10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018

or

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to

Commission File Number: 000-55775

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

(Exact name of registrant as specified in its charter)

Maryland	47-2887436
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
18191 Von Karman Avenue, Suite 300, Irvine, California	92612
(Address of principal executive offices)	(Zip Code)

(949) 270-9200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

___________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨  Yes   x  No

As of November 9, 2018, there were 60,387,726 shares of Class T common stock and 3,903,987 shares of Class I common stock of Griffin-American Healthcare REIT IV, Inc. outstanding.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

(A Maryland Corporation)

TABLE OF CONTENTS

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017	5
Condensed Consolidated Statements of Equity for the Nine Months Ended September 30, 2018 and 2017	6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017	7
Notes to Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	50
Item 4. Controls and Procedures	51
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	52
Item 1A. Risk Factors	52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3. Defaults Upon Senior Securities	60
Item 4. Mine Safety Disclosures	60
Item 5. Other Information	60
Item 6. Exhibits	61
Signatures	64

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2018 and December 31, 2017

(Unaudited)

	September 30, 2018			December 31, 2017
ASSETS
Real estate investments, net	$	638,570,000		$	419,665,000
Cash and cash equivalents	30,841,000			7,087,000
Accounts and other receivables, net	10,661,000			2,838,000
Restricted cash	182,000			16,000
Real estate deposits	4,250,000			500,000
Identified intangible assets, net	64,095,000			44,821,000
Other assets, net	8,123,000			5,226,000
Total assets	$	756,722,000		$	480,153,000
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage loans payable, net(1)	$	16,988,000		$	11,567,000
Line of credit and term loan(1)	200,000,000			84,100,000
Accounts payable and accrued liabilities(1)	29,574,000			19,428,000
Accounts payable due to affiliates(1)	8,350,000			8,118,000
Identified intangible liabilities, net	1,486,000			1,737,000
Security deposits, prepaid rent and other liabilities(1)	2,508,000			977,000
Total liabilities	258,906,000			125,927,000
Commitments and contingencies (Note 9)
Redeemable noncontrolling interests (Note 10)	1,278,000			1,002,000
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 200,000,000 shares authorized; none issued and outstanding	—			—
Class T common stock, $0.01 par value per share; 900,000,000 shares authorized;57,454,294 and 39,972,049 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	574,000			400,000
Class I common stock, $0.01 par value per share; 100,000,000 shares authorized; 3,631,170 and 2,235,111 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	36,000			22,000
Additional paid-in capital	547,221,000			376,284,000
Accumulated deficit	(51,293,000		)	(23,482,000		)
Total stockholders’ equity	496,538,000			353,224,000
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	756,722,000		$	480,153,000

___________

3

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

As of September 30, 2018 and December 31, 2017

(Unaudited)

(1) Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2018 and 2017

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenues:
Real estate revenue	$	12,512,000		$	8,488,000		$	32,529,000		$	18,738,000
Resident fees and services	9,769,000			—			26,604,000			—
Total revenues	22,281,000			8,488,000			59,133,000			18,738,000
Expenses:
Rental expenses	3,187,000			2,095,000			8,090,000			4,893,000
Property operating expenses	7,987,000			—			21,986,000			—
General and administrative	2,105,000			1,296,000			5,803,000			2,996,000
Acquisition related expenses	98,000			121,000			254,000			334,000
Depreciation and amortization	9,007,000			3,442,000			24,053,000			7,619,000
Total expenses	22,384,000			6,954,000			60,186,000			15,842,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)	(1,602,000		)	(780,000		)	(3,846,000		)	(1,607,000		)
Interest income	6,000			—			6,000			1,000
(Loss) income before income taxes	(1,699,000		)	754,000			(4,893,000		)	1,290,000
Income tax expense	(4,000		)	—			(4,000		)	—
Net (loss) income	(1,703,000		)	754,000			(4,897,000		)	1,290,000
Less: net loss attributable to redeemable noncontrolling interests	72,000			—			197,000			—
Net (loss) income attributable to controlling interest	$	(1,631,000	)	$	754,000		$	(4,700,000	)	$	1,290,000
Net (loss) income per Class T and Class I common share attributable to controlling interest — basic and diluted	$	(0.03	)	$	0.02		$	(0.09	)	$	0.05
Weighted average number of Class T and Class I common shares outstanding — basic and diluted	57,769,964			32,593,321			51,441,064			23,827,175
Distributions declared per Class T and Class I common share	$	0.15		$	0.15		$	0.45		$	0.45

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Nine Months Ended September 30, 2018 and 2017

(Unaudited)

	Class T and Class I Common Stock
	Number of Shares		Amount			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
BALANCE — December 31, 2017	42,207,160		$	422,000		$	376,284,000		$	(23,482,000	)	$	353,224,000
Issuance of common stock	17,789,763		177,000			177,486,000			—			177,663,000
Offering costs — common stock	—		—			(16,679,000		)	—			(16,679,000		)
Issuance of common stock under the DRIP	1,302,271		13,000			12,422,000			—			12,435,000
Issuance of vested and nonvested restricted common stock	22,500		—			45,000			—			45,000
Amortization of nonvested common stock compensation	—		—			100,000			—			100,000
Repurchase of common stock	(236,230	)	(2,000		)	(2,240,000		)	—			(2,242,000		)
Fair value adjustment to redeemable noncontrolling interests	—		—			(197,000		)	—			(197,000		)
Distributions declared	—		—			—			(23,111,000		)	(23,111,000		)
Net loss	—		—			—			(4,700,000		)	(4,700,000		)	(1)
BALANCE — September 30, 2018	61,085,464		$	610,000		$	547,221,000		$	(51,293,000	)	$	496,538,000

	Class T and Class I Common Stock
	Number of Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
BALANCE — December 31, 2016	11,377,439		$	114,000	$	99,492,000		$	(7,351,000	)	$	92,255,000
Issuance of common stock	24,264,521		242,000		241,193,000			—			241,435,000
Offering costs — common stock	—		—		(23,544,000		)	—			(23,544,000		)
Issuance of common stock under the DRIP	584,318		6,000		5,486,000			—			5,492,000
Issuance of vested and nonvested restricted common stock	22,500		—		45,000			—			45,000
Amortization of nonvested common stock compensation	—		—		55,000			—			55,000
Repurchase of common stock	(18,383	)	—		(178,000		)	—			(178,000		)
Distributions declared	—		—		—			(10,705,000		)	(10,705,000		)
Net income	—		—		—			1,290,000			1,290,000
BALANCE — September 30, 2017	36,230,395		$	362,000	$	322,549,000		$	(16,766,000	)	$	306,145,000

___________

(1) Amount excludes $197,000 of net loss attributable to redeemable noncontrolling interests for the nine months ended September 30, 2018. See Note 10, Redeemable Noncontrolling Interests, for a further discussion.

