |
||||||||||||||||||||||||
Medical Office Survey |
5.00% | 10.50% | 6.78% | 5.50% | 11.00% | 7.62 | % | |||||||||||||||||
Hospital |
||||||||||||||||||||||||
Medical Office Survey |
5.00% | 10.50% | 6.90% | 5.50% | 11.00% | 7.75 | % | |||||||||||||||||
Senior Housing |
||||||||||||||||||||||||
Senior Housing Survey — IL/AL/MC |
6.00% | 13.00% | 9.24 | % |
Terminal Cap Rates |
Discount Rate |
|||||||||||||||
Low |
High |
Low |
High |
|||||||||||||
Medical Office |
5.25% | 7.75% | 5.75% | 9.00% | ||||||||||||
Hospital |
6.75% | 7.00% | 5.75% | 7.75% | ||||||||||||
Senior Housing — RIDEA |
6.50% | 7.75% | 7.50% | 8.75% |
Direct Capitalization Rate Survey |
||||||||||||
Low |
High |
Weighted Average |
||||||||||
Senior Housing — NNN |
||||||||||||
Senior Housing Survey — IL/AL/MC |
4.00 | % | 10.00 | % | 6.63 | % | ||||||
Skilled Nursing Survey — SNF/CCRC |
5.00 | % | 14.00 | % | 9.30 | % |
Direct Capitalization Rate |
||||||||
Low |
High |
|||||||
Senior Housing — NNN |
6.25 | % | 6.50 | % | ||||
Skilled Nursing — NNN |
7.25 | % | 9.25 | % |
Terminal Cap Rate Survey |
Discount Rate Survey |
|||||||||||||||||||||||
Low |
High |
Weighted Average |
Low |
High |
Weighted Average |
|||||||||||||||||||
Senior Campuses |
||||||||||||||||||||||||
Medical Office Survey |
5.00% | 10.50 | % | 6.90 | % | 5.50% | 11.00% | 7.75 | % | |||||||||||||||
Senior Housing Survey — IL/AL/MC |
6.00% | 13.00% | 9.24 | % | ||||||||||||||||||||
Net Lease Nursing |
11.00% | 17.00% | 14.13 | % |
Terminal Cap Rates |
Discount Rate |
|||||||||||||||
Low |
High |
Low |
High |
|||||||||||||
Senior Campuses |
5.75 | % | 11.25 | % | 8.25 | % | 14.75 | % |
Direct Capitalization Rate Survey |
||||||||||||
Low |
High |
Weighted Average |
||||||||||
Medical Office |
||||||||||||
Medical Office Survey |
4.25 | % | 10.50 | % | 6.46 | % | ||||||
Mixed Use |
||||||||||||
Medical Office Survey |
4.25 | % | 10.50 | % | 6.46 | % | ||||||
Senior Housing Survey — CCRC |
4.00 | % | 14.00 | % | 7.77 | % |
Direct Capitalization Rate |
||||||||
Low |
High |
|||||||
Medical Office |
7.25 | % | 7.25 | % | ||||
Mixed Use |
7.80 | % | 7.80 | % |
Terminal Cap Rates |
Discount Rate |
|||||||||||||||
Low |
High |
Low |
High |
|||||||||||||
Medical Office |
6.00 | % | 8.00 | % | 6.25 | % | 8.50 | % | ||||||||
Senior Housing — RIDEA |
6.75 | % | 8.25 | % | 7.75 | % | 9.00 | % |
Direct Capitalization Rate |
||||||||
Low |
High |
|||||||
Senior Housing — NNN |
6.25 | % | 7.50 | % | ||||
Skilled Nursing — NNN |
7.50 | % | 9.25 | % |
• | 0.8924 to 1.0149 based on the results of the net asset analysis of GAHR III on a standalone basis and the net asset value analysis of GAHR IV |
• | 0.8890 to 1.0182 based on the results of the net asset analysis of GAHR III, giving effect to the AHI Acquisition and the net asset value analysis of GAHR IV. |
• | a draft, dated June 17, 2021, of the Merger Agreement and a draft, dated June 22, 2021, of the Contribution Agreement; |
• | certain publicly available business and financial information relating to GAHR IV, GAHR III, GAHR IV Advisor and GAHR III Advisor (together, the “Advisor”); |
• | certain other information relating to the historical, current and future business, financial condition, results of operations and prospects of GAHR IV, GAHR III and the Advisor made available to Truist Securities by the management of the Advisor, including financial projections for the years ending December 31, 2021 through December 31, 2025 prepared by the management of the Advisor relating to (i) GAHR IV (the “GAHR IV Projections”), (ii) GAHR III (the “GAHR III Projections”), (iii) GAHR IV after giving effect to the Mergers (the “Combined Company Projections”), and (iv) GAHR IV after giving effect to the Mergers and the AHI Acquisition (the “Fully Combined Company Projections” and, collectively with the GAHR IV Projections, the GAHR III Projections and the Combined Company Projections, the “Financial Projections”); and |
• | the financial and operating performance of GAHR IV, GAHR III, GAHR IV after giving effect to the Mergers, and GAHR IV after giving effect to the Mergers and the AHI Acquisition, as compared to that of companies with publicly traded equity securities that Truist Securities deemed relevant. |
• | Healthpeak Properties, Inc. |
• | Ventas, Inc. |
• | Welltower Inc. |
• | Community Healthcare Trust Incorporated |
• | Global Medical REIT Inc. |
• | Medical Properties Trust, Inc. |
• | National Health Investors, Inc. |
• | Sabra Health Care REIT, Inc. |
• | Omega Healthcare Investors, Inc. |
Premium / (Discount) to NAV |
||||
Mean |
25.2 | % | ||
Median |
21.6 | % |
• | Enterprise Value — generally the value as of a specified date of the relevant company’s outstanding equity securities (taking into account its options and other outstanding convertible securities) plus the value of its net debt (the value of its outstanding indebtedness, preferred stock and capital lease obligations less the amount of cash on its balance sheet). |
• | EBITDA — generally the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period. |
• | Share price as a multiple of estimated funds from operations for the year ending December 31, 2021, or “2021E FFO”; |
• | Enterprise Value as a multiple of estimated EBITDA for the year ending December 31, 2021, or “2021E EBITDA”; and |
• | Implied capitalization rate. |
• | Healthpeak Properties, Inc. |
• | Ventas, Inc. |
• | Welltower Inc. |
• | Community Healthcare Trust Incorporated |
• | Global Medical REIT Inc. |
• | Medical Properties Trust, Inc. |
• | National Health Investors, Inc. |
• | Sabra Health Care REIT, Inc. |
• | Omega Healthcare Investors, Inc. |
Share Price / 2021E FFO |
Enterprise Value / 2021E EBITDA |
Implied Cap Rate | ||||||||||
Mean |
16.8x | 19.2x | 5.87 | % | ||||||||
Median |
16.4x | 18.2x | 6.17 | % |
Fiscal Year (in thousands, and all amounts in USD) |
||||||||||||||||||||
Year 1 2021E |
Year 2 2022E |
Year 3 2023E |
Year 4 2024E |
Year 5 2025E |
||||||||||||||||
Net Operating Income |
$ |
194,925 |
$ |
235,412 |
$ |
243,686 |
$ |
250,999 |
$ |
258,531 |
||||||||||
General & Administrative Expense |
(7,828 | ) | (7,741 | ) | (7,958 | ) | (8,197 | ) | (8,443 | ) | ||||||||||
Asset Management Fees |
(21,518 | ) | (21,541 | ) | (21,541 | ) | (21,541 | ) | (21,541 | ) | ||||||||||
Interest |
(76,592 | ) | (70,629 | ) | (66,723 | ) | (56,068 | ) | (50,989 | ) | ||||||||||
Other Expense |
(15,988 | ) | (27,414 | ) | (30,116 | ) | (28,060 | ) | (30,814 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Modified Funds From Operations |
$ |
72,999 |
$ |
108,087 |
$ |
117,348 |
$ |
137,133 |
$ |
146,744 |
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|
|
|
|
|
|
|
|
|
|
Fiscal Year (in thousands, and all amounts in USD) |
||||||||||||||||||||
Year 1 2021E |
Year 2 2022E |
Year 3 2023E |
Year 4 2024E |
Year 5 2025E |
||||||||||||||||
Net Operating Income |
$ |
72,482 |
$ |
80,311 |
$ |
85,050 |
$ |
87,606 |
$ |
90,237 |
||||||||||
General & Administrative Expense |
(5,543 | ) | (5,703 | ) | (5,865 | ) | (6,032 | ) | (6,204 | ) | ||||||||||
Asset Management Fees |
(9,831 | ) | (9,836 | ) | (9,836 | ) | (9,836 | ) | (9,836 | ) | ||||||||||
Interest Expense |
(19,825 | ) | (18,255 | ) | (18,440 | ) | (18,764 | ) | (18,586 | ) | ||||||||||
Other (Expense) Income |
(786 | ) | 1,184 | 1,510 | 1,506 | 1,504 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Modified Funds From Operations |
$ |
36,497 |
$ |
47,701 |
$ |
52,419 |
$ |
54,480 |
$ |
57,115 |
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|
|
|
|
|
|
|
|
|
|
Fiscal Year (in thousands, and all amounts in USD) |
||||||||||||||||||||
Year 1 2021E |
Year 2 2022E |
Year 3 2023E |
Year 4 2024E |
Year 5 2025E |
||||||||||||||||
Net Operating Income |
$ |
267,407 |
$ |
315,723 |
$ |
328,736 |
$ |
338,605 |
$ |
348,768 |
||||||||||
General & Administrative Expense |
(13,371 | ) | (13,444 | ) | (13,823 | ) | (14,229 | ) | (14,647 | ) | ||||||||||
Asset Management Fees |
(31,349 | ) | (31,377 | ) | (31,377 | ) | (31,377 | ) | (31,377 | ) | ||||||||||
Interest Expense |
(96,417 | ) | (88,884 | ) | (85,163 | ) | (74,832 | ) | (69,575 | ) | ||||||||||
Other Expense |
(15,044 | ) | (22,387 | ) | (24,605 | ) | (24,924 | ) | (25,249 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Modified Funds From Operations |
$ |
111,226 |
$ |
159,631 |
$ |
173,768 |
$ |
193,243 |
$ |
207,920 |
||||||||||
|
|
|
|
|
|
|
|
|
|
Fiscal Year (in thousands, and all amounts in USD) |
||||||||||||||||||||
Year 1 2021E |
Year 2 2022E |
Year 3 2023E |
Year 4 2024E |
Year 5 2025E |
||||||||||||||||
Net Operating Income |
$ |
270,008 |
$ |
318,403 |
$ |
331,427 |
$ |
341,375 |
$ |
351,622 |
||||||||||
General & Administrative Expense |
(34,627 | ) | (35,309 | ) | (36,345 | ) | (37,426 | ) | (38,540 | ) | ||||||||||
Asset Management Fees |
— | — | — | — | — | |||||||||||||||
Interest Expense |
(96,417 | ) | (88,884 | ) | (85,163 | ) | (74,832 | ) | (69,575 | ) | ||||||||||
Other Expense |
(16,915 | ) | (22,387 | ) | (24,605 | ) | (24,922 | ) | (25,248 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Modified Funds From Operations |
$ |
122,049 |
$ |
171,823 |
$ |
185,314 |
$ |
204,195 |
$ |
218,259 |
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|
Salary |
Cash Bonus (Target) |
Bonus Percentage |
Restricted Stock Awards |
|||||||||||||||||||||
Time Based |
Performance Based |
Total |
||||||||||||||||||||||
Jeffrey Hanson |
$ | 425,000 | $ | 425,000 | 100 | % | $ | 637,500 | $ | 212,500 | $ | 850,000 | ||||||||||||
Danny Prosky |
750,000 | 750,000 | 100 | % | 1,500,000 | 500,000 | 2,000,000 | |||||||||||||||||
Mathieu Streiff |
425,000 | 425,000 | 100 | % | 637,500 | 212,500 | 850,000 | |||||||||||||||||
Brian Peay |
475,000 | 475,000 | 100 | % | 562,500 | 187,500 | 750,000 | |||||||||||||||||
Stefan Oh |
400,000 | 260,000 | 65 | % | 243,750 | 81,250 | 325,000 | |||||||||||||||||
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|
|
|
|
|||||||||||||||
$ | 2,475,000 | $ | 2,335,000 | $ | 3,581,250 | $ | 1,193,750 | $ | 4,775,000 | |||||||||||||||
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* | Time-based restricted stock units vest ratably over three years and, if earned, performance-based restricted stock units vest after the conclusion of the three-year performance period. |
• | banks, insurance companies, and other financial institutions; |
• | tax-exempt organizations or governmental organizations; |
• | S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | persons or entities who hold shares of GAHR III Common Stock (or, following the REIT Merger, GAHR IV Common Stock) pursuant to the exercise of any employee stock option or otherwise as compensation; |
• | individuals subject to the alternative minimum tax; |
• | regulated investment companies and REITs; |
• | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | broker, dealers or traders in securities; |
• | U.S. expatriates and former citizens of the United States; |
• | persons holding shares of GAHR III Common Stock (or, following the REIT Merger, GAHR IV Common Stock) as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
• | persons or entities deemed to sell GAHR III Common Stock (or, following the REIT Merger, GAHR IV Common Stock) under the constructive sale provisions of the Code; |
• | United States persons or entities whose functional currency is not the U.S. dollar; |
• | tax-qualified retirement plans; |
• | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; |
• | “qualified shareholders” as defined in Section 897(k)(3)(A) of the Code; or |
• | persons or entities subject to special tax accounting rules as a result of any item of gross income with respect to the stock being taken into account in an applicable financial statement. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust that (i) is subject to the primary supervision of a United States court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (ii) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes. |
• | First, the Combined Company will be required to pay regular U.S. federal corporate income tax on any REIT taxable income, including net capital gain, that it does not distribute to stockholders during, or within a specified time period after, the calendar year in which the income is earned. |
• | Second, if the Combined Company has (1) net income from the sale or other disposition of “foreclosure property” held primarily for sale to customers in the ordinary course of business or (2) other nonqualifying income from foreclosure property, the Combined Company will be required to pay regular U.S. federal corporate income tax on this income. To the extent that income from foreclosure property is otherwise qualifying income for purposes of the 75% gross income test, this tax is not applicable. Subject to certain other requirements, foreclosure property generally is defined as property the Combined Company acquired through foreclosure or after a default on a loan secured by the property or a lease of the property. See “—Foreclosure Property.” |
• | Third, the Combined Company will be required to pay a 100% tax on any net income from prohibited transactions. Prohibited transactions are, in general, sales or other taxable dispositions of property, other than foreclosure property, held as inventory or primarily for sale to customers in the ordinary course of business. |
• | Fourth, if the Combined Company fails to satisfy the 75% gross income test or the 95% gross income test, as described below, but has otherwise maintained its qualification as a REIT because certain other requirements are met, it will be required to pay a tax equal to (1) the greater of (A) the amount by which it fails to satisfy the 75% gross income test and (B) the amount by which it fails to satisfy the 95% gross income test, multiplied by (2) a fraction intended to reflect its profitability. |
• | Fifth, if the Combined Company fails to satisfy any of the asset tests (other than a de minimis failure of the 5% or 10% asset tests), as described below, due to reasonable cause and not due to willful neglect, and the Combined Company nonetheless maintains its REIT qualification because of specified cure provisions, it will be required to pay a tax equal to the greater of $50,000 or the U.S. federal corporate income tax rate multiplied by the net income generated by the nonqualifying assets that caused the Combined Company to fail such test. |
• | Sixth, if the Combined Company fails to satisfy any provision of the Code that would result in its failure to qualify as a REIT (other than a violation of the gross income tests or certain violations of the asset tests, as described below) and the violation is due to reasonable cause and not due to willful neglect, the Combined Company may retain its REIT qualification, but it will be required to pay a penalty of $50,000 for each such failure. |
• | Seventh, the Combined Company will be required to pay a 4% nondeductible excise tax to the extent it fails to distribute during each calendar year at least the sum of (1) 85% of its ordinary income for the year, (2) 95% of its capital gain net income for the year, and (3) any undistributed taxable income from prior periods. |
• | Eighth, if the Combined Company acquires any asset from a corporation that is or has been a C corporation in a transaction in which the Combined Company’s tax basis in the asset is less than the fair market value of the asset, in each case determined as of the date on which it acquired the asset, and it subsequently recognizes gain on the disposition of the asset during the five-year period beginning on the date on which it acquired the asset, then it generally will be required to pay regular U.S. federal corporate income tax on this gain to the extent of the excess of (1) the fair market value of the asset over (2) its adjusted tax basis in the asset, in each case determined as of the date on which it acquired the asset. |
• | Ninth, the Combined Company’s subsidiaries that are C corporations, including its TRSs described below, generally will be required to pay regular U.S. federal corporate income tax on their earnings. |
• | Tenth, the Combined Company will be required to pay a 100% excise tax on transactions with its TRSs that are not conducted on an arm’s-length basis. |
• | Eleventh, if the Combined Company fails to comply with the requirement to send annual letters to its stockholders holding at least a certain percentage of its stock, as determined under applicable Treasury Regulations, requesting information regarding the actual ownership of its stock, and the failure is not due to reasonable cause or is due to willful neglect, the Combined Company will be subject to a $25,000 penalty, or if the failure is intentional, a $50,000 penalty. |
(1) | It is managed by one or more trustees or directors; |
(2) | Its beneficial ownership is evidenced by transferable shares of stock, or by transferable shares or certificates of beneficial ownership; |
(3) | It would be taxable as a domestic corporation, but for its qualification as a REIT; |
(4) | It is not a financial institution or an insurance company within the meaning of certain provisions of the Code; |
(5) | It is beneficially owned by 100 or more persons; |
(6) | Not more than 50% in value of the outstanding stock or shares of beneficial interest of which are owned, actually or constructively, by five or fewer individuals, which the U.S. federal income tax laws define to include certain entities, during the last half of each taxable year; |
(7) | It elects to be a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to qualify to be taxed as a REIT for U.S. federal income tax purposes; |
(8) | It uses a calendar year for U.S. federal income tax purposes and complies with the recordkeeping requirements of the U.S. federal income tax laws; and |
(9) | It meets certain other requirements, described below, regarding the sources of its gross income, the nature and diversification of its assets and the distribution of its income. |
• | rents from real property; |
• | interest on debt secured by mortgages on real property or on interests in real property and interest on debt secured by mortgages on both real and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all such property; |
• | dividends or other distributions on, and gain from the sale of, stock or shares of beneficial interest in other REITs; |
• | gain from the sale of real estate assets (other than gain from prohibited transactions); |
• | income and gain derived from foreclosure property; and |
• | income derived from the temporary investment of new capital attributable to the issuance of its stock or a public offering of its debt with a maturity date of at least five years and that the Combined Company received during the one-year period beginning on the date on which the Combined Company received such new capital. |
• | The amount of rent is not based in whole or in part on the income or profits of any person. However, an amount the Combined Company receives or accrues generally will not be excluded from the term “rents from real property” solely because it is based on a fixed percentage or percentages of receipts or sales; |
• | Neither the Combined Company nor an actual or constructive owner of 10% or more of its capital stock actually or constructively owns 10% or more of the interests in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation, 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock of the tenant. Rents the Combined Company receives from such a tenant that is a TRS of the Combined Company, however, will not be excluded from the definition of “rents from real property” as a result of this condition if at least 90% of the space at the property to which the rents relate is leased to third parties, and the rents paid by the TRS are substantially comparable to rents paid by the Combined Company’s other tenants for comparable space. Whether rents paid by a TRS are substantially comparable to rents paid by other tenants is determined at the time the lease with the TRS is entered into, extended, and modified, if such modification increases the rents due under such lease; |
• | Rent attributable to personal property, leased in connection with a lease of real property, is not greater than 15% of the total rent received under the lease. If this condition is not met, then the portion of the rent attributable to personal property will not qualify as “rents from real property.” To the extent that rent attributable to personal property, leased in connection with a lease of real property, exceeds 15% of the total rent received under the lease, the Combined Company may transfer a portion of such personal property to a TRS; and |
• | The Combined Company generally may not operate or manage the property or furnish or render noncustomary services to its tenants, subject to a 1% de minimis exception and except as provided below. The Combined Company may, however, perform services that are “usually or customarily rendered” in connection with the rental of space for occupancy only and are not otherwise considered “rendered to the occupant” of the property. Examples of these services include the provision of light, heat, or other utilities, trash removal and general maintenance of common areas. In addition, the Combined Company may employ an independent contractor from whom it derives no revenue to provide customary services to the Combined Company’s tenants, or a TRS (which may be wholly or partially owned by the Combined Company) to provide both customary and non-customary services to the Combined Company’s tenants without causing the rent the Combined Company receives from those tenants to fail to qualify as “rents from real property.” |
• | Each “qualified health care property” is not managed or operated by the Combined Company or the TRS to which it is leased, but rather is managed or operated by an “eligible independent contractor” that qualifies for U.S. federal tax purposes as an independent contractor that is actively engaged in the trade or business of operating “qualified health care properties” for persons not related to the Combined Company or the TRS. The test for an independent contractor’s eligibility is made at the time the independent contractor enters into a management agreement or other similar service contract with the TRS to operate the “qualified health care property”; |
• | A “qualified health care property” includes any real property, and any personal property incident to the real property, that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility that extends medical, nursing, or ancillary services to patients, and that is operated by a provider of those services that is eligible for participation in the Medicare program with respect to the facility; and |
• | The TRS may not directly or indirectly provide to any person, under a franchise, license or otherwise, rights to any brand name under which any “qualified health care property” is operated, except with respect to an independent contractor in relation to facilities it manages for or leases from the Combined Company. |
• | Cash or cash items, including certain receivables and shares in certain money market funds; |
• | Government securities; |
• | Interests in real property, including leaseholds and options to acquire real property and leaseholds; |
• | Interests in mortgage loans secured by real property, and interests in mortgage loans secured by both real property and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all such property; |
• | Stock or shares of beneficial interest in other REITs; |
• | Investments in stock or debt instruments during the one-year period following its receipt of new capital that the Combined Company raises through equity offerings or public offerings of debt with at least a five-year term; |
• | debt instruments of publicly offered REITs; and |
• | personal property leased in connection with a lease of real property for which the rent attributable to personal property is not greater than 15% of the total rent received under the lease. |
• | 90% of its REIT taxable income; plus |
• | 90% of its after-tax net income, if any, from foreclosure property; minus |
• | the excess of the sum of certain items of non-cash income over 5% of its REIT taxable income. |
• | the investment in the Combined Company’s common stock is treated as effectively connected with the conduct by the non-U.S. holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such dividends are attributable), in which case the non-U.S. holder will be subject to the same treatment as U.S. holders with respect to such gain, except that a non-U.S. holder that is a corporation may also be subject to a branch profits tax of up to 30%, as discussed above; or |
• | the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case the non-U.S. holder will be subject to U.S. federal income tax at a rate of 30% on the non-U.S. holder’s capital gains (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of such non-U.S. holder (even though the individual is not considered a resident of the United States), provided the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses. |
• | the gain is treated as effectively connected with the conduct by the non-U.S. holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable), in which case the non-U.S. holder will be subject to the same treatment as U.S. holders with respect to such gain, except that a non-U.S. holder that is a corporation may also be subject to the 30% branch profits tax (or such lower rate as may be specified by an applicable income tax treaty) on such gain, as adjusted for certain items; or |
• | the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on its capital gains (or such lower rate specified by an applicable income tax treaty). |
• | the holder fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
• | the holder furnishes an incorrect taxpayer identification number; |
• | the applicable withholding agent is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
• | the holder fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
• | corporate organization, valid existence, organizational documents, good standing, qualification to do business, and subsidiaries; |
• | capitalization; |
• | due authorization, execution, delivery and enforceability of the Merger Agreement; |
• | board and special committee approvals; |
• | absence of any conflict with or violation of organizational documents or applicable laws, and the absence of any violation or breach of, or default or consent requirements under, certain agreements; |
• | permits and compliance with law; |
• | SEC filings and financial statements; |
• | internal accounting controls, compliance with the Sarbanes-Oxley Act and the absence of improper payments; |
• | no undisclosed liabilities; |
• | absence of material changes to the conduct of GAHR III’s business since December 31, 2020 or any “material adverse effect” (described below) to GAHR III since December 31, 2020; |
• | absence of employees and employee benefit plans; |
• | material contracts; |
• | litigation; |
• | environmental matters; |
• | intellectual property; |
• | real properties and leases; |
• | tax matters, including qualification as a REIT; |
• | insurance; |
• | receipt of the opinion of Stanger, the GAHR III Special Committee’s financial advisor; |
• | broker’s, finder’s, or other similar fees; |
• | inapplicability of the Investment Company Act; |
• | exemption of the Mergers from anti-takeover statutes; |
• | stockholder vote in connection with the Mergers; |
• | information privacy and security; |
• | related-party transactions; and |
• | limitation on warranties and disclaimer of other representations and warranties. |
• | corporate organization, valid existence, organizational documents, good standing, qualification to do business, and subsidiaries; |
• | capitalization; |
• | due authorization, execution, delivery and enforceability of the Merger Agreement; |
• | board and special committee approvals; |
• | absence of any conflict with or violation of organizational documents or applicable laws, and the absence of any violation or breach of, or default or consent requirements under, certain agreements; |
• | permits and compliance with law; |
• | SEC filings and financial statements; |
• | internal accounting controls, compliance with the Sarbanes-Oxley Act and the absence of improper payments; |
• | no undisclosed liabilities; |
• | absence of material changes to the conduct of GAHR IV’s and Merger Sub’s business since December 31, 2020 or any “material adverse effect” (described below) to GAHR IV or Merger Sub since December 31, 2020; |
• | absence of employees and employee benefit plans; |
• | material contracts; |
• | litigation; |
• | environmental matters; |
• | intellectual property; |
• | real properties and leases; |
• | tax matters, including qualification as a REIT; |
• | insurance; |
• | receipt of the opinion of Truist Securities, the GAHR IV Special Committee’s financial advisor; |
• | broker’s, finder’s, or other similar fees; |
• | inapplicability of the Investment Company Act; |
• | exemption of the Mergers from anti-takeover statutes; |
• | information privacy and security; |
• | related-party transactions; |
• | the purpose, activities and ownership of Merger Sub; and |
• | limitation on warranties and disclaimer of other representations and warranties. |
(i) | any changes in economic, market or business conditions generally in the U.S. or any other jurisdiction in which GAHR III and its subsidiaries, or GAHR IV and its subsidiaries, as applicable, operate or in the U.S. or global financial markets generally, including changes in interest or exchange rates, and including (for the avoidance of doubt) any such conditions related to or resulting from any epidemic, pandemic or disease outbreak or any governmental or other response or reaction to any of the foregoing, |
(ii) | changes in general economic conditions in the industries in which GAHR III and its subsidiaries, or GAHR IV and its subsidiaries, as applicable, operate, |
(iii) | any changes in legal, regulatory or political conditions, |
(iv) | the commencement, escalation or worsening of a war or armed hostilities or the occurrence of acts of terrorism or sabotage, |
(v) | the execution and delivery of the Merger Agreement, or the public announcement of the Mergers or other transactions contemplated by the Merger Agreement, |
(vi) | the taking of any action expressly required by the Merger Agreement, or the taking of any action at the written request or with the prior written consent of GAHR III or GAHR IV, as applicable, |
(vii) | earthquakes, hurricanes, floods or other natural disasters, |
(viii) | changes in law or GAAP or the interpretation thereof, |
(ix) | pandemics, disease outbreak or other natural or manmade disasters or any governmental or other response or reaction to any of the foregoing, |
(x) | any action made or initiated by any holder of GAHR III Common Stock or GAHR IV Common Stock, as applicable, including any derivative claims, arising out of or relating to the Merger Agreement or the transactions contemplated by the Merger Agreement, and |
(xi) | with respect to the GAHR III Parties, assuming no amendment, waiver or modification by the GAHR III Parties of any provision of the Contribution Agreement that was not approved by GAHR IV in writing in advance, any event, circumstance, change, effect, development, condition, or occurrence to the extent related to the consummation of the AHI Acquisition, except which, in the case of each of clauses (i), (ii), (iii), (iv), (vii) and (viii) above do not disproportionately affect GAHR III and its subsidiaries, taken as a whole, or GAHR IV and its subsidiaries, taken as a whole, compared to other companies in the multifamily real estate industry. |
• | amend or propose to amend its bylaws or charter, the certificate of limited partnership of GAHR III Operating Partnership, the GAHR III Partnership Agreement or such equivalent organizational or governing documents of any material subsidiary of GAHR III, amend the GAHR III DRIP or the GAHR III share repurchase plan in a manner material to GAHR III (it being understood that GAHR III’s reinstatement of the GAHR III DRIP or GAHR III share repurchase plan would not constitute a material amendment to such GAHR III DRIP or GAHR III share repurchase plan) or waive the stock ownership limit or create an excepted holder limit (as defined in the GAHR III Charter) under the GAHR III Charter; |
• | adjust, split, combine, reclassify, or subdivide any shares of stock or other equity securities or ownership interests of GAHR III or subsidiaries of GAHR III that are not wholly owned; |
• | declare, set aside or pay any dividend on or make any other actual, constructive or deemed distributions (whether in cash, stock, property or otherwise) with respect to shares of capital stock of GAHR III or any GAHR III subsidiary or other equity securities or ownership interests in GAHR III or any GAHR III subsidiary or otherwise make any payment to its or their stockholders or other equity holders in their capacity as such, except for (A) the declaration and payment of dividends or other distributions to GAHR III by any wholly owned GAHR III subsidiary and (B) distributions by any GAHR III subsidiary that is not wholly owned, directly or indirectly, by GAHR III, in accordance with the requirements of the organizational documents of such GAHR III subsidiary; provided, that GAHR III and any GAHR III subsidiary shall be permitted to make distributions reasonably necessary for GAHR III to maintain its status as a REIT under the Code and avoid or reduce the imposition of any entity level income or excise tax under the Code; |
• | except as required under the Contribution Agreement, redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other equity interests of GAHR III or a GAHR III subsidiary; |
provided , that, after the filing of a registration statement on Form S-4 with respect to the GAHR IV Class I Common Stock issuable in the REIT Merger, GAHR III may effect redemptions upon a stockholder’s death or “qualifying disability” in accordance with the GAHR III share repurchase plan; |
• | except for transactions among GAHR III and one or more wholly owned subsidiaries of GAHR III or among one or more wholly owned subsidiaries of GAHR III, issue, sell, pledge, dispose, encumber or grant any shares of the capital stock of GAHR III or any GAHR III subsidiary or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock or other equity interests of GAHR III or any of its subsidiaries; |
• | acquire or agree to acquire any material assets, except acquisitions by GAHR III or any wholly owned subsidiary of GAHR III of or from an existing wholly owned subsidiary of GAHR III, acquisitions described in the GAHR III disclosure letter and other acquisitions of personal property for a purchase price of less than $2,000,000 in the aggregate; |
• | except as described in the GAHR III disclosure letter, sell, mortgage, pledge, lease, assign, transfer, dispose of or encumber, or effect a deed in lieu of foreclosure with respect to, any property or assets, except in the ordinary course of business; |
• | incur, create, assume, guarantee, refinance, replace or prepay any indebtedness or issue or materially amend the terms of any indebtedness, except indebtedness incurred under GAHR III’s existing debt facilities in the ordinary course of business, indebtedness to fund transactions permitted under the Merger Agreement, indebtedness that does not exceed $1,000,000 and refinancing indebtedness if such new indebtedness is not materially more onerous to GAHR III and the principal amount of such replacement indebtedness is not materially greater than the replaced indebtedness; |
• | make any loans, advances or capital contributions to, or investments in, any other person (including to any of its officers, directors, affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such persons other than in the ordinary course of business and other than intercompany loans between GAHR III and its wholly owned subsidiaries; |
• | other than in the ordinary course of business, enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any GAHR III material contract (or any contract that, if existing as of the date of the Merger Agreement, would be a GAHR III material contract); |
• | make any payment of any liability of GAHR III or any GAHR III subsidiary before it comes due in accordance with its terms, except in the ordinary course of business or in connection with dispositions or refinancings of indebtedness otherwise permitted by the Merger Agreement; |
• | waive, release, assign, settle or compromise any legal action, suit, investigation, arbitration or proceeding that (i) involves the payment of monetary damages greater than the amounts specifically reserved with respect thereto on the most recent balance sheet of GAHR III or that exceed $200,000 individually or $500,000 in the aggregate, (ii) involves injunctive relief, (iii) provides for the admission of material liability or (iv) involves any present, former or purported holder or group of holders of GAHR III Common Stock (excluding in each case any matter related to taxes); |
• | except in connection with the AHI Acquisition and as expressly provided for in the Contribution Agreement and related documents shared with GAHR IV prior to or on the date of the Merger Agreement, (i) hire or terminate any officer of GAHR III or any GAHR III subsidiary, except where due to cause, (ii) materially increase in any manner the amount, rate or terms of compensation or benefits of any of GAHR III’s directors, officers or employees, with certain exceptions, or (iii) enter into, adopt, amend or terminate any employment, bonus, severance or retirement contract or GAHR III benefit plan, except in the ordinary course in conjunction with annual employee benefit plan renewals or as may be required to comply with applicable law; |
• | fail to maintain all financial books and records in all material respects in accordance with GAAP or make any material change to its methods of accounting in effect on December 31, 2020, except as required by a change in GAAP or in applicable law, or make any change with respect to accounting policies, principles or practices unless required by GAAP or the SEC; |
• | enter into any new line of business; |
• | form any new funds, joint ventures, or non-traded real estate investment trusts or other pooled-investment vehicles; |
• | fail to duly and timely file all material reports and other material documents required to be filed with the SEC or any other governmental authority, subject to extensions permitted by law or applicable rules and regulations; |
• | enter into or modify in a manner adverse to GAHR III any GAHR III Tax Protection Agreement (as defined in the Merger Agreement), make, change or rescind any material election relating to taxes, change a material method of tax accounting, file or amend any material tax return, settle or compromise any material federal, state, local or foreign tax liability, audit, claim or assessment, enter into any material closing agreement related to taxes, or knowingly surrender any right to claim any material tax refund or give or request any waiver of a statute of limitation with respect to any material tax return, with certain exceptions; |
• | take any action, or fail to take any action, which action or failure would reasonably be expected to cause (A) GAHR III to fail to qualify as a REIT or (B) any GAHR III subsidiary to cease to be treated as any of (x) a partnership or disregarded entity for U.S. federal income tax purposes or (y) a qualified REIT subsidiary or a taxable REIT subsidiary under the applicable provisions of Section 856 of the Code, as the case may be; |
• | make or commit to make any capital expenditures other than in the ordinary course of business or to address obligations under existing contracts, or in conjunction with emergency repairs; |
• | adopt a plan of merger, complete or partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except by a GAHR III subsidiary in connection with any permitted acquisitions or dispositions in a manner that would not reasonably be expected to be materially adverse to GAHR III or to prevent or impair the ability of the GAHR III Parties to consummate the Mergers; |
• | amend or modify the compensation terms or any other obligations of GAHR III contained in the engagement letter with Stanger in a manner adverse to GAHR III or engage other financial advisors in connection with the transactions contemplated by the Merger Agreement; |
• | permit any liens or encumbrances other than those permitted by the Merger Agreement; |
• | materially modify or reduce the amount of any insurance coverage provided by GAHR III’s insurance policies; |
• | take any action (or fail to take any action) that would make dissenters’, appraisal or similar rights available to the holders of the GAHR III Common Stock with respect to the Mergers; |
• | enter into certain related-party transactions except in the ordinary course of business or as provided for in the Merger Agreement; |
• | amend or modify any contract relating to the AHI Acquisition, modify the consideration to be paid for the AHI Acquisition or fail to notify GAHR IV of any material delays, inability to obtain required consents or failure to meet any closing obligations relating to the AHI Acquisition; or |
• | authorize, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing. |
• | amend or propose to amend its bylaws or charter, the certificate of limited partnership of GAHR IV Operating Partnership, the GAHR IV Partnership Agreement or such equivalent organizational or governing documents of any material subsidiary of GAHR IV, amend the GAHR IV DRIP or the GAHR IV share repurchase plan in a manner material to GAHR IV (it being understood that GAHR IV’s reinstatement of the GAHR IV share repurchase plan would not constitute a material amendment to the GAHR IV share repurchase plan), or waive the stock ownership limit or create an excepted holder limit (as defined in the GAHR IV Charter) under the GAHR IV Charter; |
• | adjust, split, combine, reclassify, or subdivide any shares of stock or other equity securities or ownership interests of GAHR IV or subsidiaries of GAHR IV that are not wholly owned; |
• | declare, set aside, or pay any dividend on or make any other actual, constructive or deemed distributions (whether in cash, stock, property or otherwise) with respect to shares of capital stock of GAHR IV or any GAHR IV subsidiary or other equity securities or ownership interests in GAHR IV or any GAHR IV subsidiary or otherwise make any payment to its or their stockholders or other equity holders in their capacity as such, except for (A) the declaration and payment of dividends or other distributions to GAHR IV by any wholly owned GAHR IV subsidiary and (B) distributions by any GAHR IV subsidiary that is not wholly owned, directly or indirectly, by GAHR IV, in accordance with the requirements of the organizational documents of such GAHR IV subsidiary; provided, that GAHR IV and any GAHR IV subsidiary shall be permitted to make distributions reasonably necessary for GAHR IV to maintain its status as a REIT under the Code and avoid or reduce the imposition of any entity level income or excise tax under the Code; |
• | redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other equity interests of GAHR IV or any GAHR IV subsidiary; provided, that, after the filing of a registration statement on Form S-4 with respect to the GAHR IV Class I Common Stock issuable in the REIT Merger, GAHR IV may effect redemptions upon a stockholder’s death or “qualifying disability” in accordance with the GAHR IV share repurchase plan; |
• | except for transactions among GAHR IV and one or more wholly owned subsidiaries of GAHR IV or among one or more wholly owned subsidiaries of GAHR IV, issue, sell, pledge, dispose, encumber or grant any shares of the capital stock of GAHR IV or any GAHR IV subsidiary or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock or other equity interests of GAHR IV or any of its subsidiaries; |
• | acquire or agree to acquire any material assets, except acquisitions by GAHR IV or any wholly owned subsidiary of GAHR IV of or from an existing wholly owned subsidiary of GAHR IV, acquisitions described in the GAHR IV disclosure letter and other acquisitions of personal property for a purchase price of less than $2,000,000 in the aggregate; |
• | except as described in the GAHR IV disclosure letter, sell, mortgage, pledge, lease, assign, transfer, dispose of or encumber, or effect a deed in lieu of foreclosure with respect to, any property or assets, except in the ordinary course of business; |
• | incur, create, assume, guarantee, refinance, replace or prepay any indebtedness or issue or materially amend the terms of any indebtedness, except indebtedness incurred under GAHR IV’s existing debt facilities in the ordinary course of business, indebtedness to fund transactions permitted under the Merger Agreement, indebtedness that does not exceed $1,000,000 and refinancing indebtedness if such new indebtedness is not materially more onerous to GAHR IV and the principal amount of such replacement indebtedness is not materially greater than the replaced indebtedness; |
• | make any loans, advances or capital contributions to, or investments in, any other person (including to any of its officers, directors, affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such persons other than intercompany loans between GAHR IV and its wholly owned subsidiaries; |
• | other than in the ordinary course of business, enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any rights or claims under, any GAHR IV material contract (or any contract that, if existing as of the date of the Merger Agreement, would be a GAHR IV material contract); |
• | make any payment of any liability of GAHR IV or any GAHR IV subsidiary before it comes due in accordance with its terms, except in the ordinary course of business or in connection with dispositions or refinancings of indebtedness otherwise permitted by the Merger Agreement; |
• | waive, release, assign, settle or compromise any legal action, suit, investigation, arbitration or proceeding that (i) involves the payment of monetary damages greater than the amounts specifically reserved with respect thereto on the most recent balance sheet of GAHR IV or that exceed $100,000 individually or $250,000 in the aggregate, (ii) involves injunctive relief, (iii) provides for the admission of material liability or (iv) involves any present, former or purported holder or group of holders of GAHR IV Common Stock (excluding in each case any matter related to taxes); |
• | hire or terminate any officer of GAHR IV or any GAHR IV subsidiary, except where due to cause, (ii) materially increase in any manner the compensation or benefits of any of GAHR IV’s directors or (iii) enter into, adopt, amend or terminate any employment, bonus, severance or retirement contract or GAHR IV benefit plan, except as may be required to comply with applicable law; |
• | fail to maintain all financial books and records in all material respects in accordance with GAAP or make any material change to its methods of accounting in effect on December 31, 2020, except as required by a change in GAAP or in applicable law, or make any change with respect to accounting policies, principles or practices unless required by GAAP or the SEC; |
• | enter into any new line of business; |
• | form any new funds, joint ventures, or non-traded real estate investment trusts or other pooled-investment vehicles; |
• | fail to duly and timely file all material reports and other material documents required to be filed with the SEC or any other governmental authority, subject to extensions permitted by law or applicable rules and regulations; |
• | enter into or modify in a manner adverse to GAHR IV any GAHR IV Tax Protection Agreement (as defined in the Merger Agreement), make, change or rescind any material election relating to taxes, change a material method of tax accounting, file or amend any material tax return, settle or compromise any material federal, state, local or foreign tax liability, audit, claim or assessment, enter into any material closing agreement related to taxes, or knowingly surrender any right to claim any material tax refund or give or request any waiver of a statute of limitation with respect to any material tax return, with certain exceptions; |
• | take any action, or fail to take any action, which action or failure would reasonably be expected to cause (A) GAHR IV to fail to qualify as a REIT or (B) any GAHR IV subsidiary to cease to be treated as any of (x) a partnership or disregarded entity for U.S. federal income tax purposes or (y) a qualified REIT subsidiary or a taxable REIT subsidiary under the applicable provisions of Section 856 of the Code, as the case may be; |
• | make or commit to make any capital expenditures other than in the ordinary course of business or to address obligations under existing contracts, or in conjunction with emergency repairs; |
• | adopt a plan of merger, complete or partial liquidation or resolutions providing for or authorizing such merger, liquidation or a dissolution, consolidation, recapitalization or bankruptcy reorganization, except by a GAHR IV subsidiary in connection with any permitted acquisitions or dispositions in a manner that would not reasonably be expected to be materially adverse to GAHR IV or to prevent or impair the ability of the GAHR IV Parties to consummate the Mergers; |
• | amend or modify the compensation terms or any other obligations of GAHR IV contained in the engagement letter with Truist Securities in a manner adverse to GAHR IV or engage other financial advisors in connection with the transactions contemplated by the Merger Agreement; |
• | permit any liens or encumbrances other than those permitted by the Merger Agreement; |
• | materially modify or reduce the amount of any insurance coverage provided by GAHR IV’s insurance policies; |
• | take any action (or fail to take any action) that would make dissenters’, appraisal or similar rights available to the holders of GAHR IV Common Stock with respect to the Mergers; |
• | enter into certain related-party transactions except in the ordinary course of business or as provided for in the Merger Agreement; or |
• | authorize, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing. |
• | in the event of any notice or other communication received by such party from (i) any governmental authority in connection with the Mergers or (ii) any person alleging that the consent of such person may be required in connection with the Mergers; |
• | if (i) any representation or warranty made by such party in the Merger Agreement becomes untrue or inaccurate such that it would be reasonable to expect that the closing conditions set forth in the Merger Agreement would be incapable of being satisfied by the Outside Date or (ii) such party fails to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement; and |
• | of any action commenced, or to the knowledge of such party, threatened against, relating to or involving such party or any of its subsidiaries, that relates to the Merger Agreement, the Mergers or the other transactions contemplated thereby. |
• | approval of the REIT Merger and the GAHR III Charter Amendment (Merger Agreement) by the GAHR III stockholders, approval of the REIT Merger and the GAHR IV Charter Amendment (Merger Agreement) by the GAHR IV stockholders and each of the GAHR III Charter Amendment (Merger Agreement) and the GAHR IV Charter Amendment (Merger Agreement) shall have become effective pursuant to the MGCL; |
• | the absence of any judgment, injunction, order or decree issued by any governmental authority of competent jurisdiction prohibiting the consummation of the Mergers, and the absence of any law that has been enacted, entered, promulgated or enforced by any governmental authority after the date of the Merger Agreement that prohibits, restrains, enjoins or makes illegal the consummation of the Mergers or the other transactions contemplated by the Merger Agreement; and |
• | the registration statement on Form S-4 shall have been declared effective and no stop order suspending the effectiveness of the registration statement on Form S-4 shall have been issued, and no proceedings for that purpose shall have been initiated by the SEC that have not been withdrawn. |
• | the accuracy in all material respects as of the date of the Merger Agreement and the effective time of the Mergers of certain representations and warranties made in the Merger Agreement by the GAHR IV Parties regarding (i) the organization and qualification of the GAHR IV Parties, (ii) authority to enter into and approval of the Mergers and the Merger Agreement, (iii) conflicts or consents in connection with the Mergers and (iv) certain aspects of GAHR IV’s capital structure; |
• | the accuracy in all but de minimis respects as of the date of the Merger Agreement and the effective time of the Mergers of certain representations and warranties made in the Merger Agreement by the GAHR IV Parties regarding certain aspects of its capital structure other than such changes to the capital structure effected pursuant to the GAHR IV Charter Amendment (Merger Agreement); |
• | the accuracy as of the date of the Merger Agreement and the effective time of the Mergers of all other representations and warranties of the GAHR IV Parties contained in the Merger Agreement, except (a) representations and warranties made as of a specific date shall be true and correct only on such date, and (b) where the failure of such representations or warranties to be true and correct does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on GAHR IV and its subsidiaries taken as a whole; |
• | the GAHR IV Parties must have performed and complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by them on or prior to the effective time of the Mergers; |
• | on the closing date, no circumstance shall exist that constitutes a material adverse effect (as described above) as to the GAHR IV Parties; |
• | GAHR III must have received a certificate, dated the date of the closing of the Mergers, signed by the chief executive officer and chief financial officer of GAHR IV, certifying to the effect that the factual conditions described in the five preceding bullet points have been satisfied; |
• | GAHR III must have received the written opinion of Morris, Manning & Martin, dated as of the closing date, regarding GAHR IV’s qualification and taxation as a REIT under the Code commencing with GAHR IV’s taxable year that ended on December 31, 2016; |
• | GAHR III must have received the written opinion of DLA Piper to the effect that the REIT Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code; and |
• | GAHR IV must have received certain third-party consents in form and substance reasonably acceptable to GAHR III. |
• | the accuracy in all material respects as of the date of the Merger Agreement and the effective time of the Mergers of certain representations and warranties made in the Merger Agreement by the GAHR III Parties regarding (i) the organization and qualification of the GAHR III Parties, (ii) authority to enter into and approval of the Mergers and the Merger Agreement, (iii) conflicts or consents in connection with the Mergers and (iv) certain aspects of GAHR III’s capital structure; |
• | the accuracy in all but de minimis respects as of the date of the Merger Agreement and the effective time of the Mergers of certain representations and warranties made in the Merger Agreement by the GAHR III Parties regarding certain aspects of its capital structure; |
• | the accuracy as of the date of the Merger Agreement and the effective time of the Mergers of all other representations and warranties of the GAHR III Parties contained in the Merger Agreement, except (a) representations and warranties made as of a specific date shall be true and correct only on such date, and (b) where the failure of such representations or warranties to be true and correct does not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on GAHR III and its subsidiaries taken as a whole; |
• | the GAHR III Parties must have performed and complied in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by them on or prior to the effective time of the Mergers; |
• | on the closing date, no circumstance shall exist that constitutes a material adverse effect (as described above) as to the GAHR III Parties; |
• | GAHR IV must have received a certificate, dated the date of the closing of the Mergers, signed by the chief executive officer and chief financial officer of GAHR III, certifying to the effect that the factual conditions described in the five preceding bullet points have been satisfied; |
• | GAHR IV must have received the written opinion of Morris, Manning & Martin, dated as of the closing date, regarding GAHR III’s qualification and taxation as a REIT under the Code commencing with GAHR III’s taxable year that ended on December 31, 2014; |
• | GAHR IV must have received the written opinion of Morris, Manning & Martin to the effect that the REIT Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code; and |
• | GAHR III must have received certain third-party consents in form and substance reasonably acceptable to GAHR IV. |
• | The REIT Merger has not occurred on or before 11:59 p.m. New York time on the Outside Date. However, the right to terminate due to the failure of the REIT Merger to occur on or before such date will not be available to GAHR III or GAHR IV if the failure of GAHR III or GAHR IV to perform or comply in all material respects with any of their respective obligations under the Merger Agreement caused the failure of the REIT Merger to be consummated by such date. |
• | There is any final, non-appealable order issued by a governmental authority of competent jurisdiction that permanently restrains or otherwise prohibits the transactions contemplated by the Merger Agreement. The right to terminate due to the issuance of such an order will not be available to GAHR III or GAHR IV if the issuance of such final, non-appealable order was primarily due to the failure of GAHR III or GAHR IV to perform in all material respects with any of their respective obligations, covenants or agreements under the Merger Agreement. |
• | The approvals of the GAHR III stockholders of the REIT Merger and GAHR III Charter Amendment (Merger Agreement) have not been obtained at the GAHR III Special Meeting or the approvals of the GAHR IV stockholders of the REIT Merger and GAHR IV Charter Amendment (Merger Agreement) have not been obtained at the GAHR IV Annual Meeting. The right to terminate due to the failure to receive the requisite |
approvals of the GAHR III stockholders or the GAHR IV stockholders will not be available to GAHR III or GAHR IV if such failure was primarily due to the failure of GAHR III or GAHR IV to perform in all material respects with any of their respective obligations, covenants or agreements under the Merger Agreement. |
1) | GAHR IV has breached any of its representations or warranties or failed to perform any of its obligations, covenants or agreements set forth in the Merger Agreement, which breach or failure to perform (A) would result in a failure of GAHR IV to satisfy certain closing conditions and (B) cannot be cured or, if curable, is not cured by GAHR IV by the earlier of two business days before the Outside Date and 20 days following written notice of such breach or failure; provided, however, that GAHR III shall not have the right to terminate the Merger Agreement pursuant to the foregoing if GAHR III is then in breach of any of its representations or agreements set forth in the Merger Agreement such that GAHR IV already had a right to terminate the Merger Agreement as described below; |
2) | If GAHR III has accepted a Superior Proposal in accordance with the Merger Agreement at any time prior to obtaining the necessary approvals of the GAHR III stockholders so long as the termination fee payment described in “—Termination Fee and Expense Reimbursement” is made in full to GAHR IV prior to or concurrently with such termination; or |
3) | If, at any time prior to obtaining the necessary approvals of the GAHR IV stockholders, the GAHR IV Board has effected a GAHR IV Adverse Recommendation Change or GAHR IV has materially violated any of its obligations described above in “—Covenants and Agreements—No Solicitation; Change in Recommendation with a Competing Proposal or Intervening Event.” |
1) | GAHR III has breached any of its representations or warranties or failed to perform any of its obligations, covenants or agreements set forth in the Merger Agreement, which breach or failure to perform (A) would result in a failure of GAHR III to satisfy certain closing conditions and (B) cannot be cured or, if curable, is not cured by GAHR III by the earlier of two business day before the Outside Date and 20 days following written notice of such breach or failure; provided, however, that GAHR IV shall not have the right to terminate the Merger Agreement pursuant to the foregoing if GAHR IV is then in breach of any of its representations or agreements set forth in the Merger Agreement such that GAHR III already had a right to terminate the Merger Agreement as described above; |
2) | If GAHR IV has accepted a Superior Proposal in accordance with the Merger Agreement at any time prior to obtaining the necessary approvals of the GAHR IV stockholders so long as the termination fee payment described in “—Termination Fee and Expense Reimbursement” is made in full to GAHR III prior to or concurrently with such termination; or |
3) | If, at any time prior to obtaining the necessary approvals of the GAHR III Stockholders, the GAHR III Board has effected a GAHR III Adverse Recommendation Change or GAHR III has materially violated any of its obligations described above in “—Covenants and Agreements—No Solicitation; Change in Recommendation with a Competing Proposal or Intervening Event.” |
1) | GAHR IV due to GAHR III’s breach or failure to perform any obligation set forth in the Merger Agreement and prior to the breach or failure to perform giving rise to such right of termination, a Competing Proposal (with, for all purposes of this provision, all percentages included in the definition of “Competing Proposal” increased to 50%) has been publicly disclosed or otherwise communicated to the GAHR III Board and within 12 months after the date of such termination, a Competing Proposal is consummated or GAHR III enters into a definitive agreement relating to a Competing Proposal that is later consummated; |
2) | GAHR III in order to accept a Superior Proposal; or |
3) | GAHR IV pursuant to item (3) under “—Termination by GAHR IV” above. |
1) | GAHR III due to GAHR IV’s breach or failure to perform any obligation set forth in the Merger Agreement and prior to the breach or failure to perform giving rise to such right of termination, a Competing Proposal (with, for all purposes of this provision, all percentages included in the definition of “Competing Proposal” increased to 50%) has been publicly disclosed or otherwise communicated to the GAHR IV Board and within 12 months after the date of such termination, a Competing Proposal is consummated or GAHR IV enters into a definitive agreement relating to a Competing Proposal that is later consummated; |
2) | GAHR IV in order to accept a Superior Proposal; or |
3) | GAHR III pursuant to item (3) under “—Termination by GAHR III” above. |
• | a law is enacted or an order is issued that prohibits the consummation of the AHI Acquisition; |
• | the AHI Acquisition has not been consummated on or before March 23, 2022; |
• | the GAHR III Board changes its recommendation in favor of the GAHR III Charter Amendment Proposal (AHI Acquisition); or |
• | there is an uncured breach of the representations, warranties, covenants or obligations by the other that would cause the closing conditions in the Contribution Agreement not to be satisfied. |
• | organization and qualification; |
• | authority and approvals; |
• | title to contributed assets; |
• | no conflicts; |
• | consents and filings; |
• | absence of certain changes; |
• | proceedings; |
• | compliance with laws; |
• | tax matters; |
• | employees; |
• | financial statements; |
• | undisclosed liabilities; |
• | material contracts; |
• | fees and expenses of brokers; |
• | intellectual property; |
• | property; |
• | information for proxy statement; |
• | insurance; |
• | corruption laws; |
• | Office of Foreign Assets Control and export control; |
• | personal information; |
• | sufficiency of assets and personnel; and |
• | affiliated party contracts. |
• | organization and qualification; |
• | authority and approvals; |
• | title to contributed interest; |
• | no conflicts; |
• | consents and filings; |
• | proceedings; |
• | material contracts; |
• | fees and expenses of brokers; and |
• | information for proxy statement. |
• | organization and qualification; |
• | authority and approvals; |
• | no conflicts; |
• | consents and filings; |
• | capitalization; |
• | information for proxy statement; |
• | tax status; |
• | Investment Company Act; and |
• | fees and expenses of brokers. |
• | entering into any contract with respect to, or consummating, any acquisition in any manner (including by merging or consolidating or effecting any business combination) of any other person or business in respect of the contributed business; |
• | selling or encumbering any property or assets of the contributed business; |
• | making any loans, advances or capital contributions to, or investments in, any other person, or incurring any indebtedness of the contributed business; |
• | except if fully covered by insurance, instituting or settling any litigation involving the contributed business unless the remedy sought involves the payment of monetary damages only in an amount less than $100,000; |
• | assigning or licensing any intellectual property; |
• | (i) increasing the compensation (other than year-end bonuses or other discretionary year-end compensation) of any employees, except to the extent that any such increases are in the ordinary course of business or otherwise required by contract or law; (ii) accelerating the time of payment or vesting of any compensation or benefits due to any employees, unless otherwise required by contract or law; (iii) adopting, materially amending or terminating any benefit plan; (iv) hiring any new employee, other than in the ordinary course of business; or (v) terminating any employee, other than in the ordinary course of business or for cause; |
• | modifying, amending or terminating any material contract in a manner that would adversely and materially impact the economic benefits derived by the contributed business, or entering into any new material contract (other than renewals on substantially the same terms); |
• | making any extension in the period for payment of the account payables, or accelerating the payment of the account receivables; |
• | allowing the lapse or termination of policies of insurance covering the contributed business; and |
• | encumbering any assets of the contributed business. |
• | amending the organizational documents of GAHR III or GAHR III Operating Partnership; |
• | adopting or publicly proposing a plan of complete or partial liquidation, restructuring, recapitalization or other reorganization; and |
• | taking any action that would adversely affect its qualification as a real estate investment trust within the meaning of Section 856 of the Code. |
• | the expiration (or termination) of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; |
• | receipt by GAHR III of approval from its stockholders of the GAHR III Charter Amendment Proposal (AHI Acquisition); |
• | the AHI Principals and at least four of six other key American Healthcare Investors personnel continuing their employment with GAHR III immediately following the closing of the AHI Acquisition; |
• | that GAHR III not (without the consent of the Sponsors) agree to reduce the Exchange Ratio without fully compensating the Sponsors for that reduction; |
• | that all of the closing conditions in the Merger Agreement have been satisfied or waived, and that the Merger Agreement has not terminated; |
• | the accuracy of the parties’ representations and warranties and compliance with their covenants (subject to the materiality “bringdown” standards); and |
• | the absence of certain material adverse changes with respect to the contributed business. |
• | GAHR III has agreed to conduct its business only through the GAHR III Operating Partnership. |
• | GAHR III’s ability to effect a change in control or to effect certain amendments to the GAHR III Partnership Agreement are limited unless standard limited partner protections are in place. |
• | The limited partners acknowledge that in the event of a conflict between what is in the best interests of the GAHR III stockholders and the limited partners of the GAHR III Operating Partnership, the GAHR III Board need only consider the interests of the GAHR III stockholders and the contractual rights of the limited partners. |
• | The GAHR III OP Units issued to HoldCo are subject to the restrictions on transfer and afforded special cash redemption rights, all as described under “Lock-Up Period” above. |
• | Superior alignment of interest: |
• | With the exception of the earnout consideration, the consideration paid by GAHR III to HoldCo is fully in GAHR III OP Units, with significant lock-up provisions and no voting rights. |
• | Existing management, which GAHR III intends to continue to employ following the consummation of the AHI Acquisition, will have a significant equity investment in GAHR III and GAHR IV, strongly aligning their interests with stockholders. |
• | Improved capital market opportunities, including strategic liquidity alternatives: |
• | Self-managed REITs are typically viewed more favorably by lenders and institutional investors, potentially enhancing the Combined Company’s access to capital and reducing financing costs. |
• | In publicly traded markets, externally managed REITs typically trade at a discount relative to self-managed REITs, improving the Combined Company’s potential liquidity options, including the potential to pursue a listing of its shares on a public exchange. |
• | Significant improvement to cash flow and earnings: |
• | Upon consummation of the AHI Acquisition, the Combined Company will be entirely self-managed, which is expected to result in synergies and improved cash flow of the Combined Company. |
• | a transaction involving securities of the Roll-up Entity that have been for at least 12 months listed on a national securities exchange; or |
• | a transaction involving our conversion to a corporate, trust, or association form if, as a consequence of the transaction, there will be no significant adverse change in any of the following: stockholder voting rights; the term of our existence; compensation to our advisor; or our investment objectives. |
(A) | accepting the securities of a Roll-up Entity offered in the proposed Roll-up Transaction; or |
(B) | one of the following: |
(1) | remaining as holders of our stock and preserving their interests therein on the same terms and conditions as existed previously; or |
(2) | receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of our net assets. |
• | that would result in the common stockholders having democracy rights in a Roll-up Entity that are less than those provided in the GAHR IV Charter and the GAHR IV Bylaws and described elsewhere herein, including rights with respect to the election and removal of directors, annual reports, annual and special meetings, amendment of the GAHR IV Charter, and our dissolution; |
• | that includes provisions that would operate to materially impede or frustrate the accumulation of shares of stock by any purchaser of the securities of the Roll-up Entity, except to the minimum extent necessary to preserve the tax status of the Roll-up Entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-up Entity on the basis of the number of shares of stock held by that investor; |
• | in which investor’s rights to access of records of the Roll-up Entity will be less than those provided in the “— Meetings and Special Voting Requirements” section above; or |
• | in which any of the costs of the Roll-up Transaction would be borne by us if the Roll-up Transaction is rejected by our common stockholders. |
• | any person who beneficially owns, directly or indirectly, 10.0% or more of the voting power of the corporation’s outstanding voting stock; or |
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10.0% or more of the voting power of the then outstanding stock of the corporation. |
• | 80.0% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and |
• | two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares of stock held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
• | one-tenth or more but less than one-third; |
• | one-third or more but less than a majority; or |
• | a majority or more of all voting power. |
• | a classified board of directors; |
• | a two-thirds vote requirement for removing a director; |
• | a requirement that the number of directors be fixed only by vote of the directors; |
• | a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and |
• | a majority requirement for the calling of a stockholder-requested special meeting of stockholders. |
• | an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or |
• | with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful. |
• | the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was in our best interest; |
• | the indemnitee was acting on our behalf or performing services for us; |
• | in the case of affiliated directors, the GAHR IV Advisor or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification; and |
• | in the case of our independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification. |
• | the proceeding relates to acts or omissions with respect to the performance of duties or services on our behalf; |
• | the indemnitee provides us with written affirmation of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification; |
• | the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and |
• | the indemnitee provides us with a written agreement to repay the amount paid or reimbursed, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with the requisite standard of conduct and is not entitled to indemnification. |
• | there has been a successful adjudication on the merits of each count involving alleged material securities law violations; |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or |
• | a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in the state in which our securities were offered or sold as to indemnification for violations of securities laws. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
Authorized Stock |
GAHR III is authorized to issue an aggregate of 1,200,000,000 shares of stock, consisting of 1,000,000,000 shares of GAHR III Common Stock and 200,000,000 shares of preferred stock, $0.01 par value per share. The issuance of preferred stock must be approved by a majority of independent directors not otherwise interested in the transaction, who will have access at GAHR III’s expense to GAHR III’s |
GAHR IV is authorized to issue 1,200,000,000 shares of stock, consisting of 1,000,000,000 shares of GAHR IV Common Stock, of which 900,000,000 are classified as GAHR IV Class T Common Stock and 100,000,000 are classified as GAHR IV Class I Common Stock, and 200,000,000 shares of preferred stock, $0.01 par value per share. The issuance of preferred stock must be approved by |
GAHR IV is authorized to issue 1,200,000,000 shares of stock, consisting of 1,000,000,000 shares of GAHR IV Common Stock, of which 200,000,000 are classified as GAHR IV Class T Common Stock and 800,000,000 are classified as GAHR IV Class I Common Stock, and 200,000,000 shares of preferred stock, $0.01 par value per share. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
legal counsel or to independent legal counsel. | a majority of independent directors not otherwise interested in the transaction, who will have access at GAHR IV’s expense to GAHR IV’s legal counsel or to independent legal counsel. | |||||
Conversion of Shares of Stock |
The GAHR III Charter does not provide for the conversion of any shares of GAHR III Common Stock. | Same as GAHR III. | The GAHR IV Charter provides that, upon the listing of a class of GAHR IV Common Stock or such later date not to exceed twelve months from the date of listing as shall be approved by the GAHR IV Board, each share of the class or classes of GAHR IV Common Stock that are not so listed will automatically and without any action on the part of the holder thereof convert into a number of shares of the class of GAHR IV Common Stock that is listed equal to a fraction, the numerator of which is the net asset value of GAHR IV allocable to the shares of the applicable class of GAHR IV Common Stock that is not listed and the denominator of which is the net asset value of GAHR IV allocable to the shares of the class of GAHR IV Common Stock that is listed. | |||
Voting Rights |
Except as may be provided otherwise in the GAHR III Charter, and subject to the express terms of any series of preferred stock, the holders of GAHR III | Except as may be provided otherwise in the GAHR IV Charter, and subject to the express terms of any series of preferred stock, the holders of GAHR IV | Except as may be provided otherwise in the GAHR IV Charter, and subject to the express terms of any series of preferred stock, the holders of GAHR IV |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
Common Stock have the exclusive right to vote on all matters as to which a common stockholder is entitled to vote pursuant to applicable law at all meetings of stockholders. Subject to the provisions of the GAHR III Charter relating to the restrictions on transfer and ownership of stock and except as may otherwise be specified in the GAHR III Charter, each share of GAHR III Common Stock entitles the holder thereof to one vote on all matters upon which stockholders are entitled to vote. The voting rights per share (other than any publicly held share) sold in a private offering may not exceed the voting rights which bear the same relationship to the voting rights of a publicly held share as the consideration paid to GAHR III for each privately offered share bears to the book value of each outstanding publicly held share. With respect to shares of stock owned by the GAHR III Advisor, any director of GAHR III or any of their affiliates, neither the GAHR III Advisor, any director nor any of their affiliates may vote or consent on matters submitted to the stockholders regarding the removal of the GAHR III Advisor, any director or any of their affiliates. In determining the requisite |
Common Stock have the exclusive right to vote on all matters as to which a common stockholder is entitled to vote pursuant to applicable law at all meetings of stockholders. Subject to the provisions of the GAHR IV Charter relating to the restrictions on transfer and ownership of stock and except as may otherwise be specified in the GAHR IV Charter, each share of GAHR IV Common Stock entitles the holder thereof to one vote on all matters upon which stockholders are entitled to vote. The shares of GAHR IV Class I Common Stock vote together with the shares of GAHR IV Class T Common Stock as a single class on all actions to be taken by the stockholders. However, the holders of GAHR IV Class I Common Stock have exclusive voting rights on any amendment of the GAHR IV Charter (including the terms of the GAHR IV Class I Common Stock) that would alter only the contract rights of the GAHR IV Class I Common Stock and no holders of any other class or series of stock are entitled to vote thereon. In addition, the holders of GAHR IV Class I Common Stock have no voting rights on any amendment of the GAHR IV Charter that would alter only the contract | Common Stock have the exclusive right to vote on all matters as to which a common stockholder is entitled to vote pursuant to applicable law at all meetings of stockholders. Subject to the provisions of the GAHR III Charter relating to the restrictions on transfer and ownership of stock and except as may otherwise be specified in the GAHR IV Charter, each share of GAHR IV Common Stock entitles the holder thereof to one vote on all matters upon which stockholders are entitled to vote. The shares of GAHR IV Class I Common Stock vote together with the shares of GAHR IV Class T Common Stock as a single class on all actions to be taken by the stockholders. However, the holders of GAHR IV Class I Common Stock have exclusive voting rights on any amendment of the GAHR IV Charter (including the terms of the GAHR IV Class I Common Stock) that would alter only the contract rights of the GAHR IV Class I Common Stock and no holders of any other class or series of stock are entitled to vote thereon. In addition, the holders of GAHR IV Class I Common Stock have no voting rights on any amendment of the GAHR IV Charter that would |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
percentage in interest of shares of stock necessary to approve a matter on which the GAHR III Advisor, any director or any of their affiliates may not vote, any shares of stock owned by any of them will not be included. | rights of any other class or series of GAHR IV Common Stock, including, without limitation, the GAHR IV Class T Common Stock. The voting rights per share (other than any publicly held share) sold in a private offering may not exceed the voting rights which bear the same relationship to the voting rights of a publicly held share as the consideration paid to GAHR IV for each privately offered share bears to the book value of each outstanding publicly held share. With respect to shares of stock owned by the GAHR IV Advisor, any director of GAHR IV or any of their affiliates, neither the GAHR IV Advisor, any director nor any of their affiliates may vote or consent on matters submitted to the stockholders regarding the removal of the GAHR IV Advisor, any director or any of their affiliates. In determining the requisite percentage in interest of shares of stock necessary to approve a matter on which the GAHR IV Advisor, any director or any of their affiliates may not vote, any shares of stock owned by any of them will not be included. |
alter only the contract rights of any other class or series of GAHR IV Common Stock, including, without limitation, the GAHR IV Class T Common Stock. | ||||
Special Meetings of Stockholders |
The GAHR III Charter and the GAHR III Bylaws provide that special meetings of the stockholders (i) may be | Same as GAHR III. | The GAHR IV Bylaws provide that special meetings of the stockholders (i) may be called at any time by the |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
called at any time by the chief executive officer, the president, the chairman of the board, a majority of the directors or a majority of the independent directors and (ii) must be called by the secretary to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than 10% of the votes entitled to be cast on such matter at such meeting. | chief executive officer, the president, the chairman of the board, a majority of the directors or a majority of the independent directors and (ii) must be called by the secretary to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than 10% of the votes entitled to be cast on such matter at such meeting. The GAHR IV Board could amend the GAHR IV Bylaws without a stockholder vote to require, consistent with the bylaws of many listed companies, the written request of stockholders entitled to cast a majority of the votes entitled to be cast on any matter that may properly be considered at a meeting of stockholders, as well as the satisfaction of certain procedural requirements, in order to call a special meeting to act on such matter. | |||||
Notice of Stockholder Meetings |
Notice of stockholder meetings must be given to stockholders not less than 10 nor more than 90 days prior to any meeting, except that the GAHR III Charter and the GAHR III Bylaws require that the notice for special meetings called upon stockholder request be given within 10 days of the request and that such meetings be held | Same as GAHR III. | Notice of stockholder meetings must be given to stockholders not less than 10 nor more than 90 days prior to any meeting, except that the GAHR IV Bylaws require that the notice for special meetings called upon stockholder request be given within 10 days of the request and that such meetings be held not less |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
not less than 15 nor more than 60 days after delivery of the notice. | than 15 nor more than 60 days after delivery of the notice. The GAHR IV Board could amend the GAHR IV Bylaws without a stockholder vote to require, consistent with the bylaws of many listed companies, the same notice for stockholder-requested special meetings as required for all other stockholder meetings. | |||||
Number of Directors |
The GAHR III Charter provides that the number of directors may be increased or decreased from time to time pursuant to the GAHR III Bylaws but may not be fewer than three. The GAHR III Bylaws provide that a majority of the entire GAHR III Board may establish, increase or decrease the number of directors but the number may never be less than three nor more than 15. | Same as GAHR III. | The GAHR IV Charter provides that the number of directors may be increased or decreased from time to time pursuant to the GAHR IV Bylaws but may not be fewer than the minimum number required by the MGCL, which is one. The GAHR IV Bylaws provide that a majority of the entire GAHR IV Board may establish, increase or decrease the number of directors but the number may never be less than three nor more than 15. | |||
Independent Directors |
The GAHR III Charter requires that at least a majority of the directors be independent directors ( i.e. co-sponsor of GAHR III or the GAHR III Advisor), except for a period of 90 days following the death, removal or resignation of an independent director |
Same as GAHR III. | The GAHR IV Bylaws provide that independent directors must nominate replacements for vacancies among the independent directors’ positions, although the GAHR IV Board could amend the GAHR IV Bylaws without a stockholder vote to eliminate this requirement which is uncommon among listed companies. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
pending the election of such independent director’s successor. The GAHR III Charter and the GAHR III Bylaws further provide that independent directors must nominate replacements for vacancies among the independent directors’ positions. | ||||||
Vote Required for Director Election |
The GAHR III Charter and GAHR III Bylaws provide that the holders of a majority of the shares of stock of GAHR III entitled to vote who are present in person or represented by proxy at an annual meeting of stockholders at which a quorum is present may, without the necessity for concurrence by the GAHR III Board, vote to elect a director. | Same as GAHR III. | The GAHR IV Bylaws provide that the holders of a majority of the shares of stock of GAHR IV entitled to vote who are present in person or represented by proxy at an annual meeting of stockholders at which a quorum is present may, without the necessity for concurrence by the GAHR IV Board, vote to elect a director. The GAHR IV Board could amend the GAHR IV Bylaws without a stockholder vote to require, consistent with the bylaws of many listed companies, only a plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present in order to elect a director. | |||
Removal of Directors |
The GAHR III Charter provides that any director, or the entire GAHR III Board, may be removed from office at any time, but only by the affirmative vote of at least a majority of the votes entitled to be cast generally in the election of directors. | Same as GAHR III. | The GAHR IV Charter provides that any director, or the entire GAHR IV Board, may be removed from office at any time, but only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
Transactions with Affiliates |
The GAHR III Charter contains certain requirements and limitations with respect to transactions between GAHR III, on the one hand, and the GAHR III Advisor, a co-sponsor of GAHR III, a director of GAHR III or any affiliate thereof, on the other hand, including (i) sales and leases of assets to GAHR III, (ii) sales and leases of assets to the GAHR III Advisor, a co-sponsor of GAHR III, a director of GAHR III or any affiliate thereof, (iii) certain loans from the GAHR III Advisor, a co-sponsor of GAHR III, a director of GAHR III or any affiliate thereof and (iv) any other transaction with the GAHR III Advisor, a co-sponsor of GAHR III, a director of GAHR III or any affiliate thereof, unless a majority of the GAHR III directors (including a majority of the independent directors) not otherwise interested in such transaction approve such transaction as being fair and reasonable to GAHR III and on terms and conditions no less favorable to GAHR III than those available from unaffiliated third parties. |
Same as GAHR III. | The GAHR IV Charter does not address transactions with affiliates. | |||
Limitation of Liability and Indemnification of Directors and Officers |
The GAHR III Charter limits the liability of GAHR III’s directors and officers to GAHR III and its stockholders for money damages and requires GAHR III to indemnify | Same as GAHR III. | The GAHR IV Charter limits the liability of GAHR IV’s directors and officers to GAHR IV and its stockholders for money damages to the maximum extent |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former director or officer of GAHR III and who is made or threatened to be made a party to the proceeding by reason of his or service in that capacity, (ii) any individual who, while a director of GAHR III and at the request of GAHR III, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or service in that capacity or (iii) the GAHR III Advisor or any of its affiliates acting as an agent of GAHR III. However, GAHR III may indemnify a director, the GAHR III Advisor or any affiliate of the GAHR III Advisor (collectively, the “GAHR III Indemnified Parties”) for liability or loss suffered by any of them or hold a GAHR III Indemnified Party harmless for any loss or liability by GAHR III only if the following conditions are met: (i) the GAHR III Indemnified Party has | permitted by Maryland law. The GAHR IV Charter requires GAHR IV to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former director or officer of GAHR IV or any of its subsidiaries and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity or (ii) any individual who, while a director or officer of GAHR IV or any of its subsidiaries and at the request of GAHR IV or any of its subsidiaries, serves or has served as a director, officer, member, manager, partner or trustee of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
determined, in good faith, that the course of conduct which caused the loss or liability was in the best interests of GAHR III, (ii) the GAHR III Indemnified Party was acting on behalf of or performing services for GAHR III, (iii) such liability or loss was not the result of negligence or misconduct by the GAHR III Indemnified Party (or gross negligence or willful misconduct in the case of an independent director) and (iv) such indemnification is recoverable only out of the net assets of GAHR III and not from its stockholders. In addition, GAHR III may not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by a GAHR III Indemnified Party unless one or more of the following conditions are met: (A) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the GAHR III Indemnified Party, (B) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the GAHR III Indemnified Party, or (C) a court of competent jurisdiction approves a settlement of the claims against the |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
GAHR III Indemnified Party and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which securities of GAHR III were offered or sold as to indemnification for violations of securities laws. The GAHR III Charter further provides that a GAHR III Indemnified Party may be paid or reimbursed reasonable legal expenses and other costs incurred in advance of the final disposition of a proceeding as a result of any legal action for which indemnification is being sought only if the following conditions are met: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of GAHR III, (ii) the GAHR III Indemnified Party provides GAHR III with written affirmation of such GAHR III Indemnified Party’s good faith belief that the standard of conduct necessary for indemnification has been met, (iii) the legal proceeding is initiated by a third party who is not a stockholder of GAHR III or the legal proceeding is |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
initiated by a stockholder acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement, and (iv) the GAHR III Indemnified Party undertakes to repay the amount paid or reimbursed by GAHR III, together with the applicable legal rate of interest thereon, if it is ultimately determined that the GAHR III Indemnified Party is not entitled to indemnification. | ||||||
Roll-Up Transactions |
The GAHR III Charter requires that, in connection with a proposed roll-up transaction, the person sponsoring the roll-up transaction offer to holders of GAHR III Common Stock who vote against the proposed roll-up transaction the choice of either (i) accepting the securities of the roll-up entity offered in the proposed roll-up transaction or (ii) one of the following: (A) remaining as common stockholders of GAHR III and preserving their interest therein on the same terms and conditions as existed previously or (B) receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of the net assets of GAHR III.The GAHR III Charter prohibits GAHR III from |
Same as GAHR III. |
The GAHR IV Charter does not include any provision related to roll-up transactions. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
participating in any roll-up transaction: (i) that would result in the holders of GAHR III Common Stock having voting rights in a roll-up entity that are less than the rights provided for in the GAHR III Charter, (ii) that includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares by any purchaser of the securities of the roll-up entity (except to the minimum extent necessary to preserve the tax status of the roll-up entity), or that would limit the ability of an investor to exercise the voting rights of its securities of the roll-up entity on the basis of the number of shares held by that investor, (iii) in which investor’s rights to access of records of the roll-up entity will be less than those described in the GAHR III Charter or (iv) in which any of the costs of the roll-up transaction will be borne by GAHR III if the roll-up transaction is rejected by the holders of GAHR III Common Stock. |
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Distributions in Kind |
The GAHR III Charter prohibits distributions in kind, except for (i) distributions of readily marketable securities, (ii) distributions of beneficial interests in a liquidating trust established for the dissolution of GAHR III and the liquidation of its assets in | Same as GAHR III. | The GAHR IV Charter does not prohibit distributions in kind. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
accordance with the terms of the GAHR III Charter or (iii) distributions in which (A) the GAHR III Board advises each stockholder of the risks associated with direct ownership of the property, (B) the GAHR III Board offers each stockholder the election of receiving such in-kind distributions and (C) in-kind distributions are made only to those stockholders that accept such offer. |
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Stockholder Inspection Rights |
Under the MGCL, any stockholder has the right to inspect the following corporate records: (i) bylaws; (ii) minutes of the proceedings of stockholders; (iii) an annual statement of affairs; (iv) any voting trust agreements; and (v) a statement showing all stock and securities issued by the corporation over a specified period of time not to exceed 12 months. In addition, one or more persons that together have held at least 5% of the outstanding stock of any class for at least six months have the right to inspect the corporation’s books of account and its stock ledger and may request a verified list of stockholders. The GAHR III Charter provides that, subject to certain limitations and requirements set forth therein, an alphabetical list of the names, addresses and telephone numbers of |
Same as GAHR III. |
Under the MGCL, any stockholder has the right to inspect the following corporate records: (i) bylaws; (ii) minutes of the proceedings of stockholders; (iii) an annual statement of affairs; (iv) any voting trust agreements; and (v) a statement showing all stock and securities issued by the corporation over a specified period of time not to exceed 12 months. In addition, one or more persons that together have held at least 5% of the outstanding stock of any class for at least six months have the right to inspect the corporation’s books of account and its stock ledger and may request a verified list of stockholders. The GAHR IV Charter does not provide additional rights of inspection. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