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2018 and 2017

(Unaudited)

	Nine Months Ended September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(4,897,000	)	$	1,290,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	24,053,000			7,619,000
Other amortization (including deferred financing costs, above/below-market leases, leasehold interests, above-market leasehold interests and debt discount/premium)	620,000			251,000
Deferred rent	(2,045,000		)	(1,124,000		)
Stock based compensation	145,000			100,000
Share discounts	—			3,000
Bad debt expense, net	181,000			94,000
Changes in operating assets and liabilities:
Accounts and other receivables	(5,863,000		)	(362,000		)
Other assets	(430,000		)	(305,000		)
Accounts payable and accrued liabilities	4,176,000			1,394,000
Accounts payable due to affiliates	217,000			169,000
Security deposits, prepaid rent and other liabilities	(480,000		)	(280,000		)
Net cash provided by operating activities	15,677,000			8,849,000
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate investments	(248,423,000		)	(215,738,000		)
Capital expenditures	(5,166,000		)	(845,000		)
Real estate deposits	(3,750,000		)	(4,821,000		)
Pre-acquisition expenses	(422,000		)	(698,000		)
Net cash used in investing activities	(257,761,000		)	(222,102,000		)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgage loans payable	(323,000		)	(189,000		)
Borrowings under the line of credit and term loan	425,500,000			192,600,000
Payments on the line of credit and term loan	(309,600,000		)	(200,500,000		)
Deferred financing costs	(145,000		)	(175,000		)
Proceeds from issuance of common stock	176,417,000			241,647,000
Repurchase of common stock	(2,242,000		)	(178,000		)
Contribution from noncontrolling interest	276,000			—
Payment of offering costs	(14,030,000		)	(13,673,000		)
Security deposits	(16,000		)	(97,000		)
Distributions paid	(9,833,000		)	(4,006,000		)
Net cash provided by financing activities	266,004,000			215,429,000
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	23,920,000			2,176,000
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period	7,103,000			2,237,000
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period	$	31,023,000		$	4,413,000
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period:
Cash and cash equivalents	$	7,087,000		$	2,237,000
Restricted cash	16,000			—
Cash, cash equivalents and restricted cash	$	7,103,000		$	2,237,000

7

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Nine Months Ended September 30, 2018 and 2017

(Unaudited)

	Nine Months Ended September 30,
	2018		2017
End of period:
Cash and cash equivalents	$	30,841,000	$	4,397,000
Restricted cash	182,000		16,000
Cash, cash equivalents and restricted cash	$	31,023,000	$	4,413,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest	$	3,010,000	$	1,356,000
Income taxes	$	12,000	$	7,000
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES
Investing Activities:
Accrued capital expenditures	$	2,531,000	$	931,000
Accrued pre-acquisition expenses	$	805,000	$	601,000
Tenant improvement overage	$	435,000	$	—
The following represents the increase in certain assets and liabilities in connection with our acquisitions of real estate investments:
Other assets	$	200,000	$	213,000
Mortgage loans payable, net	$	5,808,000	$	8,000,000
Accounts payable and accrued liabilities	$	589,000	$	803,000
Security deposits and prepaid rent	$	1,592,000	$	545,000
Financing Activities:
Issuance of common stock under the DRIP	$	12,435,000	$	5,492,000
Distributions declared but not paid	$	2,960,000	$	1,739,000
Accrued Contingent Advisor Payment	$	7,750,000	$	7,759,000
Accrued stockholder servicing fee	$	15,203,000	$	11,496,000
Accrued deferred financing costs	$	34,000	$	22,000
Receivable from transfer agent	$	1,667,000	$	807,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Nine Months Ended September 30, 2018 and 2017

The use of the words “we,” “us” or “our” refers to Griffin-American Healthcare REIT IV, Inc. and its subsidiaries, including Griffin-American Healthcare REIT IV Holdings, LP, except where otherwise noted.

1. Organization and Description of Business

Griffin-American Healthcare REIT IV, Inc., a Maryland corporation, was incorporated on January 23, 2015 and therefore we consider that our date of inception. We were initially capitalized on February 6, 2015. We invest in a diversified portfolio of real estate properties, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. We also operate healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code of 1986, as amended, or the Code, authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008). We may also originate and acquire secured loans and real estate-related investments on an infrequent and opportunistic basis. We generally seek investments that produce current income. We qualified to be taxed as a real estate investment trust, or REIT, under the Code for federal income tax purposes beginning with our taxable year ended December 31, 2016, and we intend to continue to qualify to be taxed as a REIT.

On February 16, 2016, we commenced our initial public offering, or our offering, in which we were initially offering to the public up to $3,150,000,000 in shares of our Class T common stock, consisting of up to $3,000,000,000 in shares of our Class T common stock at a price of $10.00 per share in our primary offering and up to $150,000,000 in shares of our Class T common stock for $9.50 per share pursuant to our distribution reinvestment plan, as amended, or the DRIP. Effective June 17, 2016, we reallocated certain of the unsold shares of Class T common stock being offered and began offering shares of Class I common stock, such that we are currently offering up to approximately $2,800,000,000 in shares of Class T common stock and $200,000,000 in shares of Class I common stock in our primary offering, and up to an aggregate of $150,000,000 in shares of our Class T and Class I common stock pursuant to the DRIP, aggregating up to $3,150,000,000, or the maximum offering amount.

The shares of our Class T common stock in our primary offering were being offered at a price of $10.00 per share prior to April 11, 2018. The shares of our Class I common stock in our primary offering were being offered at a price of $9.30 per share prior to March 1, 2017 and $9.21 per share from March 1, 2017 to April 10, 2018. The shares of our Class T and Class I common stock issued pursuant to the DRIP were sold at a price of $9.50 per share prior to January 1, 2017 and $9.40 per share from January 1, 2017 to April 10, 2018. On April 6, 2018, our board of directors, at the recommendation of the audit committee of our board of directors, comprised solely of independent directors, unanimously approved and established an estimated per share net asset value, or NAV, of our common stock of $9.65. As a result, on April 6, 2018, our board of directors unanimously approved revised offering prices for each class of shares of our common stock to be sold in the primary portion of our initial public offering based on the estimated per share NAV of our Class T and Class I common stock of $9.65 plus any applicable per share up-front selling commissions and dealer manager fees funded by us, effective April 11, 2018. Accordingly, the revised offering price for shares of our Class T common stock and Class I common stock sold pursuant to our primary offering on or after April 11, 2018 is $10.05 per share and $9.65 per share, respectively. Effective April 11, 2018, the shares of our Class T and Class I common stock issued pursuant to the DRIP are sold at a price of $9.65 per share, the most recent estimated per share NAV approved and established by our board of directors.

We will sell shares of our Class T and Class I common stock in our offering until the earlier of February 16, 2019 or the date on which the maximum offering amount has been sold. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the DRIP, and among classes of stock. As of September 30, 2018, we had received and accepted subscriptions in our offering for 59,008,261 aggregate shares of our Class T and Class I common stock, or approximately $587,815,000, excluding shares of our common stock issued pursuant to the DRIP.

We conduct substantially all of our operations through Griffin-American Healthcare REIT IV Holdings, LP, or our operating partnership. We are externally advised by Griffin-American Healthcare REIT IV Advisor, LLC, or our advisor, pursuant to an advisory agreement, or the Advisory Agreement, between us and our advisor. The Advisory Agreement was effective as of February 16, 2016 and had a one-year term, subject to successive one-year renewals upon the mutual consent of the parties. The Advisory Agreement was last renewed pursuant to the mutual consent of the parties on February 14, 2018 and expires on February 16, 2019. Our advisor uses its best efforts, subject to the oversight and review of our board of directors, to, among other things, research, identify, review and make investments in and dispositions of properties and securities on our behalf consistent with our investment policies and objectives. Our advisor performs its duties and responsibilities under the Advisory Agreement as our fiduciary. Our advisor is 75.0% owned and managed by American Healthcare Investors, LLC, or

9

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

American Healthcare Investors, and 25.0% owned by a wholly owned subsidiary of Griffin Capital Company, LLC, or Griffin Capital, or collectively, our co-sponsors. American Healthcare Investors is 47.1% owned by AHI Group Holdings, LLC, or AHI Group Holdings, 45.1% indirectly owned by Colony Capital, Inc. (NYSE: CLNY), or Colony Capital, and 7.8% owned by James F. Flaherty III, a former partner of Colony Capital. We are not affiliated with Griffin Capital, Griffin Capital Securities, LLC, or our dealer manager, Colony Capital or Mr. Flaherty; however, we are affiliated with Griffin-American Healthcare REIT IV Advisor, LLC, American Healthcare Investors and AHI Group Holdings.