the stockholders of GAHR III, along with the number of shares of stock held by each of them, will be available for inspection by any stockholder or such stockholder’s designated agent at the home office of GAHR III upon the request of such stockholder, and that a copy of the stockholder list will be mailed to any stockholder so requesting within ten days of receipt by GAHR III of the request. The GAHR III Charter further provides that a stockholder may request a copy of the stockholder list in connection with matters relating to the stockholder’s voting rights and the exercise of stockholder rights under federal proxy laws. | ||||||
Reports to Stockholders |
Under the MGCL, GAHR III must prepare, or cause to be prepared, annually a full and correct statement of affairs of the corporation, to include a balance sheet and a financial statement of operations for the preceding fiscal year. The GAHR III Charter further provides that GAHR III will cause to be prepared and mailed or delivered to each stockholder as of a record date after the end of the fiscal year and each holder of other publicly held securities of GAHR III within 120 days after the end of the fiscal year to |
Same as GAHR III. |
Under the MGCL, GAHR IV must prepare, or cause to be prepared, annually a full and correct statement of affairs of the corporation, to include a balance sheet and a financial statement of operations for the preceding fiscal year. The GAHR IV Charter does not provide additional rights to reports. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
which it relates an annual report for each fiscal year that will include: (i) financial statements prepared in accordance with generally accepted accounting principles that are audited and reported on by independent certified public accountants; (ii) the ratio of the costs of raising capital during the period to the capital raised; (iii) the aggregate amount of advisory fees and the aggregate amount of other fees paid to the GAHR III Advisor and any affiliate thereof by GAHR III, including fees or charges paid to the GAHR III Advisor and any affiliate thereof by third parties doing business with GAHR III; (iv) the total operating expenses of GAHR III, stated as a percentage of average invested assets and as a percentage of its net income; (v) a report from the independent directors that the policies being followed by GAHR III are in the best interests of its stockholders and the basis for such determination; and (vi) separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving GAHR III and the GAHR III Advisor, a co-sponsor of GAHR III, any director of GAHR III or any affiliate thereof occurring in the year for which the annual report is made. |
Rights of GAHR III Stockholders |
Current Rights of GAHR IV Stockholders |
Rights of GAHR IV Stockholders (and GAHR III Stockholders after the Mergers) after Amendment and Restatement of GAHR IV Charter | ||||
Investment Policies and Limitations |
In addition to the limitations described in “Transactions with Affiliates” above, the GAHR III Charter establishes investment restrictions and limitations with respect to numerous investments, including investments in equity securities, unimproved real property, mortgages on unimproved real property, commodities and mortgages. | Same as GAHR III. | The GAHR IV Charter does not include any investment policies or limitations, and the GAHR IV Board may from time to time, in its sole discretion and as it deems appropriate, adopt, amend, revise or terminate any policy or policies with respect to GAHR IV. | |||
Suitability of Stockholders |
The GAHR III Charter provides that, subject to suitability standards established by individual states and until such time as the GAHR III Common Stock is listed on a national securities exchange, to become a stockholder of GAHR III, such prospective stockholder must represent to GAHR III (or, in the case of sales to fiduciary accounts, the fiduciary account must represent to GAHR III with respect to the beneficiary), among other requirements as GAHR III may require from time to time, that such prospective stockholder or beneficiary has (i) a minimum annual gross income of $70,000 and a net worth of not less than $70,000 or (ii) a net worth of not less than $250,000, in each case excluding home, furnishings and automobiles from the calculation of net worth. | Same as GAHR III. | The GAHR IV Charter does not include provisions regarding suitability of stockholders. |
GAHR III Proxy Solicitor: Broadridge Financial Solutions, Inc. 51 Mercedes Way Edgewood, New York 11717 Call toll free: 1 (855) 928-4498 |
GAHR IV Proxy Solicitor: Broadridge Financial Solutions, Inc. 51 Mercedes Way Edgewood, New York 11717 Call toll free: 1 (855) 976-3325 |
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• | GAHR III stockholders will have the largest voting interest in the post-combination company; and |
• | GAHR III is significantly larger than GAHR IV, the legal acquiror, in total assets and revenue. |
Historical |
Historical |
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GAHR III |
NewCo |
Pro Forma Combined (adjusted for AHI Acquisition) |
GAHR IV |
Pro Forma Combined Company |
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As of March 31, 2021 |
As of March 31, 2021 |
AHI Acquisition Transaction Accounting Adjustments |
As of March 31, 2021 |
As of March 31, 2021 |
REIT Merger Transaction Accounting Adjustments |
As of March 31, 2021 |
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ASSETS |
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Real estate investments, net |
$ | 2,409,943,000 | $ | — | $ | — | $ | 2,409,943,000 | $ | 917,513,000 | $ | 176,886,000 | 4(g) | $ | 3,504,342,000 | |||||||||||||||||||||
Debt security investment, net |
76,685,000 | — | — | 76,685,000 | — | — | 76,685,000 | |||||||||||||||||||||||||||||
Cash and cash equivalents |
89,995,000 | 100,000 | — | 90,095,000 | 19,167,000 | (11,705,000 | ) | 4(h) | 97,171,000 | |||||||||||||||||||||||||||
(386,000 | ) | 4(i) | ||||||||||||||||||||||||||||||||||
Accounts and other receivables, net |
121,359,000 | — | — | 121,359,000 | 2,374,000 | — | 123,733,000 | |||||||||||||||||||||||||||||
Restricted cash |
39,711,000 | — | — | 39,711,000 | 735,000 | — | 40,446,000 | |||||||||||||||||||||||||||||
Identified intangible assets, net |
153,523,000 | — | 42,000 | 4(a) | 153,565,000 | 59,906,000 | 67,711,000 | 4(j) | 281,182,000 | |||||||||||||||||||||||||||
Goodwill |
75,309,000 | — | 134,462,000 | 4(b) | 209,771,000 | — | — | 209,771,000 | ||||||||||||||||||||||||||||
Operating lease right-of-use |
143,239,000 | 4,113,000 | (569,000 | ) | 4(c) | 146,783,000 | 14,103,000 | (1,000 | ) | 4(k) | 160,885,000 | |||||||||||||||||||||||||
Other assets, net |
120,262,000 | 127,000 | (127,000 | ) | 4(a) | 120,262,000 | 72,842,000 | (17,170,000 | ) | 4(l) | 130,185,000 | |||||||||||||||||||||||||
(45,749,000 | ) | 4(m) | ||||||||||||||||||||||||||||||||||
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Total assets |
$ | 3,230,026,000 | $ | 4,340,000 | $ | 133,808,000 | $ | 3,368,174,000 | $ | 1,086,640,000 | $ | 169,586,000 | $ | 4,624,400,000 | ||||||||||||||||||||||
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LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
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Liabilities: |
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Mortgage loans payable, net |
$ | 912,883,000 | $ | — | $ | — | $ | 912,883,000 | $ | 17,708,000 | $ | 1,123,000 | 4(n) | $ | 931,714,000 | |||||||||||||||||||||
Lines of credit and term loans |
842,234,000 | — | — | 842,234,000 | 481,400,000 | — | 1,323,634,000 | |||||||||||||||||||||||||||||
Accounts payable and accrued liabilities |
170,033,000 | 2,500,000 | — | 172,533,000 | 21,931,000 | (995,000 | ) | 4(h) | 193,469,000 | |||||||||||||||||||||||||||
Accounts payable due to affiliates |
2,426,000 | — | — | 2,426,000 | 1,042,000 | — | 3,468,000 | |||||||||||||||||||||||||||||
Identified intangible liabilities, net |
320,000 | — | — | 320,000 | 1,234,000 | 15,126,000 | 4(j) | 16,680,000 | ||||||||||||||||||||||||||||
Financing obligations |
20,080,000 | — | — | 20,080,000 | — | — | 20,080,000 | |||||||||||||||||||||||||||||
Operating lease liabilities |
136,655,000 | 4,292,000 | (833,000 | ) | 4(d) | 140,114,000 | 9,941,000 | 176,000 | 4(o) | 150,231,000 | ||||||||||||||||||||||||||
Security deposits, prepaid rent and other liabilities |
86,940,000 | — | — | 86,940,000 | 9,660,000 | (3,134,000 | ) | 4(p) | 93,466,000 | |||||||||||||||||||||||||||
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Total liabilities |
2,171,571,000 | 6,792,000 | (833,000 | ) | 2,177,530,000 | 542,916,000 | 12,296,000 | 2,732,742,000 | ||||||||||||||||||||||||||||
Commitments and Contingencies |
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Redeemable noncontrolling interests |
40,382,000 | — | 17,930,000 | 4(f) | 58,312,000 | 2,623,000 | (96,000 | ) | 4(q) | 63,024,000 | ||||||||||||||||||||||||||
(4,000 | ) | 4(i) | ||||||||||||||||||||||||||||||||||
2,189,000 | 4(v) |
Historical |
Historical |
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GAHR III |
NewCo |
Pro Forma Combined (adjusted for AHI Acquisition) |
GAHR IV |
Pro Forma Combined Company |
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As of March 31, 2021 |
As of March 31, 2021 |
AHI Acquisition Transaction Accounting Adjustments |
As of March 31, 2021 |
As of March 31, 2021 |
REIT Merger Transaction Accounting Adjustments |
As of March 31, 2021 |
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Equity: |
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Stockholders’ equity: |
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Preferred stock |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Common stock |
1,939,000 | — | — | 1,939,000 | — | (1,939,000 | ) | 4(r) | — | |||||||||||||||||||||||||
Class T common stock |
— | — | — | — | 760,000 | 760,000 | 4(r) | 760,000 | ||||||||||||||||||||||||||
(760,000 | ) | 4(s) | ||||||||||||||||||||||||||||||||
Class I common stock |
— | — | — | — | 57,000 | 1,853,000 | 4(r) | 1,853,000 | ||||||||||||||||||||||||||
(57,000 | ) | 4(s) | ||||||||||||||||||||||||||||||||
Members’ equity |
— | (2,452,000 | ) | 2,452,000 | 4(e) | — | — | — | — | |||||||||||||||||||||||||
Additional paid-in capital |
1,730,096,000 | — | 44,100,000 | 4(f) | 1,774,196,000 | 736,486,000 | 708,056,000 | 4(t) | 2,494,935,000 | |||||||||||||||||||||||||
24,436,000 | 4(u) | |||||||||||||||||||||||||||||||||
(674,000 | ) | 4(r) | ||||||||||||||||||||||||||||||||
(736,486,000 | ) | 4(s) | ||||||||||||||||||||||||||||||||
(10,697,000 | ) | 4(v) | ||||||||||||||||||||||||||||||||
(382,000 | ) | 4(i) | ||||||||||||||||||||||||||||||||
Accumulated deficit |
(876,118,000 | ) | — | — | (876,118,000 | ) | (196,835,000 | ) | 196,835,000 | 4(s) | (886,828,000 | ) | ||||||||||||||||||||||
(10,710,000 | ) | 4(h) | ||||||||||||||||||||||||||||||||
Accumulated other comprehensive loss |
(1,939,000 | ) | — | 143,000 | 4(f) | (1,796,000 | ) | — | (42,000 | ) | 4(v) | (1,838,000 | ) | |||||||||||||||||||||
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Total stockholders’ equity |
853,978,000 | (2,452,000 | ) | 46,695,000 | 898,221,000 | 540,468,000 | 170,193,000 | 1,608,882,000 | ||||||||||||||||||||||||||
Noncontrolling interests |
164,095,000 | — | 70,016,000 | 4(f) | 234,111,000 | 633,000 | 894,000 | 4(q) | 219,752,000 | |||||||||||||||||||||||||
(24,436,000 | ) | 4(u) | ||||||||||||||||||||||||||||||||
8,550,000 | 4(v) | |||||||||||||||||||||||||||||||||
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Total equity |
1,018,073,000 | (2,452,000 | ) | 116,711,000 | 1,132,332,000 | 541,101,000 | 155,201,000 | 1,828,634,000 | ||||||||||||||||||||||||||
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Total liabilities, redeemable noncontrolling interests and equity |
$ | 3,230,026,000 | $ | 4,340,000 | $ | 133,808,000 | $ | 3,368,174,000 | $ | 1,086,640,000 | $ | 169,586,000 | $ | 4,624,400,000 | ||||||||||||||||||||
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Historical |
Historical |
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GAHR III |
NewCo |
Pro Forma Combined (adjusted for AHI Acquisition) |
GAHR IV |
Pro Forma Combined Company |
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Three Months Ended March 31, 2021 |
Three Months Ended March 31, 2021 |
AHI Acquisition Transaction Accounting Adjustments |
Three Months Ended March 31, 2021 |
Three Months Ended March 31, 2021 |
REIT Merger Transaction Accounting Adjustments |
Three Months Ended March 31, 2021 |
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Revenues and grant income: |
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Revenues |
$ | — | $ | 11,186,000 | $ | (8,053,000 | ) | 5(a) | $ | 3,133,000 | $ | — | $ | (3,133,000 | ) | 5(e) | $ | — | ||||||||||||||||||||||
Resident fees and services |
253,026,000 | — | — | 253,026,000 | 15,895,000 | — | 268,921,000 | |||||||||||||||||||||||||||||||||
Real estate revenue |
30,023,000 | — | — | 30,023,000 | 21,946,000 | (421,000 | ) | 5(d) | 51,548,000 | |||||||||||||||||||||||||||||||
Grant income |
8,229,000 | — | — | 8,229,000 | — | — | 8,229,000 | |||||||||||||||||||||||||||||||||
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Total revenues and grant income |
291,278,000 | 11,186,000 | (8,053,000 | ) | 294,411,000 | 37,841,000 | (3,554,000 | ) | 328,698,000 | |||||||||||||||||||||||||||||||
Expenses: |
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Property operating expenses |
245,142,000 | — | — | 245,142,000 | 15,194,000 | — | 260,336,000 | |||||||||||||||||||||||||||||||||
Rental expenses |
8,055,000 | — | (338,000 | ) | 5(a) | 7,717,000 | 6,024,000 | (279,000 | ) | 5(e) | 13,462,000 | |||||||||||||||||||||||||||||
General and administrative |
7,257,000 | 5,716,000 | (5,678,000 | ) | 5(a) | 7,295,000 | 3,747,000 | (2,540,000 | ) | 5(e) | 8,752,000 | |||||||||||||||||||||||||||||
250,000 | 5(f) | |||||||||||||||||||||||||||||||||||||||
Business acquisition expenses |
1,248,000 | — | — | 1,248,000 | 314,000 | (1,815,000 | ) | 5(g) | (392,000 | ) | ||||||||||||||||||||||||||||||
(139,000 | ) | 5(e) | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
25,723,000 | 1,379,000 | (1,379,000 | ) | 5(b) | 25,723,000 | 12,402,000 | 3,141,000 | 5(h) | 40,206,000 | ||||||||||||||||||||||||||||||
(1,060,000 | ) | 5(i) | ||||||||||||||||||||||||||||||||||||||
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Total expenses |
287,425,000 | 7,095,000 | (7,395,000 | ) | 287,125,000 | 37,681,000 | (2,442,000 | ) | 322,364,000 | |||||||||||||||||||||||||||||||
Other income (expense): |
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Interest expense: |
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Interest expense |
(20,365,000 | ) | — | — | (20,365,000 | ) | (4,726,000 | ) | 497,000 | 5(j) | (24,594,000 | ) | ||||||||||||||||||||||||||||
Gain in fair value of derivative financial instruments |
1,821,000 | — | — | 1,821,000 | 1,455,000 | — | 3,276,000 | |||||||||||||||||||||||||||||||||
Interest income |
— | 5,000 | (5,000 | ) | 5(b) | — | — | — | — | |||||||||||||||||||||||||||||||
Loss on disposition of real estate investment |
(335,000 | ) | — | — | (335,000 | ) | — | — | (335,000 | ) | ||||||||||||||||||||||||||||||
Loss from unconsolidated entities |
(1,771,000 | ) | — | — | (1,771,000 | ) | (904,000 | ) | 904,000 | 5(k) | (1,771,000 | ) | ||||||||||||||||||||||||||||
Foreign currency gain |
415,000 | — | — | 415,000 | — | — | 415,000 | |||||||||||||||||||||||||||||||||
Other income |
272,000 | 269,000 | (196,000 | ) | 5(b) | 345,000 | 7,000 | — | 352,000 | |||||||||||||||||||||||||||||||
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(Loss) income before income taxes |
(16,110,000 | ) | 4,365,000 | (859,000 | ) | (12,604,000 | ) | (4,008,000 | ) | 289,000 | (16,323,000 | ) | ||||||||||||||||||||||||||||
Income tax expense |
(163,000 | ) | — | — | (163,000 | ) | — | — | (163,000 | ) | ||||||||||||||||||||||||||||||
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Net (loss) income |
(16,273,000 | ) | 4,365,000 | (859,000 | ) | (12,767,000 | ) | (4,008,000 | ) | 289,000 | (16,486,000 | ) | ||||||||||||||||||||||||||||
Less: net loss (income) attributable to noncontrolling interests |
4,426,000 | (2,371,000 | ) | 2,371,000 | 5(b) | 5,042,000 | 264,000 | (818,000 | ) | 5(k) | 4,485,000 | |||||||||||||||||||||||||||||
616,000 | 5(c) | (3,000 | ) | 5(l) | ||||||||||||||||||||||||||||||||||||
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Net (loss) income attributable to controlling interest |
$ | (11,847,000 | ) | $ | 1,994,000 | $ | 2,128,000 | $ | (7,725,000 | ) | $ | (3,744,000 | ) | $ | (532,000 | ) | $ | (12,001,000 | ) | |||||||||||||||||||||
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Net loss per share: |
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Basic and Diluted |
$ | (0.06 | ) | $ | (0.04 | ) | 5(m) | $ | (0.05 | ) | $ | (0.05 | ) | 5 | (n) | |||||||||||||||||||||||||
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Shares used in computing net loss per share: |
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Basic and Diluted |
193,856,872 | 193,856,872 | 5(m) | 81,511,212 | 261,390,084 | 5 | (n) | |||||||||||||||||||||||||||||||||
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Historical |
Historical |
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GAHR III |
NewCo |
Pro Forma Combined (adjusted for AHI Acquisition) |
GAHR IV |
Pro Forma Combined Company |
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Fiscal Year Ended December 31, 2020 |
Fiscal Year Ended December 31, 2020 |
AHI Acquisition Transaction Accounting Adjustments |
Fiscal Year Ended December 31, 2020 |
Fiscal Year Ended December 31, 2020 |
REIT Merger Transaction Accounting Adjustments |
Fiscal Year Ended December 31, 2020 |
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Revenues and grant income: |
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Revenues |
$ | — | $ | 38,618,000 | $ | (25,435,000 | ) | 5(a) | $ | 13,183,000 | $ | — | $ | (13,183,000 | ) | 5(e) | $ | — | ||||||||||||||||||||
Resident fees and services |
1,069,073,000 | — | — | 1,069,073,000 | 67,793,000 | — | 1,136,866,000 | |||||||||||||||||||||||||||||||
Real estate revenue |
120,047,000 | — | — | 120,047,000 | 86,321,000 | (1,711,000 | ) | 5(d) | 204,657,000 | |||||||||||||||||||||||||||||
Grant income |
55,181,000 | — | — | 55,181,000 | 1,005,000 | — | 56,186,000 | |||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||
Total revenues and grant income |
1,244,301,000 | 38,618,000 | (25,435,000 | ) | 1,257,484,000 | 155,119,000 | (14,894,000 | ) | 1,397,709,000 | |||||||||||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||||||||||||
Property operating expenses |
993,727,000 | — | — | 993,727,000 | 60,224,000 | — | 1,053,951,000 | |||||||||||||||||||||||||||||||
Rental expenses |
32,298,000 | — | (1,372,000 | ) | 5(a) | 30,926,000 | 23,450,000 | (1,123,000 | ) | 5(e) | 53,253,000 | |||||||||||||||||||||||||||
General and administrative |
27,007,000 | 21,510,000 | (21,953,000 | ) | 5(a) | 26,564,000 | 16,691,000 | (10,063,000 | ) | 5(e) | 34,192,000 | |||||||||||||||||||||||||||
1,000,000 | 5(f) | |||||||||||||||||||||||||||||||||||||
Business acquisition expenses |
290,000 | — | — | 290,000 | (160,000 | ) | 12,525,000 | 5(g) | 12,528,000 | |||||||||||||||||||||||||||||
(127,000 | ) | 5(e) | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
98,858,000 | 5,528,000 | (5,528,000 | ) | 5(b) | 98,858,000 | 50,304,000 | 12,659,000 | 5(h) | 155,472,000 | ||||||||||||||||||||||||||||
(6,349,000 | ) | 5(i) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total expenses |
1,152,180,000 | 27,038,000 | (28,853,000 | ) | 1,150,365,000 | 150,509,000 | 8,522,000 | 1,309,396,000 | ||||||||||||||||||||||||||||||
Other income (expense): |
||||||||||||||||||||||||||||||||||||||
Interest expense: |
||||||||||||||||||||||||||||||||||||||
Interest expense |
(71,278,000 | ) | — | — | (71,278,000 | ) | (19,955,000 | ) | 2,003,000 | 5(j) | (89,230,000 | ) | ||||||||||||||||||||||||||
Loss in fair value of derivative financial instruments |
(3,906,000 | ) | — | — | (3,906,000 | ) | (870,000 | ) | — | (4,776,000 | ) | |||||||||||||||||||||||||||
Interest income |
— | 84,000 | (84,000 | ) | 5(b) | — | — | — | — | |||||||||||||||||||||||||||||
Gain on dispositions of real estate investments |
1,395,000 | — | — | 1,395,000 | — | — | 1,395,000 | |||||||||||||||||||||||||||||||
Impairment of real estate investments |
(11,069,000 | ) | — | — | (11,069,000 | ) | (3,642,000 | ) | — | (14,711,000 | ) | |||||||||||||||||||||||||||
(Loss) income from unconsolidated entities |
(4,517,000 | ) | — | — | (4,517,000 | ) | 629,000 | (629,000 | ) | 5(k) | (4,517,000 | ) | ||||||||||||||||||||||||||
Foreign currency gain |
1,469,000 | — | — | 1,469,000 | — | — | 1,469,000 | |||||||||||||||||||||||||||||||
Other income |
1,570,000 | 793,000 | (402,000 | ) | 5(b) | 1,961,000 | 286,000 | — | 2,247,000 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Income (loss) before income taxes |
5,785,000 | 12,457,000 | 2,932,000 | 21,174,000 | (18,942,000 | ) | (22,042,000 | ) | (19,810,000 | ) | ||||||||||||||||||||||||||||
Income tax benefit |
3,078,000 | — | — | 3,078,000 | — | — | 3,078,000 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net income (loss) |
8,863,000 | 12,457,000 | 2,932,000 | 24,252,000 | (18,942,000 | ) | (22,042,000 | ) | (16,732,000 | ) | ||||||||||||||||||||||||||||
Less: net (income) loss attributable to noncontrolling interests |
(6,700,000 | ) | (8,322,000 | ) | 8,322,000 | 5(b) | (7,996,000 | ) | 885,000 | 1,122,000 | 5(k) | (3,521,000 | ) | |||||||||||||||||||||||||
(1,296,000 | ) | 5(c) | 2,468,000 | 5(l) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net income (loss) attributable to controlling interest |
$ | 2,163,000 | $ | 4,135,000 | $ | 9,958,000 | $ | 16,256,000 | $ | (18,057,000 | ) | $ | (18,452,000 | ) | $ | (20,253,000 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net income (loss) per share: |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Basic and Diluted |
$ | 0.01 | $ | 0.08 | 5(m) | $ | (0.22 | ) | $ | (0.08) | 5 | (n) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Shares used in computing net income (loss) per share: |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Basic and Diluted |
194,168,833 | 194,168,833 | 5(m) | 80,661,645 | 261,572,764 | 5 | (n) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
1. |
Basis of Presentation |
• | The accompanying notes to the unaudited pro forma condensed combined financial information; |
• | the separate historical audited consolidated financial statements of GAHR III as of and for the fiscal year ended December 31, 2020, included in GAHR III’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 25, 2021; |
• | the separate historical unaudited consolidated financial statements of GAHR III as of and for the three months ended March 31, 2021, included in GAHR III’s Quarterly Report on Form 10-Q filed with the SEC on May 17, 2021; |
• | the separate historical audited consolidated financial statements of GAHR IV as of and for the year ended December 31, 2020, included in GAHR IV’s Annual Report on Form 10-K filed with the SEC on March 26, 2021; and |
• | the separate historical unaudited consolidated financial statements of GAHR IV as of and for the three months ended March 31, 2021, included in GAHR IV’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2021. |
2. |
Significant Accounting Policies |
3. |
Calculation of Purchase Consideration and Preliminary Purchase Price Allocation of the AHI Acquisition and REIT Merger |
Equity consideration (1) |
$ | 134,689,000 | ||
Closing cash adjustment (2) |
100,000 | |||
Closing date deficient working capital adjustment (3) |
(2,600,000 | ) | ||
|
|
|||
Total purchase consideration |
$ |
132,189,000 |
||
|
|
(1) | Represents the estimated fair value of GAHR III Operating Partnership units to be issued as consideration, with a reference value for purposes thereof of $8.71 per unit. Approximately 15,463,683 GAHR III Operating Partnership units are anticipated to be issued. |
(2) | Represents the consideration adjustment for the estimated closing cash. |
(3) | Represents the consideration adjustment for the estimated working capital deficit. |
Deemed issuance of GAHR III Common Stock to GAHR IV stockholders (1) |
$ | 767,756,000 | ||
Consideration allocated to the acquisition of additional interest in Trilogy REIT Holdings, LLC (2) |
(59,700,000 | ) | ||
|
|
|||
Total purchase consideration |
$ |
708,056,000 |
||
|
|
(1) | Represents the fair value of GAHR III Common Stock that is deemed to be issued for accounting purposes only. The fair value of the purchase consideration is calculated based on 88,146,464 shares of common stock deemed to be issued by GAHR III at the estimated fair value per share of $8.71. The fair value of the equity consideration will be measured on the closing date at the then-current fair value of the GAHR III Common Stock, which may differ materially from the estimated fair value assumed in this pro forma condensed combined financial information. For example, an increase or decrease in the fair value of GAHR III Common Stock by 10% on the closing date from the value used in this pro forma condensed combined financial information would increase or decrease the value of the purchase consideration by approximately $76,776,000, which would be reflected in this pro forma condensed combined financial information as an increase or decrease to goodwill, offset with a decrease or increase to stockholders’ equity. |
(2) | Represents the fair value of GAHR IV’s holdings in Trilogy REIT Holdings, LLC (“Trilogy”). As GAHR III holds controlling interest in Trilogy, and therefore consolidates Trilogy, the consideration attributed to the acquisition of additional interest in Trilogy is accounted for separately from the REIT Merger. |
Cash and cash equivalents |
$ | 100,000 | ||
Operating lease right-of-use |
3,544,000 | |||
Identified intangible assets, net |
42,000 | |||
|
|
|||
Total assets |
3,686,000 | |||
Accounts payable and accrued liabilities |
(2,500,000 | ) | ||
Operating lease liabilities |
(3,459,000 | ) | ||
|
|
|||
Total liabilities |
(5,959,000 | ) | ||
Net liabilities assumed (a) |
(2,273,000 | ) | ||
Preliminary purchase consideration (b) |
132,189,000 | |||
|
|
|||
Preliminary goodwill (b) - (a) |
$ |
134,462,000 |
||
|
|
Real estate investments, net |
$ | 1,094,399,000 | ||
Cash and cash equivalents |
19,167,000 | |||
Accounts and other receivables, net |
2,374,000 | |||
Restricted cash |
735,000 | |||
Identified intangible assets, net |
127,617,000 | |||
Operating lease right-of-use |
14,102,000 | |||
Other assets, net |
9,923,000 | |||
|
|
|||
Total assets |
1,268,317,000 | |||
Mortgage loans payable, net |
(18,831,000 | ) | ||
Lines of credit and term loans |
(481,400,000 | ) | ||
Accounts payable and accrued liabilities |
(21,931,000 | ) | ||
Accounts payable due to affiliates |
(1,042,000 | ) | ||
Identified intangible liabilities, net |
(16,360,000 | ) | ||
Operating lease liabilities |
(10,117,000 | ) | ||
Security deposits, prepaid rent and other liabilities |
(6,526,000 | ) | ||
|
|
|||
Total liabilities |
(556,207,000 | ) | ||
Redeemable noncontrolling interests |
(2,527,000 | ) | ||
Noncontrolling interests |
(1,527,000 | ) | ||
|
|
|||
Net assets acquired (a) |
708,056,000 | |||
|
|
|||
Preliminary purchase consideration (b) |
708,056,000 | |||
|
|
|||
Preliminary goodwill (b) - (a) |
$ | — | ||
|
|
4. |
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet |
(a) | To record the estimated fair value of $42,000 for NewCo’s above-market lease intangible assets, as well as eliminate NewCo’s historical deferred lease receivables of $42,000 and historical prepaid leases of $85,000 referenced in note 4(c). Preliminary identifiable intangible assets consist of the following: |
Intangible Assets |
Approximate Fair Value |
Estimated useful life |
||||||
Above-market leases |
$ | 42,000 | 4 Years |
(b) | To record preliminary estimate of goodwill. |
(c) | To record the adjustment for the right-of-use off-market lease assets of $85,000, which represents NewCo’s historical prepaid leases. The remaining difference in the adjustment amount from note 4(d) is attributable to the historical difference between the historical right-of-use assets and operating lease liabilities. |
(d) | To record the adjustment for the operating lease liabilities as of March 31, 2021, remeasured using GAHR III’s weighted average discount rate. |
(e) | To eliminate NewCo’s historical equity balance. |
(f) | To record issuance of GAHR III purchase consideration of $132,189,000, allocated between $70,016,000 as permanent noncontrolling interests to the NewCo sellers, $17,930,000 as redeemable noncontrolling interests to the NewCo sellers, a corresponding $143,000 reduction in the accumulated other comprehensive loss balance attributable to controlling interests, and $44,100,000 offset to additional paid-in capital. |
(g) | To record the net adjustment to the estimated fair value of acquired real estate investments, net. Preliminary real estate investments consist of the following: |
Real estate investments |
Approximate Fair Value |
Estimated useful lives (in years) |
Incremental first year amortization |
|||||||||||
Land |
$ | 111,037,000 | N/A | $ | — | |||||||||
Buildings and improvements |
906,754,000 | 29 | 31,267,000 | |||||||||||
Site improvements |
31,832,000 | 6 | 5,305,000 | |||||||||||
Unamortized tenant improvement allowances |
39,176,000 | 6 | 6,530,000 | |||||||||||
Furniture, fixtures and equipment |
5,600,000 | 5 | 1,120,000 | |||||||||||
|
|
|
|
|||||||||||
Total real estate investments |
$ | 1,094,399,000 |
$ | 44,222,000 |
||||||||||
|
|
|
|
(h) | To record the payment of estimated transaction costs incurred by GAHR III and GAHR IV, inclusive of the settlement of accrued transaction costs of $995,000, and the payment of transaction costs of $10,710,000 estimated to be incurred subsequent to March 31, 2021 and through the consummation of the REIT Merger. |
(i) | To record the redemption of AHI’s noncontrolling interests in GAHR III, GAHR III Operating Partnership, GAHR IV, and GAHR IV Operating Partnership in connection with the REIT Merger. |
(j) | To record the net adjustment to the estimated fair value of acquired identifiable intangible assets and liabilities. Preliminary identifiable intangible assets and liabilities consist of the following (the incremental amortization in this table does not include amortization related to assets and liabilities for which the carrying value equals the fair value, as there is no incremental amortization for such assets and liabilities): |
Intangible Assets |
Approximate Fair Value |
Estimated useful lives (in years) |
Incremental first year amortization |
|||||||||
In-place leases |
$ | 82,278,000 | 6 | $ | 13,713,000 | |||||||
Above-market leases |
44,991,000 | 10 | 3,166,000 | |||||||||
Certificates of need |
348,000 | N/A | — | |||||||||
|
|
|
|
|||||||||
Total identified intangible assets |
$ |
127,617,000 |
$ |
16,879,000 |
||||||||
|
|
|
|
|||||||||
Intangible Liabilities |
Approximate Fair Value |
Estimated useful lives (in years) |
Incremental first year amortization |
|||||||||
Below-market leases |
$ | (16,360,000 | ) | 10 | $ | (1,323,000 | ) | |||||
|
|
|
|
|||||||||
Total identified intangible liabilities |
$ |
(16,360,000 |
) |
$ |
(1,323,000 |
) | ||||||
|
|
|
|
(k) | To record remeasured right-of-use off-market lease assets of $3,985,000. The off-market lease assets are comprised of the following components: |
Above/below ground lease |
$ | 1,799,000 | ||
Prepaid ground lease |
2,186,000 | |||
|
|
|||
Off-market lease assets in ROU |
$ |
3,985,000 |
||
|
|
(l) | To eliminate GAHR IV’s historical lease commissions of $2,583,000, deferred rent receivable of $13,333,000, and deferred financing costs on its line of credit and term loans of $1,254,000 as these do not represent assets for the Combined Company. |
(m) | To eliminate GAHR IV’s investment in Trilogy, as Trilogy is already consolidated by GAHR III. |
(n) | To record the net adjustment to the estimated fair value of mortgage loans payable and the removal of GAHR IV’s deferred financing costs and unamortized premiums and discounts as these do not represent liabilities for the Combined Company. |
(o) | To record the adjustment for the operating lease liabilities as of March 31, 2021, remeasured using GAHR III’s weighted average discount rate. |
(p) | To eliminate GAHR IV’s historical prepaid rent liability, which reflects the off-market lease term and therefore, is included in the identified intangible liability recorded in note 4(j). |
(q) | To record the net adjustment to the acquired GAHR IV redeemable and permanent noncontrolling interests to reflect the estimated fair value. |
(r) | To reflect the par value of shares of GAHR IV’s equity structure, and the elimination of GAHR III par value, as GAHR IV is the legal acquiror. |
(s) | To eliminate GAHR IV’s historical equity balances. |
(t) | To reflect issuance of equity consideration. |
(u) | To record reduction of the noncontrolling interest in Trilogy resulting from the acquisition of GAHR IV’s interest in Trilogy. |
(v) | To record an increase in permanent and redeemable noncontrolling interest balances held by NewCo sellers resulting from the increase in the carrying value of GAHR III Operating Partnership as a result of the merger with GAHR IV Operating Partnership and to record a corresponding increase in the accumulated other comprehensive loss attributable to controlling interests, all of which are offset against additional paid-in capital. |
5. |
Notes to Unaudited Pro Forma Condensed Combined Statements of Operations for the Three Months Ended March 31, 2021 and for the Year Ended December 31, 2020 |
(a) | To eliminate NewCo’s revenues attributed to the management contracts with GAHR III and the corresponding expenses recognized by GAHR III during the period, which are net of amounts capitalized to the balance sheet. |
(b) | To eliminate the expenses associated with AHI assets that will not be contributed to NewCo. Additionally, the adjustment also includes elimination of noncontrolling interest income, as NewCo will be wholly owned by GAHR III Operating Partnership. |
(c) | To allocate income or loss attributable to the additional noncontrolling interest resulting from the issuance of the GAHR III Operating Partnership units to NewCo sellers. |
(d) | To eliminate GAHR IV’s historical contra revenue related to the amortization of above- and below-market leases and to record contra revenue based on the fair values of acquired above- and below-market leases. |
(e) | To eliminate NewCo’s revenues attributed to the management contracts with GAHR IV and the corresponding expenses recognized by GAHR IV during the period, which are net of amounts capitalized to the balance sheet. |
(f) | To record compensation expense for stock grants awarded per the Merger Agreement. |
(g) | To eliminate $1,815,000 in the historical transaction costs incurred during the three months ended March 31, 2021 and add such costs to the pro forma income statement for the year ended December 31, 2020, based on the pro forma assumed closing date of January 1, 2020, and to record transaction costs of $10,710,000 estimated to be incurred subsequent to March 31, 2021 and through the consummation of the REIT Merger. |
(h) | To eliminate GAHR IV’s historical depreciation expense and to record depreciation expense based on the estimated fair value of the acquired real estate investments. |
(i) | To eliminate GAHR IV’s historical amortization expense and to record amortization expense based on the estimated fair value of the acquired intangible assets. |
(j) | To eliminate GAHR IV’s historical amortization related to deferred financing costs and unamortized discounts and premiums, and to record amortization based on the estimated fair value of debt. |
(k) | To eliminate GAHR IV’s income or loss from unconsolidated entities (i.e. Trilogy) and GAHR III’s income or loss attributable to GAHR IV’s noncontrolling interests in Trilogy. |
(l) | To allocate income or loss attributable to the additional noncontrolling interest resulting from the issuance of the GAHR III Operating Partnership units to NewCo sellers. |
(m) | Represents the pro forma basic and diluted income (loss) from continuing operations per share calculated using the historical weighted average shares of GAHR III Common Stock outstanding. The convertible GAHR III Operating Partnership units issued as consideration for NewCo are anti-dilutive for the three months ended March 31, 2021 and the year ended December 31, 2020. |
(n) | Represents the pro forma basic and diluted loss from continuing operations per share calculated using the historical weighted average shares of GAHR III Common Stock outstanding multiplied by the exchange ratio, as GAHR IV is the legal acquiror, adjusted for the redemption of GAHR IV shares as referenced in note 4(i), and the GAHR IV shares issued at close. The weighted average shares outstanding for the three months ended March 31, 2021 include vested amounts of the new stock grants issued as part of the Merger Agreement. The new stock grants are not included in the weighted average shares outstanding for the year ended December 31, 2020 per their vesting schedule. |
• | Significant negative industry or economic trends; |
• | A significant underperformance relative to historical or projected future operating results; and |
• | A significant change in the extent or manner in which the asset is used or significant physical change in the asset. |
• | We evaluated management’s impairment analysis by: |
– | Evaluating management’s process for identifying impairment indicators and whether management appropriately considered the examples of impairment indicators provided within the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) 360, Property, Plant, & Equipment. |
– | Obtaining independent market data to determine if there were additional indicators of impairment not identified by management. |
– | Testing the real estate investments for possible indicators of impairment, including searching for adverse asset-specific conditions, such as occupancy and net operating income performance by each investment. |
• | Developed an independent expectation of impairment indicators and compared such expectation to management’s analysis. |
December 31, |
||||||||
2020 |
2019 |
|||||||
ASSETS |
| |||||||
Real estate investments, net |
$ | $ | ||||||
Cash and cash equivalents |
||||||||
Accounts and other receivables, net |
||||||||
Restricted cash |
||||||||
Real estate deposits |
||||||||
Identified intangible assets, net |
||||||||
Operating lease right-of-use |
||||||||
Other assets, net |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
| |||||||
Liabilities: |
||||||||
Mortgage loans payable, net(1) |
$ | $ | ||||||
Line of credit and term loans(1) |
||||||||
Accounts payable and accrued liabilities(1) |
||||||||
Accounts payable due to affiliates(1) |
||||||||
Identified intangible liabilities, net |
||||||||
Operating lease liabilities(1) |
||||||||
Security deposits, prepaid rent and other liabilities(1) |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
Commitments and contingencies (Note 10) |
||||||||
Redeemable noncontrolling interests (Note 11) |
||||||||
Equity: |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Class T common stock, $ |
||||||||
Class I common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
Noncontrolling interest (Note 12) |
||||||||
|
|
|
|
|||||
Total equity |
||||||||
|
|
|
|
|||||
Total liabilities, redeemable noncontrolling interests and equity |
$ | $ | ||||||
|
|
|
|
(1) | Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of December 31, 2020 and 2019 represented liabilities of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries. Griffin-American Healthcare REIT IV Holdings, LP is a variable interest entity, or VIE, and a consolidated subsidiary of Griffin-American Healthcare REIT IV, Inc. The creditors of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries do not have recourse against Griffin-American Healthcare REIT IV, Inc., except for the 2018 Credit Facility, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $ |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Revenues and grant income: |
||||||||||||
Real estate revenue |
$ | $ | $ | |||||||||
Resident fees and services |
||||||||||||
Grant income |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues and grant income |
||||||||||||
Expenses: |
||||||||||||
Rental expenses |
||||||||||||
Property operating expenses |
||||||||||||
General and administrative |
||||||||||||
Acquisition related expenses |
( |
) | ||||||||||
Depreciation and amortization |
||||||||||||
|
|
|
|
|
|
|||||||
Total expenses |
||||||||||||
Other income (expense): |
||||||||||||
Interest expense: |
||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
( |
) | ( |
) | ( |
) | ||||||
Loss in fair value of derivative financial instruments |
( |
) | ( |
) | ||||||||
Impairment of real estate investments |
( |
) | ||||||||||
Income (loss) from unconsolidated entity |
( |
) | ||||||||||
Other income |
||||||||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
( |
) | ( |
) | ( |
) | ||||||
Income tax benefit (expense) |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss |
( |
) | ( |
) | ( |
) | ||||||
Less: net loss attributable to noncontrolling interests |
||||||||||||
|
|
|
|
|
|
|||||||
Net loss attributable to controlling interest |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
|
|
|
|
|
|
|||||||
Net loss per Class T and Class I common share attributable to controlling interest — basic and diluted |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
|
|
|
|
|
|
|||||||
Weighted average number of Class T and Class I common shares outstanding — basic and diluted |
||||||||||||
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||
Class T and Class I Common Stock |
||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Equity |
Noncontrolling Interest |
Total Equity |
||||||||||||||||||||||
BALANCE — December 31, 2017 |
$ | $ | $ | ( |
) | $ | $ | — | $ | |||||||||||||||||||
Issuance of common stock |
— | — | ||||||||||||||||||||||||||
Offering costs — common stock |
— | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||
Issuance of common stock under the DRIP |
— | |||||||||||||||||||||||||||
Issuance of vested and nonvested restricted common stock |
— | — | — | |||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | — | |||||||||||||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||
Distributions declared ($ |
— | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | — | ( |
)(1) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE — December 31, 2018 |
$ | $ | $ | ( |
) | $ | $ | — | $ | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Issuance of common stock |
— | — | ||||||||||||||||||||||||||
Offering costs — common stock |
— | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||
Issuance of common stock under the DRIP |
— | |||||||||||||||||||||||||||
Issuance of vested and nonvested restricted common stock |
— | — | — | |||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | — | |||||||||||||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||
Distributions declared ($ |
— | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | — | ( |
)(1) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE — December 31, 2019 |
$ | $ | $ | ( |
) | $ | $ | — | $ | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Offering costs — common stock |
— | — | — | — | ||||||||||||||||||||||||
Issuance of common stock under the DRIP |
— | — | ||||||||||||||||||||||||||
Issuance of vested and nonvested restricted common stock |
— | — | — | |||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | — | — | ||||||||||||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||
Contribution from noncontrolling interest |
— | — | — | — | — | |||||||||||||||||||||||
Distributions to noncontrolling interest |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||
Distributions declared ($ |
— | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | ( |
) | ( |
)(1) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE — December 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Amount excludes $ |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Other amortization |
||||||||||||
Deferred rent |
( |
) | ( |
) | ( |
) | ||||||
Stock based compensation |
||||||||||||
(Income) loss from unconsolidated entity |
( |
) | ( |
) | ||||||||
Distributions of earnings from unconsolidated entity |
||||||||||||
Bad debt expense |
||||||||||||
Change in fair value of derivative financial instruments |
||||||||||||
Impairment of real estate investments |
— | — | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts and other receivables |
( |
) | ||||||||||
Other assets |
( |
) | ( |
) | ( |
) | ||||||
Accounts payable and accrued liabilities |
||||||||||||
Accounts payable due to affiliates |
||||||||||||
Security deposits, prepaid rent, operating lease and other liabilities |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
||||||||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||
Acquisitions of real estate investments |
( |
) | ( |
) | ( |
) | ||||||
Capital expenditures |
( |
) | ( |
) | ( |
) | ||||||
Investment in unconsolidated entity |
( |
) | ( |
) | ||||||||
Distributions in excess of earnings from unconsolidated entity |
||||||||||||
Real estate deposits |
( |
) | ||||||||||
Pre-acquisition expenses |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||
Payments on mortgage loans payable |
( |
) | ( |
) | ( |
) | ||||||
Borrowings under the line of credit and term loans |
||||||||||||
Payments on the line of credit and term loans |
( |
) | ( |
) | ( |
) | ||||||
Deferred financing costs |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from issuance of common stock |
||||||||||||
Payment of offering costs |
( |
) | ( |
) | ( |
) | ||||||
Distributions paid |
( |
) | ( |
) | ( |
) | ||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ||||||
Contribution from noncontrolling interest |
||||||||||||
Distributions to noncontrolling interest |
( |
) | ||||||||||
Contributions from redeemable noncontrolling interests |
||||||||||||
Distributions to redeemable noncontrolling interests |
( |
) | ( |
) | ||||||||
Security deposits |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
||||||||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
$ | $ | $ | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
||||||||||||
Beginning of period: |
||||||||||||
Cash and cash equivalents |
$ | $ | $ | |||||||||
Restricted cash |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
End of period: |
||||||||||||
Cash and cash equivalents |
$ | $ | $ | |||||||||
Restricted cash |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||||||
Cash paid for: |
||||||||||||
Interest |
$ | $ | $ | |||||||||
Income taxes |
$ | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES |
||||||||||||
Investing Activities: |
||||||||||||
Accrued capital expenditures |
$ | $ | $ | |||||||||
Tenant improvement overage |
$ | $ | $ | |||||||||
Accrued pre-acquisition expenses |
$ | $ | $ | |||||||||
The following represents the increase in certain assets and liabilities in connection with our acquisitions of real estate investments: |
||||||||||||
Right-of-use |
$ | $ | $ | |||||||||
Other assets |
$ | $ | $ | |||||||||
Mortgage loans payable, net |
$ | $ | $ | |||||||||
Accounts payable and accrued liabilities |
$ | $ | $ | |||||||||
Operating lease liability |
$ | $ | $ | |||||||||
Security deposits and prepaid rent |
$ | $ | $ | |||||||||
Financing Activities: |
||||||||||||
Issuance of common stock under the DRIP |
$ | $ | $ | |||||||||
Distributions declared but not paid |
$ | $ | $ | |||||||||
Accrued stockholder servicing fee |
$ | $ | $ | |||||||||
Accrued Contingent Advisor Payment |
$ | $ | $ | |||||||||
Receivable from transfer agent |
$ | $ | $ |
Years Ended December 31, |
||||||||||||||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||||||||||||||
Point in Time |
Over Time |
Total |
Point in Time |
Over Time |
Total |
Point in Time |
Over Time |
Total |
||||||||||||||||||||||||||||
Senior housing — RIDEA |
$ | $ | $ | $ | $ | $ | $ | $ | $ |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Private and other payors |
$ | $ | $ | |||||||||
Medicaid |
||||||||||||
Total resident fees and services |
$ | $ | $ | |||||||||
Medicaid |
Private and Other Payors |
Total |
||||||||||
Beginning balance — |
$ | $ | $ | |||||||||
Ending balance — |
||||||||||||
(Decrease)/increase |
$ | ( |
) | $ | $ | ( |
) | |||||
• | significant negative industry or economic trends; |
• | a significant underperformance relative to historical or projected future operating results; and |
• | a significant change in the extent or manner in which the asset is used or significant physical change in the asset. |
• | management, having the authority to approve the action, commits to a plan to sell the asset; |
• | the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; |
• | an active program to locate a buyer or buyers and other actions required to complete the plan to sell the asset has been initiated; |
• | the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year; |
• | the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and |
• | given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be withdrawn. |
December 31, |
||||||||
2020 |
2019 |
|||||||
Building and improvements |
$ | $ | ||||||
Land |
||||||||
Furniture, fixtures and equipment |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Total |
$ | $ | ||||||
Acquisition |
Location |
Type |
Date Acquired |
Contract Purchase Price |
Line of Credit(1) |
Total Acquisition Fee(2) |
||||||||||||||||||
Catalina West Haven ALF(3) |
West Haven, UT | Senior Housing — RIDEA |
|
$ | $ | $ | ||||||||||||||||||
Louisiana Senior Housing Portfolio(4) |
|
Gonzales, Monroe, New Iberia, Shreveport and Slidell, LA |
|
Senior Housing — RIDEA |
|
|||||||||||||||||||
Catalina Madera ALF(3) |
Madera, CA | Senior Housing — RIDEA |
|
|||||||||||||||||||||
Total |
$ |
$ |
$ |
|||||||||||||||||||||
(1) | Represents a borrowing under the 2018 Credit Facility, as defined in Note 7, Line of Credit and Term Loans, at the time of acquisition. |
(2) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, a base acquisition fee of |
(3) | On January 1, 2020 and January 31, 2020, we completed the acquisitions of Catalina West Haven ALF and Catalina Madera ALF, respectively, pursuant to a joint venture with an affiliate of Avalon Health Care, Inc., or Avalon, an unaffiliated third party. Our ownership of the joint venture is approximately |
(4) | On January 3, 2020, we completed the acquisition of Louisiana Senior Housing Portfolio pursuant to a joint venture with an affiliate of Senior Solutions Management Group, or SSMG, an unaffiliated third party. Our ownership of the joint venture is approximately |
2020 Acquisitions |
||||
Building and improvements |
$ |
|||
Land |
||||
In-place leases |
||||
Furniture, fixtures and equipment |
||||
|
|
|||
Total assets acquired |
$ |
|||
|
|
Acquisition(1) |
Location |
Type |
Date Acquired |
Contract Purchase Price |
Mortgage Loan Payable(2) |
Line of Credit(3) |
Total Acquisition Fee(4) |
|||||||||||||||||||||
Lithonia MOB |
Lithonia, GA | Medical Office |
|
$ | $ | — | $ | — | $ | |||||||||||||||||||
West Des Moines SNF |
West Des Moines, IA |
|
Skilled Nursing |
|
— | — | ||||||||||||||||||||||
Great Nord MOB Portfolio |
|
Tinley Park, IL; Chesterton and Crown Point, IN; and Plymouth, MN |
|
Medical Office |
|
— | ||||||||||||||||||||||
Michigan ALF Portfolio(5) |
Grand Rapids, MI |
|
Senior Housing |
|
||||||||||||||||||||||||
Overland Park MOB |
Overland Park, KS |
|
Medical Office |
|
— | |||||||||||||||||||||||
Blue Badger MOB |
Marysville, OH |
|
Medical Office |
|
— | |||||||||||||||||||||||
Bloomington MOB |
Bloomington, IL |
|
Medical Office |
|
— | |||||||||||||||||||||||
Memphis MOB |
Memphis, TN | Medical Office |
|
— | ||||||||||||||||||||||||
Haverhill MOB |
Haverhill, MA |
|
Medical Office |
|
— | |||||||||||||||||||||||
Fresno MOB |
Fresno, CA | Medical Office |
|
— | ||||||||||||||||||||||||
Colorado Foothills MOB Portfolio |
|
Arvada, Centennial and Colorado Springs, CO |
|
Medical Office |
|
— | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) | We own |
|
|
(2) | Represents the principal balance of the mortgage loan payable assumed by us at the time of acquisition. |
|
|
(3) | Represents a borrowing under the 2018 Credit Facility at the time of acquisition. |
|
|
(4) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, a base acquisition fee of |
|
|
(5) | We added |
2019 Acquisitions |
||||
Building and improvements |
$ | |||
Land |
||||
In-place leases |
||||
Above-market leases |
||||
Right-of-use |
||||
|
|
|||
Total assets acquired |
||||
|
|
|||
Mortgage loan payable (including debt discount of $ |
( |
) | ||
Below-market leases |
( |
) | ||
Operating lease liability |
( |
) | ||
|
|
|||
Total liabilities assumed |
( |
) | ||
|
|
|||
Net assets acquired |
$ | |||
|
|
Acquisition(1) |
Location |
Type |
Date Acquired |
Contract Purchase Price |
Mortgage Loan Payable(2) |
Line of Credit(3) |
Total Acquisition Fee(4) |
|||||||||||||||||||||
Central Wisconsin Senior Care Portfolio |
|
Sun Prairie and Waunakee, WI |
|
Skilled Nursing |
|
$ | $ | — | $ | $ | ||||||||||||||||||
Sauk Prairie MOB |
Prairie du Sac, WI |
|
Medical Office |
|
— | |||||||||||||||||||||||
Surprise MOB |
Surprise, AZ | Medical Office |
|
— | ||||||||||||||||||||||||
Southfield MOB |
Southfield, MI | Medical Office |
|
|||||||||||||||||||||||||
Pinnacle Beaumont ALF(5) |
Beaumont, TX | Housing — RIDEA |
|
— | ||||||||||||||||||||||||
Grand Junction MOB |
Grand Junction, CO |
|
Medical Office |
|
— | |||||||||||||||||||||||
Edmonds MOB |
Edmonds, WA | Medical Office |
|
— | ||||||||||||||||||||||||
Pinnacle Warrenton ALF(5) |
Warrenton, MO | Housing — RIDEA |
|
— | ||||||||||||||||||||||||
Glendale MOB |
Glendale, WI | Medical Office |
|
— | ||||||||||||||||||||||||
Missouri SNF Portfolio |
|
Florissant, Kansas City, Milan, Moberly, Salisbury, Sedalia, St. Elizabeth and Trenton, MO |
|
Skilled Nursing |
|
— | ||||||||||||||||||||||
Flemington MOB Portfolio |
Flemington, NJ | Medical Office |
|
— | ||||||||||||||||||||||||
Lawrenceville MOB II |
Lawrenceville, GA |
|
Medical Office |
|
— | |||||||||||||||||||||||
Mill Creek MOB |
Mill Creek, WA | Medical Office |
|
— | ||||||||||||||||||||||||
Modesto MOB |
Modesto, CA | Medical Office |
|
— | ||||||||||||||||||||||||
Michigan ALF Portfolio |
|
Grand Rapids, Holland, Howell, Lansing and Wyoming, MI |
|
Senior Housing |
|
— | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) | We own |
(2) |
Represents the principal balance of the mortgage loan payable assumed by us at the time of acquisition. |
(3) |
Represents a borrowing under the 2016 Credit Facility or 2018 Credit Facility, as defined in Note 7, Line of Credit and Term Loans, at the time of acquisition. |
(4) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, a base acquisition fee of |
(5) | On July 1, 2018 and August 1, 2018, we completed the acquisitions of Pinnacle Beaumont ALF and Pinnacle Warrenton ALF, respectively, pursuant to a joint venture with an affiliate of Meridian Senior Living, LLC, or Meridian, an unaffiliated third party. Our ownership of the joint venture is approximately |
2018 Acquisitions |
||||
Building and improvements |
$ | |||
Land |
||||
Furniture, fixtures and equipment |
||||
In-place leases |
||||
Certificates of need |
||||
Leasehold interests |
||||
Above-market leases |
||||
Total assets acquired |
||||
Mortgage loan payable (including debt discount of $ |
( |
) | ||
Below-market leases |
( |
) | ||
Total liabilities assumed |
( |
) | ||
Net assets acquired |
$ | |||
December 31, |
||||||||
2020 |
2019 |
|||||||
Amortized intangible assets: |
||||||||
In-place leases, net of accumulated amortization of $ |
$ | $ | ||||||
Above-market leases, net of accumulated amortization of $ |
||||||||
Unamortized intangible assets: |
||||||||
Certificates of need |
||||||||
Total |
$ | $ | ||||||
Year |
Amount |
|||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total |
$ | |||
December 31, |
||||||||
2020 |
2019 |
|||||||
Investment in unconsolidated entity |
$ | $ | ||||||
Deferred rent receivables |
||||||||
Prepaid expenses, deposits and other assets |
||||||||
Lease commissions, net of accumulated amortization of $ |
||||||||
Deferred financing costs, net of accumulated amortization of $ |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
(1) | Deferred financing costs only include costs related to our line of credit and term loans. Amortization expense on deferred financing costs of our line of credit and term loans for the years ended December 31, 2020, 2019 and 2018 was $ |
December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | $ | ||||||
Additions: |
||||||||
Assumption of mortgage loan payable, net |
||||||||
Amortization of deferred financing costs |
||||||||
Amortization of discount/premium on mortgage loans payable |
||||||||
Deductions: |
||||||||
Scheduled principal payments on mortgage loans payable |
( |
) | ( |
) | ||||
Deferred financing costs |
( |
) | ||||||
|
|
|
|
|||||
Ending balance |
$ | $ | ||||||
|
|
|
|
Year |
|
|
Amount |
|
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Fair Value |
||||||||||||||||||||||||
December 31, |
||||||||||||||||||||||||
Instrument |
Notional Amount |
Index |
Interest Rate |
Maturity Date |
2020 |
2019 |
||||||||||||||||||
|
$ | % | $ | ( |
) | $ | ( |
) | ||||||||||||||||
|
% | ( |
) | ( |
) | |||||||||||||||||||
|
% | ( |
) | |||||||||||||||||||||
|
% | ( |
) | ( |
) | |||||||||||||||||||
|
% | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
$ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||
|
|
|
|
|
|
Year |
Amount |
|||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | $ | ||||||
Additions |
||||||||
Distributions |
( |
) | ( |
) | ||||
Adjustment to redemption value |
||||||||
Net loss attributable to redeemable noncontrolling interests |
( |
) | ( |
) | ||||
Ending balance |
$ | $ | ||||||
Approval Date by our Board |
Estimated Per Share NAV (Unaudited) |
|||
04/06/18 |
$ | |||
04/04/19 |
$ | |||
04/02/20 |
$ |
12 months ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Operating expenses as a percentage of average invested assets |
% | % | % | |||||||||
Operating expenses as a percentage of net income |
% | % | % |
|
|
December 31, |
| |||||
Fee |
2020 |
2019 |
||||||
Asset management fees |
$ |
$ | ||||||
Property management fees |
||||||||
Acquisition and development fees |
||||||||
Construction management fees |
||||||||
Operating expenses |
||||||||
Lease commissions |
||||||||
Total |
$ |
$ | ||||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | $ | $ | $ |
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | $ | $ | $ |
December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Carrying Amount(1) |
Fair Value |
Carrying Amount(1) |
Fair Value |
|||||||||||||
Financial Liabilities: |
||||||||||||||||
Mortgage loans payable |
$ | $ | $ | $ | ||||||||||||
Line of credit and term loans |
$ | $ | $ | $ |
(1) | Carrying amount is net of any discount/premium and deferred financing costs. |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Federal deferred |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
State deferred |
( |
) | ( |
) | ( |
) | ||||||
Federal current |
||||||||||||
State current |
( |
) | ||||||||||
Valuation allowance |
||||||||||||
|
|
|
|
|
|
|||||||
Total income tax (benefit) expense |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred income tax assets: |
||||||||
Fixed assets and intangibles |
$ |
$ |
||||||
Expense accruals and other |
||||||||
Net operating loss |
||||||||
Valuation allowances |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total deferred income tax assets |
$ | $ | ||||||
|
|
|
|
Years Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Ordinary income |
$ |
$ |
$ |
|||||||||||||||||||||
Capital gain |
||||||||||||||||||||||||
Return of capital |
||||||||||||||||||||||||
$ |
$ |
$ |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year |
Amount |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total |
$ |
|||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Weighted average remaining lease term (in years) |
||||||||
Weighted average discount rate |
% | % |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Cash paid for amounts included in the measurement of operating lease liabilities: |
||||||||
Operating cash outflows related to operating leases |
$ | $ | ||||||
Right-of-use |
$ | $ |
Year |
A mount |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total operating lease payments |
||||
Less: interest |
||||
Present value of operating lease liabilities |
$ |
|||
|
|
Medical Office Buildings |
Senior Housing — RIDEA |
Skilled Nursing Facilities |
Senior Housing |
Year Ended December 31, 2020 |
||||||||||||||||
Revenues and grant income: |
||||||||||||||||||||
Real estate revenue |
$ |
$ |
— | $ |
$ |
$ | ||||||||||||||
Resident fees and services |
— | — | — | |||||||||||||||||
Grant income |
— | — | — | |||||||||||||||||
Total revenues and grant income |
||||||||||||||||||||
Expenses: |
||||||||||||||||||||
Rental expenses |
— | |||||||||||||||||||
Property operating expenses |
— | — | — | |||||||||||||||||
Segment net operating income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Expenses: |
||||||||||||||||||||
General and administrative |
$ | |||||||||||||||||||
Acquisition related expenses |
( |
) | ||||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||
Other income (expense): |
||||||||||||||||||||
Interest expense: |
||||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
( |
) | ||||||||||||||||||
Loss in fair value of derivative financial instruments |
( |
) | ||||||||||||||||||
Impairment of real estate investments |
( |
) | ||||||||||||||||||
Income from unconsolidated entity |
||||||||||||||||||||
Other income |
||||||||||||||||||||
Net loss |
$ |
( ) |
||||||||||||||||||
Medical Office Buildings |
Senior Housing — RIDEA |
Skilled Nursing Facilities |
Senior Housing |
Year Ended December 31, 2019 |
||||||||||||
Revenues: |
||||||||||||||||
Real estate revenue |
$ | $ | — | $ | $ | $ | ||||||||||
Resident fees and services |
— | — | — | |||||||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental expenses |
— | |||||||||||||||
Property operating expenses |
— | — | — | |||||||||||||
Segment net operating income |
$ |
$ |
$ |
$ |
$ |
|||||||||||
Expenses: |
||||||||||||||||
General and administrative |
$ | |||||||||||||||
Acquisition related expenses |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
Other income (expense): |
||||||||||||||||
Interest expense: |
||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
( |
) | ||||||||||||||
Loss in fair value of derivative financial instruments |
( |
) | ||||||||||||||
Income from unconsolidated entity |
||||||||||||||||
Other income |
||||||||||||||||
Loss before income taxes |
( |
) | ||||||||||||||
Income tax benefit |
||||||||||||||||
Net loss |
$ |
( |
) | |||||||||||||
Medical Office Buildings |
Senior Housing — RIDEA |
Skilled Nursing Facilities |
Senior Housing |
Year Ended December 31, 2018 |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Real estate revenue |
$ |
$ |
— |
$ |
$ |
$ |
||||||||||||||
Resident fees and services |
— |
— |
— |
|||||||||||||||||
Total revenues |
||||||||||||||||||||
Expenses: |
||||||||||||||||||||
Rental expenses |
— |
|||||||||||||||||||
Property operating expenses |
— |
— |
— |
|||||||||||||||||
Segment net operating income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Expenses: |
||||||||||||||||||||
General and administrative |
$ |
|||||||||||||||||||
Acquisition related expenses |
||||||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||
Other income (expense): |
||||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
( |
) | ||||||||||||||||||
Loss from unconsolidated entity |
( |
) | ||||||||||||||||||
Other income |
||||||||||||||||||||
Loss before income taxes |
( |
) | ||||||||||||||||||
Income tax expense |
( |
) | ||||||||||||||||||
Net loss |
$ |
( |
) | |||||||||||||||||
December 31, |
||||||||
2020 |
2019 |
|||||||
Medical office buildings |
$ |
$ |
||||||
Senior housing — RIDEA |
||||||||
Skilled nursing |
||||||||
Senior housing |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
Tenant |
Annualized Base Rent/ NOI(1) |
Percentage of Annualized Base Rent/NOI |
Acquisition |
Reportable Segment |
GLA (Sq Ft) |
Lease Expiration Date |
||||||||||||||||||
RC Tier Properties, LLC |
$ | % | Missouri SNF Portfolio |
(1) | Amount is based on contractual base rent from leases in effect as of December 31, 2020, for our non–RIDEA properties and annualized NOI for our senior housing — RIDEA facilities. The loss of this tenant or its inability to pay rent could have a material adverse effect on our business and results of operations. |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(e) |
|||||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(d) |
Accumulated Depreciation (f)(g) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||||
Auburn MOB (Medical Office) |
Auburn, CA | $ | $ | $ | $ | $ | $ | $ | $ | ( |
) | 1997 | 06/28/16 | |||||||||||||||||||||||||||||||
Pottsville MOB (Medical Office) |
Pottsville, PA | ( |
) | 2004 | 09/16/16 | |||||||||||||||||||||||||||||||||||||||
Charlottesville MOB (Medical Office) |
Charlottesville, |
|
( |
) | 2001 | 09/22/16 | ||||||||||||||||||||||||||||||||||||||
Rochester Hills MOB (Medical Office) |
Rochester Hills, |
|
( |
) | 1990 | 09/29/16 | ||||||||||||||||||||||||||||||||||||||
Cullman MOB III (Medical Office) |
Cullman, AL | ( |
) | 2010 | 09/30/16 | |||||||||||||||||||||||||||||||||||||||
Iron MOB Portfolio (Medical Office) |
Cullman, AL | ( |
) | 1994 | 10/13/16 | |||||||||||||||||||||||||||||||||||||||
Cullman, AL | ( |
) | 1998 | 10/13/16 | ||||||||||||||||||||||||||||||||||||||||
Sylacauga, AL | ( |
) | 1997 | 10/13/16 | ||||||||||||||||||||||||||||||||||||||||
Mint Hill MOB (Medical Office) |
Mint Hill, NC | ( |
) | 2007 | 11/14/16 | |||||||||||||||||||||||||||||||||||||||
Lafayette Assisted Living Portfolio (Senior Housing — RIDEA) |
Lafayette, LA | ( |
) | 1996 | 12/01/16 | |||||||||||||||||||||||||||||||||||||||
Lafayette, LA | ( |
) | 2014 | 12/01/16 | ||||||||||||||||||||||||||||||||||||||||
Evendale MOB (Medical Office) |
Evendale, OH | ( |
) | 1988 | 12/13/16 | |||||||||||||||||||||||||||||||||||||||
Battle Creek MOB (Medical Office) |
Battle Creek, MI | ( |
) | 1996 | 03/10/17 | |||||||||||||||||||||||||||||||||||||||
Reno MOB (Medical Office) |
Reno, NV | ( |
) | 2005 | 03/13/17 | |||||||||||||||||||||||||||||||||||||||
Athens MOB Portfolio (Medical Office) |
Athens, GA | ( |
) | 2006 | 05/18/17 | |||||||||||||||||||||||||||||||||||||||
Athens, GA | ( |
) | 2006 | 05/18/17 | ||||||||||||||||||||||||||||||||||||||||
SW Illinois Senior Housing Portfolio (Senior Housing) |
Columbia, IL | ( |
) | 2007 | 05/22/17 | |||||||||||||||||||||||||||||||||||||||
Columbia, IL | ( |
) | 1999 | 05/22/17 | ||||||||||||||||||||||||||||||||||||||||
Millstadt, IL | ( |
) | 2004 | 05/22/17 | ||||||||||||||||||||||||||||||||||||||||
Red Bud, IL | ( |
) | 2006 | 05/22/17 | ||||||||||||||||||||||||||||||||||||||||
Waterloo, IL | ( |
) | 2012 | 05/22/17 | ||||||||||||||||||||||||||||||||||||||||
Lawrenceville MOB (Medical Office) |
Lawrenceville, GA | ( |
) | 2005 | 06/12/17 | |||||||||||||||||||||||||||||||||||||||
Northern California Senior Housing Portfolio (Senior Housing — RIDEA) |
Belmont, CA | ( |
) | ( |
) | 1958/2000 | 06/28/17 | |||||||||||||||||||||||||||||||||||||
Fairfield, CA | ( |
)(c) | ( |
) | 1974 | 06/28/17 | ||||||||||||||||||||||||||||||||||||||
Menlo Park, CA | ( |
) | ( |
) | 1945 | 06/28/17 | ||||||||||||||||||||||||||||||||||||||
Sacramento, CA | ( |
)(c) | ( |
) | 1978 | 06/28/17 | ||||||||||||||||||||||||||||||||||||||
Roseburg MOB (Medical Office) |
Roseburg, OR | ( |
) | 2003 | 06/29/17 |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(e) |
|||||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(d) |
Accumulated Depreciation (f)(g) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||||
Fairfield County MOB Portfolio (Medical Office) |
Stratford, CT | $ | $ | $ | $ | $ | $ | $ | $ | ( |
) | 1963 | 09/29/17 | |||||||||||||||||||||||||||||||
Trumbull, CT | ( |
) | 1987 | 09/29/17 | ||||||||||||||||||||||||||||||||||||||||
Central Florida Senior Housing Portfolio (Senior Housing — RIDEA) |
Bradenton, FL | ( |
) | 1973/1983 | 11/01/17 | |||||||||||||||||||||||||||||||||||||||
Brooksville, FL | ( |
) | 1960/2007 | 11/01/17 | ||||||||||||||||||||||||||||||||||||||||
Brooksville, FL | ( |
) | 2008 | 11/01/17 | ||||||||||||||||||||||||||||||||||||||||
Lake Placid, FL | ( |
) | 2008 | 11/01/17 | ||||||||||||||||||||||||||||||||||||||||
Lakeland, FL | ( |
) | 1985 | 11/01/17 | ||||||||||||||||||||||||||||||||||||||||
Pinellas Park, |
|
( |
) | 2016 | 11/01/17 | |||||||||||||||||||||||||||||||||||||||
Sanford, FL | ( |
) | 1984 | 11/01/17 | ||||||||||||||||||||||||||||||||||||||||
Spring Hill, FL | ( |
) | 1988 | 11/01/17 | ||||||||||||||||||||||||||||||||||||||||
Winter Haven, |
|
( |
) | 1984 | 11/01/17 | |||||||||||||||||||||||||||||||||||||||
Central Wisconsin Senior Care Portfolio (Skilled Nursing) |
Sun Prairie, WI | ( |
) | 1960/2006 | 03/01/18 | |||||||||||||||||||||||||||||||||||||||
Waunakee, WI | ( |
) | 1974/2005 | 03/01/18 | ||||||||||||||||||||||||||||||||||||||||
Sauk Prairie MOB (Medical Office) |
Prairie du Sac, |
|
( |
) | 2014 | 04/09/18 | ||||||||||||||||||||||||||||||||||||||
Surprise MOB (Medical Office) |
Surprise, AZ | ( |
) | 2012 | 04/27/18 | |||||||||||||||||||||||||||||||||||||||
Southfield MOB (Medical Office) |
Southfield, MI | ( |
) | 1975/2014 | 05/11/18 | |||||||||||||||||||||||||||||||||||||||
Pinnacle Beaumont ALF (Senior Housing — RIDEA) |
Beaumont, TX | ( |
) | 2012 | 07/01/18 | |||||||||||||||||||||||||||||||||||||||
Grand Junction MOB (Medical Office) |
Grand CO |
|
( |
) | 2013 | 07/06/18 | ||||||||||||||||||||||||||||||||||||||
Edmonds MOB (Medical Office) |
Edmonds, WA | ( |
) | 1991/2008 | 07/30/18 | |||||||||||||||||||||||||||||||||||||||
Pinnacle Warrenton ALF (Senior Housing — RIDEA) |
Warrenton, |
|
( |
) | 1986 | 08/01/18 | ||||||||||||||||||||||||||||||||||||||
Glendale MOB (Medical Office) |
Glendale, WI | ( |
) | 2004 | 08/13/18 | |||||||||||||||||||||||||||||||||||||||
Missouri SNF Portfolio (Skilled Nursing) |
Florissant, MO | ( |
) | 1987 | 09/28/18 | |||||||||||||||||||||||||||||||||||||||
Kansas City, |
|
( |
) | 1974 | 09/28/18 | |||||||||||||||||||||||||||||||||||||||
Milan, MO | ( |
) | 1980 | 09/28/18 | ||||||||||||||||||||||||||||||||||||||||
Missouri, MO | ( |
) | 1963 | 09/28/18 | ||||||||||||||||||||||||||||||||||||||||
Salisbury, MO | ( |
) | 1970 | 09/28/18 | ||||||||||||||||||||||||||||||||||||||||
|
|
|
Sedalia, MO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
1975 |
|
|
|
09/28/18 |
| |||||
|
|
|
St. Elizabeth, MO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
1981 |
|
|
|
09/28/18 |
| |||||
|
|
|
Trenton, MO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
1967 |
|
|
|
09/28/18 |
|
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(e) |
|||||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(d) |
Accumulated Depreciation (f)(g) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||||
Flemington MOB Portfolio (Medical Office) |
Flemington, NJ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) | 2002 | 11/29/18 | |||||||||||||||||||||||||||||||
Flemington, NJ |
( |
) | 1993 | 11/29/18 | ||||||||||||||||||||||||||||||||||||||||
Lawrenceville MOB II (Medical Office) |
Lawrenceville, GA |
( |
) | 1990 | 12/19/18 | |||||||||||||||||||||||||||||||||||||||
Mill Creek MOB (Medical Office) |
Mill Creek, WA |
( |
) | 1991 | 12/21/18 | |||||||||||||||||||||||||||||||||||||||
Modesto MOB (Medical Office) |
Modesto, CA |
( |
) | 1991/2016 | 12/28/18 | |||||||||||||||||||||||||||||||||||||||
Michigan ALF Portfolio (Senior Housing) |
Grand Rapids, MI |
( |
) | 1953/2016 | 12/28/18 | |||||||||||||||||||||||||||||||||||||||
Grand Rapids, MI |
( |
) | 1989 | 05/01/19 | ||||||||||||||||||||||||||||||||||||||||
Holland, MI |
( |
) | 2007/2017 | 12/28/18 | ||||||||||||||||||||||||||||||||||||||||
Howell, MI |
( |
) | 2003 | 12/28/18 | ||||||||||||||||||||||||||||||||||||||||
Lansing, MI |
( |
) | 1988/2015 | 12/28/18 | ||||||||||||||||||||||||||||||||||||||||
Wyoming, MI |
( |
) | 1964/2016 | 12/28/18 | ||||||||||||||||||||||||||||||||||||||||
Lithonia MOB (Medical Office) |
Lithonia, GA |
|
( |
) | 2015 | 03/05/19 | ||||||||||||||||||||||||||||||||||||||
West Des Moines SNF (Skilled Nursing) |
West Des Moines, IA |
|
( |
) | 2004 | 03/24/19 | ||||||||||||||||||||||||||||||||||||||
Great Nord MOB Portfolio (Medical Office) |
Tinley Park, IL |
( |
) | 2002 | 04/08/19 | |||||||||||||||||||||||||||||||||||||||
Chesterton, IN |
( |
) | 2007 | 04/08/19 | ||||||||||||||||||||||||||||||||||||||||
Crown Point, IN |
( |
) | 2005 | 04/08/19 | ||||||||||||||||||||||||||||||||||||||||
Plymouth, MN |
( |
) | 2014 | 04/08/19 | ||||||||||||||||||||||||||||||||||||||||
Overland Park MOB (Medical Office) |
Overland Park, KS |
|
( |
) | 2017 | 08/05/19 | ||||||||||||||||||||||||||||||||||||||
Blue Badger MOB (Medical Office) |
Marysville, OH |
( |
) | 2014 | 08/09/19 | |||||||||||||||||||||||||||||||||||||||
Bloomington MOB (Medical Office) |
Bloomington, IL |
( |
) | 1990 | 08/13/19 | |||||||||||||||||||||||||||||||||||||||
Memphis MOB (Medical Office) |
Memphis, TN |
( |
) | 1984 | 08/15/19 | |||||||||||||||||||||||||||||||||||||||
Haverhill MOB (Medical Office) |
Haverhill, MA |
( |
) | 1987 | 08/27/19 | |||||||||||||||||||||||||||||||||||||||
Fresno MOB (Medical Office) |
Fresno, CA |
( |
) | 2007 | 10/30/19 | |||||||||||||||||||||||||||||||||||||||
Colorado Foothills MOB Portfolio (Medical Office) |
Arvada, CO |
( |
) | 1979 | 11/19/19 | |||||||||||||||||||||||||||||||||||||||
Centennial, CO |
( |
) | 1979 | 11/19/19 | ||||||||||||||||||||||||||||||||||||||||
Colorado Springs, CO |
( |
) | 1999 | 11/19/19 |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(e) |
|||||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(d) |
Accumulated Depreciation (f)(g) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||||
Catalina West Haven ALF (Senior Housing — RIDEA) |
West Haven, |
|
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | 2012 | 01/01/20 | ||||||||||||||||||||||||||||||
Louisiana Senior Housing Portfolio (Senior Housing — RIDEA) |
Gonzales, LA | ( |
) | 1996 | 01/03/20 | |||||||||||||||||||||||||||||||||||||||
Monroe, LA | ( |
) | 1994 | 01/03/20 | ||||||||||||||||||||||||||||||||||||||||
New Iberia, |
( |
) | 1996 | 01/03/20 | ||||||||||||||||||||||||||||||||||||||||
Shreveport, |
|
( |
) | 1996 | 01/03/20 | |||||||||||||||||||||||||||||||||||||||
Slidell, LA | ( |
) | 1996 | 01/03/20 | ||||||||||||||||||||||||||||||||||||||||
Catalina Madera ALF (Senior Housing — RIDEA) |
Madera, CA | ( |
) | 2005 | 01/31/20 | |||||||||||||||||||||||||||||||||||||||
|
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|||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | |||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||
Construction in progress |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | |||||||||||||||||||||||||||||||||||
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(a) | We own |
(b) | The cost capitalized subsequent to acquisition is shown net of dispositions and impairments. |
(c) | Properties were classified as held for sale assets as of December 31, 2020. |
(d) | The changes in total real estate for the years ended December 31, 2020, 2019 and 2018 are as follows: |
Amount |
||||
Balance — December 31, 2017 |
$ | |||
Acquisitions |
||||
Additions |
||||
Dispositions |
( |
) | ||
|
|
|||
Balance — December 31, 2018 |
$ | |||
|
|
|||
Acquisitions |
$ | |||
Additions |
||||
Dispositions |
( |
) | ||
|
|
|||
Balance — December 31, 2019 |
$ | |||
|
|
|||
Acquisitions |
$ | |||
Additions |
||||
Dispositions and impairments |
( |
) | ||
|
|
|||
Balance — December 31, 2020 |
$ | |||
|
|
(e) | As of December 31, 2020, for federal income tax purposes, the aggregate cost of our properties is $ |
(f) | The changes in accumulated depreciation for the years ended December 31, 2020, 2019 and 2018 are as follows: |
Amount |
||||
Balance — December 31, 2017 |
$ | |||
Additions |
||||
Dispositions |
( |
) | ||
|
|
|||
Balance — December 31, 2018 |
$ | |||
|
|
|||
Additions |
$ | |||
Dispositions |
( |
) | ||
|
|
|||
Balance — December 31, 2019 |
$ | |||
|
|
|||
Additions |
$ | |||
Dispositions |
( |
) | ||
|
|
|||
Balance — December 31, 2020 |
$ | |||
|
|
(g) | The cost of buildings and capital improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and capital improvements, up to |
March 31, 2021 |
December 31, 2020 |
|||||||
ASSETS |
| |||||||
Real estate investments, net |
$ | $ | ||||||
Cash and cash equivalents |
||||||||
Accounts and other receivables, net |
||||||||
Restricted cash |
||||||||
Identified intangible assets, net |
||||||||
Operating lease right-of-use |
||||||||
Other assets, net |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
| |||||||
Liabilities: |
||||||||
Mortgage loans payable, net(1) |
$ | $ | ||||||
Line of credit and term loans(1) |
||||||||
Accounts payable and accrued liabilities(1) |
||||||||
Accounts payable due to affiliates(1) |
||||||||
Identified intangible liabilities, net |
||||||||
Operating lease liabilities(1) |
||||||||
Security deposits, prepaid rent and other liabilities(1) |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
Commitments and contingencies (Note 10) |
||||||||
Redeemable noncontrolling interests (Note 11) |
||||||||
Equity: |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Class T common stock, $ |
||||||||
Class I common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
Noncontrolling interest (Note 12) |
||||||||
|
|
|
|
|||||
Total equity |
||||||||
|
|
|
|
|||||
Total liabilities, redeemable noncontrolling interests and equity |
$ | $ | ||||||
|
|
|
|
(1) |
Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of March 31, 2021 and December 31, 2020 represented liabilities of Griffin American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries. Griffin-American Healthcare REIT IV Holdings, LP is a variable interest entity, or VIE, and a consolidated subsidiary of Griffin-American Healthcare REIT IV, Inc. The creditors of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries do not have recourse against Griffin-American Healthcare REIT IV, Inc., except for the 2018 Credit Facility, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $ |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Revenues: |
||||||||
Real estate revenue |
$ | $ | ||||||
Resident fees and services |
||||||||
|
|
|
|
|||||
Total revenues |
||||||||
Expenses: |
||||||||
Rental expenses |
||||||||
Property operating expenses |
||||||||
General and administrative |
||||||||
Business acquisition expenses |
||||||||
Depreciation and amortization |
||||||||
|
|
|
|
|||||
Total expenses |
||||||||
Other income (expense): |
||||||||
Interest expense: |
||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
( |
) | ( |
) | ||||
Gain (loss) in fair value of derivative financial instruments |
( |
) | ||||||
(Loss) income from unconsolidated entity |
( |
) | ||||||
Other income |
||||||||
|
|
|
|
|||||
Net loss |
( |
) | ( |
) | ||||
Less: net loss attributable to noncontrolling interests |
||||||||
|
|
|
|
|||||
Net loss attributable to controlling interest |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Net loss per Class T and Class I common share attributable to controlling interest — basic and diluted |
$ | ( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Weighted average number of Class T and Class I common shares outstanding — basic and diluted |
||||||||
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||
Class T and Class I Common Stock |
||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In |
Accumulated Deficit |
Total Stockholders’ Equity |
Noncontrolling Interest |
Total Equity |
||||||||||||||||||||||
BALANCE — December 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
Offering costs — common stock |
— | — | ||||||||||||||||||||||||||
Issuance of common stock under the DRIP |
||||||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | ||||||||||||||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Distributions to noncontrolling interest |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Distributions declared ($ |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | ( |
) | ( |
)(1) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE — March 31, 2021 |
$ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
| ||||||||||||||||||||
|
|
Class T and Class I Common Stock |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
|
|
Number of Shares |
|
|
Amount |
|
|
Additional Paid-In Capital |
|
|
Accumulated Deficit |
|
|
Total Stockholders’ Equity |
|
|
Noncontrolling Interest |
|
|
Total Equity |
| ||||||
BALANCE — December 31, 2019 |
$ | $ | $ | ( |
) | $ | $ | |
$ | ||||||||||||||||||
Offering costs — common stock |
— | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||
Issuance of common stock under the DRIP |
|||||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | |||||||||||||||||||||||||
Contribution from noncontrolling interest |
— | ||||||||||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||
Distributions declared ($ |
— | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | ( |
) | ( |
)(1) | ||||||||||||||||
BALANCE — March 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | $ |
(1) | Amount excludes $ |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Other amortization |
||||||||
Deferred rent |
( |
) | ( |
) | ||||
Stock based compensation |
||||||||
Loss (income) from unconsolidated entity |
( |
) | ||||||
Change in fair value of derivative financial instruments |
( |
) | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts and other receivables |
||||||||
Other assets |
( |
) | ( |
) | ||||
Accounts payable and accrued liabilities |
||||||||
Accounts payable due to affiliates |
( |
) | ||||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Security deposits, prepaid rent and other liabilities |
( |
) | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
||||||||
|
|
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Acquisitions of real estate investments |
( |
) | ( |
) | ||||
Capital expenditures |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Payments on mortgage loans payable |
( |
) | ( |
) | ||||
Borrowings under the line of credit and term loans |
||||||||
Payments on the line of credit and term loans |
( |
) | ||||||
Deferred financing costs |
( |
) | ( |
) | ||||
Payment of offering costs |
( |
) | ( |
) | ||||
Distributions paid |
( |
) | ( |
) | ||||
Repurchase of common stock |
( |
) | ||||||
Contribution from noncontrolling interest |
||||||||
Distributions to noncontrolling interest |
( |
) | ||||||
Contributions from redeemable noncontrolling interest |
||||||||
Distributions to redeemable noncontrolling interests |
( |
) | ( |
) | ||||
Security deposits |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash (used in) provided by financing activities |
( |
) | ||||||
|
|
|
|
|||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period |
||||||||
|
|
|
|
|||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
||||||||
Beginning of period: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash |
$ | $ | ||||||
|
|
|
|
|||||
End of period: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash |
$ | $ | ||||||
|
|
|
|
|||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||
Cash paid for: |
||||||||
Interest |
$ | $ | ||||||
Income taxes |
$ | $ | ||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES |
||||||||
Investing Activities: |
||||||||
Accrued capital expenditures |
$ | $ | ||||||
Tenant improvement overage |
$ | $ | ||||||
The following represents the increase in certain assets and liabilities in connection with our acquisitions of real estate investments: |
||||||||
Other assets |
$ | $ | ||||||
Accounts payable and accrued liabilities |
$ | $ | ||||||
Prepaid rent |
$ | $ | ||||||
Financing Activities: |
||||||||
Issuance of common stock under the DRIP |
$ | $ | ||||||
Distributions declared but not paid |
$ | $ | ||||||
Accrued stockholder servicing fee |
$ | $ |
Three Months Ended March 31, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Point in Time |
Over Time |
Total |
Point in Time |
Over Time |
Total |
|||||||||||||||||||
Senior housing — RIDEA |
$ | $ | $ | $ | $ | $ |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Private and other payors |
$ | $ | ||||||
Medicaid |
||||||||
Total resident fees and services |
$ | $ | ||||||
Medicaid |
Private and Other Payors |
Total |
||||||||||
Beginning balance — |
$ | $ | $ | |||||||||
Ending balance — |
||||||||||||
Decrease |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
March 31, 2021 |
December 31, 2020 |
|||||||
Building and improvements |
$ | $ | ||||||
Land |
||||||||
Furniture, fixtures and equipment |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Total |
$ | $ | ||||||
2021 Acquisition |
||||
Building and improvements |
$ |
|||
Land |
||||
In-place lease |
||||
Total assets acquired |
$ | |||
March 31, 2021 |
December 31, 2020 |
|||||||
Amortized intangible assets: |
||||||||
In-place leases, net of accumulated amortization of $ |
$ |
$ |
||||||
Above-market leases, net of accumulated amortization of $ |
||||||||
Unamortized intangible assets: |
||||||||
Certificates of need |
||||||||
Total |
$ | $ | ||||||
Year |
Amount |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total |
$ | |||
March 31, 2021 |
December 31, 2020 |
|||||||
Investment in unconsolidated entity |
$ |
$ |
||||||
Deferred rent receivables |
||||||||
Prepaid expenses, deposits and other assets |
||||||||
Lease commissions, net of accumulated amortization of $ |
||||||||
Deferred financing costs, net of accumulated amortization of $ |
||||||||
Total |
$ | $ | ||||||
(1) | Deferred financing costs only include costs related to our line of credit and term loans. Amortization expense on deferred financing costs of our line of credit and term loans for the three months ended March 31, 2021 and 2020 was $ |
March 31, 2021 |
December 31, 2020 |
|||||||
Balance Sheet Data: |
||||||||
Total assets |
$ |
$ |
||||||
Total liabilities |
$ |
$ |
Three Months Ended March 31, |
|||||||
2021 |
2020 |
||||||
Statements of Operations Data: |
|||||||
Revenues |
$ |
$ |
|||||
Grant income |
|||||||
Expenses |
|||||||
Net (loss) income |
$ |
( |
) |
$ |
|||
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Beginning balance |
$ |
$ |
||||||
Additions: |
||||||||
Amortization of deferred financing costs |
||||||||
Amortization of discount/premium on mortgage loans payable |
||||||||
Deductions: |
||||||||
Scheduled principal payments on mortgage loans payable |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Ending balance |
$ |
$ |
||||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Fair Value |
||||||||||||||||||||||||
Instrument |
Notional Amount |
Index |
Interest Rate |
Maturity Date |
March 31, 2021 |
December 31, 2020 |
||||||||||||||||||
$ | % | $ | ( |
) | $ | ( |
) | |||||||||||||||||
% | ( |
) | ( |
) | ||||||||||||||||||||
% | ( |
) | ( |
) | ||||||||||||||||||||
% | ( |
) | ( |
) | ||||||||||||||||||||
% | ( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
$ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||
|
|
|
|
|
|
Year |
Amount |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Beginning balance |
$ |
$ |
||||||
Additions |
||||||||
Distributions |
( |
) | ( |
) | ||||
Adjustment to redemption value |
||||||||
Net loss attributable to redeemable noncontrolling interests |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Ending balance |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Asset management fees(1 ) |
$ |
$ |
||||||
Property management fees(2) |
||||||||
Base acquisition fees and reimbursement of acquisition expenses(3) |
||||||||
Operating expenses(4) |
||||||||
Lease fees(5) |
||||||||
Development fees(6) |
||||||||
Construction management fees(7) |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
(1) |
Asset management fees are included in general and administrative in our accompanying condensed consolidated statements of operations. |
(2) |
Property management fees are included in rental expenses or general and administrative expenses in our accompanying condensed consolidated statements of operations, depending on the property type from which the fee was incurred. |
(3) |
Such amounts are capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets or are expensed as incurred and included in business acquisition expenses in our accompanying condensed consolidated statements of operations, as applicable. |
(4) |
We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. For the 12 months ended March 31, 2021 and 2020, our operating expenses did not exceed such limitations. Operating expenses are generally included in general and administrative in our accompanying condensed consolidated statements of operations. |
(5) |
Lease fees are capitalized as costs of entering into new leases and included in other assets, net in our accompanying condensed consolidated balance sheets, and amortized over the term of the lease. |
(6) |
Development fees are expensed as incurred and included in business acquisition expenses in our accompanying condensed consolidated statements of operations. |
(7) |
Construction management fees are capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets or are expensed and included in our accompanying condensed consolidated statements of operations, as applicable. |
Fee |
March 31, 2021 |
December 31, 2020 |
||||||
Asset management fees |
$ | $ | ||||||
Property management fees |
||||||||
Construction management fees |
||||||||
Development fees |
||||||||
Operating expenses |
||||||||
Lease commissions |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | $ | $ | $ |
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | $ | $ | $ |
March 31, 2021 |
December 31, 2020 |
|||||||||||||||
Carrying Amount(1) |
Fair Value |
Carrying Amount(1) |
Fair Value |
|||||||||||||
Financial Liabilities: |
||||||||||||||||
Mortgage loans payable |
$ | $ | $ | $ | ||||||||||||
Line of credit and term loans |
$ | $ | $ | $ |
(1) | Carrying amount is net of any discount/premium and deferred financing costs. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Federal deferred |
$ | ( |
) | $ | ( |
) | ||
State deferred |
( |
) | ( |
) | ||||
Federal current |
||||||||
State current |
||||||||
Valuation allowance |
||||||||
|
|
|
|
|||||
Total income tax (benefit) expense |
$ | $ | ||||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Weighted average remaining lease term (in years) |
||||||||
Weighted average discount rate |
% | % |
Year |
|
|
Amount |
|
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total operating lease payments |
||||
Less: interest |
||||
|
|
|||
Present value of operating lease liabilities |
$ | |||
|
|
Medical Office Buildings |
Senior Housing — RIDEA |
Skilled Nursing Facilities |
Senior Housing |
Three Months Ended March 31, 2021 |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Real estate revenue |
$ | $ | — | $ | $ | $ | ||||||||||||||
Resident fees and services |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
||||||||||||||||||||
Expenses: |
||||||||||||||||||||
Rental expenses |
— | |||||||||||||||||||
Property operating expenses |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Segment net operating income |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
General and administrative |
|
$ | ||||||||||||||||||
Business acquisition expenses |
|
|||||||||||||||||||
Depreciation and amortization |
|
|||||||||||||||||||
Other income (expense): |
||||||||||||||||||||
Interest expense: |
||||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
|
( |
) | |||||||||||||||||
Gain in fair value of derivative financial instruments |
|
|||||||||||||||||||
Loss from unconsolidated entity |
|
( |
) | |||||||||||||||||
Other income |
|
|||||||||||||||||||
|
|
|||||||||||||||||||
Net loss |
|
$ |
( |
) | ||||||||||||||||
|
|
Medical Office Buildings |
Senior Housing — RIDEA |
Skilled Nursing Facilities |
Senior Housing |
Three Ended March 31, 2020 |
||||||||||||||
Revenues: |
||||||||||||||||||
Real estate revenue |
$ | $ | — | $ | $ | $ | ||||||||||||
Resident fees and services |
— | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
||||||||||||||||||
Expenses: |
||||||||||||||||||
Rental expenses |
— | |||||||||||||||||
Property operating expenses |
— | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Segment net operating income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Expenses: |
||||||||||||||||||
General and administrative |
|
$ | ||||||||||||||||
Business acquisition expenses |
|
|||||||||||||||||
Depreciation and amortization |
|
|||||||||||||||||
Other income (expense): |
||||||||||||||||||
Interest expense: |
||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
|
( |
) | |||||||||||||||
Loss in fair value of derivative financial instruments |
|
( |
) | |||||||||||||||
Income from unconsolidated entity |
|
|||||||||||||||||
Other income |
||||||||||||||||||
|
|
|||||||||||||||||
Net loss |
|
$ |
( |
) | ||||||||||||||
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Medical office buildings |
$ | $ | ||||||
Senior housing — RIDEA |
||||||||
Skilled nursing facilities |
||||||||
Senior housing |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
Tenant |
Annualized Base Rent/ NOI(1) |
Percentage of Annualized Base Rent/NOI |
Acquisition |
Reportable Segment |
GLA (Sq Ft) |
Lease Expiration Date | ||||||||||||||
RC Tier Properties, LLC |
$ |
% |
Missouri SNF Portfolio |
(1) |
Amount is based on contractual base rent from leases in effect as of March 31, 2021, for our non–RIDEA properties and annualized NOI for our senior housing — RIDEA facilities. The loss of this tenant or its inability to pay rent could have a material adverse effect on our business and results of operations. |
• | Significant negative industry or economic trends; |
• | A significant underperformance relative to historical or projected future operating results; and |
• | A significant change in the extent or manner in which the asset is used or significant physical change in the asset. |
• | We evaluated management’s impairment analysis by: |
– | Evaluating management’s process for identifying impairment indicators and whether management appropriately considered the examples of impairment indicators provided within the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) 360, Property, Plant, & Equipment. |
– | Obtaining independent market data to determine if there were additional indicators of impairment not identified by management. |
– | Testing the real estate investments for possible indicators of impairment, including searching for adverse asset-specific conditions, such as occupancy and net operating income performance by each investment. |
• | Developed an independent expectation of impairment indicators and compared such expectation to management’s analysis. |
December 31, |
||||||||
2020 |
2019 |
|||||||
ASSETS |
| |||||||
Real estate investments, net |
$ | 2,330,000,000 | $ | 2,270,421,000 | ||||
Debt security investment, net |
75,851,000 | 72,717,000 | ||||||
Cash and cash equivalents |
113,212,000 | 53,149,000 | ||||||
Accounts and other receivables, net |
124,556,000 | 144,130,000 | ||||||
Restricted cash |
38,978,000 | 36,731,000 | ||||||
Identified intangible assets, net |
154,687,000 | 160,247,000 | ||||||
Goodwill |
75,309,000 | 75,309,000 | ||||||
Operating lease right-of-use |
203,988,000 | 219,187,000 | ||||||
Other assets, net |
118,356,000 | 140,398,000 | ||||||
|
|
|
|
|||||
Total assets |
$ | 3,234,937,000 | $ | 3,172,289,000 | ||||
|
|
|
|
|||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
| |||||||
Liabilities: |
||||||||
Mortgage loans payable, net(1) |
$ | 810,478,000 | $ | 792,870,000 | ||||
Lines of credit and term loans(1) |
843,634,000 | 815,879,000 | ||||||
Accounts payable and accrued liabilities(1) |
186,651,000 | 171,394,000 | ||||||
Accounts payable due to affiliates(1) |
8,026,000 | 2,321,000 | ||||||
Identified intangible liabilities, net |
367,000 | 663,000 | ||||||
Financing obligations(1) |
28,425,000 | 30,918,000 | ||||||
Operating lease liabilities(1) |
193,634,000 | 207,371,000 | ||||||
Security deposits, prepaid rent and other liabilities(1) |
88,899,000 | 48,105,000 | ||||||
|
|
|
|
|||||
Total liabilities |
2,160,114,000 | 2,069,521,000 | ||||||
Commitments and contingencies (Note 11) |
||||||||
Redeemable noncontrolling interests (Note 12) |
40,340,000 | 44,105,000 | ||||||
Equity: |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $0.01 par value per share; 200,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
Common stock, $0.01 par value per share; 1,000,000,000 shares authorized; 193,889,872 and 193,967,474 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
1,939,000 | 1,939,000 | ||||||
Additional paid-in capital |
1,730,448,000 | 1,728,421,000 | ||||||
Accumulated deficit |
(864,271,000 | ) | (827,550,000 | ) | ||||
Accumulated other comprehensive loss |
(2,008,000 | ) | (2,255,000 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
866,108,000 | 900,555,000 | ||||||
Noncontrolling interests (Note 13) |
168,375,000 | 158,108,000 | ||||||
|
|
|
|
|||||
Total equity |
1,034,483,000 | 1,058,663,000 | ||||||
|
|
|
|
|||||
Total liabilities, redeemable noncontrolling interests and equity |
$ | 3,234,937,000 | $ | 3,172,289,000 | ||||
|
|
|
|