We currently operate through four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities. As of September 30, 2018, we had completed 28 property acquisitions whereby we owned 56 properties, comprising 58 buildings, or approximately 3,389,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $714,490,000.

2. Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding our condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing our accompanying condensed consolidated financial statements.

Basis of Presentation

Our accompanying condensed consolidated financial statements include our accounts and those of our operating partnership and the wholly owned subsidiaries of our operating partnership, as well as any variable interest entities, or VIEs, in which we are the primary beneficiary. We evaluate our ability to control an entity, and whether the entity is a VIE and of which we are the primary beneficiary, by considering substantive terms of the arrangement and identifying which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance.

We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, or wholly owned subsidiaries of our operating partnership, will own substantially all of the interests in properties acquired on our behalf. We are the sole general partner of our operating partnership, and as of September 30, 2018 and December 31, 2017, we owned greater than a 99.99% general partnership interest therein. Our advisor is a limited partner, and as of September 30, 2018 and December 31, 2017, owned less than a 0.01% noncontrolling limited partnership interest in our operating partnership.

Because we are the sole general partner of our operating partnership and have unilateral control over its management and major operating decisions (even if additional limited partners are admitted to our operating partnership), the accounts of our operating partnership are consolidated in our condensed consolidated financial statements. All intercompany accounts and transactions are eliminated in consolidation.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the United States Securities and Exchange Commission, or SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results that may be expected for the full year; such full year results may be less favorable.

In preparing our accompanying condensed consolidated financial statements, management has evaluated subsequent events through the financial statement issuance date. We believe that although the disclosures contained herein are adequate to prevent the information presented from being misleading, our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018.

10

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Use of Estimates

The preparation of our accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions, allowance for doubtful accounts, impairment of long-lived assets, and contingencies. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.

Revenue Recognition

In May 2014, the, Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, which has been codified to Accounting Standards Codification, or ASC, Topic 606. We evaluate all of our revenue streams to identify whether each revenue stream would be subject to the provisions of ASC Topic 606 and whether there are any differences in the timing, measurement or presentation of revenue recognition. Based on a review of our various revenue streams, certain components of resident fees and services, such as revenues that are ancillary to the contractual rights of residents within our senior housing facilities operated utilizing a RIDEA structure, are subject to ASC Topic 606. While these revenue streams are subject to the provisions of ASC Topic 606, we believe that the pattern and timing of recognition of income are consistent with the previous accounting model. Virtually all resident fees and services are earned over a period of time and the majority of these revenues are paid by private payor types with the residual being paid by Medicaid. We adopted ASC Topic 606 on January 1, 2018 using the modified retrospective adoption method and the adoption did not have a material impact on our consolidated financial statements. Included within resident fees and services for the three and nine months ended September 30, 2018 was $219,000 and $639,000, respectively, of ancillary service revenue.

Segment Information

We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. Accordingly, when we acquired our first medical office building in June 2016; senior housing facility in December 2016; senior housing — RIDEA facility in November 2017; and skilled nursing facility in March 2018, we added a new reporting segment at each such time. As of September 30, 2018, we operate through four reportable business segments, with activities related to investing in medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities. See Note 15, Segment Reporting, for a further discussion.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, or ASU 2016-02, which amends the guidance on accounting for leases, including extensive amendments to the disclosure requirements. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02 from a lessor perspective, the guidance will require bifurcation of lease revenues into lease components and non-lease components and to separately recognize and disclose non-lease components that are executory in nature. Lease components will continue to be recognized on a straight-line basis over the lease term and certain non-lease components may be accounted for under the new revenue recognition guidance in ASC Topic 606. In addition, ASU 2016-02 provides a practical expedient that allows an entity to not reassess the following upon adoption (must be elected as a group): (i) whether an expired or existing contract contains a lease arrangement; (ii) the lease classification related to expired or existing lease arrangements; or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. We plan to elect this practical expedient.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10, and ASU 2018-11, Leases (Topic 842) Targeted Improvements, or ASU 2018-11, which update the guidance on accounting for leases under ASU 2016-02. ASU 2018-10 was issued to increase stockholders’ awareness of narrow aspects of the guidance issued in the amendments and to expedite the improvements under ASU 2016-02. ASU 2018-11 provides (a) an alternative transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, in addition to the modified retrospective transition method prescribed by ASU 2016-02, which requires application of the new leases standard at the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

beginning of the earliest period presented in the financial statements for comparative purposes; and (b) a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. We completed a preliminary assessment of predominance for our medical office buildings, senior housing, and skilled nursing segments and, effective upon the adoption of ASU 2016-02 (codified under ASC Topic 842), we expect to recognize revenue from these segments under ASC Topic 842. We are still in the process of completing our preliminary assessment related to senior housing — RIDEA and plan to finalize our assessment for all reporting segments during the fourth quarter of 2018.

ASU 2016-02, ASU 2018-10 and ASU 2018-11 are effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted for financial statements that have not yet been made available for issuance. As a result of the adoption of the new leases standard on January 1, 2019, we: (i) will recognize all of our operating leases for which we are the lessee, including facilities leases and ground leases, on our consolidated balance sheets; and (ii) may be required to increase our revenue and expense for the amount of real estate taxes and insurance paid by our tenants under triple-net leases; however, we are still evaluating the complete impact of the adoption of the new leases standard and its related expedients, in addition to the transition method, on January 1, 2019 to our consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted after December 15, 2018. We do not expect the adoption of ASU 2016-13 on January 1, 2020 to have a material impact on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income, or ASU 2018-02, which amends the reclassification requirements from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017, or the Tax Act. Under ASU 2018-02, an entity will be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of ASU 2018-02 on January 1, 2019 to have a material impact on our consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Amendments to the SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, or ASU 2018-05, which updates the income tax accounting in GAAP to reflect the SEC’s interpretive guidance with regards to the Tax Act. See Note 14, Income Taxes, for a further discussion.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), orASU 2018-13, which modifies the disclosure requirements in ASC Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We are currently evaluating this guidance to determine the impact on our disclosures.

3. Real Estate Investments, Net

Our real estate investments, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
Building and improvements	$	580,961,000		$	371,890,000
Land	72,979,000			52,202,000
Furniture, fixtures and equipment	4,900,000			4,458,000
	658,840,000			428,550,000
Less: accumulated depreciation	(20,270,000		)	(8,885,000		)
Total	$	638,570,000		$	419,665,000

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Depreciation expense for the three months ended September 30, 2018 and 2017 was $4,384,000 and $2,305,000, respectively. Depreciation expense for the nine months ended September 30, 2018 and 2017 was $11,581,000 and $5,110,000, respectively. In addition to the property acquisitions discussed below, for the three and nine months ended September 30, 2018, we incurred capital expenditures of $1,434,000 and $2,650,000, respectively, on our medical office buildings and $1,837,000 and $4,127,000, respectively, on our senior housing — RIDEA facilities. We did not incur any capital expenditures on our senior housing facilities and skilled nursing facilities for the three and nine months ended September 30, 2018.

Acquisitions in 2018

For the nine months ended September 30, 2018, using net proceeds from our offering and debt financing, we completed 10 property acquisitions comprising 18 buildings from unaffiliated third parties. The following is a summary of our property acquisitions for the nine months ended September 30, 2018:

Acquisition(1)	Location	Type	Date Acquired	Contract Purchase Price		Mortgage Loan Payable(2)		Corporate Line of Credit(3)		Total Acquisition Fee(4)
Central Wisconsin Senior Care Portfolio	Sun Prairie and Waunakee, WI	Skilled Nursing	03/01/18	$	22,600,000	$	—	$	22,600,000	$	1,018,000
Sauk Prairie MOB	Prairie du Sac, WI	Medical Office	04/09/18	19,500,000		—		19,500,000		878,000
Surprise MOB	Surprise, AZ	Medical Office	04/27/18	11,650,000		—		8,000,000		524,000
Southfield MOB	Southfield, MI	Medical Office	05/11/18	16,200,000		6,071,000		10,000,000		728,000
Pinnacle Beaumont ALF(5)	Beaumont, TX	Senior Housing — RIDEA	07/01/18	19,500,000		—		19,400,000		868,000
Grand Junction MOB	Grand Junction, CO	Medical Office	07/06/18	31,500,000		—		31,400,000		1,418,000
Edmonds MOB	Edmonds, WA	Medical Office	07/30/18	23,500,000		—		22,000,000		1,058,000
Pinnacle Warrenton ALF(5)	Warrenton, MO	Senior Housing — RIDEA	08/01/18	8,100,000		—		8,100,000		360,000
Glendale MOB	Glendale, WI	Medical Office	08/13/18	7,600,000		—		7,000,000		342,000
Missouri SNF Portfolio	Various cities, MO	Skilled Nursing	09/28/18	88,200,000		—		87,000,000		3,970,000
Total				$	248,350,000	$	6,071,000	$	235,000,000	$	11,164,000

___________

(1) We own 100% of our properties acquired for the nine months ended September 30, 2018, with the exception of Pinnacle Beaumont ALF and Pinnacle Warrenton ALF.

(2) Represents the principal balance of the mortgage loan payable assumed by us at the time of acquisition.

(3) Represents a borrowing under the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan, 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 2.25% of the portion of the aggregate contract purchase price paid by us. In addition, the total acquisition fee includes a Contingent Advisor Payment, as defined in Note 12, Related Party Transactions, in the amount of 2.25% of the portion of the aggregate contract purchase price paid by us, which shall be paid by us to our advisor, subject to the satisfaction of certain conditions. See Note 12, Related Party Transactions — Acquisition and Development Stage — Acquisition Fee, for a further discussion.

(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 98%.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

We accounted for the 10 property acquisitions we completed for the nine months ended September 30, 2018 as asset acquisitions. We incurred and capitalized base acquisition fees and direct acquisition related expenses of $9,548,000. In addition, we incurred Contingent Advisor Payments of $5,582,000 to our advisor for such property acquisitions. The following table summarizes the purchase price of the assets acquired and liabilities assumed at the time of acquisition from our 10 property acquisitions in 2018 based on their relative fair values:

	2018 Acquisitions
Building and improvements	$	203,774,000
Land	20,773,000
Furniture, fixtures and equipment	79,000
In-place leases	31,355,000
Certificates of need	349,000
Above-market leases	200,000
Total assets acquired	256,530,000
Mortgage loan payable (including debt discount of $263,000)	(5,808,000		)
Below-market leases	(42,000		)
Total liabilities assumed	(5,850,000		)
Net assets acquired	$	250,680,000

4. Identified Intangible Assets, Net

Identified intangible assets, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Amortized intangible assets:
In-place leases, net of accumulated amortization of $17,576,000 and $5,832,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 9.8 years and 7.3 years as of September 30, 2018 and December 31, 2017, respectively)	$	56,688,000	$	37,766,000
Leasehold interests, net of accumulated amortization of $193,000 and $119,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 69.9 years and 70.6 years as of September 30, 2018 and December 31, 2017, respectively)	6,219,000		6,292,000
Above-market leases, net of accumulated amortization of $277,000 and $173,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 4.7 years and 5.6 years as of September 30, 2018 and December 31, 2017, respectively)	839,000		763,000
Unamortized intangible assets:
Certificates of need	349,000		—
Total	$	64,095,000	$	44,821,000

Amortization expense on identified intangible assets for the three months ended September 30, 2018 and 2017 was $4,673,000 and $1,196,000, respectively, which included $47,000 and $38,000, respectively, of amortization recorded against real estate revenue for above-market leases and $24,000 and $24,000, respectively, of amortization recorded to rental expenses for leasehold interests in our accompanying condensed consolidated statements of operations.

Amortization expense on identified intangible assets for the nine months ended September 30, 2018 and 2017 was $12,630,000 and $2,683,000, respectively, which included $124,000 and $104,000, respectively, of amortization recorded against real estate revenue for above-market leases and $73,000 and $73,000, respectively, of amortization recorded to rental expenses for leasehold interests in our accompanying condensed consolidated statements of operations.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

The aggregate weighted average remaining life of the identified intangible assets was 15.6 years and 16.2 years as of September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, estimated amortization expense on the identified intangible assets for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter was as follows:

Year	Amount
2018	$	3,419,000
2019	8,978,000
2020	7,063,000
2021	6,356,000
2022	5,468,000
Thereafter	32,462,000
Total	$	63,746,000

5. Other Assets, Net

Other assets, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Deferred rent receivables	$	3,958,000	$	1,912,000
Prepaid expenses and deposits	2,762,000		1,532,000
Deferred financing costs, net of accumulated amortization of $1,212,000 and $554,000 as of September 30, 2018 and December 31, 2017, respectively(1)	851,000		1,456,000
Lease commissions, net of accumulated amortization of $42,000 and $9,000 as of September 30, 2018 and December 31, 2017, respectively	552,000		326,000
Total	$	8,123,000	$	5,226,000

___________

(1) Deferred financing costs, net only include costs related to the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan.

Amortization expense on deferred financing costs of the Corporate Line of Credit for the three months ended September 30, 2018 and 2017 was $221,000 and $90,000, respectively, and for the nine months ended September 30, 2018 and 2017 was $658,000 and $267,000, respectively. Amortization expense on deferred financing costs of the Corporate Line of Credit is recorded to interest expense in our accompanying condensed consolidated statements of operations. Amortization expense on lease commissions for the three months ended September 30, 2018 and 2017 was $21,000 and $3,000, respectively, and for the nine months ended September 30, 2018 and 2017 was $39,000 and $3,000, respectively.

6. Mortgage Loans Payable, Net

As of September 30, 2018 and December 31, 2017, mortgage loans payable were $17,382,000 ($16,988,000, including discount/premium and deferred financing costs, net) and $11,634,000 ($11,567,000, including premium and deferred financing costs, net), respectively. As of September 30, 2018, we had three fixed-rate mortgage loans with interest rates ranging from 3.75% to 5.25% per annum, maturity dates ranging from April 1, 2020 to August 1, 2029 and a weighted average effective interest rate of 4.51%. As of December 31, 2017, we had two fixed-rate mortgage loans with interest rates ranging from 4.77% to 5.25% per annum, maturity dates ranging from April 1, 2020 to August 1, 2029 and a weighted average effective interest rate of 4.92%.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

The changes in the carrying amount of mortgage loans payable, net consisted of the following for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Beginning balance	$	11,567,000		$	3,965,000
Additions:
Assumptions of mortgage loans payable, net	5,808,000			8,000,000
Amortization of deferred financing costs(1)	53,000			23,000
Deductions:
Deferred financing costs(1)	(123,000		)	(151,000		)
Scheduled principal payments on mortgage loans payable	(323,000		)	(189,000		)
Amortization of discount/premium on mortgage loans payable	6,000			(9,000		)
Ending balance	$	16,988,000		$	11,639,000

___________

(1) Deferred financing costs only include costs related to our mortgage loans payable.