(1) | Such liabilities of Griffin-American Healthcare REIT III, Inc. as of December 31, 2020 and 2019 represented liabilities of Griffin-American Healthcare REIT III Holdings, LP or its consolidated subsidiaries. Griffin-American Healthcare REIT III Holdings, LP is a variable interest entity, or VIE, and a consolidated subsidiary of Griffin-American Healthcare REIT III, Inc. The creditors of Griffin-American Healthcare REIT III Holdings, LP or its consolidated subsidiaries do not have recourse against Griffin-American Healthcare REIT III, Inc., except for the 2019 Corporate Line of Credit, as defined in Note 8, held by Griffin-American Healthcare REIT III Holdings, LP in the amount of $556,500,000 and $557,000,000 as of December 31, 2020 and 2019, respectively, which is guaranteed by Griffin-American Healthcare REIT III, Inc. |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Revenues and grant income: |
||||||||||||
Resident fees and services |
$ | 1,069,073,000 | $ | 1,099,078,000 | $ | 1,005,691,000 | ||||||
Real estate revenue |
120,047,000 | 124,038,000 | 129,569,000 | |||||||||
Grant income |
55,181,000 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total revenues and grant income |
1,244,301,000 | 1,223,116,000 | 1,135,260,000 | |||||||||
Expenses: |
||||||||||||
Property operating expenses |
993,727,000 | 967,860,000 | 889,071,000 | |||||||||
Rental expenses |
32,298,000 | 33,859,000 | 34,823,000 | |||||||||
General and administrative |
27,007,000 | 29,749,000 | 28,770,000 | |||||||||
Acquisition related expenses |
290,000 | (161,000 | ) | (2,913,000 | ) | |||||||
Depreciation and amortization |
98,858,000 | 111,412,000 | 95,678,000 | |||||||||
|
|
|
|
|
|
|||||||
Total expenses |
1,152,180,000 | 1,142,719,000 | 1,045,429,000 | |||||||||
Other income (expense): |
||||||||||||
Interest expense: |
||||||||||||
Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment) |
(71,278,000 | ) | (78,553,000 | ) | (66,281,000 | ) | ||||||
Loss in fair value of derivative financial instruments |
(3,906,000 | ) | (4,541,000 | ) | (1,949,000 | ) | ||||||
Gain on dispositions of real estate investments |
1,395,000 | — | — | |||||||||
Impairment of real estate investments |
(11,069,000 | ) | — | (2,542,000 | ) | |||||||
Loss from unconsolidated entities |
(4,517,000 | ) | (2,097,000 | ) | (3,877,000 | ) | ||||||
Foreign currency gain (loss) |
1,469,000 | 1,730,000 | (2,690,000 | ) | ||||||||
Other income |
1,570,000 | 3,736,000 | 1,248,000 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
5,785,000 | 672,000 | 13,740,000 | |||||||||
Income tax benefit (expense) |
3,078,000 | (1,524,000 | ) | 797,000 | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
8,863,000 | (852,000 | ) | 14,537,000 | ||||||||
Less: net income attributable to noncontrolling interests |
(6,700,000 | ) | (4,113,000 | ) | (1,240,000 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income (loss) attributable to controlling interest |
$ | 2,163,000 | $ | (4,965,000 | ) | $ | 13,297,000 | |||||
|
|
|
|
|
|
|||||||
Net income (loss) per common share attributable to controlling interest — basic and diluted |
$ | 0.01 | $ | (0.03 | ) | $ | 0.07 | |||||
|
|
|
|
|
|
|||||||
Weighted average number of common shares outstanding — basic and diluted |
194,168,833 | 196,342,873 | 199,953,936 | |||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 8,863,000 | $ | (852,000 | ) | $ | 14,537,000 | |||||
Other comprehensive income (loss): |
||||||||||||
Foreign currency translation adjustments |
247,000 | 305,000 | (589,000 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total other comprehensive income (loss) |
247,000 | 305,000 | (589,000 | ) | ||||||||
|
|
|
|
|
|
|||||||
Comprehensive income (loss) |
9,110,000 | (547,000 | ) | 13,948,000 | ||||||||
Less: comprehensive income attributable to noncontrolling interests |
(6,700,000 | ) | (4,113,000 | ) | (1,240,000 | ) | ||||||
|
|
|
|
|
|
|||||||
Comprehensive income (loss) attributable to controlling interest |
$ | 2,410,000 | $ | (4,660,000 | ) | $ | 12,708,000 | |||||
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common Stock |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
Noncontrolling Interests |
Total Equity |
|||||||||||||||||||||||||
BALANCE — December 31, 2017 |
199,343,234 | $ | 1,993,000 | $ | 1,785,872,000 | $ | (598,044,000 | ) | $ | (1,971,000 | ) | $ | 1,187,850,000 | $ | 158,725,000 | $ | 1,346,575,000 | |||||||||||||||
Offering costs — common stock |
— | — | (7,000 | ) | — | — | (7,000 | ) | — | (7,000 | ) | |||||||||||||||||||||
Issuance of common stock under the DRIP |
6,464,432 | 65,000 | 59,965,000 | — | — | 60,030,000 | — | 60,030,000 | ||||||||||||||||||||||||
Issuance of vested and nonvested restricted common stock |
22,500 | — | 41,000 | — | — | 41,000 | — | 41,000 | ||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | 174,000 | — | — | 174,000 | — | 174,000 | ||||||||||||||||||||||||
Stock based compensation |
— | — | — | — | — | — | 2,898,000 | 2,898,000 | ||||||||||||||||||||||||
Repurchase of common stock |
(8,272,789 | ) | (83,000 | ) | (76,494,000 | ) | — | — | (76,577,000 | ) | — | (76,577,000 | ) | |||||||||||||||||||
Contribution from noncontrolling interest |
— | — | — | — | — | — | 4,470,000 | 4,470,000 | ||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (6,701,000 | ) | (6,701,000 | ) | ||||||||||||||||||||||
Reclassification of noncontrolling interests to mezzanine equity |
— | — | — | — | — | — | (780,000 | ) | (780,000 | ) | ||||||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | (3,711,000 | ) | — | — | (3,711,000 | ) | (1,590,000 | ) | (5,301,000 | ) | ||||||||||||||||||||
Distributions declared ($0.60 per share) |
— | — | — | (120,001,000 | ) | — | (120,001,000 | ) | — | (120,001,000 | ) | |||||||||||||||||||||
Net income |
— | — | — | 13,297,000 | — | 13,297,000 | 1,106,000 | 14,403,000 | (1) | |||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | (589,000 | ) | (589,000 | ) | — | (589,000 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BALANCE —December 31, 2018 |
197,557,377 | $ | 1,975,000 | $ | 1,765,840,000 | $ | (704,748,000 | ) | $ | (2,560,000 | ) | $ | 1,060,507,000 | $ | 158,128,000 | $ | 1,218,635,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common Stock |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
Noncontrolling Interests |
Total Equity |
|||||||||||||||||||||||||
Offering costs —common stock |
— | $ | — | $ | (91,000 | ) | $ | — | $ | — | $ | (91,000 | ) | $ | — | $ | (91,000 | ) | ||||||||||||||
Issuance of common stock under the DRIP |
5,913,684 | 59,000 | 55,381,000 | — | — | 55,440,000 | — | 55,440,000 | ||||||||||||||||||||||||
Issuance of vested and nonvested restricted common stock |
22,500 | — | 42,000 | — | — | 42,000 | — | 42,000 | ||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | 173,000 | — | — | 173,000 | — | 173,000 | ||||||||||||||||||||||||
Stock based compensation |
— | — | — | — | — | — | 2,698,000 | 2,698,000 | ||||||||||||||||||||||||
Repurchase of common stock |
(9,526,087 | ) | (95,000 | ) | (89,793,000 | ) | — | — | (89,888,000 | ) | — | (89,888,000 | ) | |||||||||||||||||||
Contributions from noncontrolling interests |
— | — | — | — | — | — | 3,000,000 | 3,000,000 | ||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (7,272,000 | ) | (7,272,000 | ) | ||||||||||||||||||||||
Reclassification of noncontrolling interests to mezzanine equity |
— | — | — | — | — | — | (780,000 | ) | (780,000 | ) | ||||||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | (3,131,000 | ) | — | — | (3,131,000 | ) | (1,342,000 | ) | (4,473,000 | ) | ||||||||||||||||||||
Distributions declared ($0.60 per share) |
— | — | — | (117,837,000 | ) | — | (117,837,000 | ) | — | (117,837,000 | ) | |||||||||||||||||||||
Net (loss) income |
— | — | — | (4,965,000 | ) | — | (4,965,000 | ) | 3,676,000 | (1,289,000 | ) (1) | |||||||||||||||||||||
Other comprehensive income |
— | — | — | — | 305,000 | 305,000 | — | 305,000 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BALANCE —December 31, 2019 |
193,967,474 | $ | 1,939,000 | $ | 1,728,421,000 | $ | (827,550,000 | ) | $ | (2,255,000 | ) | $ | 900,555,000 | $ | 158,108,000 | $ | 1,058,663,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common Stock |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
Noncontrolling Interests |
Total Equity |
|||||||||||||||||||||||||
Offering costs —common stock |
— | $ | — | $ | (8,000 | ) | $ | — | $ | — | $ | (8,000 | ) | $ | — | $ | (8,000 | ) | ||||||||||||||
Issuance of common stock under the DRIP |
2,325,762 | 24,000 | 21,837,000 | — | — | 21,861,000 | — | 21,861,000 | ||||||||||||||||||||||||
Issuance of vested and nonvested restricted common stock |
7,500 | — | 14,000 | — | — | 14,000 | — | 14,000 | ||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | 141,000 | — | — | 141,000 | — | 141,000 | ||||||||||||||||||||||||
Stock based compensation |
— | — | — | — | — | — | (1,188,000 | ) | (1,188,000 | ) | ||||||||||||||||||||||
Repurchase of common stock |
(2,410,864 | ) | (24,000 | ) | (23,083,000 | ) | — | — | (23,107,000 | ) | — | (23,107,000 | ) | |||||||||||||||||||
Issuance of noncontrolling interest |
— | — | 515,000 | — | — | 515,000 | 10,485,000 | 11,000,000 | ||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (5,463,000 | ) | (5,463,000 | ) | ||||||||||||||||||||||
Reclassification of noncontrolling interests to mezzanine equity |
— | — | — | — | — | — | (715,000 | ) | (715,000 | ) | ||||||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | 2,611,000 | — | — | 2,611,000 | 1,103,000 | 3,714,000 | ||||||||||||||||||||||||
Distributions declared ($0.20 per share) |
— | — | — | (38,884,000 | ) | — | (38,884,000 | ) | — | (38,884,000 | ) | |||||||||||||||||||||
Net income |
— | — | — | 2,163,000 | — | 2,163,000 | 6,045,000 | 8,208,000 | (1) | |||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | 247,000 | 247,000 | — | 247,000 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BALANCE — December 31, 2020 |
193,889,872 | $ | 1,939,000 | $ | 1,730,448,000 | $ | (864,271,000 | ) | $ | (2,008,000 | ) | $ | 866,108,000 | $ | 168,375,000 | $ | 1,034,483,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For the years ended December 31, 2020, 2019 and 2018, amounts exclude $655,000, $437,000 and $134,000, respectively, of net income attributable to redeemable noncontrolling interests. See Note 12, Redeemable Noncontrolling Interests, for a further discussion. |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||
Net income (loss) |
$ | 8,863,000 | $ | (852,000 | ) | $ | 14,537,000 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
98,858,000 | 111,412,000 | 95,678,000 | |||||||||
Other amortization |
30,789,000 | 29,740,000 | 4,918,000 | |||||||||
Deferred rent |
(5,606,000 | ) | (3,264,000 | ) | (4,841,000 | ) | ||||||
Stock based compensation |
(1,342,000 | ) | 2,744,000 | 3,026,000 | ||||||||
Stock based compensation — nonvested restricted common stock |
155,000 | 215,000 | 215,000 | |||||||||
Loss from unconsolidated entities |
4,517,000 | 2,097,000 | 3,877,000 | |||||||||
Gain on dispositions of real estate investments |
(1,395,000 | ) | — | — | ||||||||
Foreign currency (gain) loss |
(1,522,000 | ) | (1,731,000 | ) | 2,658,000 | |||||||
Loss on extinguishment of debt |
— | 2,968,000 | — | |||||||||
Deferred income taxes |
(3,329,000 | ) | 964,000 | (1,854,000 | ) | |||||||
Contingent consideration related to acquisition of real estate |
— | — | (93,000 | ) | ||||||||
Change in fair value of contingent consideration |
— | (681,000 | ) | (2,843,000 | ) | |||||||
Change in fair value of derivative financial instruments |
3,906,000 | 4,541,000 | 1,949,000 | |||||||||
Impairment of real estate investments |
11,069,000 | — | 2,542,000 | |||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts and other receivables |
20,318,000 | (22,435,000 | ) | (6,731,000 | ) | |||||||
Other assets |
(7,357,000 | ) | (6,537,000 | ) | (15,317,000 | ) | ||||||
Accounts payable and accrued liabilities |
30,290,000 | 18,103,000 | 8,187,000 | |||||||||
Accounts payable due to affiliates |
5,162,000 | 121,000 | (26,000 | ) | ||||||||
Security deposits, prepaid rent, operating lease and other liabilities |
25,780,000 | (19,951,000 | ) | 932,000 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
219,156,000 | 117,454,000 | 106,814,000 | |||||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||
Developments and capital expenditures |
(128,302,000 | ) | (92,836,000 | ) | (66,907,000 | ) | ||||||
Acquisitions of real estate and other investments |
(30,552,000 | ) | (37,863,000 | ) | (67,285,000 | ) | ||||||
Proceeds from dispositions of real estate and other investments |
12,525,000 | 1,227,000 | 1,000,000 | |||||||||
Investments in unconsolidated entities |
(960,000 | ) | (1,640,000 | ) | (2,050,000 | ) | ||||||
Real estate and other deposits |
(656,000 | ) | (650,000 | ) | (2,329,000 | ) | ||||||
Principal repayments on real estate notes receivable |
— | 28,650,000 | 1,799,000 | |||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
(147,945,000 | ) | (103,112,000 | ) | (135,772,000 | ) | ||||||
|
|
|
|
|
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||
Borrowings under mortgage loans payable |
92,399,000 | 191,246,000 | 181,594,000 | |||||||||
Payments on mortgage loans payable |
(71,990,000 | ) | (74,037,000 | ) | (10,444,000 | ) | ||||||
Early payoff of mortgage loans payable |
(2,601,000 | ) | (14,022,000 | ) | (94,449,000 | ) | ||||||
Borrowings under the lines of credit and term loans |
121,755,000 | 1,030,653,000 | 273,639,000 | |||||||||
Payments on the lines of credit and term loans |
(94,000,000 | ) | (952,822,000 | ) | (159,716,000 | ) | ||||||
Deferred financing costs |
(4,890,000 | ) | (12,945,000 | ) | (4,177,000 | ) | ||||||
Debt extinguishment costs |
— | (870,000 | ) | — | ||||||||
Borrowing under financing obligation |
1,907,000 | — | — | |||||||||
Payments on financing and other obligations |
(5,453,000 | ) | (7,850,000 | ) | (8,055,000 | ) |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Distributions paid |
$ | (26,997,000 | ) | $ | (62,612,000 | ) | $ | (59,974,000 | ) | |||
Repurchase of common stock |
(23,107,000 | ) | (89,888,000 | ) | (76,577,000 | ) | ||||||
Issuance of noncontrolling interest |
11,000,000 | — | — | |||||||||
Contributions from noncontrolling interests |
— | 3,000,000 | 4,470,000 | |||||||||
Distributions to noncontrolling interests |
(5,463,000 | ) | (7,272,000 | ) | (6,701,000 | ) | ||||||
Distributions to redeemable noncontrolling interests |
(1,271,000 | ) | (1,430,000 | ) | (711,000 | ) | ||||||
Repurchase of stock warrants and redeemable noncontrolling interests |
(150,000 | ) | (475,000 | ) | (306,000 | ) | ||||||
Purchase of derivative financial instruments |
— | — | (153,000 | ) | ||||||||
Contingent consideration related to acquisition of real estate |
— | — | (1,490,000 | ) | ||||||||
Contributions from redeemable noncontrolling interests |
— | 2,000,000 | 535,000 | |||||||||
Security deposits and other |
50,000 | 12,000 | 112,000 | |||||||||
|
|
|
|
|
|
|||||||
Net cash (used in) provided by financing activities |
(8,811,000 | ) | 2,688,000 | 37,597,000 | ||||||||
|
|
|
|
|
|
|||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
$ | 62,400,000 | $ | 17,030,000 | $ | 8,639,000 | ||||||
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
(90,000 | ) | 145,000 | (77,000 | ) | |||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period |
89,880,000 | 72,705,000 | 64,143,000 | |||||||||
|
|
|
|
|
|
|||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period |
$ | 152,190,000 | $ | 89,880,000 | $ | 72,705,000 | ||||||
|
|
|
|
|
|
|||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
||||||||||||
Beginning of period: |
||||||||||||
Cash and cash equivalents |
$ | 53,149,000 | $ | 35,132,000 | $ | 33,656,000 | ||||||
Restricted cash |
36,731,000 | 37,573,000 | 30,487,000 | |||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash |
$ | 89,880,000 | $ | 72,705,000 | $ | 64,143,000 | ||||||
|
|
|
|
|
|
|||||||
End of period: |
||||||||||||
Cash and cash equivalents |
$ | 113,212,000 | $ | 53,149,000 | $ | 35,132,000 | ||||||
Restricted cash |
38,978,000 | 36,731,000 | 37,573,000 | |||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash |
$ | 152,190,000 | $ | 89,880,000 | $ | 72,705,000 | ||||||
|
|
|
|
|
|
|||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||||||
Cash paid for: |
||||||||||||
Interest |
$ | 65,771,000 | $ | 68,654,000 | $ | 59,365,000 | ||||||
Income taxes |
$ | 753,000 | $ | 921,000 | $ | 1,647,000 | ||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES |
||||||||||||
Investing Activities: |
||||||||||||
Accrued developments and capital expenditures |
$ | 22,342,000 | $ | 25,194,000 | $ | 12,616,000 | ||||||
Capital expenditures from financing obligations |
$ | 1,053,000 | $ | 11,821,000 | $ | 16,809,000 | ||||||
Tenant improvement overage |
$ | 4,482,000 | $ | 1,216,000 | $ | 1,373,000 | ||||||
Investments in unconsolidated entity |
$ | — | $ | 5,276,000 | $ | — |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
The following represents the (decrease) increase in certain assets and liabilities in connection with our acquisitions and dispositions of real estate investments: |
||||||||||||
Accounts and other receivables |
$ | (11,000 | ) | $ | — | $ | — | |||||
Other assets, net |
$ | (253,000 | ) | $ | — | $ | (1,587,000 | ) | ||||
Accounts payable and accrued liabilities |
$ | (110,000 | ) | $ | 46,000 | $ | 58,000 | |||||
Security deposits, prepaid rent and other liabilities |
$ | (459,000 | ) | $ | 105,000 | $ | 223,000 | |||||
Financing Activities: |
||||||||||||
Issuance of common stock under the DRIP |
$ | 21,861,000 | $ | 55,440,000 | $ | 60,030,000 | ||||||
Distributions declared but not paid |
$ | — | $ | 9,974,000 | $ | 10,189,000 | ||||||
Reclassification of noncontrolling interests to mezzanine equity |
$ | 715,000 | $ | 780,000 | $ | 780,000 |
• | Medicare: |
• | Medicaid: non-state, government-owned entities such as county hospital districts. We have operational responsibility through management agreements for facilities retained by the county hospital districts including this IGT. |
• | Other: |
Integrated Senior Health Campuses |
Senior Housing — RIDEA(1) |
Total |
||||||||||
2020: |
||||||||||||
Point in time |
$ | 196,053,000 | $ | 2,861,000 | $ | 198,914,000 | ||||||
Over time |
787,116,000 | 83,043,000 | 870,159,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services |
$ | 983,169,000 | $ | 85,904,000 | $ | 1,069,073,000 | ||||||
|
|
|
|
|
|
|||||||
2019: |
||||||||||||
Point in time |
$ | 214,650,000 | $ | 2,944,000 | $ | 217,594,000 | ||||||
Over time |
816,284,000 | 65,200,000 | 881,484,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services |
$ | 1,030,934,000 | $ | 68,144,000 | $ | 1,099,078,000 | ||||||
|
|
|
|
|
|
|||||||
2018: |
||||||||||||
Point in time |
$ | 185,273,000 | $ | 3,079,000 | $ | 188,352,000 | ||||||
Over time |
755,343,000 | 61,996,000 | 817,339,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services |
$ | 940,616,000 | $ | 65,075,000 | $ | 1,005,691,000 | ||||||
|
|
|
|
|
|
Integrated Senior Health Campuses |
Senior Housing — RIDEA(1) |
Total |
||||||||||
2020: |
||||||||||||
Private and other payors |
$ | 437,133,000 | $ | 84,308,000 | $ | 521,441,000 | ||||||
Medicare |
356,350,000 | — | 356,350,000 | |||||||||
Medicaid |
189,686,000 | 1,596,000 | 191,282,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services |
$ | 983,169,000 | $ | 85,904,000 | $ | 1,069,073,000 | ||||||
|
|
|
|
|
|
|||||||
2019: |
||||||||||||
Private and other payors |
$ | 499,693,000 | $ | 67,930,000 | $ | 567,623,000 | ||||||
Medicare |
338,466,000 | — | 338,466,000 | |||||||||
Medicaid |
192,775,000 | 214,000 | 192,989,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services |
$ | 1,030,934,000 | $ | 68,144,000 | $ | 1,099,078,000 | ||||||
|
|
|
|
|
|
|||||||
2018: |
||||||||||||
Private and other payors |
$ | 437,100,000 | $ | 65,032,000 | $ | 502,132,000 | ||||||
Medicare |
332,852,000 | — | 332,852,000 | |||||||||
Medicaid |
170,664,000 | 43,000 | 170,707,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services |
$ | 940,616,000 | $ | 65,075,000 | $ | 1,005,691,000 | ||||||
|
|
|
|
|
|
(1) | Includes fees for basic housing and assisted living care. We record revenue when services are rendered at amounts billable to individual residents. Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For patients under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered. |
Private and Other Payors |
Medicare |
Medicaid |
Total |
|||||||||||||
Beginning balance — |
$ | 46,543,000 | $ | 32,127,000 | $ | 26,366,000 | $ | 105,036,000 | ||||||||
Ending balance — |
36,125,000 | 36,479,000 | 14,473,000 | 87,077,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(Decrease)/increase |
$ | (10,418,000 | ) | $ | 4,352,000 | $ | (11,893,000 | ) | $ | (17,959,000 | ) | |||||
|
|
|
|
|
|
|
|
Total |
||||
Beginning balance — |
$ | 13,518,000 | ||
Ending balance — |
10,597,000 | |||
|
|
|||
Decrease |
$ | (2,921,000 | ) | |
|
|
• | significant negative industry or economic trends; |
• | a significant underperformance relative to historical or projected future operating results; and |
• | a significant change in the extent or manner in which the asset is used or significant physical change in the asset. |
• | management, having the authority to approve the action, commits to a plan to sell the asset; |
• | the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; |
• | an active program to locate a buyer or buyers and other actions required to complete the plan to sell the asset has been initiated; |
• | the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year; |
• | the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and |
• | given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be withdrawn. |
December 31, |
||||||||
2020 |
2019 |
|||||||
Building, improvements and construction in process |
$ | 2,379,337,000 | $ | 2,262,320,000 | ||||
Land and improvements |
200,319,000 | 195,491,000 | ||||||
Furniture, fixtures and equipment |
174,994,000 | 150,508,000 | ||||||
|
|
|
|
|||||
2,754,650,000 | 2,608,319,000 | |||||||
Less: accumulated depreciation |
(424,650,000 | ) | (337,898,000 | ) | ||||
|
|
|
|
|||||
$ | 2,330,000,000 | $ | 2,270,421,000 | |||||
|
|
|
|
Location |
Date Acquired |
Contract Purchase Price |
Line of Credit(1) |
Acquisition Fee(2) |
||||||||||||
Monticello, IN |
07/30/20 | $ | 10,600,000 | $ | 13,200,000 | $ | 161,000 | |||||||||
Louisville, KY |
07/30/20 | 16,719,000 | 15,055,000 | 254,000 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total |
$ | 27,319,000 | $ | 28,255,000 | $ | 415,000 | ||||||||||
|
|
|
|
|
|
(1) | Represents borrowings under the 2019 Trilogy Credit Facility, as defined in Note 8, Lines of Credit and Term Loans, at the time of acquisition. |
(2) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, an acquisition fee of 2.25% of the portion of the contract purchase price of the properties attributed to our ownership interest in the Trilogy subsidiary that acquired the properties. |
2020 Acquisitions |
||||
Building and improvements |
$ | 26,311,000 | ||
Land |
4,563,000 | |||
|
|
|||
Total assets acquired |
$ | 30,874,000 | ||
|
|
Acquisition |
Location |
Type |
Date Acquired |
Contract Purchase Price |
Line of Credit |
Acquisition Fee |
||||||||||||||||||
North Carolina ALF Portfolio(1) |
Garner, NC | |
Senior Housing — RIDEA |
|
03/27/19 | $ | 15,000,000 | $ | 15,000,000 | $ | 338,000 | |||||||||||||
The Cloister at Silvercrest(2) |
|
New Albany, IN |
|
|
Integrated Senior Health Campus |
|
10/01/19 | 750,000 | — | 11,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total |
$ | 15,750,000 | $ | 15,000,000 | $ | 349,000 | ||||||||||||||||||
|
|
|
|
|
|
(1) | We own 100% of such property acquired, which we added to our existing North Carolina ALF Portfolio. The other six buildings in North Carolina ALF Portfolio were acquired between January 2015 and August 2018. We borrowed under the 2019 Corporate Line of Credit, as defined in Note 8, Lines of Credit and Term Loans, at the time of acquisition. Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, an acquisition fee of 2.25% of the contract purchase price of such property. |
(2) | We, through a majority-owned subsidiary of Trilogy, of which we owned 67.7% at the time of such property acquisition, acquired such property using cash on hand. Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, an acquisition fee of 2.25% of the portion of the contract purchase price of the property attributed to our ownership interest in the Trilogy subsidiary that acquired the property. |
Location |
Date Acquired |
Contract Purchase Price |
Line of Credit(1) |
Acquisition Fee(2) |
||||||||||||
Corydon, IN |
09/05/19 | $ | 14,082,000 | $ | 14,114,000 | $ | 215,000 |
(1) | Represents a borrowing under the 2019 Trilogy Credit Facility, at the time of acquisition. |
(2) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, an acquisition fee of 2.25% of the portion of the contract purchase price of the property attributed to our ownership interest at the time of acquisition in the Trilogy subsidiary that acquired the property. |
2019 Acquisitions |
||||
Building and improvements |
$ | 23,834,000 | ||
Land |
8,496,000 | |||
In-place leases |
3,596,000 | |||
|
|
|||
Total assets acquired |
$ | 35,926,000 | ||
|
|
Acquisition(1) |
Location |
Type |
Date Acquired |
Contract Purchase Price |
Line of Credit(2) |
Acquisition Fee(3) |
||||||||||||||||
North Carolina ALF Portfolio |
Matthews, NC | Senior Housing — RIDEA |
08/30/18 | $ | 15,000,000 | $ | 13,500,000 | $ | 338,000 |
(1) | We own 100% of our property acquired in 2018. |
(2) | Represents a borrowing under the 2016 Corporate Line of Credit, as defined in Note 8, Lines of Credit and Term Loans, at the time of acquisition. |
(3) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, an acquisition fee of 2.25% of the contract purchase price of such property. |
Locations |
Date Acquired |
Contract Purchase Price |
Mortgage Loan Payable(1) |
Acquisition Fee(2) |
||||||||||||
Lexington, KY; Novi and Romeo, MI; and Fremont, OH |
07/20/18 | $ | 47,455,000 | $ | 47,500,000 | $ | 723,000 |
(1) | Represents the principal balance of the mortgage loan payable placed on the properties at the time of acquisition. |
(2) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, an acquisition fee of 2.25% of the portion of the contract purchase price of the properties attributed to our ownership interest at the time of acquisition in the Trilogy subsidiary that acquired the properties. |
2018 Acquisitions |
||||
Building and improvements |
$ | 49,757,000 | ||
Land |
10,980,000 | |||
In-place leases |
6,894,000 | |||
Certificates of need |
1,313,000 | |||
|
|
|||
Total assets acquired |
$ | 68,944,000 | ||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Amortized intangible assets: |
||||||||
In-place leases, net of accumulated amortization of $22,019,000 and $21,029,000 as of December 31, 2020 and 2019, respectively (with a weighted average remaining life of 9.4 years as of both December 31, 2020 and 2019) |
$ | 23,760,000 | $ | 30,407,000 | ||||
Customer relationships, net of accumulated amortization of $486,000 and $336,000 as of December 31, 2020 and 2019, respectively (with a weighted average remaining life of 15.7 years and 16.8 years as of December 31, 2020 and 2019, respectively) |
2,354,000 | 2,504,000 | ||||||
Above-market leases, net of accumulated amortization of $1,975,000 and $2,057,000 as of December 31, 2020 and 2019, respectively (with a weighted average remaining life of 4.6 years and 5.0 years as of December 31, 2020 and 2019, respectively) |
1,032,000 | 1,452,000 | ||||||
Internally developed technology and software, net of accumulated amortization of $305,000 and $211,000 as of December 31, 2020 and 2019, respectively (with a weighted average remaining life of 1.7 years and 2.8 years as of December 31, 2020 and 2019, respectively) |
165,000 | 259,000 | ||||||
Unamortized intangible assets: |
||||||||
Certificates of need |
96,589,000 | 94,838,000 | ||||||
Trade names |
30,787,000 | 30,787,000 | ||||||
|
|
|
|
|||||
$ | 154,687,000 | $ | 160,247,000 | |||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 4,639,000 | ||
2022 |
3,909,000 | |||
2023 |
3,140,000 | |||
2024 |
2,723,000 | |||
2025 |
2,210,000 | |||
Thereafter |
10,690,000 | |||
|
|
|||
$ | 27,311,000 | |||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred rent receivables |
$ | 38,918,000 | $ | 33,205,000 | ||||
Prepaid expenses, deposits, other assets and deferred tax assets, net |
16,618,000 | 40,354,000 | ||||||
Inventory |
24,669,000 | 23,872,000 | ||||||
Investments in unconsolidated entities |
16,469,000 | 20,176,000 | ||||||
Lease commissions, net of accumulated amortization of $3,413,000 and $2,201,000 as of December 31, 2020 and 2019, respectively |
11,309,000 | 10,794,000 | ||||||
Deferred financing costs, net of accumulated amortization of $5,700,000 and $2,138,000 as of December 31, 2020 and 2019, respectively(1) |
6,864,000 | 8,137,000 | ||||||
Lease inducement, net of accumulated amortization of $1,491,000 and $1,140,000 as of December 31, 2020 and 2019, respectively (with a weighted average remaining life of 9.9 years and 10.9 years as of December 31, 2020 and 2019, respectively) |
3,509,000 | 3,860,000 | ||||||
|
|
|
|
|||||
$ | 118,356,000 | $ | 140,398,000 | |||||
|
|
|
|
(1) | Deferred financing costs only include costs related to our lines of credit and term loans. See Note 8, Lines of Credit and Term Loans. |
December 31, |
||||||||
2020 |
2019 |
|||||||
Total fixed-rate debt |
$ | 742,686,000 | $ | 714,786,000 | ||||
Total variable-rate debt |
91,340,000 | 101,431,000 | ||||||
|
|
|
|
|||||
Total fixed- and variable-rate debt |
834,026,000 | 816,217,000 | ||||||
Less: deferred financing costs, net |
(10,389,000 | ) | (9,362,000 | ) | ||||
Add: premium |
204,000 | 304,000 | ||||||
Less: discount |
(13,363,000 | ) | (14,289,000 | ) | ||||
|
|
|
|
|||||
Mortgage loans payable, net |
$ | 810,478,000 | $ | 792,870,000 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | 792,870,000 | $ | 688,262,000 | ||||
Additions: |
||||||||
Borrowings under mortgage loans payable |
92,399,000 | 191,246,000 | ||||||
Amortization of deferred financing costs |
796,000 | 1,544,000 | ||||||
Amortization of discount/premium on mortgage loans payable |
826,000 | 647,000 | ||||||
Deductions: |
||||||||
Scheduled principal payments on mortgage loans payable |
(71,990,000 | ) | (74,037,000 | ) | ||||
Early payoff of mortgage loans payable |
(2,601,000 | ) | (14,022,000 | ) | ||||
Deferred financing costs |
(1,822,000 | ) | (770,000 | ) | ||||
|
|
|
|
|||||
Ending balance |
$ | 810,478,000 | $ | 792,870,000 | ||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 54,169,000 | ||
2022 |
62,985,000 | |||
2023 |
67,651,000 | |||
2024 |
80,451,000 | |||
2025 |
15,324,000 | |||
Thereafter |
553,446,000 | |||
|
|
|||
$ | 834,026,000 | |||
|
|
Fair Value |
||||||||||||||||||||||||
December 31, |
||||||||||||||||||||||||
Instrument |
Notional Amount |
Index |
Interest Rate |
Maturity Date |
2020 |
2019 |
||||||||||||||||||
Cap |
$ | 20,000,000 | one month LIBOR | 3.00 | % | 09/23/21 | $ | — | $ | — | ||||||||||||||
Swap |
250,000,000 | one month LIBOR | 2.10 | % | 01/25/22 | (5,245,000 | ) | (2,821,000 | ) | |||||||||||||||
Swap |
130,000,000 | one month LIBOR | 1.98 | % | 01/25/22 | (2,561,000 | ) | (1,150,000 | ) | |||||||||||||||
Swap |
100,000,000 | one month LIBOR | 0.20 | % | 01/25/22 | (71,000 | ) | — | ||||||||||||||||
|
|
|
|
|||||||||||||||||||||
$ | (7,877,000 | ) | $ | (3,971,000 | ) | |||||||||||||||||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 180,000 | ||
2022 |
89,000 | |||
2023 |
71,000 | |||
2024 |
27,000 | |||
2025 |
— | |||
Thereafter |
— | |||
|
|
|||
$ | 367,000 | |||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | 44,105,000 | $ | 38,245,000 | ||||
Additions |
— | 2,000,000 | ||||||
Reclassification from equity |
715,000 | 780,000 | ||||||
Distributions |
(1,271,000 | ) | (1,430,000 | ) | ||||
Repurchase of redeemable noncontrolling interests |
(150,000 | ) | (400,000 | ) | ||||
Adjustment to redemption value |
(3,714,000 | ) | 4,473,000 | |||||
Net income attributable to redeemable noncontrolling interests |
655,000 | 437,000 | ||||||
|
|
|
|
|||||
Ending balance |
$ | 40,340,000 | $ | 44,105,000 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Beginning balance — foreign currency translation adjustments |
$ | (2,255,000 | ) | $ | (2,560,000 | ) | ||
Net change in current period |
247,000 | 305,000 | ||||||
|
|
|
|
|||||
Ending balance — foreign currency translation adjustments |
$ | (2,008,000 | ) | $ | (2,255,000 | ) | ||
|
|
|
|
Approval Date by our Board |
Estimated Per Share NAV (Unaudited) |
|||
10/05/16 |
$ | 9.01 | ||
10/04/17 |
$ | 9.27 | ||
10/03/18 |
$ | 9.37 | ||
10/03/19 |
$ | 9.40 |
12 Months Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Operating expenses as a percentage of average invested assets |
1.0 | % | 0.9 | % | 0.9 | % | ||||||
Operating expenses as a percentage of net income |
22.1 | % | 18.9 | % | 19.1 | % |
December 31, |
||||||||
Fee |
2020 |
2019 |
||||||
Asset and property management fees |
$ | 7,155,000 | $ | 1,991,000 | ||||
Development fees |
743,000 | — | ||||||
Construction management fees |
91,000 | 175,000 | ||||||
Lease commissions |
27,000 | 143,000 | ||||||
Operating expenses |
10,000 | 12,000 | ||||||
|
|
|
|
|||||
$ | 8,026,000 | $ | 2,321,000 | |||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Derivative financial instrument |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets at fair value |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | — | $ | 7,877,000 | $ | — | $ | 7,877,000 | ||||||||
Warrants |
— | — | 1,025,000 | 1,025,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities at fair value |
$ | — | $ | 7,877,000 | $ | 1,025,000 | $ | 8,902,000 | ||||||||
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Derivative financial instrument |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets at fair value |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | — | $ | 3,971,000 | $ | — | $ | 3,971,000 | ||||||||
Warrants |
— | — | 1,178,000 | 1,178,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities at fair value |
$ | — | $ | 3,971,000 | $ | 1,178,000 | $ | 5,149,000 | ||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Contingent Consideration Obligations: |
||||||||||||
Beginning balance |
$ | — | $ | 681,000 | $ | 5,107,000 | ||||||
Realized/unrealized gains recognized in earnings |
— | (681,000 | ) | (2,843,000 | ) | |||||||
Settlements of obligations |
— | — | (1,583,000 | ) | ||||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | — | $ | — | $ | 681,000 | ||||||
|
|
|
|
|
|
|||||||
Amount of total gains included in earnings attributable to the change in unrealized gains related to obligations still held |
$ | — | $ | (681,000 | ) | $ | (2,843,000 | ) | ||||
|
|
|
|
|
|
Range of Inputs or Inputs |
||||
Unobservable Inputs |
||||
Market rent per square foot |
$ | 13.75 to $25.00 | ||
Capitalization rate |
7.50 | % | ||
Discount rate |
8.00 | % |
December 31, |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Carrying Amount(1) |
Fair Value |
Carrying Amount(1) |
Fair Value |
|||||||||||||
Financial Assets: |
||||||||||||||||
Debt security investment |
$ | 75,851,000 | $ | 94,033,000 | $ | 72,717,000 | $ | 94,026,000 | ||||||||
Financial Liabilities: |
||||||||||||||||
Mortgage loans payable |
$ | 810,478,000 | $ | 830,049,000 | $ | 792,870,000 | $ | 732,846,000 | ||||||||
Lines of credit and term loans |
$ | 836,770,000 | $ | 847,048,000 | $ | 807,742,000 | $ | 816,355,000 |
(1) | Carrying amount is net of any discount/premium and unamortized costs. |
December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Domestic |
$ | 6,171,000 | $ | 1,193,000 | $ | 14,202,000 | ||||||
Foreign |
(386,000 | ) | (521,000 | ) | (462,000 | ) | ||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
$ | 5,785,000 | $ | 672,000 | $ | 13,740,000 | ||||||
|
|
|
|
|
|
December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Federal deferred |
$ | (4,818,000 | ) | $ | (3,672,000 | ) | $ | (4,647,000 | ) | |||
State deferred |
(932,000 | ) | (737,000 | ) | (922,000 | ) | ||||||
Federal current |
(361,000 | ) | (29,000 | ) | — | |||||||
State current |
— | (16,000 | ) | — | ||||||||
Foreign current |
612,000 | 605,000 | 988,000 | |||||||||
Valuation allowances |
2,421,000 | 5,373,000 | 3,784,000 | |||||||||
|
|
|
|
|
|
|||||||
Total income tax (benefit) expense |
$ | (3,078,000 | ) | $ | 1,524,000 | $ | (797,000 | ) | ||||
|
|
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred income tax assets: |
||||||||
Fixed assets and intangibles |
$ | 5,619,000 | $ | 6,509,000 | ||||
Expense accruals and other |
13,968,000 | 14,233,000 | ||||||
Net operating loss |
21,168,000 | 14,341,000 | ||||||
Reserves and accruals |
6,541,000 | 5,540,000 | ||||||
Allowances for accounts receivable |
1,932,000 | (179,000 | ) | |||||
Investments in unconsolidated entities |
2,357,000 | 2,326,000 | ||||||
|
|
|
|
|||||
Total deferred income tax assets |
$ | 51,585,000 | $ | 42,770,000 | ||||
|
|
|
|
|||||
Deferred income tax liabilities: |
||||||||
Fixed assets and intangibles |
$ | (16,840,000 | ) | $ | (14,468,000 | ) | ||
Other — temporary differences |
(2,868,000 | ) | (2,176,000 | ) | ||||
|
|
|
|
|||||
Total deferred income tax liabilities |
$ | (19,708,000 | ) | $ | (16,644,000 | ) | ||
|
|
|
|
|||||
Net deferred income tax assets before valuation allowance |
$ | 31,877,000 | $ | 26,126,000 | ||||
Valuation allowances |
(31,877,000 | ) | (29,455,000 | ) | ||||
|
|
|
|
|||||
Net deferred income tax assets (liabilities) |
$ | — | $ | (3,329,000 | ) | |||
|
|
|
|
Years Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Ordinary income |
$ | — | — | % | $ | 35,294,000 | 29.9 | % | $ | 33,141,000 | 27.6 | % | ||||||||||||
Capital gain |
— | — | — | — | — | — | ||||||||||||||||||
Return of capital |
48,842,000 | 100 | 82,731,000 | 70.1 | 86,833,000 | 72.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 48,842,000 | 100 | % | $ | 118,025,000 | 100 | % | $ | 119,974,000 | 100 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year |
Amount |
|||
|
|
|||
2021 |
$ | 89,484,000 | ||
2022 |
83,728,000 | |||
2023 |
76,843,000 | |||
2024 |
70,123,000 | |||
2025 |
61,594,000 | |||
Thereafter |
410,526,000 | |||
|
|
|||
Total |
$ | 792,298,000 | ||
|
|
Years Ended December 31, |
||||||||||
Lease Cost |
Classification |
2020 |
2019 |
|||||||
Operating lease cost(1) |
Property operating expenses and rental expenses | $ | 32,441,000 | $ | 29,974,000 | |||||
Finance lease cost |
||||||||||
Amortization of leased assets |
Depreciation and amortization | 1,891,000 | 2,001,000 | |||||||
Interest on lease liabilities |
Interest expense | 609,000 | 391,000 | |||||||
|
|
|
|
|||||||
Total lease cost |
$ | 34,941,000 | $ | 32,366,000 | ||||||
|
|
|
|
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
December 31, |
||||||||
Lease Term and Discount Rate |
2020 |
2019 |
||||||
Weighted average remaining lease term (in years) |
||||||||
Operating leases |
13.3 | 13.5 | ||||||
Finance leases |
1.3 | 1.3 | ||||||
Weighted average discount rate |
||||||||
Operating leases |
5.77 | % | 5.94 | % | ||||
Finance leases |
5.62 | % | 7.33 | % |
Years Ended December 31, |
||||||||
Supplemental Disclosure of Cash Flows Information |
2020 |
2019 |
||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||
Operating cash outflows related to operating leases |
$ | 23,790,000 | $ | 22,114,000 | ||||
Operating cash outflows related to finance leases |
$ | 609,000 | $ | 390,000 | ||||
Financing cash outflows related to finance leases |
$ | 1,235,000 | $ | 3,076,000 | ||||
Leased assets obtained in exchange for finance lease liabilities |
$ | 66,000 | $ | — | ||||
Right-of-use |
$ | 14,302,000 | $ | 31,958,000 |
Year |
Amount |
|||
2021 |
$ | 23,875,000 | ||
2022 |
24,328,000 | |||
2023 |
24,520,000 | |||
2024 |
23,756,000 | |||
2025 |
23,639,000 | |||
Thereafter |
167,081,000 | |||
|
|
|||
Total operating lease payments |
287,199,000 | |||
Less: interest |
93,565,000 | |||
|
|
|||
Present value of operating lease liabilities |
$ | 193,634,000 | ||
|
|
Year |
Amount |
|||
2021 |
$ | 151,000 | ||
2022 |
22,000 | |||
2023 |
16,000 | |||
2024 |
— | |||
2025 |
— | |||
Thereafter |
— | |||
|
|
|||
Total finance lease payments |
189,000 | |||
Less: interest |
8,000 | |||
|
|
|||
Present value of finance lease liabilities |
$ | 181,000 | ||
|
|
Integrated Senior Health Campuses |
Senior Housing — RIDEA |
Medical Office Buildings |
Senior Housing |
Skilled Nursing Facilities |
Hospitals |
Year Ended December 31, 2020 |
||||||||||||||||||||||
Revenues and grant income: |
||||||||||||||||||||||||||||
Resident fees and services |
$ | 983,169,000 | $ | 85,904,000 | $ | — | $ | — | $ | — | $ | — | $ | 1,069,073,000 | ||||||||||||||
Real estate revenue |
— | — | 78,424,000 | 14,524,000 | 16,107,000 | 10,992,000 | 120,047,000 | |||||||||||||||||||||
Grant income |
53,855,000 | 1,326,000 | — | — | — | — | 55,181,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues and grant income |
1,037,024,000 | 87,230,000 | 78,424,000 | 14,524,000 | 16,107,000 | 10,992,000 | 1,244,301,000 | |||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
Property operating expenses |
929,897,000 | 63,830,000 | — | — | — | — | 993,727,000 | |||||||||||||||||||||
Rental expenses |
— | — | 30,216,000 | 64,000 | 1,572,000 | 446,000 | 32,298,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment net operating income |
$ | 107,127,000 | $ | 23,400,000 | $ | 48,208,000 | $ | 14,460,000 | $ | 14,535,000 | $ | 10,546,000 | $ | 218,276,000 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
General and administrative |
|
$ | 27,007,000 | |||||||||||||||||||||||||
Acquisition related expenses |
|
290,000 | ||||||||||||||||||||||||||
Depreciation and amortization |
|
98,858,000 | ||||||||||||||||||||||||||
Other income (expense): |
|
|||||||||||||||||||||||||||
Interest expense: |
||||||||||||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
|
(71,278,000 | ) | |||||||||||||||||||||||||
Loss in fair value of derivative financial instruments |
|
(3,906,000 | ) | |||||||||||||||||||||||||
Gain on dispositions of real estate investments |
|
1,395,000 | ||||||||||||||||||||||||||
Impairment of real estate investments |
|
(11,069,000 | ) | |||||||||||||||||||||||||
Loss from unconsolidated entities |
|
(4,517,000 | ) | |||||||||||||||||||||||||
Foreign currency gain |
|
1,469,000 | ||||||||||||||||||||||||||
Other income |
|
1,570,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Income before income taxes |
|
5,785,000 | ||||||||||||||||||||||||||
Income tax benefit |
|
3,078,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net income |
|
$ | 8,863,000 | |||||||||||||||||||||||||
|
|
Integrated Senior Health Campuses |
Senior Housing — RIDEA |
Medical Office Buildings |
Senior Housing |
Skilled Nursing Facilities |
Hospitals |
Year Ended December 31, 2019 |
||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Resident fees and services |
$ | 1,030,934,000 | $ | 68,144,000 | $ | — | $ | — | $ | — | $ | — | $ | 1,099,078,000 | ||||||||||||||
Real estate revenue |
— | — | 80,805,000 | 18,407,000 | 13,345,000 | 11,481,000 | 124,038,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
1,030,934,000 | 68,144,000 | 80,805,000 | 18,407,000 | 13,345,000 | 11,481,000 | 1,223,116,000 | |||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
Property operating expenses |
919,793,000 | 48,067,000 | — | — | — | — | 967,860,000 | |||||||||||||||||||||
Rental expenses |
— | — | 30,870,000 | 1,001,000 | 1,456,000 | 532,000 | 33,859,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment net operating income |
$ | 111,141,000 | $ | 20,077,000 | $ | 49,935,000 | $ | 17,406,000 | $ | 11,889,000 | $ | 10,949,000 | $ | 221,397,000 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
General and administrative |
|
$ | 29,749,000 | |||||||||||||||||||||||||
Acquisition related expenses |
|
(161,000 | ) | |||||||||||||||||||||||||
Depreciation and amortization |
|
111,412,000 | ||||||||||||||||||||||||||
Other income (expense): |
|
|||||||||||||||||||||||||||
Interest expense: |
|
|||||||||||||||||||||||||||
Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment) |
|
(78,553,000 | ) | |||||||||||||||||||||||||
Loss in fair value of derivative financial instruments |
|
(4,541,000 | ) | |||||||||||||||||||||||||
Loss from unconsolidated entities |
|
(2,097,000 | ) | |||||||||||||||||||||||||
Foreign currency gain |
|
1,730,000 | ||||||||||||||||||||||||||
Other income |
|
3,736,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Income before income taxes |
|
672,000 | ||||||||||||||||||||||||||
Income tax expense |
|
(1,524,000 | ) | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net loss |
|
$ | (852,000 | ) | ||||||||||||||||||||||||
|
|
Integrated Senior Health Campuses |
Senior Housing — RIDEA |
Medical Office Buildings |
Senior Housing |
Skilled Nursing Facilities |
Hospitals |
Year Ended December 31, 2018 |
||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Resident fees and services |
$ | 940,616,000 | $ | 65,075,000 | $ | — | $ | — | $ | — | $ | — | $ | 1,005,691,000 | ||||||||||||||
Real estate revenue |
— | — | 80,078,000 | 21,913,000 | 14,887,000 | 12,691,000 | 129,569,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
940,616,000 | 65,075,000 | 80,078,000 | 21,913,000 | 14,887,000 | 12,691,000 | 1,135,260,000 | |||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
Property operating expenses |
844,279,000 | 44,792,000 | — | — | — | — | 889,071,000 | |||||||||||||||||||||
Rental expenses |
— | — | 30,514,000 | 837,000 | 1,816,000 | 1,656,000 | 34,823,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment net operating income |
$ | 96,337,000 | $ | 20,283,000 | $ | 49,564,000 | $ | 21,076,000 | $ | 13,071,000 | $ | 11,035,000 | $ | 211,366,000 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
General and administrative |
|
$ | 28,770,000 | |||||||||||||||||||||||||
Acquisition related expenses |
|
(2,913,000 | ) | |||||||||||||||||||||||||
Depreciation and amortization |
|
95,678,000 | ||||||||||||||||||||||||||
Other income (expense): |
|
|||||||||||||||||||||||||||
Interest expense: |
|
|||||||||||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
|
(66,281,000 | ) | |||||||||||||||||||||||||
Loss in fair value of derivative financial instruments |
|
(1,949,000 | ) | |||||||||||||||||||||||||
Impairment of real estate investment |
|
(2,542,000 | ) | |||||||||||||||||||||||||
Loss from unconsolidated entities |
|
(3,877,000 | ) | |||||||||||||||||||||||||
Foreign currency loss |
|
(2,690,000 | ) | |||||||||||||||||||||||||
Other income |
|
1,248,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Income before income taxes |
|
13,740,000 | ||||||||||||||||||||||||||
Income tax benefit |
|
797,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net income |
|
$ | 14,537,000 | |||||||||||||||||||||||||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Integrated senior health campuses |
$ | 1,886,878,000 | $ | 1,791,868,000 | ||||
Medical office buildings |
610,653,000 | 620,292,000 | ||||||
Senior housing — RIDEA |
348,987,000 | 360,823,000 | ||||||
Senior housing |
152,406,000 | 152,909,000 | ||||||
Skilled nursing facilities |
115,941,000 | 126,606,000 | ||||||
Hospitals |
109,663,000 | 113,737,000 | ||||||
Other |
10,409,000 | 6,054,000 | ||||||
|
|
|
|
|||||
Total assets |
$ | 3,234,937,000 | $ | 3,172,289,000 | ||||
|
|
|
|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Revenues and grant income: |
||||||||||||
United States |
$ | 1,239,509,000 | $ | 1,218,337,000 | $ | 1,130,350,000 | ||||||
International |
4,792,000 | 4,779,000 | 4,910,000 | |||||||||
|
|
|
|
|
|
|||||||
$ | 1,244,301,000 | $ | 1,223,116,000 | $ | 1,135,260,000 | |||||||
|
|
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Real estate investments, net: |
||||||||
United States |
$ | 2,279,257,000 | $ | 2,219,882,000 | ||||
International |
50,743,000 | 50,539,000 | ||||||
|
|
|
|
|||||
$ | 2,330,000,000 | $ | 2,270,421,000 | |||||
|
|
|
|
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(f) |
|||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(e) |
Accumulated Depreciation (g)(h) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||
DeKalb Professional Center (Medical Office) |
Lithonia, GA | $ | — | $ | 479,000 | $ | 2,871,000 | $ | 271,000 | $ | 479,000 | $ | 3,142,000 | $ | 3,621,000 | $ | (766,000 | ) | 2008 | 06/06/14 | ||||||||||||||||||||||
Country Club MOB (Medical Office) |
Stockbridge, GA | — | 240,000 | 2,306,000 | 375,000 | 240,000 | 2,681,000 | 2,921,000 | (572,000 | ) | 2002 | 06/26/14 | ||||||||||||||||||||||||||||||
Acworth Medical Complex (Medical Office) |
Acworth, GA | — | 216,000 | 3,135,000 | 192,000 | 216,000 | 3,327,000 | 3,543,000 | (692,000 | ) | 1976/2009 | 07/02/14 | ||||||||||||||||||||||||||||||
Acworth, GA | — | 250,000 | 2,214,000 | 148,000 | 250,000 | 2,362,000 | 2,612,000 | (550,000 | ) | 1976/2009 | 07/02/14 | |||||||||||||||||||||||||||||||
Acworth, GA | — | 104,000 | 774,000 | 3,000 | 104,000 | 777,000 | 881,000 | (197,000 | ) | 1976/2009 | 07/02/14 | |||||||||||||||||||||||||||||||
Wichita KS MOB (Medical Office) |