As of September 30, 2018, the principal payments due on our mortgage loans payable for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter were as follows:

Year	Amount
2018	$	126,000
2019	518,000
2020	8,151,000
2021	434,000
2022	455,000
Thereafter	7,698,000
Total	$	17,382,000

7. Line of Credit and Term Loan

On August 25, 2016, we, through our operating partnership, as borrower, and certain of our subsidiaries, or the subsidiary guarantors, and us, collectively as guarantors, entered into a credit agreement, or the Credit Agreement, with Bank of America, N.A., or Bank of America, as administrative agent, swing line lender and letters of credit issuer; and KeyBank, National Association, or KeyBank, as syndication agent and letters of credit issuer, to obtain a revolving line of credit with an aggregate maximum principal amount of $100,000,000, or the Line of Credit, subject to certain terms and conditions.

On August 25, 2016, we also entered into separate revolving notes, or the Revolving Notes, with each of Bank of America and KeyBank, whereby we promised to pay the principal amount of each revolving loan and accrued interest to the respective lender or its registered assigns, in accordance with the terms and conditions of the Credit Agreement. The proceeds of loans made under the Line of Credit may be used for general working capital (including acquisitions), capital expenditures and other general corporate purposes not inconsistent with obligations under the Credit Agreement. We may obtain up to $20,000,000 in the form of standby letters of credit and up to $25,000,000 in the form of swing line loans. The Line of Credit matures on August 25, 2019, and we have the right to extend for one12-month period during the term of the Credit Agreement subject to satisfaction of certain conditions, including payment of an extension fee.

On October 31, 2017, we entered into an amendment to the Credit Agreement, or the First Amendment, with Bank of America, as administrative agent, and the subsidiary guarantors and lenders named therein. The material terms of the Amendment provide for: (i) a $50,000,000 increase in the Line of Credit from an aggregate principal amount of $100,000,000 to $150,000,000; (ii) a term loan with an aggregate maximum principal amount of $50,000,000, or the Term Loan Credit Facility, that matures on August 25, 2019, and we have the right to extend for one12-month period during the term of the Credit Agreement subject to satisfaction of certain conditions, including payment of an extension fee; (iii) our right, upon at least five business days’ prior written notice to Bank of America, to increase the Line of Credit or Term Loan Credit Facility

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

provided that the aggregate principal amount of all such increases and additions shall not exceed $300,000,000; (iv) a revision to the definition of Threshold Amount, as defined in the Credit Agreement, to reflect an increase in such amount for any Recourse Indebtedness, as defined in the Credit Agreement, to $20,000,000, and an increase in such amount for any Non-Recourse Indebtedness, as defined in the Credit Agreement, to $50,000,000; (v) the revision of certain Unencumbered Property Pool Criteria, as defined and set forth in the Credit Agreement; and (vi) an increase in the maximum Consolidated Secured Leverage Ratio, as defined in the Credit Agreement, to be equal to or less than 40.0%. As a result of the First Amendment, our aggregate borrowing capacity under the Line of Credit and the Term Loan Credit Facility, or collectively, the Corporate Line of Credit, was $200,000,000.

On September 28, 2018, we entered into a Second Amendment to Credit Agreement with Bank of America, as administrative agent, and the subsidiary guarantors and lenders named therein. The material terms of the Second Amendment to Credit Agreement provide for an increase in the term loan commitment by an aggregate amount equal to $150,000,000. As a result of the Second Amendment to Credit Agreement, the aggregate borrowing capacity under the Corporate Line of Credit is $350,000,000. Except as modified by the Second Amendment to Credit Agreement, the material terms of the Credit Agreement, as amended, remain in full force and effect.

At our option, the Corporate Line of Credit bears interest at per annum rates equal to (a) (i) the Eurodollar Rate (as defined in the Credit Agreement, as amended) plus (ii) a margin ranging from 1.75% to 2.25% based on our Consolidated Leverage Ratio (as defined in the Credit Agreement, as amended), or (b) (i) the greater of: (1) the prime rate publicly announced by Bank of America, (2) the Federal Funds Rate (as defined in the Credit Agreement, as amended) plus 0.50%, (3) the one-month Eurodollar Rate plus 1.00%, and (4) 0.00%, plus (ii) a margin ranging from 0.55% to 1.05% based on our Consolidated Leverage Ratio. Accrued interest on the Corporate Line of Credit is payable monthly. The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.

We are required to pay a fee on the unused portion of the lenders’ commitments under the Credit Agreement, as amended, at a per annum rate equal to 0.20% if the average daily used amount is greater than 50.0% of the commitments and 0.25% if the average daily used amount is less than or equal to 50.0% of the commitments, which fee shall be measured and payable on a quarterly basis.

The Credit Agreement, as amended, contains various affirmative and negative covenants that are customary for credit facilities and transactions of this type, including limitations on the incurrence of debt by our operating partnership and its subsidiaries. The Credit Agreement, as amended, also imposes certain financial covenants based on the following criteria, which are specifically defined in the Credit Agreement, as amended: (a) Consolidated Leverage Ratio; (b) Consolidated Secured Leverage Ratio; (c) Consolidated Tangible Net Worth; (d) Consolidated Fixed Charge Coverage Ratio; (e) Unencumbered Indebtedness Yield; (f) Consolidated Unencumbered Leverage Ratio; (g) Consolidated Unencumbered Interest Coverage Ratio; (h) Secured Recourse Indebtedness; and (i) Consolidated Unsecured Indebtedness.

The Credit Agreement, as amended, permits us to add additional subsidiaries as guarantors. In the event of default, Bank of America has the right to terminate its obligations under the Credit Agreement, as amended, including the funding of future loans, and to accelerate the payment on any unpaid principal amount of all outstanding loans and interest thereon. Additionally, in connection with the Credit Agreement, as amended, we also entered into a Pledge Agreement on August 25, 2016, pursuant to which we pledged the capital stock of our subsidiaries which own the real property to be included in the Unencumbered Property Pool, as such term is defined in the Credit Agreement, as amended. The pledged collateral will be released upon achieving a consolidated total asset value of at least $750,000,000.

As of September 30, 2018 and December 31, 2017, our aggregate borrowing capacity under the Corporate Line of Credit was $350,000,000 and $200,000,000, respectively. As of September 30, 2018 and December 31, 2017, borrowings outstanding totaled $200,000,000 and $84,100,000, respectively, and the weighted average interest rate on such borrowings outstanding was 3.97% and 3.45% per annum, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

8. Identified Intangible Liabilities, Net

Identified intangible liabilities, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Below-market leases, net of accumulated amortization of $594,000 and $345,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 6.1 years and 6.4 years as of September 30, 2018 and December 31, 2017, respectively)	$	1,102,000	$	1,349,000
Above-market leasehold interests, net of accumulated amortization of $12,000 and $6,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 51.4 years and 52.2 years as of September 30, 2018 and December 31, 2017, respectively)	384,000		388,000
Total	$	1,486,000	$	1,737,000

Amortization expense on identified intangible liabilities for the three months ended September 30, 2018 and 2017 was $170,000 and $70,000, respectively, which included $168,000 and $68,000, respectively, of amortization recorded to real estate revenue for below-market leases and $2,000 and $2,000, respectively, of amortization recorded against rental expenses for above-market leasehold interests in our accompanying condensed consolidated statements of operations.