Wichita, KS | — | 943,000 | 6,288,000 | 537,000 | 943,000 | 6,825,000 | 7,768,000 | (1,648,000 | ) | 1980/1996 | 09/04/14 | ||||||||||||||||||||||||||||||
Delta Valley ALF Portfolio (Senior Housing) |
Batesville, MS | — | 331,000 | 5,103,000 | — | 331,000 | 5,103,000 | 5,434,000 | (1,098,000 | ) | 1999/2005 | 09/11/14 | ||||||||||||||||||||||||||||||
Cleveland, MS | — | 348,000 | 6,369,000 | — | 348,000 | 6,369,000 | 6,717,000 | (1,477,000 | ) | 2004 | 09/11/14 | |||||||||||||||||||||||||||||||
Springdale, AR | — | 891,000 | 6,538,000 | — | 891,000 | 6,538,000 | 7,429,000 | (1,489,000 | ) | 1998/2005 | 01/08/15 | |||||||||||||||||||||||||||||||
Lee’s Summit MO MOB (Medical Office) |
Lee’s Summit, MO | — | 1,045,000 | 5,068,000 | 463,000 | 1,045,000 | 5,531,000 | 6,576,000 | (1,646,000 | ) | 2006 | 09/18/14 | ||||||||||||||||||||||||||||||
Carolina Commons MOB (Medical Office) |
Indian Land, SC | 6,419,000 | 1,028,000 | 9,430,000 | 2,190,000 | 1,028,000 | 11,620,000 | 12,648,000 | (2,210,000 | ) | 2009 | 10/15/14 | ||||||||||||||||||||||||||||||
Mount Olympia MOB Portfolio (Medical Office) |
Mount Dora, FL | — | 393,000 | 5,633,000 | — | 393,000 | 5,633,000 | 6,026,000 | (1,056,000 | ) | 2009 | 12/04/14 | ||||||||||||||||||||||||||||||
Olympia Fields, IL | — | 298,000 | 2,726,000 | 21,000 | 298,000 | 2,747,000 | 3,045,000 | (602,000 | ) | 2005 | 12/04/14 | |||||||||||||||||||||||||||||||
Southlake TX Hospital (Hospital) |
Southlake, TX | — | 5,089,000 | 108,517,000 | — | 5,089,000 | 108,517,000 | 113,606,000 | (17,696,000 | ) | 2013 | 12/04/14 | ||||||||||||||||||||||||||||||
East Texas MOB Portfolio (Medical Office) |
Longview, TX | — | — | 19,942,000 | 111,000 | — | 20,053,000 | 20,053,000 | (4,050,000 | ) | 2008 | 12/12/14 | ||||||||||||||||||||||||||||||
Longview, TX | — | 228,000 | 965,000 | — | 228,000 | 965,000 | 1,193,000 | (321,000 | ) | 1979/1997 | 12/12/14 | |||||||||||||||||||||||||||||||
Longview, TX | — | 759,000 | 1,696,000 | — | 759,000 | 1,696,000 | 2,455,000 | (606,000 | ) | 1998 | 12/12/14 | |||||||||||||||||||||||||||||||
Longview, TX | — | — | 8,027,000 | — | — | 8,027,000 | 8,027,000 | (1,667,000 | ) | 2004 | 12/12/14 | |||||||||||||||||||||||||||||||
Longview, TX | — | — | 696,000 | 29,000 | — | 725,000 | 725,000 | (237,000 | ) | 1956 | 12/12/14 | |||||||||||||||||||||||||||||||
Longview, TX | — | — | 27,601,000 | 3,354,000 | — | 30,955,000 | 30,955,000 | (6,626,000 | ) | 1985/1993/ 2004 | 12/12/14 | |||||||||||||||||||||||||||||||
Marshall, TX | — | 368,000 | 1,711,000 | 99,000 | 368,000 | 1,810,000 | 2,178,000 | (626,000 | ) | 1970 | 12/12/14 | |||||||||||||||||||||||||||||||
Premier MOB (Medical Office) |
Novi, MI | — | 644,000 | 10,420,000 | 825,000 | 644,000 | 11,245,000 | 11,889,000 | (2,417,000 | ) | 2006 | 12/19/14 | ||||||||||||||||||||||||||||||
Independence MOB Portfolio (Medical Office) |
Southgate, KY | — | 411,000 | 11,005,000 | 1,914,000 | 411,000 | 12,919,000 | 13,330,000 | (2,461,000 | ) | 1988 | 01/13/15 | ||||||||||||||||||||||||||||||
Somerville, MA | 30,332,000 | 1,509,000 | 46,775,000 | 4,045,000 | 1,509,000 | 50,820,000 | 52,329,000 | (8,011,000 | ) | 1990 | 01/13/15 | |||||||||||||||||||||||||||||||
Morristown, NJ | 28,364,000 | 3,763,000 | 26,957,000 | 3,940,000 | 3,764,000 | 30,896,000 | 34,660,000 | (6,808,000 | ) | 1980 | 01/13/15 | |||||||||||||||||||||||||||||||
Verona, NJ | — | 1,683,000 | 9,405,000 | 746,000 | 1,683,000 | 10,151,000 | 11,834,000 | (2,099,000 | ) | 1970 | 01/13/15 | |||||||||||||||||||||||||||||||
Bronx, NY | — | — | 19,593,000 | 2,533,000 | — | 22,126,000 | 22,126,000 | (3,794,000 | ) | 1987/1988 | 01/26/15 | |||||||||||||||||||||||||||||||
King of Prussia PA MOB (Medical Office) |
King of Prussia, PA | 8,797,000 | 3,427,000 | 13,849,000 | 4,803,000 | 3,427,000 | 18,652,000 | 22,079,000 | (4,178,000 | ) | 1946/2000 | 01/21/15 | ||||||||||||||||||||||||||||||
North Carolina ALF Portfolio (Senior Housing — RIDEA) |
Clemmons, NC | — | 596,000 | 13,237,000 | (768,000 | ) | 596,000 | 12,469,000 | 13,065,000 | (2,089,000 | ) | 2014 | 06/29/15 | |||||||||||||||||||||||||||||
Garner, NC | — | 1,723,000 | 11,517,000 | 15,000 | 1,723,000 | 11,532,000 | 13,255,000 | (722,000 | ) | 2014 | 03/27/19 | |||||||||||||||||||||||||||||||
Huntersville, NC | — | 2,033,000 | 11,494,000 | (192,000 | ) | 2,033,000 | 11,302,000 | 13,335,000 | (1,424,000 | ) | 2015 | 01/18/17 | ||||||||||||||||||||||||||||||
Matthews, NC | — | 949,000 | 12,537,000 | (188,000 | ) | 949,000 | 12,349,000 | 13,298,000 | (970,000 | ) | 2017 | 08/30/18 | ||||||||||||||||||||||||||||||
Mooresville, NC | — | 835,000 | 15,894,000 | (777,000 | ) | 835,000 | 15,117,000 | 15,952,000 | (2,577,000 | ) | 2012 | 01/28/15 | ||||||||||||||||||||||||||||||
Raleigh, NC | — | 1,069,000 | 21,235,000 | (772,000 | ) | 1,069,000 | 20,463,000 | 21,532,000 | (3,298,000 | ) | 2013 | 01/28/15 | ||||||||||||||||||||||||||||||
Wake Forest, NC | — | 772,000 | 13,596,000 | (864,000 | ) | 772,000 | 12,732,000 | 13,504,000 | (2,005,000 | ) | 2014 | 06/29/15 | ||||||||||||||||||||||||||||||
Orange Star Medical Portfolio (Medical Office and Hospital) |
Durango, CO | — | 623,000 | 14,166,000 | 279,000 | 623,000 | 14,445,000 | 15,068,000 | (2,399,000 | ) | 2004 | 02/26/15 | ||||||||||||||||||||||||||||||
Durango, CO | — | 788,000 | 10,467,000 | 604,000 | 788,000 | 11,071,000 | 11,859,000 | (1,918,000 | ) | 2004 | 02/26/15 | |||||||||||||||||||||||||||||||
Friendswood, TX | — | 500,000 | 7,664,000 | 323,000 | 500,000 | 7,987,000 | 8,487,000 | (1,476,000 | ) | 2008 | 02/26/15 | |||||||||||||||||||||||||||||||
Keller, TX | — | 1,604,000 | 7,912,000 | 429,000 | 1,604,000 | 8,341,000 | 9,945,000 | (1,549,000 | ) | 2011 | 02/26/15 | |||||||||||||||||||||||||||||||
Wharton, TX | — | 259,000 | 10,590,000 | 243,000 | 259,000 | 10,833,000 | 11,092,000 | (1,970,000 | ) | 1987 | 02/26/15 | |||||||||||||||||||||||||||||||
Kingwood MOB Portfolio (Medical Office) |
Kingwood, TX | — | 820,000 | 8,589,000 | 127,000 | 820,000 | 8,716,000 | 9,536,000 | (1,647,000 | ) | 2005 | 03/11/15 | ||||||||||||||||||||||||||||||
Kingwood, TX | — | 781,000 | 3,943,000 | 95,000 | 781,000 | 4,038,000 | 4,819,000 | (807,000 | ) | 2008 | 03/11/15 | |||||||||||||||||||||||||||||||
Mt Juliet TN MOB (Medical Office) |
Mount Juliet, TN | — | 1,188,000 | 10,720,000 | 166,000 | 1,188,000 | 10,886,000 | 12,074,000 | (1,987,000 | ) | 2012 | 03/17/15 |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(f) |
|||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(e) |
Accumulated Depreciation (g)(h) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||
Homewood AL MOB (Medical Office) |
Homewood, AL | $ | — | $ | 405,000 | $ | 6,590,000 | $ | (60,000 | ) | $ | 405,000 | $ | 6,530,000 | $ | 6,935,000 | $ | (1,233,000 | ) | 2010 | 03/27/15 | |||||||||||||||||||||
Paoli PA Medical Plaza (Medical Office) |
Paoli, PA | 12,404,000 | 2,313,000 | 12,447,000 | 7,984,000 | 2,313,000 | 20,431,000 | 22,744,000 | (2,860,000 | ) | 1951 | 04/10/15 | ||||||||||||||||||||||||||||||
Paoli, PA | — | 1,668,000 | 7,357,000 | 1,335,000 | 1,668,000 | 8,692,000 | 10,360,000 | (1,987,000 | ) | 1975 | 04/10/15 | |||||||||||||||||||||||||||||||
Glen Burnie MD MOB (Medical Office) |
Glen Burnie, MD | — | 2,692,000 | 14,095,000 | 2,649,000 | 2,692,000 | 16,744,000 | 19,436,000 | (3,533,000 | ) | 1981 | 05/06/15 | ||||||||||||||||||||||||||||||
Marietta GA MOB (Medical Office) |
Marietta, GA | — | 1,347,000 | 10,947,000 | 462,000 | 1,347,000 | 11,409,000 | 12,756,000 | (1,927,000 | ) | 2002 | 05/07/15 | ||||||||||||||||||||||||||||||
Mountain Crest Senior Housing Portfolio (Senior Housing — RIDEA) |
Elkhart, IN | — | 793,000 | 6,009,000 | 179,000 | 793,000 | 6,188,000 | 6,981,000 | (1,385,000 | ) | 1997 | 05/14/15 | ||||||||||||||||||||||||||||||
Elkhart, IN | — | 782,000 | 6,760,000 | 568,000 | 782,000 | 7,328,000 | 8,110,000 | (1,667,000 | ) | 2000 | 05/14/15 | |||||||||||||||||||||||||||||||
Hobart, IN | — | 604,000 | 11,529,000 | 105,000 | 604,000 | 11,634,000 | 12,238,000 | (2,095,000 | ) | 2008 | 05/14/15 | |||||||||||||||||||||||||||||||
LaPorte, IN | — | 392,000 | 14,894,000 | 343,000 | 392,000 | 15,237,000 | 15,629,000 | (2,719,000 | ) | 2008 | 05/14/15 | |||||||||||||||||||||||||||||||
Mishawaka, IN | 9,124,000 | 3,670,000 | 14,416,000 | 642,000 | 3,670,000 | 15,058,000 | 18,728,000 | (2,885,000 | ) | 1978 | 07/14/15 | |||||||||||||||||||||||||||||||
Niles, MI | — | 404,000 | 5,050,000 | 302,000 | 404,000 | 5,352,000 | 5,756,000 | (1,179,000 | ) | 2000 | |
06/11/15 and 11/20/15 |
||||||||||||||||||||||||||||||
Mount Dora Medical Center (Medical Office) |
Mount Dora, FL | — | 736,000 | 14,616,000 | (6,703,000 | ) | 736,000 | 7,913,000 | 8,649,000 | (1,476,000 | ) | 2008 | 05/15/15 | |||||||||||||||||||||||||||||
Nebraska Senior Housing Portfolio (Senior Housing — RIDEA) |
Bennington, NE | — | 981,000 | 20,427,000 | 467,000 | 981,000 | 20,894,000 | 21,875,000 | (3,513,000 | ) | 2009 | 05/29/15 | ||||||||||||||||||||||||||||||
Omaha, NE | — | 1,274,000 | 38,619,000 | 803,000 | 1,274,000 | 39,422,000 | 40,696,000 | (6,160,000 | ) | 2000 | 05/29/15 | |||||||||||||||||||||||||||||||
Pennsylvania Senior Housing Portfolio (Senior Housing — RIDEA) |
Bethlehem, PA | — | 1,542,000 | 22,249,000 | 538,000 | 1,542,000 | 22,787,000 | 24,329,000 | (4,185,000 | ) | 2005 | 06/30/15 | ||||||||||||||||||||||||||||||
Boyertown, PA | 22,932,000 | 480,000 | 25,544,000 | 464,000 | 480,000 | 26,008,000 | 26,488,000 | (4,255,000 | ) | 2000 | 06/30/15 | |||||||||||||||||||||||||||||||
York, PA | 12,432,000 | 972,000 | 29,860,000 | 319,000 | 972,000 | 30,179,000 | 31,151,000 | (4,855,000 | ) | 1986 | 06/30/15 | |||||||||||||||||||||||||||||||
Southern Illinois MOB Portfolio (Medical Office) |
Waterloo, IL | — | 94,000 | 1,977,000 | — | 94,000 | 1,977,000 | 2,071,000 | (384,000 | ) | 2015 | 07/01/15 | ||||||||||||||||||||||||||||||
Waterloo, IL | — | 738,000 | 6,332,000 | 584,000 | 738,000 | 6,916,000 | 7,654,000 | (1,421,000 | ) | 1995 | |
07/01/15, 12/19/17 and 04/17/18 |
||||||||||||||||||||||||||||||
Waterloo, IL | — | 200,000 | 2,648,000 | 62,000 | 200,000 | 2,710,000 | 2,910,000 | (564,000 | ) | 2011 | 07/01/15 | |||||||||||||||||||||||||||||||
Napa Medical Center (Medical Office) |
Napa, CA | — | 1,176,000 | 13,328,000 | 1,572,000 | 1,176,000 | 14,900,000 | 16,076,000 | (3,000,000 | ) | 1980 | 07/02/15 | ||||||||||||||||||||||||||||||
Chesterfield Corporate Plaza (Medical Office) |
Chesterfield, MO | — | 8,030,000 | 24,533,000 | 2,885,000 | 8,030,000 | 27,418,000 | 35,448,000 | (5,898,000 | ) | 1989 | 08/14/15 | ||||||||||||||||||||||||||||||
Richmond VA ALF (Senior Housing — RIDEA) |
North Chesterfield, VA |
33,400,000 | 2,146,000 | 56,671,000 | 525,000 | 2,146,000 | 57,196,000 | 59,342,000 | (8,175,000 | ) | 2009 | 09/11/15 | ||||||||||||||||||||||||||||||
Crown Senior Care Portfolio (Senior Housing) |
Peel, Isle of Man | — | 1,249,000 | 7,453,000 | — | 1,249,000 | 7,453,000 | 8,702,000 | (1,189,000 | ) | 2015 | 09/15/15 | ||||||||||||||||||||||||||||||
St. Albans, UK | — | 1,259,000 | 13,716,000 | 249,000 | 1,259,000 | 13,965,000 | 15,224,000 | (2,126,000 | ) | 2015 | 10/08/15 | |||||||||||||||||||||||||||||||
Salisbury, UK | — | 1,338,000 | 12,855,000 | 38,000 | 1,338,000 | 12,893,000 | 14,231,000 | (1,990,000 | ) | 2015 | 12/08/15 | |||||||||||||||||||||||||||||||
Aberdeen, UK | — | 2,171,000 | 6,473,000 | — | 2,171,000 | 6,473,000 | 8,644,000 | (773,000 | ) | 1986 | 11/15/16 | |||||||||||||||||||||||||||||||
Felixstowe, UK | — | 754,000 | 6,325,000 | 445,000 | 754,000 | 6,770,000 | 7,524,000 | (777,000 | ) | 2010/2011 | 11/15/16 | |||||||||||||||||||||||||||||||
Felixstowe, UK | — | 569,000 | 2,797,000 | 296,000 | 569,000 | 3,093,000 | 3,662,000 | (391,000 | ) | 2010/2011 | 11/15/16 | |||||||||||||||||||||||||||||||
Washington DC SNF (Skilled Nursing) |
Washington, DC | — | 1,194,000 | 34,200,000 | — | 1,194,000 | 34,200,000 | 35,394,000 | (5,964,000 | ) | 1983 | 10/29/15 | ||||||||||||||||||||||||||||||
Stockbridge GA MOB II (Medical Office) |
Stockbridge, GA | — | 499,000 | 8,353,000 | 916,000 | 499,000 | 9,269,000 | 9,768,000 | (1,525,000 | ) | 2006 | 12/03/15 | ||||||||||||||||||||||||||||||
Marietta GA MOB II (Medical Office) |
Marietta, GA | — | 661,000 | 4,783,000 | 301,000 | 661,000 | 5,084,000 | 5,745,000 | (875,000 | ) | 2007 | 12/09/15 | ||||||||||||||||||||||||||||||
Naperville MOB (Medical Office) |
Naperville, IL | — | 392,000 | 3,765,000 | 32,000 | 392,000 | 3,797,000 | 4,189,000 | (786,000 | ) | 1999 | 01/12/16 | ||||||||||||||||||||||||||||||
Naperville, IL | — | 548,000 | 11,815,000 | 424,000 | 548,000 | 12,239,000 | 12,787,000 | (2,093,000 | ) | 1989 | 01/12/16 |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(f) |
|||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(e) |
Accumulated Depreciation (g)(h) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||
Lakeview IN Medical Plaza (Medical Office) |
Indianapolis, IN | $ | 19,947,000 | $ | 2,375,000 | $ | 15,911,000 | $ | 5,528,000 | $ | 2,375,000 | $ | 21,439,000 | $ | 23,814,000 | $ | (4,623,000 | ) | 1987 | 01/21/16 | ||||||||||||||||||||||
Pennsylvania Senior Housing Portfolio II (Senior Housing — RIDEA) |
Palmyra, PA | 19,114,000 | 835,000 | 24,424,000 | 242,000 | 835,000 | 24,666,000 | 25,501,000 | (4,386,000 | ) | 2007 | 02/01/16 | ||||||||||||||||||||||||||||||
Snellville GA MOB (Medical Office) |
Snellville, GA | — | 332,000 | 7,781,000 | 502,000 | 332,000 | 8,283,000 | 8,615,000 | (1,355,000 | ) | 2005 | 02/05/16 | ||||||||||||||||||||||||||||||
Lakebrook Medical Center (Medical Office) |
Westbrook, CT | — | 653,000 | 4,855,000 | 393,000 | 653,000 | 5,248,000 | 5,901,000 | (926,000 | ) | 2007 | 02/19/16 | ||||||||||||||||||||||||||||||
Stockbridge GA MOB III (Medical Office) |
Stockbridge, GA | — | 606,000 | 7,924,000 | 299,000 | 606,000 | 8,223,000 | 8,829,000 | (1,433,000 | ) | 2007 | 03/29/16 | ||||||||||||||||||||||||||||||
Joplin MO MOB (Medical Office) |
Joplin, MO | — | 1,245,000 | 9,860,000 | (35,000 | ) | 1,245,000 | 9,825,000 | 11,070,000 | (2,220,000 | ) | 2000 | 05/10/16 | |||||||||||||||||||||||||||||
Austell GA MOB (Medical Office) |
Austell, GA | — | 663,000 | 10,547,000 | 120,000 | 663,000 | 10,667,000 | 11,330,000 | (1,467,000 | ) | 2008 | 05/25/16 | ||||||||||||||||||||||||||||||
Middletown OH MOB (Medical Office) |
Middletown, OH | — | — | 17,389,000 | 795,000 | — | 18,184,000 | 18,184,000 | (2,438,000 | ) | 2007 | 06/16/16 | ||||||||||||||||||||||||||||||
Fox Grape SNF Portfolio (Skilled Nursing) |
Braintree, MA | — | 1,844,000 | 10,847,000 | 31,000 | 1,844,000 | 10,878,000 | 12,722,000 | (1,396,000 | ) | 2015 | 07/01/16 | ||||||||||||||||||||||||||||||
Brighton, MA | — | 779,000 | 2,661,000 | 334,000 | 779,000 | 2,995,000 | 3,774,000 | (427,000 | ) | 1982 | 07/01/16 | |||||||||||||||||||||||||||||||
Duxbury, MA | — | 2,921,000 | 11,244,000 | 1,933,000 | 2,921,000 | 13,177,000 | 16,098,000 | (1,713,000 | ) | 1983 | 07/01/16 | |||||||||||||||||||||||||||||||
Hingham, MA | — | 2,316,000 | 17,390,000 | (166,000 | ) | 2,316,000 | 17,224,000 | 19,540,000 | (2,202,000 | ) | 1990 | 07/01/16 | ||||||||||||||||||||||||||||||
Weymouth, MA | — | 1,857,000 | 5,286,000 | (90,000 | ) | 1,857,000 | 5,196,000 | 7,053,000 | (620,000 | ) | 1963 | 07/01/16 | ||||||||||||||||||||||||||||||
Quincy, MA | 14,546,000 | 3,537,000 | 13,697,000 | 333,000 | 3,537,000 | 14,030,000 | 17,567,000 | (1,679,000 | ) | 1995 | 11/01/16 | |||||||||||||||||||||||||||||||
Voorhees NJ MOB (Medical Office) |
Voorhees, NJ | — | 1,727,000 | 8,451,000 | 664,000 | 1,727,000 | 9,115,000 | 10,842,000 | (1,590,000 | ) | 2008 | 07/08/16 | ||||||||||||||||||||||||||||||
Norwich CT MOB Portfolio (Medical Office) |
Norwich, CT | — | 403,000 | 1,601,000 | 1,228,000 | 403,000 | 2,829,000 | 3,232,000 | (417,000 | ) | 2014 | 12/16/16 | ||||||||||||||||||||||||||||||
Norwich, CT | — | 804,000 | 12,094,000 | 497,000 | 804,000 | 12,591,000 | 13,395,000 | (1,569,000 | ) | 1999 | 12/16/16 | |||||||||||||||||||||||||||||||
New London CT MOB (Medical Office) |
New London, CT | — | 669,000 | 3,479,000 | 355,000 | 670,000 | 3,833,000 | 4,503,000 | (671,000 | ) | 1987 | 05/03/17 | ||||||||||||||||||||||||||||||
Middletown OH MOB II (Medical Office) |
Middletown, OH | — | — | 3,949,000 | 387,000 | — | 4,336,000 | 4,336,000 | (421,000 | ) | 2007 | 12/20/17 | ||||||||||||||||||||||||||||||
Owen Valley Health Campus |
Spencer, IN | 8,939,000 | 307,000 | 9,111,000 | 224,000 | 307,000 | 9,335,000 | 9,642,000 | (1,263,000 | ) | 1999 | 12/01/15 | ||||||||||||||||||||||||||||||
Homewood Health Campus | Lebanon, IN | 8,971,000 | 973,000 | 9,702,000 | 533,000 | 1,040,000 | 10,168,000 | 11,208,000 | (1,397,000 | ) | 2000 | 12/01/15 | ||||||||||||||||||||||||||||||
Ashford Place Health Campus | Shelbyville, IN | 6,167,000 | 664,000 | 12,662,000 | 846,000 | 694,000 | 13,478,000 | 14,172,000 | (1,821,000 | ) | 2004 | 12/01/15 | ||||||||||||||||||||||||||||||
Mill Pond Health Campus | Greencastle, IN | 7,297,000 | 1,576,000 | 8,124,000 | 468,000 | 1,576,000 | 8,592,000 | 10,168,000 | (1,148,000 | ) | 2005 | 12/01/15 | ||||||||||||||||||||||||||||||
St. Andrews Health Campus | Batesville, IN | 4,604,000 | 552,000 | 8,213,000 | 416,000 | 625,000 | 8,556,000 | 9,181,000 | (1,157,000 | ) | 2005 | 12/01/15 | ||||||||||||||||||||||||||||||
Hampton Oaks Health Campus | Scottsburg, IN | 6,482,000 | 720,000 | 8,145,000 | 620,000 | 845,000 | 8,640,000 | 9,485,000 | (1,208,000 | ) | 2006 | 12/01/15 | ||||||||||||||||||||||||||||||
Forest Park Health Campus | Richmond, IN | 7,078,000 | 535,000 | 9,399,000 | 458,000 | 635,000 | 9,757,000 | 10,392,000 | (1,379,000 | ) | 2007 | 12/01/15 | ||||||||||||||||||||||||||||||
The Maples at Waterford Crossing | Goshen, IN | 5,941,000 | 344,000 | 8,027,000 | 48,000 | 347,000 | 8,072,000 | 8,419,000 | (1,088,000 | ) | 2006 | 12/01/15 | ||||||||||||||||||||||||||||||
Morrison Woods Health Campus | Muncie, IN | (c | ) | 1,526,000 | 10,144,000 | 11,877,000 | 1,862,000 | 21,685,000 | 23,547,000 | (2,029,000 | ) | 2008 | |
12/01/15 and 09/14/16 |
||||||||||||||||||||||||||||
Woodbridge Health Campus | Logansport, IN | 8,497,000 | 228,000 | 11,812,000 | 316,000 | 257,000 | 12,099,000 | 12,356,000 | (1,650,000 | ) | 2003 | 12/01/15 | ||||||||||||||||||||||||||||||
Bridgepointe Health Campus | Vincennes, IN | 7,273,000 | 572,000 | 7,469,000 | 608,000 | 670,000 | 7,979,000 | 8,649,000 | (1,078,000 | ) | 2002 | 12/01/15 | ||||||||||||||||||||||||||||||
Greenleaf Living Center | Elkhart, IN | 11,633,000 | 492,000 | 12,157,000 | 429,000 | 511,000 | 12,567,000 | 13,078,000 | (1,686,000 | ) | 2000 | 12/01/15 | ||||||||||||||||||||||||||||||
Forest Glen Health Campus | Springfield, OH | 10,264,000 | 846,000 | 12,754,000 | 359,000 | 877,000 | 13,082,000 | 13,959,000 | (1,807,000 | ) | 2007 | 12/01/15 | ||||||||||||||||||||||||||||||
The Meadows of Kalida Health Campus | Kalida, OH | 8,042,000 | 298,000 | 7,628,000 | 152,000 | 303,000 | 7,775,000 | 8,078,000 | (1,053,000 | ) | 2007 | 12/01/15 | ||||||||||||||||||||||||||||||
The Heritage | Findlay, OH | 13,396,000 | 1,312,000 | 13,475,000 | 395,000 | 1,382,000 | 13,800,000 | 15,182,000 | (1,906,000 | ) | 1975 | 12/01/15 | ||||||||||||||||||||||||||||||
Genoa Retirement Village | Genoa, OH | 8,438,000 | 881,000 | 8,113,000 | 652,000 | 909,000 | 8,737,000 | 9,646,000 | (1,204,000 | ) | 1985 | 12/01/15 | ||||||||||||||||||||||||||||||
Waterford Crossing | Goshen, IN | 8,374,000 | 344,000 | 4,381,000 | 874,000 | 349,000 | 5,250,000 | 5,599,000 | (729,000 | ) | 2004 | 12/01/15 | ||||||||||||||||||||||||||||||
St. Elizabeth Healthcare | Delphi, IN | 9,165,000 | 522,000 | 5,463,000 | 5,368,000 | 634,000 | 10,719,000 | 11,353,000 | (1,207,000 | ) | 1986 | 12/01/15 | ||||||||||||||||||||||||||||||
Cumberland Pointe | West Lafayette, IN | 9,727,000 | 1,645,000 | 13,696,000 | 600,000 | 1,901,000 | 14,040,000 | 15,941,000 | (2,095,000 | ) | 1980 | 12/01/15 | ||||||||||||||||||||||||||||||
Franciscan Healthcare Center | Louisville, KY | 10,908,000 | 808,000 | 8,439,000 | 990,000 | 815,000 | 9,422,000 | 10,237,000 | (1,390,000 | ) | 1975 | 12/01/15 | ||||||||||||||||||||||||||||||
Blair Ridge Health Campus | Peru, IN | 7,846,000 | 734,000 | 11,648,000 | 589,000 | 773,000 | 12,198,000 | 12,971,000 | (1,896,000 | ) | 2001 | 12/01/15 | ||||||||||||||||||||||||||||||
Glen Oaks Health Campus | New Castle, IN | 5,287,000 | 384,000 | 8,189,000 | 149,000 | 384,000 | 8,338,000 | 8,722,000 | (1,090,000 | ) | 2011 | 12/01/15 | ||||||||||||||||||||||||||||||
Covered Bridge Health Campus | Seymour, IN | (c | ) | 386,000 | 9,699,000 | 522,000 | — | 10,607,000 | 10,607,000 | (1,403,000 | ) | 2002 | 12/01/15 | |||||||||||||||||||||||||||||
Stonebridge Health Campus | Bedford, IN | 9,988,000 | 1,087,000 | 7,965,000 | 419,000 | 1,144,000 | 8,327,000 | 9,471,000 | (1,172,000 | ) | 2004 | 12/01/15 |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(f) |
|||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(e) |
Accumulated Depreciation (g)(h) |
Date of Construction |
Date Acquired |
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RiverOaks Health Campus |
Princeton, IN | $ | 14,898,000 | $ | 440,000 | $ | 8,953,000 | $ | 481,000 | $ | 466,000 | $ | 9,408,000 | $ | 9,874,000 | $ | (1,286,000 | ) | 2004 | 12/01/15 | ||||||||||||||||||||||
Park Terrace Health Campus |
Louisville, KY | (c | ) | 2,177,000 | 7,626,000 | 1,208,000 | 2,177,000 | 8,834,000 | 11,011,000 | (1,283,000 | ) | 1977 | 12/01/15 | |||||||||||||||||||||||||||||
Cobblestone Crossing |
Terre Haute, IN | (c | ) | 1,462,000 | 13,860,000 | 5,690,000 | 1,496,000 | 19,516,000 | 21,012,000 | (2,544,000 | ) | 2008 | 12/01/15 | |||||||||||||||||||||||||||||
Creasy Springs Health Campus |
Lafayette, IN | 16,490,000 | 2,111,000 | 14,337,000 | 5,906,000 | 2,393,000 | 19,961,000 | 22,354,000 | (2,609,000 | ) | 2010 | 12/01/15 | ||||||||||||||||||||||||||||||
Avalon Springs Health Campus |
Valparaiso, IN | 17,933,000 | 1,542,000 | 14,107,000 | 140,000 | 1,575,000 | 14,214,000 | 15,789,000 | (1,923,000 | ) | 2012 | 12/01/15 | ||||||||||||||||||||||||||||||
Prairie Lakes Health Campus |
Noblesville, IN | 9,064,000 | 2,204,000 | 13,227,000 | 624,000 | 2,342,000 | 13,713,000 | 16,055,000 | (1,836,000 | ) | 2010 | 12/01/15 | ||||||||||||||||||||||||||||||
RidgeWood Health Campus |
Lawrenceburg, IN | 14,054,000 | 1,240,000 | 16,118,000 | 81,000 | 1,261,000 | 16,178,000 | 17,439,000 | (2,151,000 | ) | 2009 | 12/01/15 | ||||||||||||||||||||||||||||||
Westport Place Health Campus |
Louisville, KY | (c | ) | 1,245,000 | 9,946,000 | 100,000 | 1,262,000 | 10,029,000 | 11,291,000 | (1,321,000 | ) | 2011 | 12/01/15 | |||||||||||||||||||||||||||||
Paddock Springs |
Warsaw, IN | 8,912,000 | 488,000 | — | 10,597,000 | 654,000 | 10,431,000 | 11,085,000 | (557,000 | ) | 2019 | 02/01/19 | ||||||||||||||||||||||||||||||
Amber Manor Care Center |
Petersburg, IN | 5,725,000 | 446,000 | 6,063,000 | 322,000 | 494,000 | 6,337,000 | 6,831,000 | (908,000 | ) | 1990 | 12/01/15 | ||||||||||||||||||||||||||||||
The Meadows of Leipsic Health Campus |
Leipsic, OH | (c | ) | 1,242,000 | 6,988,000 | 576,000 | 1,291,000 | 7,515,000 | 8,806,000 | (1,058,000 | ) | 1986 |
12/01/15 |
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Springview Manor |
Lima, OH |
(c |
) |
260,000 |
3,968,000 |
98,000 |
265,000 |
4,061,000 |
4,326,000 |
(569,000 |
) |
1978 |
12/01/15 |
|||||||||||||||||||||||||||||
Willows at Bellevue |
Bellevue, OH |
16,798,000 |
587,000 |
15,575,000 |
901,000 |
788,000 |
16,275,000 |
17,063,000 |
(2,187,000 |
) |
2008 |
12/01/15 |
||||||||||||||||||||||||||||||
Briar Hill Health Campus |
North Baltimore, OH |
(c | ) | 673,000 | 2,688,000 | 402,000 | 700,000 | 3,063,000 | 3,763,000 | (463,000 | ) | 1977 |
12/01/15 |
|||||||||||||||||||||||||||||
Cypress Pointe Health Campus |
Englewood, OH | (c | ) | 921,000 | 10,291,000 | 10,271,000 | 1,624,000 | 19,859,000 | 21,483,000 | (1,506,000 | ) | 2010 | 12/01/15 | |||||||||||||||||||||||||||||
The Oaks at NorthPointe Woods |
Battle Creek, MI | (c | ) | 567,000 | 12,716,000 | 116,000 | 567,000 | 12,832,000 | 13,399,000 | (1,707,000 | ) | 2008 | 12/01/15 | |||||||||||||||||||||||||||||
Westlake Health Campus |
Commerce, MI | 14,661,000 | 815,000 | 13,502,000 | (232,000 | ) | 541,000 | 13,544,000 | 14,085,000 | (1,814,000 | ) | 2011 | 12/01/15 | |||||||||||||||||||||||||||||
Springhurst Health Campus |
Greenfield, IN | 20,368,000 | 931,000 | 14,114,000 | 2,836,000 | 2,039,000 | 15,842,000 | 17,881,000 | (2,372,000 | ) | 2007 | |
12/01/15 and 05/16/17 |
|||||||||||||||||||||||||||||
Glen Ridge Health Campus |
Louisville, KY | (c | ) | 1,208,000 | 9,771,000 | 1,598,000 | 1,320,000 | 11,257,000 | 12,577,000 | (1,564,000 | ) | 2006 | 12/01/15 | |||||||||||||||||||||||||||||
St. Mary Healthcare |
Lafayette, IN | 5,377,000 | 348,000 | 2,710,000 | 170,000 | 348,000 | 2,880,000 | 3,228,000 | (389,000 | ) | 1969 | 12/01/15 | ||||||||||||||||||||||||||||||
The Oaks at Woodfield |
Grand Blanc, MI | (c | ) | 897,000 | 12,270,000 | 245,000 | 1,080,000 | 12,332,000 | 13,412,000 | (1,683,000 | ) | 2012 | 12/01/15 | |||||||||||||||||||||||||||||
Stonegate Health Campus |
Lapeer, MI | (c | ) | 538,000 | 13,159,000 | 159,000 | 567,000 | 13,289,000 | 13,856,000 | (1,809,000 | ) | 2012 | 12/01/15 | |||||||||||||||||||||||||||||
Senior Living at Forest Ridge |
New Castle, IN | (c | ) | 204,000 | 5,470,000 | 128,000 | 238,000 | 5,564,000 | 5,802,000 | (759,000 | ) | 2005 | 12/01/15 | |||||||||||||||||||||||||||||
Highland Oaks Health Center |
McConnelsville, OH | (c | ) | 880,000 | 1,803,000 | 1,039,000 | 1,297,000 | 2,425,000 | 3,722,000 | (374,000 | ) | 1978 | 12/01/15 | |||||||||||||||||||||||||||||
Richland Manor |
Bluffton, OH | — | 224,000 | 2,200,000 | (1,826,000 | ) | 224,000 | 374,000 | 598,000 | (367,000 | ) | 1940 | 12/01/15 | |||||||||||||||||||||||||||||
River Terrace Health Campus |
Madison, IN | (c | ) | — | 13,378,000 | 3,932,000 | 8,000 | 17,302,000 | 17,310,000 | (2,214,000 | ) | 2016 | 03/28/16 | |||||||||||||||||||||||||||||
St. Charles Health Campus |
Jasper, IN | 11,736,000 | 467,000 | 14,532,000 | 913,000 | 518,000 | 15,394,000 | 15,912,000 | (2,060,000 | ) | 2000 | |
06/24/16 and 06/30/16 |
|||||||||||||||||||||||||||||
Bethany Pointe Health Campus |
Anderson, IN | 20,117,000 | 2,337,000 | 26,524,000 | 1,618,000 | 2,445,000 | 28,034,000 | 30,479,000 | (3,748,000 | ) | 1999 | 06/30/16 | ||||||||||||||||||||||||||||||
River Pointe Health Campus |
Evansville, IN | 14,451,000 | 1,118,000 | 14,736,000 | 1,284,000 | 1,126,000 | 16,012,000 | 17,138,000 | (2,229,000 | ) | 1999 | 06/30/16 | ||||||||||||||||||||||||||||||
Waterford Place Health Campus |
Kokomo, IN | 15,295,000 | 1,219,000 | 18,557,000 | 1,386,000 | 1,373,000 | 19,789,000 | 21,162,000 | (2,693,000 | ) | 2000 | 06/30/16 | ||||||||||||||||||||||||||||||
Autumn Woods Health Campus |
New Albany, IN | (c | ) | 1,016,000 | 13,414,000 | 1,425,000 | 1,031,000 | 14,824,000 | 15,855,000 | (2,200,000 | ) | 2000 | 06/30/16 | |||||||||||||||||||||||||||||
Oakwood Health Campus |
Tell City, IN | 9,389,000 | 783,000 | 11,880,000 | 1,119,000 | 874,000 | 12,908,000 | 13,782,000 | (1,894,000 | ) | 2000 | 06/30/16 | ||||||||||||||||||||||||||||||
Cedar Ridge Health Campus |
Cynthiana, KY | (c | ) | 102,000 | 8,435,000 | 3,574,000 | 205,000 | 11,906,000 | 12,111,000 | (1,802,000 | ) | 2005 | 06/30/16 | |||||||||||||||||||||||||||||
Aspen Place Health Campus |
Greensburg, IN | 9,702,000 | 980,000 | 10,970,000 | 686,000 | 1,016,000 | 11,620,000 | 12,636,000 | (1,527,000 | ) | 2012 | 08/16/16 | ||||||||||||||||||||||||||||||
The Willows at Citation |
Lexington, KY | (c | ) | 826,000 | 10,017,000 | 629,000 | 849,000 | 10,623,000 | 11,472,000 | (1,383,000 | ) | 2014 | 08/16/16 | |||||||||||||||||||||||||||||
The Willows at East Lansing |
East Lansing, MI | 16,766,000 | 1,449,000 | 15,161,000 | 1,312,000 | 1,496,000 | 16,426,000 | 17,922,000 | (2,304,000 | ) | 2014 | 08/16/16 | ||||||||||||||||||||||||||||||
The Willows at Howell |
Howell, MI | (c | ) | 1,051,000 | 12,099,000 | 6,568,000 | 1,116,000 | 18,602,000 | 19,718,000 | (1,801,000 | ) | 2015 | 08/16/16 | |||||||||||||||||||||||||||||
The Willows at Okemos |
Okemos, MI | 7,684,000 | 1,171,000 | 12,326,000 | 786,000 | 1,210,000 | 13,073,000 | 14,283,000 | (1,917,000 | ) | 2014 | 08/16/16 | ||||||||||||||||||||||||||||||
Shelby Crossing Health Campus |
Macomb, MI | 17,620,000 | 2,533,000 | 18,440,000 | 1,969,000 | 2,612,000 | 20,330,000 | 22,942,000 | (3,040,000 | ) | 2013 | 08/16/16 | ||||||||||||||||||||||||||||||
Village Green Healthcare Center |
Greenville, OH | 7,141,000 | 355,000 | 9,696,000 | 446,000 | 373,000 | 10,124,000 | 10,497,000 | (1,315,000 | ) | 2014 | 08/16/16 | ||||||||||||||||||||||||||||||
The Oaks at Northpointe |
Zanesville, OH | (c | ) | 624,000 | 11,665,000 | 989,000 | 650,000 | 12,628,000 | 13,278,000 | (1,753,000 | ) | 2013 | 08/16/16 |
Initial Cost to Company |
Gross Amount of Which Carried at Close of Period(f) |
|||||||||||||||||||||||||||||||||||||||||
Description(a) |
Encumbrances |
Land |
Buildings and Improvements |
Cost Capitalized Subsequent to Acquisition(b) |
Land |
Buildings and Improvements |
Total(e) |
Accumulated Depreciation (g)(h) |
Date of Construction |
Date Acquired |
||||||||||||||||||||||||||||||||
The Oaks at Bethesda |
Zanesville, OH | $ | 4,663,000 | $ | 714,000 | $ | 10,791,000 | $ | 673,000 | $ | 743,000 | $ | 11,435,000 | $ | 12,178,000 | $ | (1,510,000 | ) | 2013 | 08/16/16 | ||||||||||||||||||||||
White Oak Health Campus |
Monticello, IN | (c | ) | 1,005,000 | 13,207,000 | — | 1,005,000 | 13,207,000 | 14,212,000 | (800,000 | ) | 2010 | |
09/23/16 and 07/30/20 |
||||||||||||||||||||||||||||
Woodmont Health Campus |
Boonville, IN | 8,006,000 | 790,000 | 9,633,000 | 859,000 | 880,000 | 10,402,000 | 11,282,000 | (1,511,000 | ) | 2000 | 02/01/17 | ||||||||||||||||||||||||||||||
Silver Oaks Health Campus |
Columbus, IN | (c | ) | 1,776,000 | 21,420,000 | 1,351,000 | 1,000 | 24,546,000 | 24,547,000 | (3,329,000 | ) | 2001 | 02/01/17 | |||||||||||||||||||||||||||||
Thornton Terrace Health Campus |
Hanover, IN | 5,674,000 | 764,000 | 9,209,000 | 860,000 | 826,000 | 10,007,000 | 10,833,000 | (1,415,000 | ) | 2003 | 02/01/17 | ||||||||||||||||||||||||||||||
The Willows at Hamburg |
Lexington, KY | 11,815,000 | 1,740,000 | 13,422,000 | 553,000 | 1,775,000 | 13,940,000 | 15,715,000 | (1,571,000 | ) | 2012 | 02/01/17 | ||||||||||||||||||||||||||||||
The Lakes at Monclova |
Monclova, OH | 15,933,000 | 2,869,000 | 12,855,000 | 8,863,000 | 2,989,000 | 21,598,000 | 24,587,000 | (1,835,000 | ) | 2013 | 02/01/17 | ||||||||||||||||||||||||||||||
The Willows at Willard |
Willard, OH | (c | ) | 610,000 | 12,256,000 | 9,461,000 | 186,000 | 22,141,000 | 22,327,000 | (2,087,000 | ) | 2012 | 02/01/17 | |||||||||||||||||||||||||||||
Pickerington Health Campus |
Pickerington, OH | — | 756,000 | — | 15,584,000 | 866,000 | 15,474,000 | 16,340,000 | (473,000 | ) | 2019 | 11/03/17 | ||||||||||||||||||||||||||||||
Lakeland Rehab and Health Center |
Milford, IN | — | 306,000 | 2,727,000 | (2,683,000 | ) | 350,000 | — | 350,000 | — | 1973 | 12/01/15 | ||||||||||||||||||||||||||||||
Westlake Health Campus — Commerce Villa |
Commerce, MI | (c | ) | 261,000 | 6,610,000 | 1,226,000 | 553,000 | 7,544,000 | 8,097,000 | (721,000 | ) | 2017 | 11/17/17 | |||||||||||||||||||||||||||||
Orchard Grove Health Campus |
Romeo, MI | 15,994,000 | 2,065,000 | 11,510,000 | 11,606,000 | 3,284,000 | 21,897,000 | 25,181,000 | (1,485,000 | ) | 2016 | 11/30/17 | ||||||||||||||||||||||||||||||
The Meadows of Ottawa |
Ottawa, OH | (c | ) | 695,000 | 7,752,000 | 605,000 | 728,000 | 8,324,000 | 9,052,000 | (856,000 | ) | 2014 | 12/15/17 | |||||||||||||||||||||||||||||
Valley View Healthcare Center |
Fremont, OH | 10,856,000 | 930,000 | 7,635,000 | 1,489,000 | 1,089,000 | 8,965,000 | 10,054,000 | (600,000 | ) | 2017 | 07/20/18 | ||||||||||||||||||||||||||||||
Novi Lakes Health Campus |
Novi, MI | 12,856,000 | 1,654,000 | 7,494,000 | 2,647,000 | 1,663,000 | 10,132,000 | 11,795,000 | (1,254,000 | ) | 2016 | 07/20/18 | ||||||||||||||||||||||||||||||
The Willows at Fritz Farm |
Lexington, KY | 9,440,000 | 1,538,000 | 8,637,000 | 376,000 | 1,563,000 | 8,988,000 | 10,551,000 | (580,000 | ) | 2017 | 07/20/18 | ||||||||||||||||||||||||||||||
Trilogy Real Estate Gahanna, LLC |
Gahanna, OH | 13,501,000 | 1,146,000 | — | 16,939,000 | 1,202,000 | 16,883,000 | 18,085,000 | (76,000 | ) | 2020 |
11/13/20 |
||||||||||||||||||||||||||||||
Oaks at Byron Center |
Byron Center, MI |
14,083,000 |
2,000,000 |
— |
15,789,000 |
2,193,000 |
15,596,000 |
17,789,000 |
(211,000 |
) |
2020 |
07/08/20 |
||||||||||||||||||||||||||||||
Harrison Springs Health Campus |
Corydon, IN |
(c |
) |
1,653,000 |
11,487,000 |
58,000 |
1,653,000 |
11,545,000 |
13,198,000 |
(499,000 |
) |
2016 |
09/04/19 |
|||||||||||||||||||||||||||||
The Cloister at Silvercrest |
New Albany, IN |
— |
139,000 |
634,000 |
— |
139,000 |
634,000 |
773,000 |
(20,000 |
) |
1940 |
10/01/19 |
||||||||||||||||||||||||||||||
Trilogy Healthcare of Ferdinand II, LLC |
Ferdinand, IN |
11,394,000 |
— |
— |
14,589,000 |
— |
14,589,000 |
14,589,000 |
(407,000 |
) |
2019 |
11/19/19 |
||||||||||||||||||||||||||||||
Trilogy Healthcare of Hilliard, LLC |
Hilliard, OH |
— |
1,702,000 |
— |
7,757,000 |
1,702,000 |
7,757,000 |
9,459,000 |
— |
— |
02/11/20 |
|||||||||||||||||||||||||||||||
Forest Springs Health Campus |
Louisville, KY |
(c |
) |
964,000 |
16,691,000 |
— |
964,000 |
16,691,000 |
17,655,000 |
(199,000 |
) |
2015 |
07/30/20 |
|||||||||||||||||||||||||||||
Trilogy Real Estate Butler II, LLC |
Liberty Township, OH |
— |
1,147,000 |
— |
257,000 |
1,147,000 |
257,000 |
1,404,000 |
— |
— |
10/30/20 |
|||||||||||||||||||||||||||||||
Gateway Springs Health Campus |
Hamilton, OH |
8,116,000 |
1,277,000 |
— |
10,923,000 |
1,404,000 |
10,796,000 |
12,200,000 |
— |
2020 |
12/28/20 |
|||||||||||||||||||||||||||||||
Trilogy Real Estate Hamilton III, LLC |
Harrison, OH |
7,677,000 |
1,750,000 |
— |
15,536,000 |
1,763,000 |
15,523,000 |
17,286,000 |
— |
— |
— |
|||||||||||||||||||||||||||||||
Trilogy Real Estate Kent II, LLC |
Grand Rapids, MI |
7,709,000 |
767,000 |
— |
15,982,000 |
767,000 |
15,982,000 |
16,749,000 |
— |
— |
— |
|||||||||||||||||||||||||||||||
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|
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|||||||||||||||||||||||||||
$ | 834,026,000 | $ | 195,061,000 | $ | 2,071,675,000 | $ | 306,873,000 | $ | 200,814,000 | $ | 2,372,795,000 | $ | 2,573,609,000 | $ | (344,050,000 | ) | ||||||||||||||||||||||||||
|
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|||||||||||||||||||||||||||
Leased properties(d) | $ | — | $ | 306,000 | $ | 71,362,000 | $ | 112,236,000 | $ | 1,456,000 | $ | 182,448,000 | $ | 183,904,000 | $ | (81,001,000 | ) | |||||||||||||||||||||||||
Construction in progress | — | — | — | 4,759,000 | 479,000 | 4,280,000 | 4,759,000 | (221,000 | ) | |||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
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|
|
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|
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|
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|
|||||||||||||||||||||||||||
$ |
834,026,000 |
$ |
195,367,000 |
$ |
2,143,037,000 |
$ |
423,868,000 |
$ |
202,749,000 |
$ |
2,559,523,000 |
$ |
2,762,272,000 |
$ |
(425,272,000 |
) |
||||||||||||||||||||||||||
|
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|
(a) | We own 100% of our properties as of December 31, 2020, with the exception of Trilogy, Lakeview IN Medical Plaza and Southlake TX Hospital. |
(b) | The cost capitalized subsequent to acquisition is shown net of dispositions and impairments. |
(c) | These properties are used as collateral for the secured revolver portion of the 2019 Trilogy Credit Facility, which had an outstanding balance of $287,134,000 as of December 31, 2020. See Note 8, Lines of Credit and Term Loans — 2019 Trilogy Credit Facility, for a further discussion. |
(d) | Represents furniture, fixtures, equipment, land and improvements associated with properties under operating leases. |
(e) | The changes in total real estate for the years ended December 31, 2020, 2019 and 2018 are as follows: |
Amount |
||||
Balance — December 31, 2017 |
$ | 2,336,208,000 | ||
Acquisitions |
60,751,000 | |||
Additions |
87,061,000 | |||
Dispositions and impairments |
(4,142,000 | ) | ||
Foreign currency translation adjustment |
(2,503,000 | ) | ||
|
|
|||
Balance — December 31, 2018 |
$ | 2,477,375,000 | ||
|
|
|||
Acquisitions |
$ | 32,330,000 | ||
Additions |
114,078,000 | |||
Dispositions |
(8,050,000 | ) | ||
Foreign currency translation adjustment |
2,875,000 | |||
|
|
|||
Balance — December 31, 2019 |
$ | 2,618,608,000 | ||
|
|
|||
Acquisitions |
$ | 31,157,000 | ||
Additions |
129,254,000 | |||
Dispositions and impairments |
(18,718,000 | ) | ||
Foreign currency translation adjustment |
1,971,000 | |||
|
|
|||
Balance — December 31, 2020 |
$ | 2,762,272,000 | ||
|
|
(f) | As of December 31, 2020, the aggregate cost of our properties was $2,627,228,000 for federal income tax purposes. |
(g) | The changes in accumulated depreciation for the years ended December 31, 2020, 2019 and 2018 are as follows: |
Amount |
||||
Balance — December 31, 2017 |
$ | 172,950,000 | ||
Additions |
83,309,000 | |||
Dispositions |
(1,603,000 | ) | ||
Foreign currency translation adjustment |
38,000 | |||
|
|
|||
Balance — December 31, 2018 |
$ | 254,694,000 | ||
|
|
|||
Additions |
$ | 90,914,000 | ||
Dispositions |
(7,614,000 | ) | ||
Foreign currency translation adjustment |
(96,000 | ) | ||
|
|
|||
Balance — December 31, 2019 |
$ | 337,898,000 | ||
|
|
|||
Additions |
$ | 91,617,000 | ||
Dispositions and impairments |
(4,530,000 | ) | ||
Foreign currency translation adjustment |
287,000 | |||
|
|
|||
Balance — December 31, 2020 |
$ | 425,272,000 | ||
|
|
(h) | The cost of buildings and capital improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and capital improvements, up to 39 years, and the cost of tenant improvements is depreciated over the shorter of the lease term or useful life, up to 34 years. The cost of furniture, fixtures and equipment is depreciated over the estimated useful life, up to 28 years. |
March 31, 2021 |
December 31, 2020 |
|||||||
ASSETS |
| |||||||
Real estate investments, net |
$ | 2,409,943,000 | $ | 2,330,000,000 | ||||
Debt security investment, net |
76,685,000 | 75,851,000 | ||||||
Cash and cash equivalents |
89,995,000 | 113,212,000 | ||||||
Accounts and other receivables, net |
121,359,000 | 124,556,000 | ||||||
Restricted cash |
39,711,000 | 38,978,000 | ||||||
Identified intangible assets, net |
153,523,000 | 154,687,000 | ||||||
Goodwill |
75,309,000 | 75,309,000 | ||||||
Operating lease right-of-use |
143,239,000 | 203,988,000 | ||||||
Other assets, net |
120,262,000 | 118,356,000 | ||||||
|
|
|
|
|||||
Total assets |
$ | 3,230,026,000 | $ | 3,234,937,000 | ||||
|
|
|
|
|||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
| |||||||
Liabilities: |
||||||||
Mortgage loans payable, net(1) |
$ | 912,883,000 | $ | 810,478,000 | ||||
Lines of credit and term loan(1) |
842,234,000 | 843,634,000 | ||||||
Accounts payable and accrued liabilities(1) |
170,033,000 | 186,651,000 | ||||||
Accounts payable due to affiliates(1) |
2,426,000 | 8,026,000 | ||||||
Identified intangible liabilities, net |
320,000 | 367,000 | ||||||
Financing obligations(1) |
20,080,000 | 28,425,000 | ||||||
Operating lease liabilities(1) |
136,655,000 | 193,634,000 | ||||||
Security deposits, prepaid rent and other liabilities(1) |
86,940,000 | 88,899,000 | ||||||
|
|
|
|
|||||
Total liabilities |
2,171,571,000 | 2,160,114,000 | ||||||
Commitments and contingencies (Note 11) |
||||||||
Redeemable noncontrolling interests (Note 12) |
40,382,000 | 40,340,000 | ||||||
Equity: |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $0.01 par value per share; 200,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
Common stock, $0.01 par value per share; 1,000,000,000 shares authorized; 193,889,872 shares issued and outstanding as of both March 31, 2021 and December 31, 2020 |
1,939,000 | 1,939,000 | ||||||
Additional paid-in capital |
1,730,096,000 | 1,730,448,000 | ||||||
Accumulated deficit |
(876,118,000 | ) | (864,271,000 | ) | ||||
Accumulated other comprehensive loss |
(1,939,000 | ) | (2,008,000 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
853,978,000 | 866,108,000 | ||||||
Noncontrolling interests (Note 13) |
164,095,000 | 168,375,000 | ||||||
|
|
|
|
|||||
Total equity |
1,018,073,000 | 1,034,483,000 | ||||||
|
|
|
|
|||||
Total liabilities, redeemable noncontrolling interests and equity |
$ | 3,230,026,000 | $ | 3,234,937,000 | ||||
|
|
|
|
(1) |
Such liabilities of Griffin-American Healthcare REIT III, Inc. as of March 31, 2021 and December 31, 2020 represented liabilities of Griffin-American Healthcare REIT III Holdings, LP or its consolidated subsidiaries. Griffin-American Healthcare REIT III Holdings, LP is a variable interest entity, or VIE, and a consolidated subsidiary of Griffin-American Healthcare REIT III, Inc. The creditors of Griffin-American Healthcare REIT III Holdings, LP or its consolidated subsidiaries do not have recourse against Griffin-American Healthcare REIT III, Inc., except for the 2019 Corporate Line of Credit, as defined in Note 8, held by Griffin-American Healthcare REIT III Holdings, LP in the amount of $560,500,000 and $556,500,000 as of March 31, 2021 and December 31, 2020, respectively, which is guaranteed by Griffin-American Healthcare REIT III, Inc. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Revenues and grant income: |
||||||||
Resident fees and services |
$ | 253,026,000 | $ | 289,926,000 | ||||
Real estate revenue |
30,023,000 | 30,118,000 | ||||||
Grant income |
8,229,000 | — | ||||||
|
|
|
|
|||||
Total revenues and grant income |
291,278,000 | 320,044,000 | ||||||
Expenses: |
||||||||
Property operating expenses |
245,142,000 | 255,740,000 | ||||||
Rental expenses |
8,055,000 | 8,170,000 | ||||||
General and administrative |
7,257,000 | 6,574,000 | ||||||
Business acquisition expenses |
1,248,000 | 234,000 | ||||||
Depreciation and amortization |
25,723,000 | 25,087,000 | ||||||
|
|
|
|
|||||
Total expenses |
287,425,000 | 295,805,000 | ||||||
Other income (expense): |
||||||||
Interest expense: |
||||||||
Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment) |
(20,365,000 | ) | (18,534,000 | ) | ||||
Gain (loss) in fair value of derivative financial instruments |
1,821,000 | (8,183,000 | ) | |||||
Loss on disposition of real estate investment |
(335,000 | ) | — | |||||
Impairment of real estate investments |
— | (5,102,000 | ) | |||||
Loss from unconsolidated entities |
(1,771,000 | ) | (904,000 | ) | ||||
Foreign currency gain (loss) |
415,000 | (3,065,000 | ) | |||||
Other income |
272,000 | 555,000 | ||||||
|
|
|
|
|||||
Loss before income taxes |
(16,110,000 | ) | (10,994,000 | ) | ||||
Income tax (expense) benefit |
(163,000 | ) | 3,211,000 | |||||
|
|
|
|
|||||
Net loss |
(16,273,000 | ) | (7,783,000 | ) | ||||
Less: net loss (income) attributable to noncontrolling interests |
4,426,000 | (2,127,000 | ) | |||||
|
|
|
|
|||||
Net loss attributable to controlling interest |
$ | (11,847,000 | ) | $ | (9,910,000 | ) | ||
|
|
|
|
|||||
Net loss per common share attributable to controlling interest — basic and diluted |
$ | (0.06 | ) | $ | (0.05 | ) | ||
|
|
|
|
|||||
Weighted average number of common shares outstanding — basic and diluted |
193,856,872 | 194,844,516 | ||||||
|
|
|
|
|||||
Net loss |
$ | (16,273,000 | ) | $ | (7,783,000 | ) | ||
Other comprehensive income (loss): |
||||||||
Foreign currency translation adjustments |
69,000 | (533,000 | ) | |||||
|
|
|
|
|||||
Total other comprehensive income (loss) |
69,000 | (533,000 | ) | |||||
|
|
|
|
|||||
Comprehensive loss |
(16,204,000 | ) | (8,316,000 | ) | ||||
Less: comprehensive loss (income) attributable to noncontrolling interests |
4,426,000 | (2,127,000 | ) | |||||
|
|
|
|
|||||
Comprehensive loss attributable to controlling interest |
$ | (11,778,000 | ) | $ | (10,443,000 | ) | ||
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common Stock |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
Noncontrolling Interests |
Total Equity |
|||||||||||||||||||||||||
BALANCE —December 31, 2020 |
193,889,872 | $ | 1,939,000 | $ | 1,730,448,000 | $ | (864,271,000 | ) | $ | (2,008,000 | ) | $ | 866,108,000 | $ | 168,375,000 | $ | 1,034,483,000 | |||||||||||||||
Offering costs — common stock |
— | — | (1,000 | ) | — | — | (1,000 | ) | — | (1,000 | ) | |||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | 27,000 | — | — | 27,000 | — | 27,000 | ||||||||||||||||||||||||
Stock based compensation |
— | — | — | — | — | — | (14,000 | ) | (14,000 | ) | ||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (176,000 | ) | (176,000 | ) | ||||||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | (378,000 | ) | — | — | (378,000 | ) | (148,000 | ) | (526,000 | ) | ||||||||||||||||||||
Net loss |
— | — | — | (11,847,000 | ) | — | (11,847,000 | ) | (3,942,000 | ) | (15,789,000 | )(1) | ||||||||||||||||||||
Other comprehensive income |
— | — | — | — | 69,000 | 69,000 | — | 69,000 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BALANCE — March 31, 2021 |
193,889,872 | $ | 1,939,000 | $ | 1,730,096,000 | $ | (876,118,000 | ) | $ | (1,939,000 | ) | $ | 853,978,000 | $ | 164,095,000 | $ | 1,018,073,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common Stock |
||||||||||||||||||||||||||||||||
Number of Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
Noncontrolling Interests |
Total Equity |
|||||||||||||||||||||||||
BALANCE —December 31, 2019 |
193,967,474 | $ | 1,939,000 | $ | 1,728,421,000 | $ | (827,550,000 | ) | $ | (2,255,000 | ) | $ | 900,555,000 | $ | 158,108,000 | $ | 1,058,663,000 | |||||||||||||||
Issuance of common stock under the DRIP |
1,398,021 | 14,000 | 13,127,000 | — | — | 13,141,000 | — | 13,141,000 | ||||||||||||||||||||||||
Amortization of nonvested common stock compensation |
— | — | 43,000 | — | — | 43,000 | — | 43,000 | ||||||||||||||||||||||||
Stock based compensation |
— | — | — | — | — | — | 195,000 | 195,000 | ||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (4,000 | ) | (4,000 | ) | ||||||||||||||||||||||
Reclassification of noncontrolling interests to mezzanine equity |
— | — | — | — | — | — | (195,000 | ) | (195,000 | ) | ||||||||||||||||||||||
Adjustment to value of redeemable noncontrolling interests |
— | — | (11,000 | ) | — | — | (11,000 | ) | (4,000 | ) | (15,000 | ) | ||||||||||||||||||||
Distributions declared ($0.15 per share) |
— | — | — | (29,154,000 | ) | — | (29,154,000 | ) | — | (29,154,000 | ) | |||||||||||||||||||||
Net (loss) income |
— | — | — | (9,910,000 | ) | — | (9,910,000 | ) | 1,899,000 | (8,011,000 | )(1) | |||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | (533,000 | ) | (533,000 | ) | — | (533,000 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
BALANCE — March 31, 2020 |
195,365,495 | $ | 1,953,000 | $ | 1,741,580,000 | $ | (866,614,000 | ) | $ | (2,788,000 | ) | $ | 874,131,000 | $ | 159,999,000 | $ | 1,034,130,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For the three months ended March 31, 2021 and 2020, amounts exclude $(484,000) and $228,000, respectively, of net (loss) income attributable to redeemable noncontrolling interests. See Note 12, Redeemable Noncontrolling Interests, for a further discussion. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net loss |
$ | (16,273,000 | ) | $ | (7,783,000 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
||||||||
Depreciation and amortization |
25,723,000 | 25,087,000 | ||||||
Other amortization |
5,955,000 | 7,689,000 | ||||||
Deferred rent |
(1,023,000 | ) | (1,096,000 | ) | ||||
Stock based compensation |
(14,000 | ) | 195,000 | |||||
Stock based compensation — nonvested restricted common stock |
27,000 | 43,000 | ||||||
Loss from unconsolidated entities |
1,771,000 | 904,000 | ||||||
Loss on disposition of real estate investment |
335,000 | — | ||||||
Foreign currency (gain) loss |
(416,000 | ) | 3,007,000 | |||||
Deferred income taxes |
— | (3,329,000 | ) | |||||
Loss on debt extinguishment |
2,288,000 | — | ||||||
Change in fair value of derivative financial instruments |
(1,821,000 | ) | 8,183,000 | |||||
Impairment of real estate investments |
— | 5,102,000 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts and other receivables |
3,203,000 | 5,039,000 | ||||||
Other assets |
(4,440,000 | ) | (3,104,000 | ) | ||||
Accounts payable and accrued liabilities |
(10,891,000 | ) | (6,090,000 | ) | ||||
Accounts payable due to affiliates |
(5,160,000 | ) | (35,000 | ) | ||||
Operating lease liabilities |
(4,358,000 | ) | (6,033,000 | ) | ||||
Security deposits, prepaid rent and other liabilities |
(161,000 | ) | (1,896,000 | ) | ||||
|
|
|
|
|||||
Net cash (used in) provided by operating activities |
(5,255,000 | ) | 25,883,000 | |||||
|
|
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Acquisitions of real estate investments |
(78,542,000 | ) | (1,478,000 | ) | ||||
Developments and capital expenditures |