Amortization expense on identified intangible liabilities for the nine months ended September 30, 2018 and 2017 was $294,000 and $207,000, respectively, which included $288,000 and $203,000, respectively, of amortization recorded to real estate revenue for below-market leases and $6,000 and $4,000, respectively, of amortization recorded to rental expenses for above-market leasehold interests in our accompanying condensed consolidated statements of operations.

The aggregate weighted average remaining life of the identified intangible liabilities was 17.8 years and 16.7 years as of September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, estimated amortization expense on identified intangible liabilities for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter was as follows:

Year	Amount
2018	$	87,000
2019	318,000
2020	154,000
2021	129,000
2022	120,000
Thereafter	678,000
Total	$	1,486,000

9. Commitments and Contingencies

Litigation

We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Environmental Matters

We follow a policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Other

Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business, which include calls/puts to sell/acquire properties. In our view, these matters are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

10. Redeemable Noncontrolling Interests

On February 6, 2015, our advisor made an initial capital contribution of $2,000 to our operating partnership in exchange for Class T partnership units. Upon the effectiveness of the Advisory Agreement on February 16, 2016, Griffin-American Healthcare REIT IV Advisor, LLC became our advisor. As of September 30, 2018 and December 31, 2017, our advisor owned all of our 208 Class T partnership units outstanding. As of September 30, 2018 and December 31, 2017, we owned greater than a 99.99% general partnership interest in our operating partnership, and our advisor owned less than a 0.01% limited partnership interest in our operating partnership. As our advisor, Griffin-American Healthcare REIT IV Advisor, LLC is entitled to redemption rights of its limited partnership units. The noncontrolling interest of our advisor in our operating partnership, which has redemption features outside of our control, is accounted for as a redeemable noncontrolling interest and is presented outside of permanent equity in our accompanying condensed consolidated balance sheets. See Note 12, Related Party Transactions — Liquidity Stage — Subordinated Participation Interest — Subordinated Distribution Upon Listing, and Note 12, Related Party Transactions — Subordinated Distribution Upon Termination, for a further discussion of the redemption features of the limited partnership units.

On November 1, 2017, we completed the acquisition of Central Florida Senior Housing Portfolio pursuant to a joint venture with an affiliate of Meridian, an unaffiliated third party. Our ownership of the joint venture is approximately 98%. 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. Our ownership of the joint venture is approximately 98%. The noncontrolling interest held by Meridian has redemption features outside of our control and is accounted for as redeemable noncontrolling interest in our accompanying condensed consolidated balance sheets. In addition, Meridian will be entitled to an incentive fee, subject to the satisfaction of certain terms and conditions set forth in the joint venture agreement.

We record the carrying amount of redeemable noncontrolling interests at the greater of: (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and distributions; or (ii) the redemption value. The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Beginning balance	$	1,002,000		$	2,000
Additions	276,000			—
Net loss attributable to redeemable noncontrolling interests	(197,000		)	—
Fair value adjustment to redemption value	197,000			—
Ending balance	$	1,278,000		$	2,000

11. Equity

Preferred Stock

Our charter authorizes us to issue 200,000,000 shares of our preferred stock, par value $0.01 per share. As of September 30, 2018 and December 31, 2017, no shares of our preferred stock were issued and outstanding.

Common Stock

Our charter authorizes us to issue 1,000,000,000 shares of our common stock, par value $0.01 per share. We commenced our public offering of shares of our common stock on February 16, 2016, and as of such date we were initially offering to the public up to $3,150,000,000 in shares of our Class T common stock, consisting of up to $3,000,000,000 in shares of our Class T common stock in our primary offering and up to $150,000,000 in shares of our Class T common stock pursuant to the DRIP. Effective June 17, 2016, we reallocated certain of the unsold shares of our Class T common stock being offered and began offering shares of our Class I common stock, such that we are currently offering up to approximately $2,800,000,000 in shares of Class T common stock and $200,000,000 in shares of Class I common stock in our primary offering, and up to an aggregate

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of $150,000,000 in shares of our Class T and Class I common stock pursuant to the DRIP. Subsequent to the reallocation, of the 1,000,000,000 shares of common stock authorized, 900,000,000 shares are classified as Class T common stock and 100,000,000 shares are classified as Class I common stock. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the DRIP, and among classes of stock.

Each share of our common stock, regardless of class, will be entitled to one vote per share on matters presented to the common stockholders for approval; provided, however, that stockholders of one share class shall have exclusive voting rights on any amendment to our charter that would alter only the contract rights of that share class, and no stockholders of another share class shall be entitled to vote thereon.

On February 6, 2015, our advisor acquired shares of our Class T common stock for total cash consideration of $200,000 and was admitted as our initial stockholder. We used the proceeds from the sale of shares of our Class T common stock to our advisor to make an initial capital contribution to our operating partnership. As of September 30, 2018 and December 31, 2017, our advisor owned 20,833 shares of our Class T common stock.

Through September 30, 2018, we had issued 59,008,261 aggregate shares of our Class T and Class I common stock in connection with the primary portion of our offering and 2,310,346 aggregate shares of our Class T and Class I common stock pursuant to the DRIP. We also granted an aggregate of 60,000 shares of our restricted Class T common stock to our independent directors and repurchased 313,976 shares of our common stock under our share repurchase plan through September 30, 2018. As of September 30, 2018 and December 31, 2017, we had 61,085,464 and 42,207,160 aggregate shares of our Class T and Class I common stock, respectively, issued and outstanding.

As of September 30, 2018, we had a receivable of $1,667,000 for offering proceeds, net of selling commissions and dealer manager fees, from our transfer agent, which was received in October 2018.

Distribution Reinvestment Plan

We have registered and reserved $150,000,000 in shares of our common stock for sale pursuant to the DRIP in our offering. The DRIP allows stockholders to purchase additional Class T shares and Class I shares of our common stock through the reinvestment of distributions during our offering. Pursuant to the DRIP, distributions with respect to Class T shares are reinvested in Class T shares and distributions with respect to Class I shares are reinvested in Class I shares.

For the three and nine months ended September 30, 2018, $4,668,000 and $12,435,000, respectively, in distributions were reinvested and 483,737 and 1,302,271 shares of our common stock, respectively, were issued pursuant to the DRIP. For the three and nine months ended September 30, 2017, $2,618,000 and $5,492,000, respectively, in distributions were reinvested and 278,520 and 584,318 shares of our common stock, respectively, were issued pursuant to the DRIP. As of September 30, 2018 and December 31, 2017, a total of $21,920,000 and $9,485,000, respectively, in distributions were reinvested that resulted in 2,310,346 and 1,008,075 shares of our common stock, respectively, being issued pursuant to the DRIP.

Share Repurchase Plan

In February 2016, our board of directors approved a share repurchase plan. The share repurchase plan allows for repurchases of shares of our common stock by us when certain criteria are met. Share repurchases will be made at the sole discretion of our board of directors. Subject to the availability of the funds for share repurchases, we will limit the number of shares of our common stock repurchased during any calendar year to 5.0% of the weighted average number of shares of our common stock outstanding during the prior calendar year; provided, however, that shares subject to a repurchase requested upon the death of a stockholder will not be subject to this cap. Funds for the repurchase of shares of our common stock will come exclusively from the cumulative proceeds we receive from the sale of shares of our common stock pursuant to the DRIP.