(29,196,000 | ) | (37,217,000 | ) | ||||
Proceeds from disposition of real estate investment |
1,248,000 | — | ||||||
Investments in unconsolidated entities |
(325,000 | ) | (350,000 | ) | ||||
Real estate and other deposits |
(26,000 | ) | (173,000 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(106,841,000 | ) | (39,218,000 | ) | ||||
|
|
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Borrowings under mortgage loans payable |
205,826,000 | 8,239,000 | ||||||
Payments on mortgage loans payable |
(3,480,000 | ) | (3,137,000 | ) | ||||
Early payoff of mortgage loans payable |
(101,734,000 | ) | — | |||||
Borrowings under the lines of credit and term loan |
16,600,000 | 28,500,000 | ||||||
Payments on the lines of credit and term loan |
(18,000,000 | ) | (10,000,000 | ) | ||||
Deferred financing costs |
(799,000 | ) | (849,000 | ) | ||||
Debt extinguishment costs |
(125,000 | ) | — | |||||
Payments on financing obligations |
(8,481,000 | ) | (1,615,000 | ) | ||||
Distributions paid |
— | (16,032,000 | ) | |||||
Distributions to noncontrolling interests |
(172,000 | ) | — | |||||
Security deposits and other |
(30,000 | ) | (3,000 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
89,605,000 | 5,103,000 | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(22,491,000 |
) |
$ |
(8,232,000 |
) | ||
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
7,000 | (134,000 | ) | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period |
152,190,000 | 89,880,000 | ||||||
|
|
|
|
|||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period |
$ | 129,706,000 | $ | 81,514,000 | ||||
|
|
|
|
|||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
||||||||
Beginning of period: |
||||||||
Cash and cash equivalents |
$ | 113,212,000 | $ | 53,149,000 | ||||
Restricted cash |
38,978,000 | 36,731,000 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash |
$ | 152,190,000 | $ | 89,880,000 | ||||
|
|
|
|
|||||
End of period: |
||||||||
Cash and cash equivalents |
$ | 89,995,000 | $ | 44,683,000 | ||||
Restricted cash |
39,711,000 | 36,831,000 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash |
$ | 129,706,000 | $ | 81,514,000 | ||||
|
|
|
|
|||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||
Cash paid for: |
||||||||
Interest |
$ | 16,079,000 | $ | 17,181,000 | ||||
Income taxes |
$ | 169,000 | $ | 111,000 | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES |
||||||||
Investing Activities: |
||||||||
Accrued developments and capital expenditures |
$ | 16,020,000 | $ | 22,579,000 | ||||
Capital expenditures from financing obligations |
$ | 136,000 | $ | — | ||||
Tenant improvement overage |
$ | 41,000 | $ | 896,000 | ||||
Net decrease in other assets in connection with our acquisitions and disposition of real estate investments |
$ | (186,000 | ) | $ | — | |||
Financing Activities: |
||||||||
Issuance of common stock under the DRIP |
$ | — | $ | 13,141,000 | ||||
Distributions declared but not paid |
$ | — | $ | 9,955,000 | ||||
Reclassification of noncontrolling interests to mezzanine equity |
$ | — | $ | 195,000 |
Three Months Ended March 31, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Integrated Senior Health Campuses |
Senior Housing — RIDEA(1) |
Total |
Integrated Senior Health Campuses |
Senior Housing — RIDEA(1) |
Total |
|||||||||||||||||||
Over time |
$ | 188,258,000 | $ | 19,459,000 | $ | 207,717,000 | $ | 213,266,000 | $ | 21,260,000 | $ | 234,526,000 | ||||||||||||
Point in time |
44,968,000 | 341,000 | 45,309,000 | 54,528,000 | 872,000 | 55,400,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total resident fees and services |
$ | 233,226,000 | $ | 19,800,000 | $ | 253,026,000 | $ | 267,794,000 | $ | 22,132,000 | $ | 289,926,000 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Integrated Senior Health Campuses |
Senior Housing — RIDEA(1) |
Total |
Integrated Senior Health Campuses |
Senior Housing — RIDEA(1) |
Total |
|||||||||||||||||||
Private and other payors |
$ | 106,110,000 | $ | 19,419,000 | $ | 125,529,000 | $ | 128,267,000 | $ | 21,700,000 | $ | 149,967,000 | ||||||||||||
Medicare |
84,283,000 | — | 84,283,000 | 87,219,000 | — | 87,219,000 | ||||||||||||||||||
Medicaid |
42,833,000 | 381,000 | 43,214,000 | 52,308,000 | 432,000 | 52,740,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total resident fees and services |
$ | 233,226,000 | $ | 19,800,000 | $ | 253,026,000 | $ | 267,794,000 | $ | 22,132,000 | $ | 289,926,000 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes fees for basic housing and assisted living care. We record revenue when services are rendered at amounts billable to individual residents. Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For patients under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered. |
Private and Other Payors |
Medicare |
Medicaid |
Total |
|||||||||||||
Beginning balance — |
$ | 36,125,000 | $ | 36,479,000 | $ | 14,473,000 | $ | 87,077,000 | ||||||||
Ending balance — |
37,648,000 | 31,119,000 | 18,563,000 | 87,330,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Increase/(decrease) |
$ | 1,523,000 | $ | (5,360,000 | ) | $ | 4,090,000 | $ | 253,000 | |||||||
|
|
|
|
|
|
|
|
Total |
||||
Beginning balance — |
$ | 10,597,000 | ||
Ending balance — |
11,732,000 | |||
|
|
|||
Increase |
$ | 1,135,000 | ||
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Building, improvements and construction in process |
$ | 2,459,700,000 | $ | 2,379,337,000 | ||||
Land and improvements |
215,826,000 | 200,319,000 | ||||||
Furniture, fixtures and equipment |
182,730,000 | 174,994,000 | ||||||
|
|
|
|
|||||
2,858,256,000 | 2,754,650,000 | |||||||
Less: accumulated depreciation |
(448,313,000 | ) | (424,650,000 | ) | ||||
|
|
|
|
|||||
$ | 2,409,943,000 | $ | 2,330,000,000 | |||||
|
|
|
|
Location |
Date Acquired |
Contract Purchase Price |
Mortgage Loan Payable(1) |
Acquisition Fee(2) |
||||||||||||
Kendallville, IN; and Delphos, Lima, Springfield, Sylvania and Union Township, OH |
01/19/21 | $ | 76,549,000 | $ | 78,587,000 | $ | 1,164,000 |
(1) | Represents the principal balance of the mortgage loan payable placed on the properties at the time of acquisition. |
(2) | Our advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, an acquisition fee of 2.25% of the portion of the contract purchase price of the properties attributed to our ownership interest in the Trilogy subsidiary that acquired the properties. |
2021 Acquisitions |
||||
|
|
|||
Building and improvements |
$ | 66,167,000 | ||
Land and improvements |
16,038,000 | |||
|
|
|||
Total assets acquired |
$ | 82,205,000 | ||
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Amortized intangible assets: |
||||||||
In-place leases, net of accumulated amortization of $22,504,000 and $22,019,000 as of March 31, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 9.3 years and 9.4 years as of March 31, 2021 and December 31, 2020, respectively) |
$ | 22,735,000 | $ | 23,760,000 | ||||
Customer relationships, net of accumulated amortization of $523,000 and $486,000 as of March 31, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 15.4 years and 15.7 years as of March 31, 2021 and December 31, 2020, respectively) |
2,317,000 | 2,354,000 | ||||||
Above-market leases, net of accumulated amortization of $1,740,000 and $1,975,000 as of March 31, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 4.5 years and 4.6 years as of March 31, 2021 and December 31, 2020, respectively) |
948,000 | 1,032,000 | ||||||
Internally developed technology and software, net of accumulated amortization of $329,000 and $305,000 as of March 31, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 1.4 years and 1.7 years as of March 31, 2021 and December 31, 2020, respectively) |
141,000 | 165,000 | ||||||
Unamortized intangible assets: |
||||||||
Certificates of need |
96,595,000 | 96,589,000 | ||||||
Trade names |
30,787,000 | 30,787,000 | ||||||
|
|
|
|
|||||
$ | 153,523,000 | $ | 154,687,000 | |||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 3,444,000 | ||
2022 |
3,910,000 | |||
2023 |
3,141,000 | |||
2024 |
2,725,000 | |||
2025 |
2,212,000 | |||
Thereafter |
10,709,000 | |||
|
|
|||
$ | 26,141,000 | |||
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Deferred rent receivables |
$ | 39,489,000 | $ | 38,918,000 | ||||
Prepaid expenses, deposits, other assets and deferred tax assets, net |
24,463,000 | 16,618,000 | ||||||
Inventory |
20,215,000 | 24,669,000 | ||||||
Investments in unconsolidated entities |
14,986,000 | 16,469,000 | ||||||
Lease commissions, net of accumulated amortization of $3,822,000 and $3,413,000 as of March 31, 2021 and December 31, 2020, respectively |
11,878,000 | 11,309,000 | ||||||
Deferred financing costs, net of accumulated amortization of $6,775,000 and $5,700,000 as of March 31, 2021 and December 31, 2020, respectively(1) |
5,810,000 | 6,864,000 | ||||||
Lease inducement, net of accumulated amortization of $1,579,000 and $1,491,000 as of March 31, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 9.7 years and 9.9 years as of March 31, 2021 and December 31, 2020, respectively) |
3,421,000 | 3,509,000 | ||||||
|
|
|
|
|||||
$ | 120,262,000 | $ | 118,356,000 | |||||
|
|
|
|
(1) | Deferred financing costs only include costs related to our lines of credit and term loan. See Note 8, Lines of Credit and Term Loan. |
March 31, 2021 |
December 31, 2020 |
|||||||
Total fixed-rate debt |
$ | 741,724,000 | $ | 742,686,000 | ||||
Total variable-rate debt |
192,913,000 | 91,340,000 | ||||||
|
|
|
|
|||||
Total fixed- and variable-rate debt |
934,637,000 | 834,026,000 | ||||||
Less: deferred financing costs, net |
(8,798,000 | ) | (10,389,000 | ) | ||||
Add: premium |
178,000 | 204,000 | ||||||
Less: discount |
(13,134,000 | ) | (13,363,000 | ) | ||||
|
|
|
|
|||||
Mortgage loans payable, net |
$ | 912,883,000 | $ | 810,478,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Beginning balance |
$ | 810,478,000 | $ | 792,870,000 | ||||
Additions: |
||||||||
Borrowings under mortgage loans payable |
205,826,000 | 8,239,000 | ||||||
Amortization of deferred financing costs |
2,627,000 | 395,000 | ||||||
Amortization of discount/premium on mortgage loans payable |
203,000 | 208,000 | ||||||
Deductions: |
||||||||
Early payoff of mortgage loans payable |
(101,734,000 | ) | — | |||||
Scheduled principal payments on mortgage loans payable |
(3,480,000 | ) | (3,137,000 | ) | ||||
Deferred financing costs |
(1,037,000 | ) | (801,000 | ) | ||||
|
|
|
|
|||||
Ending balance |
$ | 912,883,000 | $ | 797,774,000 | ||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 30,611,000 | ||
2022 |
63,255,000 | |||
2023 |
106,614,000 | |||
2024 |
159,291,000 | |||
2025 |
22,694,000 | |||
Thereafter |
552,172,000 | |||
|
|
|||
$ | 934,637,000 | |||
|
|
Fair Value |
||||||||||||||||||||||||
Instrument |
Notional Amount |
Index |
Interest Rate |
Maturity Date |
March 31, 2021 |
December 31, 2020 |
||||||||||||||||||
Cap |
$ | 20,000,000 | one month LIBOR | 3.00 | % | 09/23/21 | $ | — | $ | — | ||||||||||||||
Swap |
250,000,000 | one month LIBOR | 2.10 | % | 01/25/22 | (4,035,000 | ) | (5,245,000 | ) | |||||||||||||||
Swap |
130,000,000 | one month LIBOR | 1.98 | % | 01/25/22 | (1,969,000 | ) | (2,561,000 | ) | |||||||||||||||
Swap |
100,000,000 | one month LIBOR | 0.20 | % | 01/25/22 | (51,000 | ) | (71,000 | ) | |||||||||||||||
|
|
|
|
|||||||||||||||||||||
$ | (6,055,000 | ) | $ | (7,877,000 | ) | |||||||||||||||||||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 133,000 | ||
2022 |
89,000 | |||
2023 |
71,000 | |||
2024 |
27,000 | |||
2025 |
— | |||
Thereafter |
— | |||
|
|
|||
$ | 320,000 | |||
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Beginning balance |
$ | 40,340,000 | $ | 44,105,000 | ||||
Reclassification from equity |
— | 195,000 | ||||||
Adjustment to redemption value |
526,000 | 15,000 | ||||||
Net (loss) income attributable to redeemable noncontrolling interests |
(484,000 | ) | 228,000 | |||||
|
|
|
|
|||||
Ending balance |
$ | 40,382,000 | $ | 44,543,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Beginning balance — foreign currency translation adjustments |
$ | (2,008,000 | ) | $ | (2,255,000 | ) | ||
Net change in current period |
69,000 | (533,000 | ) | |||||
|
|
|
|
|||||
Ending balance — foreign currency translation adjustments |
$ | (1,939,000 | ) | $ | (2,788,000 | ) | ||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Asset management fees(1) |
$ | 5,362,000 | $ | 5,105,000 | ||||
Acquisition fees(2) |
1,334,000 | 36,000 | ||||||
Property management fees(3) |
654,000 | 653,000 | ||||||
Development fees(4) |
283,000 | 48,000 | ||||||
Lease fees(5) |
265,000 | 203,000 | ||||||
Operating expenses(6) |
63,000 | 61,000 | ||||||
Construction management fees(7) |
12,000 | 69,000 | ||||||
|
|
|
|
|||||
$ | 7,973,000 | $ | 6,175,000 | |||||
|
|
|
|
(1) | Asset management fees are included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss. |
(2) | Acquisition fees in connection with the acquisition of properties accounted for as asset acquisitions or the acquisition of real estate-related investments are capitalized as part of the associated investments in our accompanying condensed consolidated balance sheets. |
(3) | Property management fees are included in rental expenses or general and administrative expenses in our accompanying condensed consolidated statements of operations and comprehensive loss, depending on the property type from which the fee was incurred. |
(4) | Development fees are capitalized as part of the associated investments in our accompanying condensed consolidated balance sheets. |
(5) | Lease fees are capitalized as costs of entering into new leases and included in other assets, net in our accompanying condensed consolidated balance sheets. |
(6) | We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. For the 12 months ended March 31, 2021 and 2020, our operating expenses did not exceed such limitations. Operating expenses are generally included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss. |
(7) | Construction management fees are capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets or are expensed and included in our accompanying condensed consolidated statements of operations and comprehensive loss, as applicable. |
Fee |
March 31, 2021 |
December 31, 2020 |
||||||
Asset management fees |
$ | 1,795,000 | $ | 6,958,000 | ||||
Development fees |
278,000 | 743,000 | ||||||
Property management fees |
197,000 | 197,000 | ||||||
Lease commissions |
73,000 | 27,000 | ||||||
Construction management fees |
70,000 | 91,000 | ||||||
Operating expenses |
13,000 | 10,000 | ||||||
|
|
|
|
|||||
$ | 2,426,000 | $ | 8,026,000 | |||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Derivative financial instrument |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets at fair value |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | — | $ | 6,055,000 | $ | — | $ | 6,055,000 | ||||||||
Warrants |
— | — | 1,025,000 | 1,025,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities at fair value |
$ | — | $ | 6,055,000 | $ | 1,025,000 | $ | 7,080,000 | ||||||||
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Derivative financial instrument |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets at fair value |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Derivative financial instruments |
$ | — | $ | 7,877,000 | $ | — | $ | 7,877,000 | ||||||||
Warrants |
— | — | 1,025,000 | 1,025,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities at fair value |
$ | — | $ | 7,877,000 | $ | 1,025,000 | $ | 8,902,000 | ||||||||
|
|
|
|
|
|
|
|
March 31, 2021 |
December 31, 2020 |
|||||||||||||||
Carrying Amount(1) |
Fair Value |
Carrying Amount(1) |
Fair Value |
|||||||||||||
Financial Assets: |
||||||||||||||||
Debt security investment |
$ | 76,685,000 | $ | 93,973,000 | $ | 75,851,000 | $ | 94,033,000 | ||||||||
Financial Liabilities: |
||||||||||||||||
Mortgage loans payable |
$ | 912,883,000 | $ | 895,888,000 | $ | 810,478,000 | $ | 830,049,000 | ||||||||
Lines of credit and term loan |
$ | 836,424,000 | $ | 843,530,000 | $ | 836,770,000 | $ | 847,048,000 |
(1) | Carrying amount is net of any discount/premium and unamortized costs. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Domestic |
$ | (16,032,000 | ) | $ | (10,853,000 | ) | ||
Foreign |
(78,000 | ) | (141,000 | ) | ||||
|
|
|
|
|||||
Loss before income taxes |
$ | (16,110,000 | ) | $ | (10,994,000 | ) | ||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Federal deferred |
$ | (4,053,000 | ) | $ | (587,000 | ) | ||
State deferred |
(796,000 | ) | (65,000 | ) | ||||
Federal current |
— | (38,000 | ) | |||||
Foreign current |
163,000 | 156,000 | ||||||
Valuation allowances |
4,849,000 | (2,677,000 | ) | |||||
|
|
|
|
|||||
Total income tax expense (benefit) |
$ | 163,000 | $ | (3,211,000 | ) | |||
|
|
|
|
Year |
Amount |
|||
2021 |
$ | 67,746,000 | ||
2022 |
84,669,000 | |||
2023 |
78,401,000 | |||
2024 |
72,217,000 | |||
2025 |
63,796,000 | |||
Thereafter |
421,995,000 | |||
|
|
|||
Total |
$ | 788,824,000 | ||
|
|
Three Months Ended March 31, |
||||||||||
Lease Cost |
Classification |
2021 |
2020 |
|||||||
Operating lease cost(1) |
Property operating expenses and rental expenses | $ | 6,337,000 | $ | 8,194,000 | |||||
Finance lease cost |
||||||||||
Amortization of leased assets |
Depreciation and amortization | 412,000 | 535,000 | |||||||
Interest on lease liabilities |
Interest expense | 118,000 | 169,000 | |||||||
|
|
|
|
|||||||
Total lease cost |
$ | 6,867,000 | $ | 8,898,000 | ||||||
|
|
|
|
(1) | Includes short-term leases and variable lease costs, which are immaterial. |
Lease Term and Discount Rate |
March 31, 2021 |
December 31, 2020 |
||||||
Weighted average remaining lease term (in years) |
||||||||
Operating leases |
14.6 | 13.3 | ||||||
Finance leases |
3.5 | 1.3 | ||||||
Weighted average discount rate |
||||||||
Operating leases |
5.63 | % | 5.77 | % | ||||
Finance leases |
6.97 | % | 5.62 | % |
Three Months Ended March 31, |
||||||||
Supplemental Disclosure of Cash Flows Information |
2021 |
2020 |
||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||
Operating cash outflows related to finance leases |
$ | 118,000 | $ | 169,000 | ||||
Financing cash outflows related to finance leases |
$ | 60,000 | $ | 507,000 | ||||
Leased assets obtained in exchange for finance lease liabilities |
$ | 138,000 | $ | — | ||||
Right-of-use |
$ | — | $ | 1,628,000 |
Year |
Amount |
|||
2021 |
$ | 12,647,000 | ||
2022 |
16,847,000 | |||
2023 |
16,814,000 | |||
2024 |
15,819,000 | |||
2025 |
15,465,000 | |||
Thereafter |
132,307,000 | |||
|
|
|||
Total operating lease payments |
209,899,000 | |||
Less: interest |
73,244,000 | |||
|
|
|||
Present value of operating lease liabilities |
$ | 136,655,000 | ||
|
|
Year |
Amount |
|||
2021 |
$ | 120,000 | ||
2022 |
56,000 | |||
2023 |
49,000 | |||
2024 |
34,000 | |||
2025 |
31,000 | |||
Thereafter |
— | |||
|
|
|||
Total finance lease payments |
290,000 | |||
Less: interest |
33,000 | |||
|
|
|||
Present value of finance lease liabilities |
$ | 257,000 | ||
|
|
Integrated Senior Health Campuses |
Senior Housing — RIDEA |
Medical Office Buildings |
Senior Housing |
Skilled Nursing Facilities |
Hospitals |
Three Months Ended March 31, 2021 |
||||||||||||||||||||||
Revenues and grant income: |
||||||||||||||||||||||||||||
Resident fees and services |
$ | 233,226,000 | $ | 19,800,000 | $ | — | $ | — | $ | — | $ | — | $ | 253,026,000 | ||||||||||||||
Real estate revenue |
— | — | 20,023,000 | 3,570,000 | 3,667,000 | 2,763,000 | 30,023,000 | |||||||||||||||||||||
Grant income |
8,229,000 | — | — | — | — | — | 8,229,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues and grant income |
241,455,000 | 19,800,000 | 20,023,000 | 3,570,000 | 3,667,000 | 2,763,000 | 291,278,000 | |||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
Property operating expenses |
228,639,000 | 16,503,000 | — | — | — | — | 245,142,000 | |||||||||||||||||||||
Rental expenses |
— | — | 7,537,000 | 15,000 | 369,000 | 134,000 | 8,055,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment net operating income |
$ | 12,816,000 | $ | 3,297,000 | $ | 12,486,000 | $ | 3,555,000 | $ | 3,298,000 | $ | 2,629,000 | $ | 38,081,000 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
General and administrative |
|
$ | 7,257,000 | |||||||||||||||||||||||||
Business acquisition expenses |
|
1,248,000 | ||||||||||||||||||||||||||
Depreciation and amortization |
|
25,723,000 | ||||||||||||||||||||||||||
Other income (expense): |
| |||||||||||||||||||||||||||
Interest expense: |
| |||||||||||||||||||||||||||
Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment) |
|
(20,365,000 | ) | |||||||||||||||||||||||||
Gain in fair value of derivative financial instruments |
|
1,821,000 | ||||||||||||||||||||||||||
Loss on disposition of real estate investment |
|
(335,000 | ) | |||||||||||||||||||||||||
Loss from unconsolidated entities |
|
(1,771,000 | ) | |||||||||||||||||||||||||
Foreign currency gain |
|
415,000 | ||||||||||||||||||||||||||
Other income |
|
272,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Loss before income taxes |
|
(16,110,000 | ) | |||||||||||||||||||||||||
Income tax expense |
|
(163,000 | ) | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net loss |
|
$ | (16,273,000 | ) | ||||||||||||||||||||||||
|
|
Integrated Senior Health Campuses |
Senior Housing — RIDEA |
Medical Office Buildings |
Senior Housing |
Skilled Nursing Facilities |
Hospitals |
Three Months Ended March 31, 2020 |
||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||
Resident fees and services |
$ | 267,794,000 | $ | 22,132,000 | $ | — | $ | — | $ | — | $ | — | $ | 289,926,000 | ||||||||||||||
Real estate revenue |
— | — | 19,598,000 | 3,406,000 | 4,363,000 | 2,751,000 | 30,118,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
267,794,000 | 22,132,000 | 19,598,000 | 3,406,000 | 4,363,000 | 2,751,000 | 320,044,000 | |||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
Property operating expenses |
239,598,000 | 16,142,000 | — | — | — | — | 255,740,000 | |||||||||||||||||||||
Rental expenses |
— | — | 7,638,000 | 21,000 | 406,000 | 105,000 | 8,170,000 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment net operating income |
$ | 28,196,000 | $ | 5,990,000 | $ | 11,960,000 | $ | 3,385,000 | $ | 3,957,000 | $ | 2,646,000 | $ | 56,134,000 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||||||
General and administrative |
|
$ | 6,574,000 | |||||||||||||||||||||||||
Business acquisition expenses |
|
234,000 | ||||||||||||||||||||||||||
Depreciation and amortization |
|
25,087,000 | ||||||||||||||||||||||||||
Other income (expense): |
| |||||||||||||||||||||||||||
Interest expense: |
| |||||||||||||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount/premium) |
|
(18,534,000 | ) | |||||||||||||||||||||||||
Loss in fair value of derivative financial instruments |
|
(8,183,000 | ) | |||||||||||||||||||||||||
Impairment of real estate investments |
|
(5,102,000 | ) | |||||||||||||||||||||||||
Loss from unconsolidated entities |
|
(904,000 | ) | |||||||||||||||||||||||||
Foreign currency loss |
|
(3,065,000 | ) | |||||||||||||||||||||||||
Other income |
|
555,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Loss before income taxes |
|
(10,994,000 | ) | |||||||||||||||||||||||||
Income tax benefit |
|
3,211,000 | ||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net loss |
|
$ | (7,783,000 | ) | ||||||||||||||||||||||||
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Integrated senior health campuses |
$ | 1,886,043,000 | $ | 1,886,878,000 | ||||
Medical office buildings |
610,651,000 | 610,653,000 | ||||||
Senior housing — RIDEA |
347,229,000 | 348,987,000 | ||||||
Senior housing |
154,211,000 | 152,406,000 | ||||||
Skilled nursing facilities |
113,907,000 | 115,941,000 | ||||||
Hospitals |
108,314,000 | 109,663,000 | ||||||
Other |
9,671,000 | 10,409,000 | ||||||
|
|
|
|
|||||
Total assets |
$ | 3,230,026,000 | $ | 3,234,937,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Revenues and grant income: |
||||||||
United States |
$ | 289,986,000 | $ | 318,846,000 | ||||
International |
1,292,000 | 1,198,000 | ||||||
|
|
|
|
|||||
$ | 291,278,000 | $ | 320,044,000 | |||||
|
|
|
|
March 31, 2021 |
December 31, 2020 |
|||||||
Real estate investments, net: |
||||||||
United States |
$ | 2,359,163,000 | $ | 2,279,257,000 | ||||
International |
50,780,000 | 50,743,000 | ||||||
|
|
|
|
|||||
$ | 2,409,943,000 | $ | 2,330,000,000 | |||||
|
|
|
|
ARTICLE I DEFINITIONS |
A-3 | |||||
Section 1.1 |
Definitions | A-3 | ||||
Section 1.2 |
Interpretation and Rules of Construction | A-15 | ||||
ARTICLE II THE MERGERS |
A-16 | |||||
Section 2.1 |
The Mergers | A-16 | ||||
Section 2.2 |
Closing | A-16 | ||||
Section 2.3 |
Effective Times | A-16 | ||||
Section 2.4 |
Organizational Documents of the Surviving Entity and the Surviving Partnership | A-17 | ||||
Section 2.5 |
Managers of the Surviving Entity | A-18 | ||||
Section 2.6 |
Tax Treatment of Mergers | A-18 | ||||
Section 2.7 |
Subsequent Actions | A-18 | ||||
ARTICLE III EFFECTS OF THE MERGERS |
A-19 | |||||
Section 3.1 |
Effects of the Mergers | A-19 | ||||
Section 3.2 |
Exchange Procedures; Distributions with Respect to Unexchanged Shares | A-21 | ||||
Section 3.3 |
Withholding Rights | A-21 | ||||
Section 3.4 |
Dissenters Rights | A-21 | ||||
Section 3.5 |
General Effects of the Mergers | A-22 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE GAHR III PARTIES |
A-22 | |||||
Section 4.1 |
Organization and Qualification; Subsidiaries | A-23 | ||||
Section 4.2 |
Authority; Approval Required | A-24 | ||||
Section 4.3 |
No Conflict; Required Filings and Consents | A-25 | ||||
Section 4.4 |
Capital Structure | A-26 | ||||
Section 4.5 |
SEC Documents; Financial Statements; Internal Controls; Off Balance Sheet Arrangements; Investment Company Act; Anti-Corruption Laws | A-27 | ||||
Section 4.6 |
Absence of Certain Changes or Events | A-29 | ||||
Section 4.7 |
No Undisclosed Liabilities | A-29 | ||||
Section 4.8 |
Permits; Compliance with Law | A-30 | ||||
Section 4.9 |
Litigation | A-30 | ||||
Section 4.10 |
Properties | A-31 | ||||
Section 4.11 |
Environmental Matters | A-31 | ||||
Section 4.12 |
Material Contracts | A-32 | ||||
Section 4.13 |
Taxes | A-35 | ||||
Section 4.14 |
Intellectual Property | A-38 | ||||
Section 4.15 |
Information Privacy & Security | A-38 | ||||
Section 4.16 |
Insurance | A-39 | ||||
Section 4.17 |
Employee Matters | A-39 | ||||
Section 4.18 |
Related-Party Transactions | A-39 | ||||
Section 4.19 |
Brokers | A-40 |
Section 4.20 |
Opinion of Financial Advisor | A-40 | ||||
Section 4.21 |
Takeover Statutes | A-40 | ||||
Section 4.22 |
Information Supplied | A-40 | ||||
Section 4.23 |
No Other Representations and Warranties | A-41 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE GAHR IV PARTIES |
A-41 | |||||
Section 5.1 |
Organization and Qualification; Subsidiaries | A-42 | ||||
Section 5.2 |
Authority; Approval Required | A-43 | ||||
Section 5.3 |
No Conflict; Required Filings and Consents | A-44 | ||||
Section 5.4 |
Capital Structure | A-45 | ||||
Section 5.5 |
SEC Documents; Financial Statements; Internal Controls; Off Balance Sheet Arrangements; Investment Company Act; Anti-Corruption Laws | A-46 | ||||
Section 5.6 |
Absence of Certain Changes or Events | A-49 | ||||
Section 5.7 |
No Undisclosed Liabilities | A-49 | ||||
Section 5.8 |
Permits; Compliance with Law | A-49 | ||||
Section 5.9 |
Litigation | A-50 | ||||
Section 5.10 |
Properties | A-50 | ||||
Section 5.11 |
Environmental Matters | A-51 | ||||
Section 5.12 |
Material Contracts | A-51 | ||||
Section 5.13 |
Taxes | A-54 | ||||
Section 5.14 |
Intellectual Property | A-57 | ||||
Section 5.15 |
Information Privacy & Security | A-58 | ||||
Section 5.16 |
Insurance | A-58 | ||||
Section 5.17 |
Benefit Plans | A-58 | ||||
Section 5.18 |
Related-Party Transactions | A-59 | ||||
Section 5.19 |
Brokers | A-59 | ||||
Section 5.20 |
Opinion of Financial Advisor | A-59 | ||||
Section 5.21 |
Takeover Statutes | A-59 | ||||
Section 5.22 |
Ownership of Merger Sub; No Prior Activities | A-59 | ||||
Section 5.23 |
Information Supplied | A-60 | ||||
Section 5.24 |
No Other Representations and Warranties | A-60 | ||||
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGERS |
A-61 | |||||
Section 6.1 |
Conduct of Business by GAHR III | A-61 | ||||
Section 6.2 |
Conduct of Business by GAHR IV | A-66 | ||||
Section 6.3 |
No Control of Other Parties’ Business | A-70 | ||||
ARTICLE VII ADDITIONAL COVENANTS |
A-70 | |||||
Section 7.1 |
Preparation of the Form S-4, the GAHR III Proxy Statement and the GAHR IV Proxy Statement; Stockholder Approval |
A-70 | ||||
Section 7.2 |
Access to Information; Confidentiality | A-73 | ||||
Section 7.3 |
No Solicitation of Transactions; Change in Recommendation | A-74 | ||||
Section 7.4 |
Public Announcements | A-83 | ||||
Section 7.5 |
Appropriate Action; Consents; Filings | A-83 |
Section 7.6 |
Notification of Certain Matters; Transaction Litigation | A-85 | ||||
Section 7.7 |
Indemnification; Directors’ and Officers’ Insurance | A-86 | ||||
Section 7.8 |
Dividends | A-87 | ||||
Section 7.9 |
Takeover Statutes | A-87 | ||||
Section 7.10 |
Obligations of the Parties | A-88 | ||||
Section 7.11 |
Certain Transactions | A-88 | ||||
Section 7.12 |
Tax Matters | A-88 | ||||
Section 7.13 |
GAHR IV Board | A-89 | ||||
Section 7.14 |
GAHR IV Share Repurchase Plan | A-89 | ||||
Section 7.15 |
GAHR III 2013 Incentive Plan | A-89 | ||||
Section 7.16 |
GAHR IV Advisor | A-89 | ||||
ARTICLE VIII CONDITIONS |
A-90 | |||||
Section 8.1 |
Conditions to Each Party’s Obligation to Effect the Mergers | A-90 | ||||
Section 8.2 |
Conditions to Obligations of the GAHR III Parties | A-90 | ||||
Section 8.3 |
Conditions to Obligations of the GAHR IV Parties | A-92 | ||||
ARTICLE IX TERMINATION, FEES AND EXPENSES, AMENDMENT AND WAIVER |
A-93 | |||||
Section 9.1 |
Termination | A-93 | ||||
Section 9.2 |
Effect of Termination | A-95 | ||||
Section 9.3 |
Fees and Expenses | A-95 | ||||
Section 9.4 |
Amendment | A-98 | ||||
ARTICLE X GENERAL PROVISIONS |
A-99 | |||||
Section 10.1 |
Nonsurvival of Representations and Warranties and Certain Covenants | A-99 | ||||
Section 10.2 |
Notices | A-99 | ||||
Section 10.3 |
Severability | A-100 | ||||
Section 10.4 |
Counterparts | A-100 | ||||
Section 10.5 |
Entire Agreement; No Third-Party Beneficiaries | A-100 | ||||
Section 10.6 |
Extension; Waiver | A-101 | ||||
Section 10.7 |
Governing Law; Venue | A-101 | ||||
Section 10.8 |
Assignment | A-101 | ||||
Section 10.9 |
Specific Performance | A-101 | ||||
Section 10.10 |
Waiver of Jury Trial | A-102 | ||||
Section 10.11 |
Authorship | A-102 |
Defined Term |
Location of Definition | |
Acquisition Agreement | Section 7.3(d) | |
Agreement | Preamble | |
AHI Platform Acquisition | Recitals | |
Amended GAHR IV Advisory Agreement | Recitals | |
Articles of Merger | Section 2.3(a) | |
Charter Restrictions | Section 7.9 | |
Closing | Section 2.2 | |
Closing Date | Section 2.2 | |
Competing Proposal | Section 7.3(n)(i) | |
Contribution Agreement | Recitals | |
DE SOS | Section 2.3(b) | |
DRULPA | Recitals | |
Encumbrances | Section 4.10(a) | |
Escrow Agreement | Section 9.3(f) | |
Exchange Ratio | Section 3.1(a)(i) | |
Form S-4 |
Section 7.1(a) | |
GAHR III | Preamble | |
GAHR III Adverse Recommendation Change | Section 7.3(d) | |
GAHR III Advisor | Recitals | |
GAHR III Board | Recitals | |
GAHR III Board Recommendation | Section 4.2(c) | |
GAHR III Charter Amendment | Recitals | |
GAHR III Designees | Section 7.13 | |
GAHR III Disclosure Letter | Article IV | |
GAHR III Insurance Policies | Section 4.16 | |
GAHR III Intervening Event | Section 7.3(n)(ii) | |
GAHR III Management Agreement Documents | Section 4.12(d) | |
GAHR III Material Contract | Section 4.12(b) | |
GAHR III Operating Partnership | Preamble | |
GAHR III Permits | Section 4.8(a) | |
GAHR III Preferred Stock | Section 4.4(a) | |
GAHR III Related-Party Agreements | Section 4.18 | |
GAHR III SEC Documents | Section 4.5(a) | |
GAHR III Special Committee | Recitals | |
GAHR III Subsidiary Partnership | Section 4.13(h) | |
GAHR III Tax Protection Agreements | Section 4.13(h) | |
GAHR III Terminating Breach | Section 9.1(d)(i) | |
GAHR III Voting Debt | Section 4.4(d) | |
GAHR IV | Preamble |
GAHR IV Adverse Recommendation Change | Section 7.3(j) | |
GAHR IV Advisor | Recitals | |
GAHR IV Board | Recitals | |
GAHR IV Board Recommendation | Section 5.2(c) | |
GAHR IV Charter Amendment | Recitals | |
GAHR IV Disclosure Letter | Article V | |
GAHR IV Insurance Policies | Section 5.16 | |
GAHR IV Intervening Event | Section 7.3(n)(iii) | |
GAHR IV Management Agreement Documents | Section 5.12(d) | |
GAHR IV Material Contract | Section 5.12(b) | |
GAHR IV Operating Partnership | Preamble | |
GAHR IV Permits | Section 5.8(a) | |
GAHR IV Preferred Stock | Section 5.4(a) | |
GAHR IV Related Party Agreements | Section 5.18 | |
GAHR IV SEC Documents | Section 5.5(a) | |
GAHR IV Special Committee | Recitals | |
GAHR IV Subsidiary Partnership | Section 5.13(h) | |
GAHR IV Tax Protection Agreements | Section 5.13(h) | |
GAHR IV Terminating Breach | Section 9.1(c)(i) | |
GAHR IV Voting Debt | Section 5.4(d) | |
Indemnified Parties | Section 7.7(a) | |
Interim Period | Section 6.1(a) | |
Merger Effective Time | Section 2.3(a) | |
Merger Sub | Preamble | |
Mergers | Recitals | |
MGCL | Recitals | |
MLLCA | Recitals | |
Outside Date | Section 9.1(b)(i) | |
Partnership Certificate of Merger | Section 2.3(b) | |
Partnership Merger | Recitals | |
Partnership Merger Effective Time | Section 2.3(b) | |
Party(ies) | Preamble | |
Payor | Section 9.3(d) | |
Qualified REIT Subsidiary | Section 4.1(c) | |
Qualifying REIT Income | Section 9.3(f)(i) | |
Recipient | Section 9.3(c) | |
Registered Securities | Section 7.1(a) | |
REIT Merger | Recitals | |
REIT Merger Consideration | Section 3.1(a)(i) | |
REIT Merger Effective Time | Section 2.3(a) | |
Sarbanes-Oxley Act | Section 4.5(a) | |
SDAT | Section 2.3(a) |
Second Amended and Restated GAHR III Partnership Agreement | Recitals | |
Superior Proposal | Section 7.3(n)(iv) | |
Surviving Entity | Section 2.1(a) | |
Surviving Partnership | Section 2.1(b) | |
Surviving Partnership Agreement | Section 2.4(c) | |
Takeover Statutes | Section 4.21 | |
Taxable REIT Subsidiary | Section 4.1(c) | |
Transfer Agent | Section 3.2(a) | |
Transfer Taxes | Section 7.12(d) | |
Trilogy | Section 6.1(a) | |
Trilogy LLC Agreement | Section 6.1(a) |
By: |
/s/ Jeffrey T. Hanson | |
Name: Jeffrey T. Hanson | ||
Title: Chief Executive Officer and Chairman of the Board of Directors |
By: | GRIFFIN-AMERICAN HEALTHCARE REIT III, INC., as general partner | |
By: /s/ Jeffrey T.Hanson | ||
Name: Jeffrey T. Hanson | ||
Title: Chief Executive Officer and Chairman of the Board of Directors |
By: | /s/ Jeffrey T. Hanson | |
Name: Jeffrey T. Hanson | ||
Title: Chief Executive Officer and Chairman of the Board of Directors |
By: | GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC., as general partner | |
By: /s/ Jeffrey T. Hanson | ||
Name: Jeffrey T. Hanson | ||
Title: Chief Executive Officer and Chairman of the Board of Directors |
By: |
GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC., its sole member | |
By: /s/ Danny Prosky | ||
Name: Danny Prosky | ||
Title: President and Chief Operating Officer |
ATTEST: | GRIFFIN-AMERICAN HEALTHCARE REIT III, INC. | |||||||
By: | By: | |||||||
Name: |
Name: |
|||||||
Title: |
Title: |
ATTEST: |
GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC. |
Name: | Cora Lo | Name: | Jeffrey T. Hanson | |||||
Title: | Secretary | Title: | Chief Executive Officer |
ATTEST: | GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC. | |||
Name: Cora Lo | Name: Jeffrey T. Hanson | |||
Title: Secretary | Title: Chief Executive Officer |
![]() |
Robert A. Stanger & Company, Inc. 1129 Broad Street, Suite 201 Shrewsbury, New Jersey 07702 732-389-3600 |
• | Reviewed a draft copy of the Merger Agreement, which GAHR III indicated to be in substantially the form intended to be entered into by the parties; |
• | Reviewed a draft copy of the Contribution Agreement (together with the Merger Agreement, the “ Agreements |
• | Reviewed the financial statements of GAHR III and GAHR IV for the years ended December 31, 2018, 2019, and 2020, contained in the Form 10-K filed with the Securities and Exchange Commission (“SEC |
• | Reviewed the financial statements of GAHR III and GAHR IV for the quarter ended March 31, 2021 contained in the Form 10-Q filed with the SEC; |
• | Reviewed the Charters, Bylaws, Advisory Agreements and their respective amendments for GAHR III and GAHR IV; |
• | Reviewed the notes, loan agreements and amortization tables for the mortgage debts payable and debt investments of GAHR III and GAHR IV; |
• | Reviewed appraisals and valuation reports prepared by Stanger on the GAHR III properties and by Jones Lang LaSalle (“ JLL |
• | Reviewed a net asset value report for GAHR III, as prepared by Stanger, summarizing appraised values as prepared by Stanger plus other tangible assets and liabilities as of September 30, 2020; |
• | Reviewed a net asset value report for GAHR IV, as prepared by JLL, summarizing appraised values as prepared by JLL plus other tangible assets and liabilities as of September 30, 2020; |
• | Reviewed a five-year cash flow projection for each of GAHR III and GAHR IV, as prepared by the advisors to GAHR III and GAHR IV; |
• | Reviewed the terms of the asset management fee hurdle provision of the GAHR III asset management agreement; |
• | Discussed with management each of the Properties; |
• | Reviewed valuation statistics for selected publicly traded REITs that focus on investing in healthcare assets; |
• | Reviewed certain publicly available information on acquisitions of real estate management companies, and |
• | Conducted such other analyses as we deemed appropriate. |
Griffin-American Healthcare REIT IV, Inc. Attention: The Special Committee of the Board of Directors June 23, 2021 Page 2 |
• | a draft, dated June 17, 2021, of the Merger Agreement and a draft, dated June 22, 2021, of the Contribution Agreement; |
• | certain publicly available business and financial information relating to GAHR IV, GAHR III and the Advisor; |
• | certain other information relating to the historical, current and future business, financial condition, results of operations and prospects of GAHR IV, GAHR III and the Advisor made available to us by the management of the Advisor, including financial projections for the years ending December 31, 2021 through December 31, 2025 prepared by the management of the Advisor relating (i) to GAHR IV (the “GAHR IV Projections”), (ii) GAHR III (the “GAHR III Projections”), (iii) GAHR IV after giving effect to the Mergers (the “GAHR IV PF Projections”), and (iv) GAHR IV after giving effect to the Mergers and the AHI Platform Acquisition (the “GAHR IV PF Internalized Projections” and, collectively with the GAHR IV Projections, the GAHR III Projections and the GAHR IV PF Projections, the “Projections”); and |
• | the financial and operating performance of GAHR IV, GAHR III, GAHR IV after giving effect to the Mergers, and GAHR IV after giving effect to the Mergers and the AHI Platform Acquisition, as compared to that of companies with publicly traded equity securities that we deemed relevant. |
Griffin-American Healthcare REIT IV, Inc. Attention: The Special Committee of the Board of Directors June 23, 2021 Page 3 |
Griffin-American Healthcare REIT IV, Inc. Attention: The Special Committee of the Board of Directors June 23, 2021 Page 4 |
Griffin-American Healthcare REIT IV, Inc. Attention: The Special Committee of the Board of Directors June 23, 2021 Page 5 |
December 31, |
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2020 |
2019 |
2018 |
||||||||||||||||||||||||||||||||||
Number of Buildings/ Campuses |
Aggregate Contract Purchase Price |
Leased % |
Number of Buildings/ Campuses |
Aggregate Contract Purchase Price |
Leased % |
Number of Buildings/ Campuses |
Aggregate Contract Purchase Price |
Leased % |
||||||||||||||||||||||||||||
Integrated senior health campuses |
119 | $ | 1,626,950,000 | (1 | ) | 118 | $ | 1,546,121,000 | (1 | ) | 112 | $ | 1,500,649,000 | (1 | ) | |||||||||||||||||||||
Medical office buildings |
63 | 657,885,000 | 89.0 | % | 64 | 664,135,000 | 89.1 | % | 64 | 664,135,000 | 89.3 | % | ||||||||||||||||||||||||
Senior housing — RIDEA |
20 | 433,891,000 | (2 | ) | 20 | 433,891,000 | (2 | ) | 13 | 320,035,000 | (2 | ) | ||||||||||||||||||||||||
Senior housing |
9 | 89,535,000 | 100 | % | 9 | 89,535,000 | 100 | % | 15 | 188,391,000 | 100 | % | ||||||||||||||||||||||||
Skilled nursing facilities |
7 | 128,000,000 | 100 | % | 7 | 128,000,000 | 100 | % | 7 | 128,000,000 | 100 | % | ||||||||||||||||||||||||
Hospitals |
2 | 139,780,000 | 100 | % | 2 | 139,780,000 | 100 | % | 2 | 139,780,000 | 100 | % | ||||||||||||||||||||||||
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Total/weighted average(3) |
220 | $ | 3,076,041,000 | 91.9 | % | 220 | $ | 3,001,462,000 | 91.9 | % | 213 | $ | 2,940,990,000 | 92.5 | % | |||||||||||||||||||||
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(1) | The leased percentage for the resident units of our integrated senior health campuses was 77.0%, 86.1% and 84.8% for the years ended December 31, 2020, 2019 and 2018, respectively. |
(2) | The leased percentage for the resident units of our senior housing — RIDEA facilities was 74.4%, 84.9% and 84.9% for the years ended December 31, 2020, 2019 and 2018, respectively. |
(3) | Leased percentage excludes our senior housing — RIDEA facilities and integrated senior health campuses. |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Resident Fees and Services Revenue |
||||||||||||
Integrated senior health campuses |
$ | 983,169,000 | $ | 1,030,934,000 | $ | 940,616,000 | ||||||
Senior housing — RIDEA |
85,904,000 | 68,144,000 | 65,075,000 | |||||||||
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|
|||||||
Total resident fees and services revenue |
1,069,073,000 | 1,099,078,000 | 1,005,691,000 | |||||||||
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|
|||||||
Real Estate Revenue |
||||||||||||
Medical office buildings |
78,424,000 | 80,805,000 | 80,078,000 | |||||||||
Skilled nursing facilities |
16,107,000 | 13,345,000 | 14,887,000 | |||||||||
Senior housing |
14,524,000 | 18,407,000 | 21,913,000 | |||||||||
Hospitals |
10,992,000 | 11,481,000 | 12,691,000 | |||||||||
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|
|||||||
Total real estate revenue |
120,047,000 | 124,038,000 | 129,569,000 | |||||||||
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|||||||
Grant Income |
||||||||||||
Integrated senior health campuses |
53,855,000 | — | — | |||||||||
Senior housing — RIDEA |
1,326,000 | — | — | |||||||||
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|||||||
Total grant income |
55,181,000 | — | — | |||||||||
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Total revenues and grant income |
$ | 1,244,301,000 | $ | 1,223,116,000 | $ | 1,135,260,000 | ||||||
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Years Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Property Operating Expenses |
||||||||||||||||||||||||
Integrated senior health campuses |
$ | 929,897,000 | 89.7 | % | $ | 919,793,000 | 89.2 | % | $ | 844,279,000 | 89.8 | % | ||||||||||||
Senior housing — RIDEA |
63,830,000 | 73.2 | % | 48,067,000 | 70.5 | % | 44,792,000 | 68.8 | % | |||||||||||||||
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Total property operating expenses |
$ | 993,727,000 | 88.4 | % | $ | 967,860,000 | 88.1 | % | $ | 889,071,000 | 88.4 | % | ||||||||||||
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Rental Expenses |
||||||||||||||||||||||||
Medical office buildings |
$ | 30,216,000 | 38.5 | % | $ | 30,870,000 | 38.2 | % | $ | 30,514,000 | 38.1 | % | ||||||||||||
Skilled nursing facilities |
1,572,000 | 9.8 | % | 1,456,000 | 10.9 | % | 1,816,000 | 12.2 | % | |||||||||||||||
Hospitals |
446,000 | 4.1 | % | 532,000 | 4.6 | % | 1,656,000 | 13.0 | % | |||||||||||||||
Senior housing |
64,000 | 0.4 | % | 1,001,000 | 5.4 | % | 837,000 | 3.8 | % | |||||||||||||||
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Total rental expenses |
$ | 32,298,000 | 26.9 | % | $ | 33,859,000 | 27.3 | % | $ | 34,823,000 | 26.9 | % | ||||||||||||
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Years Ended December 31, |
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2020 |
2019 |
2018 |
||||||||||
Asset management and property management oversight fees — affiliates |
$ | 21,953,000 | $ | 20,073,000 | $ | 19,373,000 | ||||||
Professional and legal fees |
2,936,000 | 2,965,000 | 2,578,000 | |||||||||
Transfer agent services |
1,220,000 | 1,340,000 | 1,239,000 | |||||||||
Stock compensation expense |
(1,342,000 | ) | 2,744,000 | 3,026,000 | ||||||||
Board of directors fees |
614,000 | 280,000 | 262,000 | |||||||||
Bank charges |
586,000 | 282,000 | 374,000 | |||||||||
Directors’ and officers’ liability insurance |
337,000 | 314,000 | 315,000 | |||||||||
Postage and delivery |
247,000 | 171,000 | 250,000 | |||||||||
Franchise taxes |
194,000 | 82,000 | 354,000 | |||||||||
Restricted stock compensation |
155,000 | 215,000 | 215,000 | |||||||||
Bad debt expense |
— | 991,000 | 490,000 | |||||||||
Other |
107,000 | 292,000 | 294,000 | |||||||||
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|
|||||||
Total |
$ | 27,007,000 | $ | 29,749,000 | $ | 28,770,000 | ||||||
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Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Interest expense: |
||||||||||||
Lines of credit and term loans and derivative financial instruments |
$ | 31,499,000 | $ | 36,064,000 | $ | 29,508,000 | ||||||
Mortgage loans payable |
32,568,000 | 32,714,000 | 29,183,000 | |||||||||
Amortization of deferred financing costs: |
||||||||||||
Lines of credit and term loans |
3,559,000 | 3,664,000 | 4,637,000 | |||||||||
Mortgage loans payable |
1,171,000 | 1,449,000 | 1,269,000 | |||||||||
Amortization of debt discount/premium, net |
826,000 | 647,000 | 537,000 | |||||||||
Loss in fair value of derivative financial instruments |
3,906,000 | 4,541,000 | 1,949,000 | |||||||||
Loss on extinguishment of debt |
— | 2,968,000 | — | |||||||||
Interest on finance lease liabilities |
609,000 | 390,000 | — | |||||||||
Interest expense on financing obligations and other liabilities |
1,046,000 | 657,000 | 1,147,000 | |||||||||
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|
|
|
|
|||||||
Total |
$ | 75,184,000 | $ | 83,094,000 | $ | 68,230,000 | ||||||
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|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Cash, cash equivalents and restricted cash — beginning of period |
$ | 89,880,000 | $ | 72,705,000 | $ | 64,143,000 | ||||||
Net cash provided by operating activities |
219,156,000 | 117,454,000 | 106,814,000 | |||||||||
Net cash used in investing activities |
(147,945,000 | ) | (103,112,000 | ) | (135,772,000 | ) | ||||||
Net cash (used in) provided by financing activities |
(8,811,000 | ) | 2,688,000 | 37,597,000 | ||||||||
Effect of foreign currency translation on cash, cash equivalents and restricted cash |
(90,000 | ) | 145,000 | (77,000 | ) | |||||||
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|
|||||||
Cash, cash equivalents and restricted cash — end of period |
$ | 152,190,000 | $ | 89,880,000 | $ | 72,705,000 | ||||||
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Years Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Ordinary income |
$ | — | — | % | $ | 35,294,000 | 29.9 | % | $ | 33,141,000 | 27.6 | % | ||||||||||||
Capital gain |
— | — | — | — | — | — | ||||||||||||||||||
Return of capital |
48,842,000 | 100 | 82,731,000 | 70.1 | 86,833,000 | 72.4 | ||||||||||||||||||
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$ | 48,842,000 | 100 | % | $ | 118,025,000 | 100 | % | $ | 119,974,000 | 100 | % | |||||||||||||
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Payments Due by Period |
||||||||||||||||||||
2021 |
2022-2023 |
2024-2025 |
Thereafter |
Total |
||||||||||||||||
Principal payments — fixed-rate debt |
$ | 13,915,000 | $ | 93,051,000 | $ | 82,274,000 | $ | 553,446,000 | $ | 742,686,000 | ||||||||||
Interest payments — fixed-rate debt |
26,645,000 | 48,557,000 | 41,693,000 | 260,144,000 | 377,039,000 | |||||||||||||||
Principal payments — variable-rate debt |
40,254,000 | 881,219,000 | 13,501,000 | — | 934,974,000 | |||||||||||||||
Interest payments — variable-rate debt (based on rates in effect as of December 31, 2020) |
26,347,000 | 18,094,000 | 299,000 | — | 44,740,000 | |||||||||||||||
Ground and other lease obligations |
23,875,000 | 48,848,000 | 47,395,000 | 167,081,000 | 287,199,000 | |||||||||||||||
Financing obligations |
22,465,000 | 4,721,000 | 1,508,000 | 1,005,000 | 29,699,000 | |||||||||||||||
Finance leases |
151,000 | 38,000 | — | — | 189,000 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 153,652,000 | $ | 1,094,528,000 | $ | 186,670,000 | $ | 981,676,000 | $ | 2,416,526,000 | ||||||||||