All repurchases of our shares of common stock are subject to a one-year holding period, except for repurchases made in connection with a stockholder’s death or “qualifying disability,” as defined in our share repurchase plan. Further, all share repurchases are repurchased following a one-year holding period at a price between 92.5% to 100% of each stockholder’s repurchase amount depending on the period of time their shares have been held. During our offering, the repurchase amount for shares repurchased under our share repurchase plan shall be equal to the lesser of (i) the amount per share that a stockholder paid for their shares of our common stock, or (ii) the per share offering price in our offering. If we are no longer engaged in an offering, the repurchase amount for shares repurchased under our share repurchase plan will be determined by our board of directors. However, if shares of our common stock are repurchased in connection with a stockholder’s death or qualifying disability, the repurchase price will be no less than 100% of the price paid to acquire the shares of our common stock from us. Furthermore, our share repurchase plan provides that if there are insufficient funds to honor all repurchase requests, pending

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requests will be honored among all requests for repurchase in any given repurchase period, as follows: first, pro rata as to repurchases sought upon a stockholder’s death; next, pro rata as to repurchases sought by stockholders with a qualifying disability; and, finally, pro rata as to other repurchase requests.

For the three and nine months ended September 30, 2018, we received share repurchase requests and repurchased 115,847 and 236,230 shares of our common stock, respectively, for an aggregate of $1,110,000 and $2,242,000, respectively, at an average repurchase price of $9.58 and $9.49 per share, respectively. For the three and nine months ended September 30, 2017, we received share repurchase requests and repurchased 11,209 and 18,383 shares of our common stock, respectively, for an aggregate of $109,000 and $178,000, respectively, at an average repurchase price of $9.69 and $9.68 per share, respectively. 

As of September 30, 2018 and December 31, 2017, we received share repurchase requests and repurchased 313,976 and 77,746 shares of our common stock, respectively, for an aggregate of $2,977,000 and $735,000, respectively, at an average repurchase price of $9.48 and $9.45 per share, respectively. All shares were repurchased using proceeds we received from the sale of shares of our common stock pursuant to the DRIP.

2015 Incentive Plan

In February 2016, we adopted our incentive plan, pursuant to which our board of directors or a committee of our independent directors may grant options, shares of our restricted common stock, stock purchase rights, stock appreciation rights or other share-based awards to our independent directors, employees and consultants. The maximum number of shares of our common stock that may be issued pursuant to our incentive plan is 4,000,000 shares. For the three and nine months ended September 30, 2018, we have granted 15,000 and 22,500 shares of our restricted Class T common stock, respectively, at a weighted average grant date fair value of $10.05 per share, to our independent directors in connection with their election or re-election to our board of directors, or in consideration for their past services rendered. Such shares vested 20.0% immediately on the grant date and 20.0% will vest on each of the first four anniversaries of the grant date. For the three and nine months ended September 30, 2018, we recognized stock compensation expense of $70,000 and $145,000, respectively, and for the three and nine months ended September 30, 2017, we recognized stock compensation expense of $61,000 and $100,000, respectively, which is included in general and administrative in our accompanying condensed consolidated statements of operations.

Offering Costs

Selling Commissions

Generally, we pay our dealer manager selling commissions of up to 3.0% of the gross offering proceeds from the sale of Class T shares of our common stock pursuant to our primary offering. To the extent that selling commissions are less than 3.0% of the gross offering proceeds for any Class T shares sold, such reduction in selling commissions will be accompanied by a corresponding reduction in the applicable per share purchase price for purchases of such shares. No selling commissions are payable on Class I shares or shares of our common stock sold pursuant to the DRIP. Our dealer manager may re-allow all or a portion of these fees to participating broker-dealers. For the three and nine months ended September 30, 2018, we incurred $1,717,000 and $4,858,000, respectively, and for the three and nine months ended September 30, 2017, we incurred $2,059,000 and $6,763,000, respectively, in selling commissions to our dealer manager. Such commissions were charged to stockholders’ equity as such amounts were paid to our dealer manager from the gross proceeds of our offering.

Dealer Manager Fee

With respect to shares of our Class T common stock, our dealer manager generally receives a dealer manager fee of up to 3.0% of the gross offering proceeds from the sale of Class T shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds is funded by us and up to an amount equal to 2.0% of the gross offering proceeds is funded by our advisor. With respect to shares of our Class I common stock, prior to March 1, 2017, our dealer manager generally received a dealer manager fee up to 3.0% of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds was funded by us and an amount equal to 2.0% of the gross offering proceeds was funded by our advisor. Effective March 1, 2017, our dealer manager generally receives a dealer manager fee up to an amount equal to 1.5% of the gross offering proceeds from the sale of Class I shares pursuant to our primary offering, all of which is funded by our advisor. Our advisor intends to recoup the portion of the dealer manager fee it funds through the receipt of the Contingent Advisor Payment from us, as described below, through the payment of acquisition fees. Our dealer manager may enter into participating dealer agreements with participating dealers that provide for a reduction or waiver of dealer manager fees. To the extent that the dealer manager fee is less than 3.0% of the gross offering proceeds for any Class T shares sold and less than 1.5% of the gross offering proceeds for any Class I shares sold, such reduction will be applied first to the portion of the dealer manager fee funded by our advisor. To the extent that any reduction in

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dealer manager fee exceeds the portion of the dealer manager fee funded by our advisor, such excess reduction will be accompanied by a corresponding reduction in the applicable per share purchase price for purchases of such shares. No dealer manager fee is payable on shares of our common stock sold pursuant to the DRIP. Our dealer manager may re-allow all or a portion of these fees to participating broker-dealers.

For the three and nine months ended September 30, 2018, we incurred $587,000 and $1,648,000, respectively, and for the three and nine months ended September 30, 2017, we incurred $689,000 and $2,311,000, respectively, in dealer manager fees to our dealer manager. Such fees were charged to stockholders’ equity as such amounts were paid to our dealer manager or its affiliates from the gross proceeds of our offering. See Note 12, Related Party Transactions — Offering Stage — Dealer Manager Fee, for a further discussion of the dealer manager fee funded by our advisor.

Stockholder Servicing Fee

We pay our dealer manager a quarterly stockholder servicing fee with respect to our Class T shares sold as additional compensation to the dealer manager and participating broker-dealers. No stockholder servicing fee shall be paid with respect to Class I shares or shares of our common stock sold pursuant to the DRIP. The stockholder servicing fee accrues daily in an amount equal to 1/365th of 1.0% of the purchase price per share of our Class T shares sold in our primary offering and, in the aggregate will not exceed an amount equal to 4.0% of the gross proceeds from the sale of Class T shares in our primary offering. We will cease paying the stockholder servicing fee with respect to our Class T shares sold in our offering upon the occurrence of certain defined events. Our dealer manager may re-allow to participating broker-dealers all or a portion of the stockholder servicing fee for services that such participating broker-dealers perform in connection with the shares of our Class T common stock. By agreement with participating broker-dealers, such stockholder servicing fee may be reduced or limited.

For the three and nine months ended September 30, 2018, we incurred $1,984,000 and $5,602,000, respectively, and for the three and nine months ended September 30, 2017, we incurred $2,430,000 and $8,568,000, respectively, in stockholder servicing fees to our dealer manager. As of September 30, 2018 and December 31, 2017, we accrued $15,203,000 and $12,611,000, respectively, in connection with the stockholder servicing fee payable, which is included in accounts payable and accrued liabilities with a corresponding offset to stockholders’ equity in our accompanying condensed consolidated balance sheets.