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Years Ended December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Net income (loss) |
$ | 8,863,000 | $ | (852,000 | ) | $ | 14,537,000 | $ | 5,350,000 | $ | (203,896,000 | ) | ||||||||
Add: |
||||||||||||||||||||
Depreciation and amortization related to real estate — consolidated properties |
98,858,000 | 111,412,000 | 95,678,000 | 113,226,000 | 271,307,000 | |||||||||||||||
Depreciation and amortization related to real estate — unconsolidated entities |
2,992,000 | 1,189,000 | 1,085,000 | 1,075,000 | 1,061,000 | |||||||||||||||
Impairment of real estate investments |
11,069,000 | — | 2,542,000 | 14,070,000 | — | |||||||||||||||
Less: |
||||||||||||||||||||
Gain on dispositions of real estate investments |
(1,395,000 | ) | — | — | (3,370,000 | ) | — | |||||||||||||
Net (income) loss attributable to noncontrolling interests |
(6,700,000 | ) | (4,113,000 | ) | (1,240,000 | ) | 5,872,000 | 57,862,000 | ||||||||||||
Depreciation, amortization, impairments and gain on dispositions — noncontrolling interests |
(18,012,000 | ) | (16,477,000 | ) | (15,644,000 | ) | (22,759,000 | ) | (63,419,000 | ) | ||||||||||
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|||||||||||
FFO attributable to controlling interest |
$ | 95,675,000 | $ | 91,159,000 | $ | 96,958,000 | $ | 113,464,000 | $ | 62,915,000 | ||||||||||
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Years Ended December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Acquisition related expenses(1) |
$ | 290,000 | $ | (161,000 | ) | $ | (2,913,000 | ) | $ | (3,833,000 | ) | $ | 28,589,000 | |||||||
Amortization of above- and below-market leases(2) |
124,000 | 219,000 | 450,000 | 710,000 | 929,000 | |||||||||||||||
Amortization of loan and closing costs(3) |
170,000 | 275,000 | 251,000 | 223,000 | 754,000 | |||||||||||||||
Change in deferred rent(4) |
(1,479,000 | ) | 744,000 | (4,841,000 | ) | (5,289,000 | ) | (10,733,000 | ) | |||||||||||
Loss on extinguishment of debt(5) |
— | 2,968,000 | — | 1,432,000 | — | |||||||||||||||
Loss (gain) in fair value of derivative financial instruments(6) |
3,906,000 | 4,541,000 | 1,949,000 | (383,000 | ) | (1,968,000 | ) | |||||||||||||
Foreign currency (gain) loss(7) |
(1,469,000 | ) | (1,730,000 | ) | 2,690,000 | (4,045,000 | ) | 8,755,000 | ||||||||||||
Fair value adjustment to investments in unconsolidated entities(8) |
— | — | — | — | 9,101,000 | |||||||||||||||
Adjustments for unconsolidated entities(9) |
941,000 | 1,431,000 | 1,645,000 | 1,981,000 | 2,140,000 | |||||||||||||||
Adjustments for noncontrolling interests(9) |
(1,486,000 | ) | (2,743,000 | ) | (1,512,000 | ) | (1,988,000 | ) | (3,954,000 | ) | ||||||||||
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MFFO attributable to controlling interest |
$ | 96,672,000 | $ | 96,703,000 | $ | 94,677,000 | $ | 102,272,000 | $ | 96,528,000 | ||||||||||
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|||||||||||
Weighted average common shares outstanding — basic and diluted |
194,168,833 | 196,342,873 | 199,953,936 | 198,234,677 | 194,199,931 | |||||||||||||||
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|||||||||||
Net income (loss) per common share — basic and diluted |
$ | 0.05 | $ | — | $ | 0.07 | $ | 0.03 | $ | (1.05 | ) | |||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
FFO attributable to controlling interest per common share — basic and diluted |
$ | 0.49 | $ | 0.46 | $ | 0.48 | $ | 0.57 | $ | 0.32 | ||||||||||
|
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|
|
|
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|
|
|
|
|||||||||||
MFFO attributable to controlling interest per common share — basic and diluted |
$ | 0.50 | $ | 0.49 | $ | 0.47 | $ | 0.52 | $ | 0.50 | ||||||||||
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|
|
(1) | In evaluating investments in real estate, we differentiate the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition related expenses, we believe MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our advisor or its affiliates and third parties. |
(2) | Under GAAP, above- and below-market leases are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, we believe that by excluding charges relating to the amortization of above- and below-market leases, MFFO may provide useful supplemental information on the performance of the real estate. |
(3) | Under GAAP, direct loan and closing costs are amortized over the term of our debt security investment and notes receivable as an adjustment to the yield on our debt security investment or notes receivable. This may result in income recognition that is different than the contractual cash flows under our debt security investment and notes receivable. By adjusting for the amortization of the loan and closing costs related to our debt security investment and real estate notes receivable, MFFO may provide useful supplemental information on the realized economic impact of our debt security investment and notes receivable terms, providing insight on the expected contractual cash flows of such debt security investment and notes receivable, and aligns results with our analysis of operating performance. |
(4) | Under GAAP, as a lessor, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays). As a lessee, we record amortization of right-of-use |
underlying contract terms. By adjusting such amounts, MFFO may provide useful supplemental information on the realized economic impact of lease terms, providing insight on the expected contractual cash flows of such lease terms, and aligns results with our analysis of operating performance. |
(5) | The loss associated with the early extinguishment of debt primarily includes the write-off of unamortized deferred financing fees, write-off of unamortized debt discount, penalties, or other fees incurred. We believe that adjusting for such non-recurring losses provides useful supplemental information because such charges (or losses) may not be reflective of on-going business transactions and operations and is consistent with management’s analysis of our operating performance. |
(6) | Under GAAP, we are required to include changes in fair value of our derivative financial instruments in the determination of net income or loss. We believe that adjusting for the change in fair value of our derivative financial instruments to arrive at MFFO is appropriate because such adjustments may not be reflective of on-going operations and reflect unrealized impacts on value based only on then current market conditions, although they may be based upon general market conditions. The need to reflect the change in fair value of our derivative financial instruments is a continuous process and is analyzed on a quarterly basis in accordance with GAAP. |
(7) | We believe that adjusting for the change in foreign currency exchange rates provides useful information because such adjustments may not be reflective of on-going operations. |
(8) | Includes impairment of one of our investments in unconsolidated entities, which resulted from a measurable decrease in the fair value of the real estate operations of such entity. |
(9) | Includes all adjustments to eliminate the unconsolidated entities’ share or noncontrolling interests’ share, as applicable, of the adjustments described in notes (1) – (8) above to convert our FFO to MFFO. |
Years Ended December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Net income (loss) |
$ | 8,863,000 | $ | (852,000 | ) | $ | 14,537,000 | $ | 5,350,000 | $ | (203,896,000 | ) | ||||||||
General and administrative |
27,007,000 | 29,749,000 | 28,770,000 | 32,587,000 | 28,951,000 | |||||||||||||||
Acquisition related expenses |
290,000 | (161,000 | ) | (2,913,000 | ) | (3,833,000 | ) | 28,589,000 | ||||||||||||
Depreciation and amortization |
98,858,000 | 111,412,000 | 95,678,000 | 113,226,000 | 271,307,000 | |||||||||||||||
Interest expense |
75,184,000 | 83,094,000 | 68,230,000 | 60,489,000 | 43,697,000 | |||||||||||||||
Gain on dispositions of real estate investments |
(1,395,000 | ) | — | — | (3,370,000 | ) | — | |||||||||||||
Impairment of real estate investments |
11,069,000 | — | 2,542,000 | 14,070,000 | — | |||||||||||||||
Loss from unconsolidated entities |
4,517,000 | 2,097,000 | 3,877,000 | 5,048,000 | 18,377,000 | |||||||||||||||
Foreign currency (gain) loss |
(1,469,000 | ) | (1,730,000 | ) | 2,690,000 | (4,045,000 | ) | 8,755,000 | ||||||||||||
Other income |
(1,570,000 | ) | (3,736,000 | ) | (1,248,000 | ) | (1,517,000 | ) | (1,085,000 | ) | ||||||||||
Income tax (benefit) expense |
(3,078,000 | ) | 1,524,000 | (797,000 | ) | (3,227,000 | ) | 343,000 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net operating income |
$ | 218,276,000 | $ | 221,397,000 | $ | 211,366,000 | $ | 214,778,000 | $ | 195,038,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
March 31, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Number of Buildings/ Campuses |
Aggregate Contract Purchase Price |
Leased % |
Number of Buildings/ Campuses |
Aggregate Contract Purchase Price |
Leased % |
|||||||||||||||||||
Integrated senior health campuses |
120 | $ | 1,732,058,000 | (1 | ) | 118 | $ | 1,547,192,000 | (1 | ) | ||||||||||||||
Medical office buildings |
63 | 657,885,000 | 89.1 | % | 64 | 664,135,000 | 87.5 | % | ||||||||||||||||
Senior housing — RIDEA |
20 | 433,891,000 | (2 | ) | 20 | 433,891,000 | (2 | ) | ||||||||||||||||
Senior housing |
9 | 89,535,000 | 100 | % | 9 | 89,535,000 | 100 | % | ||||||||||||||||
Skilled nursing facilities |
6 | 119,500,000 | 100 | % | 7 | 128,000,000 | 100 | % | ||||||||||||||||
Hospitals |
2 | 139,780,000 | 100 | % | 2 | 139,780,000 | 100 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total/weighted average(3) |
220 | $ | 3,172,649,000 | 91.7 | % | 220 | $ | 3,002,533,000 | 90.7 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The leased percentage for the resident units of our integrated senior health campuses was 67.6% and 83.5% for the three months ended March 31, 2021 and 2020, respectively. |
(2) | The leased percentage for the resident units of our senior housing — RIDEA facilities was 70.0% and 82.5% for the three months ended March 31, 2021 and 2020, respectively. |
(3) | Leased percentage excludes our senior housing — RIDEA facilities and integrated senior health campuses. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Resident Fees and Services Revenue |
||||||||
Integrated senior health campuses |
$ | 233,226,000 | $ | 267,794,000 | ||||
Senior housing — RIDEA |
19,800,000 | 22,132,000 | ||||||
|
|
|
|
|||||
Total resident fees and services revenue |
253,026,000 | 289,926,000 | ||||||
|
|
|
|
|||||
Real Estate Revenue |
||||||||
Medical office buildings |
20,023,000 | 19,598,000 | ||||||
Skilled nursing facilities |
3,667,000 | 4,363,000 | ||||||
Senior housing |
3,570,000 | 3,406,000 | ||||||
Hospitals |
2,763,000 | 2,751,000 | ||||||
|
|
|
|
|||||
Total real estate revenue |
30,023,000 | 30,118,000 | ||||||
|
|
|
|
|||||
Grant Income |
||||||||
Integrated senior health campuses |
8,229,000 | — | ||||||
|
|
|
|
|||||
Total grant income |
8,229,000 | — | ||||||
|
|
|
|
|||||
Total revenues and grant income |
$ | 291,278,000 | $ | 320,044,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Property Operating Expenses |
||||||||||||||||
Integrated senior health campuses |
$ | 228,639,000 | 94.7 | % | $ | 239,598,000 | 89.5 | % | ||||||||
Senior housing — RIDEA |
16,503,000 | 83.3 | % | 16,142,000 | 72.9 | % | ||||||||||
|
|
|
|
|||||||||||||
Total property operating expenses |
$ | 245,142,000 | 93.8 | % | $ | 255,740,000 | 88.2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Rental Expenses |
||||||||||||||||
Medical office buildings |
$ | 7,537,000 | 37.6 | % | $ | 7,638,000 | 39.0 | % | ||||||||
Skilled nursing facilities |
369,000 | 10.1 | % | 406,000 | 9.3 | % | ||||||||||
Hospitals |
134,000 | 4.8 | % | 105,000 | 3.8 | % | ||||||||||
Senior housing |
15,000 | 0.4 | % | 21,000 | 0.6 | % | ||||||||||
|
|
|
|
|||||||||||||
Total rental expenses |
$ | 8,055,000 | 26.8 | % | $ | 8,170,000 | 27.1 | % | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Asset management and property management oversight fees — affiliates |
$ | 5,678,000 | $ | 5,105,000 | ||||
Professional and legal fees |
744,000 | 471,000 | ||||||
Transfer agent services |
312,000 | 325,000 | ||||||
Bank charges |
167,000 | 114,000 | ||||||
Directors’ and officers’ liability insurance |
115,000 | 82,000 | ||||||
Board of directors fees |
81,000 | 77,000 | ||||||
Franchise taxes |
70,000 | 86,000 | ||||||
Postage and delivery |
48,000 | 45,000 | ||||||
Restricted stock compensation |
27,000 | 43,000 | ||||||
Stock compensation expense |
(14,000 | ) | 195,000 | |||||
Other |
29,000 | 31,000 | ||||||
|
|
|
|
|||||
Total |
$ | 7,257,000 | $ | 6,574,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Interest expense: |
||||||||
Lines of credit and term loan and derivative financial instruments |
$ | 7,594,000 | $ | 8,433,000 | ||||
Mortgage loans payable |
8,585,000 | 8,338,000 | ||||||
Amortization of deferred financing costs: |
||||||||
Lines of credit and term loan |
1,075,000 | 760,000 | ||||||
Mortgage loans payable |
339,000 | 295,000 | ||||||
Amortization of debt discount/premium, net |
203,000 | 208,000 | ||||||
(Gain) loss in fair value of derivative financial instruments |
(1,821,000 | ) | 8,183,000 | |||||
Loss on debt extinguishment |
2,288,000 | — | ||||||
Interest on finance lease liabilities |
118,000 | 169,000 | ||||||
Interest expense on financing obligations and other liabilities |
163,000 | 331,000 | ||||||
|
|
|
|
|||||
Total |
$ | 18,544,000 | $ | 26,717,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Cash, cash equivalents and restricted cash — beginning of period |
$ | 152,190,000 | $ | 89,880,000 | ||||
Net cash (used in) provided by operating activities |
(5,255,000 | ) | 25,883,000 | |||||
Net cash used in investing activities |
(106,841,000 | ) | (39,218,000 | ) | ||||
Net cash provided by financing activities |
89,605,000 | 5,103,000 | ||||||
Effect of foreign currency translation on cash, cash equivalents and restricted cash |
7,000 | (134,000 | ) | |||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash — end of period |
$ | 129,706,000 | $ | 81,514,000 | ||||
|
|
|
|
Three Months Ended March 31, 2020 |
||||||||
Distributions paid in cash |
$ | 16,032,000 | ||||||
Distributions reinvested |
13,141,000 | |||||||
|
|
|||||||
$ | 29,173,000 | |||||||
|
|
|||||||
Sources of distributions: |
||||||||
Cash flows from operations |
$ | 25,883,000 | 88.7 | % | ||||
Proceeds from borrowings |
3,290,000 | 11.3 | ||||||
|
|
|
|
|||||
$ | 29,173,000 | 100 | % | |||||
|
|
|
|
Three Months Ended March 31, 2020 |
||||||||
Distributions paid in cash |
$ | 16,032,000 | ||||||
Distributions reinvested |
13,141,000 | |||||||
|
|
|||||||
$ | 29,173,000 | |||||||
|
|
|||||||
Sources of distributions: |
||||||||
FFO attributable to controlling interest |
$ | 16,229,000 | 55.6 | % | ||||
Proceeds from borrowings |
12,944,000 | 44.4 | ||||||
|
|
|
|
|||||
$ | 29,173,000 | 100 | % | |||||
|
|
|
|
Payments Due by Period |
||||||||||||||||||||
2021 |
2022-2023 |
2024-2025 |
Thereafter |
Total |
||||||||||||||||
Principal payments — fixed-rate debt |
$ | 10,743,000 | $ | 93,586,000 | $ | 85,223,000 | $ | 552,172,000 | $ | 741,724,000 | ||||||||||
Interest payments — fixed-rate debt |
19,350,000 | 46,963,000 | 40,089,000 | 243,979,000 | 350,381,000 | |||||||||||||||
Principal payments — variable-rate debt |
19,868,000 | 918,517,000 | 96,762,000 | — | 1,035,147,000 | |||||||||||||||
Interest payments — variable-rate debt (based on rates in effect as of March 31, 2021) |
22,378,000 | 24,748,000 | 830,000 | — | 47,956,000 | |||||||||||||||
Ground and other lease obligations |
12,647,000 | 33,661,000 | 31,284,000 | 132,307,000 | 209,899,000 | |||||||||||||||
Financing obligations |
14,037,000 | 4,422,000 | 1,415,000 | 974,000 | 20,848,000 | |||||||||||||||
Finance leases |
120,000 | 105,000 | 65,000 | — | 290,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 99,143,000 | $ | 1,122,002,000 | $ | 255,668,000 | $ | 929,432,000 | $ | 2,406,245,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Net loss |
$ | (16,273,000 | ) | $ | (7,783,000 | ) | ||
Add: |
||||||||
Depreciation and amortization related to real estate — consolidated properties |
25,723,000 | 25,087,000 | ||||||
Depreciation and amortization related to real estate — unconsolidated entities |
806,000 | 744,000 | ||||||
Loss on disposition of real estate investment |
335,000 | — | ||||||
Impairment of real estate investments |
— | 5,102,000 | ||||||
Net loss (income) attributable to noncontrolling interests |
4,426,000 | (2,127,000 | ) | |||||
Less: |
||||||||
Depreciation, amortization, impairment and loss on disposition — noncontrolling interests |
(4,765,000 | ) | (4,794,000 | ) | ||||
|
|
|
|
|||||
FFO attributable to controlling interest |
$ | 10,252,000 | $ | 16,229,000 | ||||
|
|
|
|
|||||
Business acquisition expenses(1) |
$ | 1,248,000 | $ | 234,000 | ||||
Amortization of above- and below-market leases(2) |
36,000 | 19,000 | ||||||
Amortization of closing costs(3) |
47,000 | 40,000 | ||||||
Change in deferred rent(4) |
(334,000 | ) | (28,000 | ) | ||||
Loss on debt extinguishment(5) |
2,288,000 | — | ||||||
(Gain) loss in fair value of derivative financial instruments(6) |
(1,821,000 | ) | 8,183,000 | |||||
Foreign currency (gain) loss(7) |
(415,000 | ) | 3,065,000 | |||||
Adjustments for unconsolidated entities(8) |
171,000 | 316,000 | ||||||
Adjustments for noncontrolling interests(8) |
(971,000 | ) | (510,000 | ) | ||||
|
|
|
|
|||||
MFFO attributable to controlling interest |
$ | 10,501,000 | $ | 27,548,000 | ||||
|
|
|
|
|||||
Weighted average common shares outstanding — basic and diluted |
193,856,872 | 194,844,516 | ||||||
|
|
|
|
|||||
Net loss per common share — basic and diluted |
$ | (0.08 | ) | $ | (0.04 | ) | ||
|
|
|
|
|||||
FFO attributable to controlling interest per common share — basic and diluted |
$ | 0.05 | $ | 0.08 | ||||
|
|
|
|
|||||
MFFO attributable to controlling interest per common share — basic and diluted |
$ | 0.05 | $ | 0.14 | ||||
|
|
|
|
(1) | In evaluating investments in real estate, we differentiate the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding business acquisition expenses that have been deducted as expenses in the determination of GAAP net income or |
loss, we believe MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Business acquisition expenses include payments to our advisor or its affiliates and third parties. |
(2) | Under GAAP, above- and below-market leases are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate-related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, we believe that by excluding charges relating to the amortization of above- and below-market leases, MFFO may provide useful supplemental information on the performance of the real estate. |
(3) | Under GAAP, direct closing costs are amortized over the term of our debt security investment as an adjustment to the yield on our debt security investment. This may result in income recognition that is different than the contractual cash flows under our debt security investment. By adjusting for the amortization of the closing costs related to our debt security investment, MFFO may provide useful supplemental information on the realized economic impact of our debt security investment terms, providing insight on the expected contractual cash flows of such debt security investment, and aligns results with management’s analysis of operating performance. |
(4) | Under GAAP, as a lessor, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays). As a lessee, we record amortization of right-of-use |
(5) | The loss associated with the early extinguishment of debt primarily relates to the write-off of unamortized deferred financing fees and other fees. We believe that adjusting for such non-recurring losses provides useful supplemental information because such charges (or losses) may not be reflective of on-going business transactions and operations and is consistent with management’s analysis of our operating performance. |
(6) | Under GAAP, we are required to include changes in fair value of our derivative financial instruments in the determination of net income or loss. We believe that adjusting for the change in fair value of our derivative financial instruments to arrive at MFFO is appropriate because such adjustments may not be reflective of on-going operations and reflect unrealized impacts on value based only on then current market conditions, although they may be based upon general market conditions. The need to reflect the change in fair value of our derivative financial instruments is a continuous process and is analyzed on a quarterly basis in accordance with GAAP. |
(7) | We believe that adjusting for the change in foreign currency exchange rates provides useful information because such adjustments may not be reflective of on-going operations. |
(8) | Includes all adjustments to eliminate the unconsolidated entities’ share or noncontrolling interests’ share, as applicable, of the adjustments described in notes (1) – |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Net loss |
$ | (16,273,000 | ) | $ | (7,783,000 | ) | ||
General and administrative |
7,257,000 | 6,574,000 | ||||||
Business acquisition expenses |
1,248,000 | 234,000 | ||||||
Depreciation and amortization |
25,723,000 | 25,087,000 | ||||||
Interest expense |
18,544,000 | 26,717,000 | ||||||
Loss on disposition of real estate investment |
335,000 | — | ||||||
Impairment of real estate investments |
— | 5,102,000 | ||||||
Loss from unconsolidated entities |
1,771,000 | 904,000 | ||||||
Foreign currency (gain) loss |
(415,000 | ) | 3,065,000 | |||||
Other income |
(272,000 | ) | (555,000 | ) | ||||
Income tax expense (benefit) |
163,000 | (3,211,000 | ) | |||||
|
|
|
|
|||||
Net operating income |
$ | 38,081,000 | $ | 56,134,000 | ||||
|
|
|
|
December 31, |
||||||||||||||||||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||||||||||||||||||
Number of Buildings |
Aggregate Contract Purchase Price |
Leased % |
Number of Buildings |
Aggregate Contract Purchase Price |
Leased % |
Number of Buildings |
Aggregate Contract Purchase Price |
Leased % |
||||||||||||||||||||||||||||||||
Medical office buildings |
43 | $ | 605,122,000 | (1) | 93.2 | % | 43 | $ | 603,639,000 | 93.1 | % | 29 | $ | 423,439,000 | 93.5 | % | ||||||||||||||||||||||||
Senior housing — RIDEA |
26 | 264,709,000 | (2) | (3 | ) | 14 | 153,850,000 | (3 | ) | 12 | 137,100,000 | (3 | ) | |||||||||||||||||||||||||||
Senior housing |
14 | 101,800,000 | 100 | % | 19 | 147,600,000 | 100 | % | 18 | 150,350,000 | 100 | % | ||||||||||||||||||||||||||||
Skilled nursing facilities |
11 | 117,800,000 | 100 | % | 11 | 117,800,000 | 100 | % | 10 | 110,800,000 | 100 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total/weighted average(4) |
94 | $ | 1,089,431,000 | 95.7 | % | 87 | $ | 1,022,889,000 | 95.8 | % | 69 | $ | 821,689,000 | 96.4 | % | |||||||||||||||||||||||||
|
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|
|
|
|
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|
|
(1) | Includes a $1,483,000 earn-out paid in June 2020 in connection with our property acquisition of Overland Park MOB in August 2019. See Note 3, Real Estate Investments, Net, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of such earn-out. |
(2) | Includes a $360,000 earn-out paid in December 2020 in connection with our property acquisition of Catalina Madera ALF in January 2020. See Note 3, Real Estate Investments, Net, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of such earn-out. |
(3) | For the years ended December 31, 2020, 2019 and 2018, the leased percentage for the resident units of our senior housing RIDEA facilities was 74.9%, 83.2.% and 77.7%, respectively, based on daily average occupancy of licensed beds/units. |
(4) | Leased percentage excludes our senior housing — RIDEA facilities. |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Real Estate Revenue |
||||||||||||
Medical office buildings |
$ | 65,509,000 | $ | 54,508,000 | $ | 34,339,000 | ||||||
Skilled nursing facilities |
11,968,000 | 11,681,000 | 4,266,000 | |||||||||
Senior housing |
8,844,000 | 8,421,000 | 8,994,000 | |||||||||
|
|
|
|
|
|
|||||||
Total real estate revenue |
86,321,000 | 74,610,000 | 47,599,000 | |||||||||
|
|
|
|
|
|
|||||||
Resident Fees and Services Revenue |
||||||||||||
Senior housing — RIDEA |
67,793,000 | 46,160,000 | 36,857,000 | |||||||||
|
|
|
|
|
|
|||||||
Total resident fees and services revenue |
67,793,000 | 46,160,000 | 36,857,000 | |||||||||
|
|
|
|
|
|
|||||||
Grant Income |
||||||||||||
Senior housing — RIDEA |
1,005,000 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total grant income |
1,005,000 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total revenues and grant income |
$ | 155,119,000 | $ | 120,770,000 | $ | 84,456,000 | ||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Rental Expenses |
||||||||||||||||||||||||
Medical office buildings |
$ | 22,068,000 | 33.7 | % | $ | 17,528,000 | 32.2 | % | $ | 9,934,000 | 28.9 | % | ||||||||||||
Senior housing |
806,000 | 9.1 | % | 1,142,000 | 13.6 | % | 1,214,000 | 13.5 | % | |||||||||||||||
Skilled nursing facilities |
576,000 | 4.8 | % | 556,000 | 4.8 | % | 351,000 | 8.2 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total rental expenses |
$ | 23,450,000 | 27.2 | % | $ | 19,226,000 | 25.8 | % | $ | 11,499,000 | 24.2 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Property Operating Expenses |
||||||||||||||||||||||||
Senior housing — RIDEA |
$ | 60,224,000 | 87.5 | % | $ | 37,434,000 | 81.1 | % | $ | 30,023,000 | 81.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total property operating expenses |
$ | 60,224,000 | 87.5 | % | $ | 37,434,000 | 81.1 | % | $ | 30,023,000 | 81.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Asset management and property management oversight fees — affiliates |
$ | 10,063,000 | $ | 8,276,000 | $ | 4,975,000 | ||||||
Professional and legal fees |
3,454,000 | 3,664,000 | 1,436,000 | |||||||||
Bank charges |
678,000 | 268,000 | 240,000 | |||||||||
Board of directors fees |
599,000 | 255,000 | 253,000 | |||||||||
Bad debt expense |
510,000 | 1,482,000 | 1,274,000 | |||||||||
Transfer agent services |
493,000 | 524,000 | 362,000 | |||||||||
Directors’ and officers’ liability insurance |
259,000 | 244,000 | 212,000 | |||||||||
Franchise taxes |
253,000 | 129,000 | 100,000 | |||||||||
Restricted stock compensation |
215,000 | 207,000 | 185,000 | |||||||||
Other |
167,000 | 186,000 | 135,000 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 16,691,000 | $ | 15,235,000 | $ | 9,172,000 | ||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Interest expense: |
||||||||||||
Line of credit and term loans and derivative financial instruments |
$ | 17,193,000 | $ | 13,014,000 | $ | 4,984,000 | ||||||
Mortgage loans payable |
793,000 | 1,030,000 | 715,000 | |||||||||
Amortization of deferred financing costs: |
||||||||||||
Line of credit and term loans |
1,880,000 | 2,028,000 | 1,000,000 | |||||||||
Mortgage loans payable |
40,000 | 78,000 | 76,000 | |||||||||
Loss in fair value of derivative financial instruments |
870,000 | 4,385,000 | — | |||||||||
Amortization of debt discount/premium |
49,000 | 41,000 | 13,000 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 20,825,000 | $ | 20,576,000 | $ | 6,788,000 | ||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Cash, cash equivalents and restricted cash — beginning of period |
$ | 15,846,000 | $ | 14,590,000 | $ | 7,103,000 | ||||||
Net cash provided by operating activities |
35,495,000 | 39,540,000 | 15,423,000 | |||||||||
Net cash used in investing activities |
(76,456,000 | ) | (199,934,000 | ) | (411,554,000 | ) | ||||||
Net cash provided by financing activities |
43,240,000 | 161,650,000 | 403,618,000 | |||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash — end of period |
$ | 18,125,000 | $ | 15,846,000 | $ | 14,590,000 | ||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
2018 |
||||||||||||||||||||||
Ordinary income |
$ | 5,479,000 | 14.5 | % | $ | 10,099,000 | 21.8 | % | $ | 11,909,000 | 37.7 | % | ||||||||||||
Capital gain |
— | — | — | — | — | — | ||||||||||||||||||
Return of capital |
32,193,000 | 85.5 | 36,317,000 | 78.2 | 19,673,000 | 62.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 37,672,000 | 100 | % | $ | 46,416,000 | 100 | % | $ | 31,582,000 | 100 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period |
||||||||||||||||||||
2021 |
2022-2023 |
2024-2025 |
Thereafter |
Total |
||||||||||||||||
Principal payments — fixed-rate debt |
$ | 607,000 | $ | 1,331,000 | $ | 6,589,000 | $ | 10,239,000 | $ | 18,766,000 | ||||||||||
Interest payments — fixed-rate debt |
729,000 | 1,370,000 | 1,113,000 | 4,969,000 | 8,181,000 | |||||||||||||||
Principal payments — variable-rate debt |
476,900,000 | — | — | — | 476,900,000 | |||||||||||||||
Interest payments — variable-rate debt (based on rates in effect as of December 31, 2020) |
9,410,000 | — | — | — | 9,410,000 | |||||||||||||||
Ground lease obligations |
523,000 | 1,056,000 | 1,072,000 | 46,565,000 | 49,216,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 488,169,000 | $ | 3,757,000 | $ | 8,774,000 | $ | 61,773,000 | $ | 562,473,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Net (loss) income |
$ | (18,942,000 | ) | $ | (18,851,000 | ) | $ | (8,586,000 | ) | $ | 508,000 | $ | (5,474,000 | ) | ||||||
Add: |
||||||||||||||||||||
Depreciation and amortization related to real estate — consolidated properties |
50,304,000 | 45,626,000 | 32,658,000 | 13,639,000 | 1,252,000 | |||||||||||||||
Depreciation and amortization related to real estate — unconsolidated entity |
3,517,000 | 3,365,000 | 891,000 | — | — | |||||||||||||||
Impairment of real estate investments — consolidated properties |
3,642,000 | — | — | — | ||||||||||||||||
Impairments and gain on disposition of real estate investments, net — unconsolidated entity |
78,000 | — | — | — | — | |||||||||||||||
Net loss attributable to noncontrolling interests |
885,000 | 82,000 | 232,000 | 33,000 | — | |||||||||||||||
Less: |
||||||||||||||||||||
Depreciation, amortization and impairments — noncontrolling interests |
(980,000 | ) | (113,000 | ) | (272,000 | ) | (46,000 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
FFO attributable to controlling interest |
$ | 38,504,000 | $ | 30,109,000 | $ | 24,923,000 | $ | 14,134,000 | $ | (4,222,000 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Acquisition related expenses(1) |
$ | (160,000 | ) | $ | 1,974,000 | $ | 2,795,000 | $ | 655,000 | $ | 4,745,000 | |||||||||
Amortization of above- and below-market leases(2) |
132,000 | (207,000 | ) | (165,000 | ) | (143,000 | ) | (29,000 | ) | |||||||||||
Change in deferred rent(3) |
(4,207,000 | ) | (2,925,000 | ) | (3,029,000 | ) | (1,705,000 | ) | (207,000 | ) | ||||||||||
Loss in fair value of derivative financial instruments(4) |
870,000 | 4,385,000 | — | — | — | |||||||||||||||
Adjustments for unconsolidated entity(5) |
301,000 | 486,000 | 99,000 | — | — | |||||||||||||||
Adjustments for noncontrolling interests(5) |
(6,000 | ) | — | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
MFFO attributable to controlling interest |
$ | 35,434,000 | $ | 33,822,000 | $ | 24,623,000 | $ | 12,941,000 | $ | 287,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Weighted average Class T and Class I common shares outstanding — basic and diluted |
80,661,645 | 78,396,077 | 54,847,197 | 27,754,701 | 3,131,466 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net (loss) income per Class T and Class I common share — basic and diluted |
$ | (0.23 | ) | $ | (0.24 | ) | $ | (0.16 | ) | $ | 0.02 | $ | (1.75 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
FFO attributable to controlling interest per Class T and Class I common share — basic and diluted |
$ | 0.48 | $ | 0.38 | $ | 0.45 | $ | 0.51 | $ | (1.35 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
MFFO attributable to controlling interest per Class T and Class I common share — basic and diluted |
$ | 0.44 | $ | 0.43 | $ | 0.45 | $ | 0.47 | $ | 0.09 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | In evaluating investments in real estate, we differentiate the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition related expenses, we believe MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our advisor or its affiliates and third parties. |
(2) | Under GAAP, above- and below-market leases are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate-related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, we believe that by excluding charges relating to the amortization of above- and below-market leases, MFFO may provide useful supplemental information on the performance of the real estate. |
(3) | Under GAAP, as a lessor, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays). As a lessee, we record amortization of right-of-use |
(4) | Under GAAP, we are required to include changes in fair value of our derivative financial instruments in the determination of net income or loss. We believe that adjusting for the change in fair value of our derivative financial instruments to arrive at MFFO is appropriate because such adjustments may not be reflective of on-going operations and reflect unrealized impacts on value based only on then current market conditions, although they may be based upon general market conditions. The need to reflect the change in fair value of our derivative financial instruments is a continuous process and is analyzed on a quarterly basis in accordance with GAAP. |
(5) | Includes all adjustments to eliminate the unconsolidated entity’s share or noncontrolling interests’ share, as applicable, of the adjustments described in notes (1) – (4) above to convert our FFO to MFFO. |
Years Ended December 31, |
||||||||||||||||||||
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Net (loss) income |
$ | (18,942,000 | ) | $ | (18,851,000 | ) | $ | (8,586,000 | ) | $ | 508,000 | $ | (5,474,000 | ) | ||||||
General and administrative |
16,691,000 | 15,235,000 | 9,172,000 | 4,338,000 | 1,221,000 | |||||||||||||||
Acquisition related expenses |
(160,000 | ) | 1,974,000 | 2,795,000 | 655,000 | 4,745,000 | ||||||||||||||
Depreciation and amortization |
50,304,000 | 45,626,000 | 32,658,000 | 13,639,000 | 1,252,000 | |||||||||||||||
Interest expense |
20,825,000 | 20,576,000 | 6,788,000 | 2,699,000 | 514,000 | |||||||||||||||
Impairment of real estate investments |
3,642,000 | — | — | — | — | |||||||||||||||
(Income) loss from unconsolidated entity |
(629,000 | ) | (267,000 | ) | 110,000 | — | — | |||||||||||||
Other income |
(286,000 | ) | (175,000 | ) | (11,000 | ) | (1,000 | ) | — | |||||||||||
Income tax (benefit) expense |
— | (8,000 | ) | 8,000 | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net operating income |
$ | 71,445,000 | $ | 64,110,000 | $ | 42,934,000 | $ | 21,838,000 | $ | 2,258,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
March 31, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Number of Buildings |
Aggregate Contract Purchase Price |
Leased % |
Number of Buildings |
Aggregate Contract Purchase Price |
Leased % |
|||||||||||||||||||
Medical office buildings |
43 | $ | 608,072,000 | 93.3 | % | 43 | $ | 603,639,000 | 93.1 | % | ||||||||||||||
Senior housing — RIDEA |
26 | 264,709,000 | (1 | ) | 26 | 264,349,000 | (1 | ) | ||||||||||||||||
Senior housing |
14 | 101,800,000 | 100 | % | 14 | 101,800,000 | 100 | % | ||||||||||||||||
Skilled nursing facilities |
11 | 117,800,000 | 100 | % | 11 | 117,800,000 | 100 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total/weighted average(2) |
94 | $ | 1,092,381,000 | 95.7 | % | 94 | $ | 1,087,588,000 | 95.4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | For the three months ended March 31, 2021 and 2020, the leased percentage for the resident units of our senior housing — RIDEA facilities was 67.6% and 81.7%, respectively, based on daily average occupancy of licensed beds/units. |
(2) | Leased percentage excludes our senior housing — RIDEA facilities. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Real Estate Revenue |
||||||||
Medical office buildings |
$ | 16,752,000 | $ | 16,271,000 | ||||
Skilled nursing facilities |
3,000,000 | 3,012,000 | ||||||
Senior housing |
2,194,000 | 2,180,000 | ||||||
|
|
|
|
|||||
Total real estate revenue |
21,946,000 | 21,463,000 | ||||||
|
|
|
|
|||||
Resident Fees and Services Revenue |
||||||||
Senior housing — RIDEA |
15,895,000 | 16,081,000 | ||||||
|
|
|
|
|||||
Total resident fees and services |
15,895,000 | 16,081,000 | ||||||
|
|
|
|
|||||
Total revenues |
$ | 37,841,000 | $ | 37,544,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Rental Expenses |
||||||||||||||||
Medical office buildings |
$ | 5,705,000 | 34.1 | % | $ | 5,390,000 | 33.1 | % | ||||||||
Senior housing |
174,000 | 7.9 | % | 280,000 | 12.8 | % | ||||||||||
Skilled nursing facilities |
145,000 | 4.8 | % | 152,000 | 5.0 | % | ||||||||||
|
|
|
|
|||||||||||||
Total rental expenses |
$ | 6,024,000 | 27.4 | % | $ | 5,822,000 | 27.1 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Property Operating Expenses |
||||||||||||||||
Senior housing — RIDEA |
$ | 15,194,000 | 95.6 | % | $ | 13,017,000 | 80.9 | % | ||||||||
|
|
|
|
|||||||||||||
Total property operating expenses |
$ | 15,194,000 | 95.6 | % | $ | 13,017,000 | 80.9 | % | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Asset management and property management oversight fees — affiliates |
$ | 2,540,000 | $ | 2,411,000 | ||||
Professional and legal fees |
600,000 | 1,528,000 | ||||||
Bank charges |
180,000 | 129,000 | ||||||
Transfer agent services |
124,000 | 134,000 | ||||||
Directors’ and officers’ liability insurance |
76,000 | 65,000 | ||||||
Franchise taxes |
72,000 | 40,000 | ||||||
Board of directors fees |
69,000 | 68,000 | ||||||
Restricted stock compensation |
43,000 | 43,000 | ||||||
Other |
43,000 | 30,000 | ||||||
|
|
|
|
|||||
Total |
$ | 3,747,000 | $ | 4,448,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Interest expense: |
||||||||
Line of credit and term loans and derivative financial instruments |
$ | 4,037,000 | $ | 4,618,000 | ||||
Mortgage loans payable |
200,000 | 191,000 | ||||||
Amortization of deferred financing costs: |
||||||||
Line of credit and term loans |
470,000 | 469,000 | ||||||
Mortgage loans payable |
7,000 | 20,000 | ||||||
(Gain) loss in fair value of derivative financial instruments |
(1,455,000 | ) | 4,605,000 | |||||
Amortization of debt discount/premium |
12,000 | 12,000 | ||||||
|
|
|
|
|||||
Total |
$ | 3,271,000 | $ | 9,915,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Cash, cash equivalents and restricted cash — beginning of period |
$ | 18,125,000 | $ | 15,846,000 | ||||
Net cash provided by operating activities |
8,093,000 | 9,793,000 | ||||||
Net cash used in investing activities |
(4,273,000 | ) | (68,297,000 | ) | ||||
Net cash (used in) provided by financing activities |
(2,043,000 | ) | 63,522,000 | |||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash — end of period |
$ | 19,902,000 | $ | 20,864,000 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Distributions paid in cash |
$ | 3,926,000 | $ | 5,561,000 | ||||||||||||
Distributions reinvested |
4,106,000 | 6,437,000 | ||||||||||||||
|
|
|
|
|||||||||||||
$ | 8,032,000 | $ | 11,998,000 | |||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
Cash flows from operations |
$ | 8,032,000 | 100 | % | $ | 9,793,000 | 81.6 | % | ||||||||
Proceeds from borrowings |
— | — | 2,205,000 | 18.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 8,032,000 | 100 | % | $ | 11,998,000 | 100 | % | |||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Distributions paid in cash |
$ | 3,926,000 | $ | 5,561,000 | ||||||||||||
Distributions reinvested |
4,106,000 | 6,437,000 | ||||||||||||||
|
|
|
|
|||||||||||||
$ | 8,032,000 | $ | 11,998,000 | |||||||||||||
|
|
|
|
|||||||||||||
Sources of distributions: |
||||||||||||||||
FFO attributable to controlling interest |
$ | 8,032,000 | 100 | % | $ | 5,416,000 | 45.1 | % | ||||||||
Proceeds from borrowings |
— | — | 6,582,000 | 54.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 8,032,000 | 100 | % | $ | 11,998,000 | 100 | % | |||||||||
|
|
|
|
|
|
|
|
Payments Due by Period |
||||||||||||||||||||
2021 |
2022-2023 |
2024-2025 |
Thereafter |
Total |
||||||||||||||||
Principal payments — fixed-rate debt |
$ | 469,000 | $ | 1,331,000 | $ | 6,589,000 | $ | 10,239,000 | $ | 18,628,000 | ||||||||||
Interest payments — fixed-rate debt |
545,000 | 1,370,000 | 1,113,000 | 4,969,000 | 7,997,000 | |||||||||||||||
Principal payments — variable-rate debt |
481,400,000 | — | — | — | 481,400,000 | |||||||||||||||
Interest payments — variable-rate debt (based on rates in effect as of March 31, 2021) |
6,737,000 | — | — | — | 6,737,000 | |||||||||||||||
Ground lease obligations |
417,000 | 1,056,000 | 1,072,000 | 46,565,000 | 49,110,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 489,568,000 | $ | 3,757,000 | $ | 8,774,000 | $ | 61,773,000 | $ | 563,872,000 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Net loss |
$ | (4,008,000 | ) | $ | (7,933,000 | ) | ||
Add: |
||||||||
Depreciation and amortization related to real estate — consolidated properties |
12,402,000 | 12,530,000 | ||||||
Depreciation and amortization related to real estate — unconsolidated entity |
945,000 | 882,000 | ||||||
Net loss attributable to noncontrolling interests |
264,000 | 167,000 | ||||||
Less: |
||||||||
Depreciation and amortization — noncontrolling interests |
(249,000 | ) | (230,000 | ) | ||||
|
|
|
|
|||||
FFO attributable to controlling interest |
$ | 9,354,000 | $ | 5,416,000 | ||||
|
|
|
|
|||||
Business acquisition expenses(1) |
$ | 314,000 | $ | 9,000 | ||||
Amortization of above- and below-market leases(2) |
40,000 | 18,000 | ||||||
Change in deferred rent(3) |
(873,000 | ) | (1,074,000 | ) | ||||
(Gain) loss in fair value of derivative financial instruments(4) |
(1,455,000 | ) | 4,605,000 | |||||
Adjustments for unconsolidated entity(5) |
182,000 | 173,000 | ||||||
Adjustments for noncontrolling interests(5) |
— | (6,000 | ) | |||||
|
|
|
|
|||||
MFFO attributable to controlling interest |
$ | 7,562,000 | $ | 9,141,000 | ||||
|
|
|
|
|||||
Weighted average Class T and Class I common shares outstanding — basic and diluted |
81,511,212 | 80,301,650 | ||||||
|
|
|
|
|||||
Net loss per Class T and Class I common share — basic and diluted |
$ | (0.05 | ) | $ | (0.10 | ) | ||
|
|
|
|
|||||
FFO attributable to controlling interest per Class T and Class I common share — basic and diluted |
$ | 0.11 | $ | 0.07 | ||||
|
|
|
|
|||||
MFFO attributable to controlling interest per Class T and Class I common share — basic and diluted |
$ | 0.09 | $ | 0.11 | ||||
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|
|
|
(1) | In evaluating investments in real estate, we differentiate the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding business acquisition expenses that have been deducted as expenses in the determination of GAAP net income or loss, we believe MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Business acquisition expenses include payments to our advisor or its affiliates and third parties. |
(2) | Under GAAP, above- and below-market leases are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate-related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, we believe that by excluding charges relating to the amortization of above- and below-market leases, MFFO may provide useful supplemental information on the performance of the real estate. |
(3) | Under GAAP, as a lessor, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays). As a lessee, we record amortization of right-of-use |
(4) | Under GAAP, we are required to include changes in fair value of our derivative financial instruments in the determination of net income or loss. We believe that adjusting for the change in fair value of our derivative financial instruments to arrive at MFFO is appropriate because such adjustments may not be reflective of on-going operations and reflect unrealized impacts on value based only on then current market conditions, although they may be based upon general market conditions. The need to reflect the change in fair value of our derivative financial instruments is a continuous process and is analyzed on a quarterly basis in accordance with GAAP. |
(5) | Includes all adjustments to eliminate the unconsolidated entity’s share or noncontrolling interests’ share, as applicable, of the adjustments described in notes (1) – (4) above to convert our FFO to MFFO. |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Net loss |
$ | (4,008,000 | ) | $ | (7,933,000 | ) | ||
General and administrative |
3,747,000 | 4,448,000 | ||||||
Business acquisition expenses |
314,000 | 9,000 | ||||||
Depreciation and amortization |
12,402,000 | 12,530,000 | ||||||
Interest expense |
3,271,000 | 9,915,000 | ||||||
Loss (income) from unconsolidated entity |
904,000 | (255,000 | ) | |||||
Other income |
(7,000 | ) | (9,000 | ) | ||||
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|
|
|
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Net operating income |
$ | 16,623,000 | $ | 18,705,000 | ||||
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|
(i) | the Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of GAHR IV; |
(ii) | the Indemnitee was acting on behalf of or performing services for GAHR IV; |
(iii) | such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnitee is a director (other than an independent director), GAHR IV Advisor or an affiliate of GAHR IV Advisor or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an independent director; |
(iv) | such indemnification or agreement to hold harmless is recoverable only out of net assets and not from stockholders; and |
(v) | with respect to losses, liability or expenses arising from or out of an alleged violation of federal or state securities laws, one or more of the following conditions are met: (A) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnitee; (B) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (C) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which securities of GAHR IV were offered or sold as to indemnification for violations of securities laws. |
(a) | The following is a list of exhibits filed as part of this Registration Statement. |
Exhibit No. |
Description | |
2.1* | | |
3.1 | | |
3.2 | | |
3.3 | | |
4.1 | | |
5.1* | | |
8.1* | | |
8.2* | | |
8.3* | | |
8.4* | | |
10.1 | | |
10.2 | | |
10.3 | |
Exhibit No. |
Description | |
10.4 | | |
10.5 | | |
10.6 | | |
10.7 | | |
10.8 | | |
10.9 | | |
10.10 | | |
10.11 | | |
10.12 | | |
21.1** | Subsidiaries of Griffin-American Healthcare REIT IV, Inc. | |
23.1* | | |
23.2* | | |
23.3* | | |
23.4* | | |
23.5* | | |
23.6* | |
Exhibit No. |
Description | |
23.7* | | |
24.1* | | |
99.1* | | |
99.2* | | |
99.3** | Form of Proxy Card of Griffin-American Healthcare REIT III, Inc. | |
99.4** | Form of Proxy Card of Griffin-American Healthcare REIT IV, Inc. | |
99.5* | | |
99.6* | | |
99.7* | | |
99.8* | | |
99.9* | | |
101.INS* | Inline XBRL Instance Document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. |
** | To be filed by amendment. |
(a) | The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement. |
(b) | The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(d) | The undersigned registrant hereby undertakes that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements filed in reliance on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(e) | The undersigned registrant hereby undertakes that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424, (ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant, (iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant and (iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(f) | The undersigned registrant hereby undertakes that, prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(g) | The undersigned registrant hereby undertakes that every prospectus (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(h) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(i) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one (1) business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. |
(j) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. |
GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC. | ||
By: |
/s/ Jeffrey T. Hanson | |
Jeffrey T. Hanson | ||
Chief Executive Officer and Chairman of the Board of Directors |
Signature |
Title |
Date | ||
/s/ Jeffrey T. Hanson Jeffrey T. Hanson |
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) |
July 16, 2021 | ||
/s/ Brian S. Peay Brian S. Peay |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
July 16, 2021 | ||
/s/ Richard S. Welch Richard S. Welch |
Director |
July 16, 2021 | ||
/s/ Brian J. Flornes Brian J. Flornes |
Independent Director |
July 16, 2021 | ||
/s/ Dianne Hurley Dianne Hurley |
Independent Director |
July 16, 2021 | ||
/s/ Wilbur H. Smith III Wilbur H. Smith III |
Independent Director |
July 16, 2021 |