12. Related Party Transactions

Fees and Expenses Paid to Affiliates

All of our executive officers and one of our non-independent directors are also executive officers and employees and/or holders of a direct or indirect interest in our advisor, one of our co-sponsors or other affiliated entities. We are affiliated with our advisor, American Healthcare Investors and AHI Group Holdings; however, we are not affiliated with Griffin Capital, our dealer manager, Colony Capital or Mr. Flaherty. We entered into the Advisory Agreement, which entitles our advisor and its affiliates to specified compensation for certain services, as well as reimbursement of certain expenses. Our board of directors, including a majority of our independent directors, has reviewed the material transactions between our affiliates and us during the nine months ended September 30, 2018 and 2017. Set forth below is a description of the transactions with affiliates. We believe that we have executed all of the transactions set forth below on terms that are fair and reasonable to us and on terms no less favorable to us than those available from unaffiliated third parties. For the three months ended September 30, 2018 and 2017, we incurred $6,968,000 and $2,856,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $14,097,000 and $12,633,000, respectively, in fees and expenses to our affiliates as detailed below.

Offering Stage

Dealer Manager Fee

With respect to shares of our Class T common stock, our dealer manager generally receives a dealer manager fee of up to 3.0% of the gross offering proceeds from the sale of Class T shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds is funded by us and up to an amount equal to 2.0% of the gross offering proceeds is funded by our advisor. With respect to shares of our Class I common stock, prior to March 1, 2017, our dealer manager generally received a dealer manager fee up to 3.0% of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds was funded by us and an amount equal to 2.0% of the gross offering proceeds was funded by our advisor. Effective March 1, 2017, our dealer manager generally receives a dealer manager fee up to an amount equal to 1.5% of the gross offering proceeds from the sale of Class I shares pursuant to our primary offering, all of which is funded by our advisor. Our dealer manager may enter into participating dealer

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agreements with participating dealers that provide for a reduction or waiver of dealer manager fees. To the extent that the dealer manager fee is less than 3.0% of the gross offering proceeds for any Class T shares sold and less than 1.5% of the gross offering proceeds for any Class I shares sold, such reduction will be applied first to the portion of the dealer manager fee funded by our advisor. To the extent that any reduction in dealer manager fee exceeds the portion of the dealer manager fee funded by our advisor, such excess reduction will be accompanied by a corresponding reduction in the applicable per share purchase price for purchases of such shares. No dealer manager fee is payable on shares of our common stock sold pursuant to the DRIP. Our advisor intends to recoup the portion of the dealer manager fee it funds through the receipt of the Contingent Advisor Payment from us, as described below, through the payment of acquisition fees.

For the three months ended September 30, 2018 and 2017, we incurred $1,193,000 and $1,414,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $3,393,000 and $4,751,000, respectively, payable to our advisor as part of the Contingent Advisor Payment in connection with the dealer manager fee that our advisor had incurred. Such fee was charged to stockholders’ equity as incurred with a corresponding offset to accounts payable due to affiliates in our accompanying condensed consolidated balance sheets. See Note 11, Equity — Offering Costs — Dealer Manager Fee, for a further discussion of the dealer manager fee funded by us.

Other Organizational and Offering Expenses

Our other organizational and offering expenses in connection with our offering (other than selling commissions, the dealer manager fee and the stockholder servicing fee) are funded by our advisor. Our advisor intends to recoup such expenses it funds through the receipt of the Contingent Advisor Payment from us, as described below, through the payment of acquisition fees. We anticipate that our other organizational and offering expenses will not exceed 1.0% of the gross offering proceeds for shares of our common stock sold pursuant to our primary offering. No other organizational and offering expenses will be paid with respect to shares of our common stock sold pursuant to the DRIP.

For the three months ended September 30, 2018 and 2017, we incurred $270,000 and $259,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $1,178,000 and $1,151,000, respectively, payable to our advisor as part of the Contingent Advisor Payment in connection with the other organizational and offering expenses that our advisor had incurred. Such expenses were charged to stockholders’ equity as incurred with a corresponding offset to accounts payable due to affiliates in our accompanying condensed consolidated balance sheets.

Acquisition and Development Stage

Acquisition Fee

We pay our advisor an acquisition fee of up to 4.50% of the contract purchase price, including any contingent or earn-out payments that may be paid, of each property we acquire or, with respect to any real estate-related investment we originate or acquire, up to 4.25% of the origination or acquisition price, including any contingent or earn-out payments that may be paid. The 4.50% or 4.25% acquisition fees consist of a 2.25% or 2.00% base acquisition fee, or the base acquisition fee, for real estate and real estate-related acquisitions, respectively, and an additional 2.25% contingent advisor payment, or the Contingent Advisor Payment. The Contingent Advisor Payment allows our advisor to recoup the portion of the dealer manager fee and other organizational and offering expenses funded by our advisor. Therefore, the amount of the Contingent Advisor Payment paid upon the closing of an acquisition shall not exceed the then outstanding amounts paid by our advisor for dealer manager fees and other organizational and offering expenses at the time of such closing. For these purposes, the amounts paid by our advisor and considered as “outstanding” are reduced by the amount of the Contingent Advisor Payment previously paid. Notwithstanding the foregoing, the initial $7,500,000 of amounts paid by our advisor to fund the dealer manager fee and other organizational and offering expenses, or the Contingent Advisor Payment Holdback, shall be retained by us until the later of the termination of our last public offering or the third anniversary of the commencement date of our initial public offering, at which time such amount shall be paid to our advisor or its affiliates. In connection with any subsequent public offering of shares of our common stock, the Contingent Advisor Payment Holdback may increase, based upon the maximum offering amount in such subsequent public offering and the amount sold in prior offerings. Our advisor or its affiliates will be entitled to receive these acquisition fees for properties and real estate-related investments acquired with funds raised in our offering, including acquisitions completed after the termination of the Advisory Agreement (including imputed leverage of 50.0% on funds raised in our offering), or funded with net proceeds from the sale of a property or real estate-related investment, subject to certain conditions. Our advisor may waive or defer all or a portion of the acquisition fee at any time and from time to time, in our advisor’s sole discretion.

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The base acquisition fee in connection with the acquisition of properties accounted for as business combinations in accordance with ASC Topic 805, Business Combinations, or ASC Topic 805, is expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations. The base acquisition fee in connection with the acquisition of properties accounted for as asset acquisitions in accordance with ASU 2017-01 or the acquisition of real estate-related investments is capitalized as part of the associated investment in our accompanying condensed consolidated balance sheets. For the three months ended September 30, 2018 and 2017, we paid base acquisition fees of $4,007,000 and $347,000, respectively, and for the nine months ended September 30, 2018 and 2017, we paid base acquisition fees of $5,581,000 and $4,901,000, respectively, to our advisor. As of September 30, 2018 and December 31, 2017, we recorded $7,750,000 and $7,744,000, respectively, as part of the Contingent Advisor Payment, which is included in accounts payable due to affiliates with a corresponding offset to stockholders’ equity in our accompanying condensed consolidated balance sheets. As of September 30, 2018, we have paid $9,659,000 in Contingent Advisor Payments to our advisor. For a further discussion of amounts paid in connection with the Contingent Advisor Payment, see “Dealer Manager Fee” and “Other Organizational and Offering Expenses,” above. In addition, see Note 3, Real Estate Investments, Net, for a further discussion.

Development Fee

In the event our advisor or its affiliates provide development-related services, we pay our advisor or its affiliates a development fee in an amount that is usual and customary for comparable services rendered for similar projects in the geographic market where the services are provided; however, we will not pay a development fee to our advisor or its affiliates if our advisor or its affiliates elect to receive an acquisition fee based on the cost of such development.

For the three and nine months ended September 30, 2018 and 2017, we did not incur any development fees to our advisor or its affiliates.

Reimbursement of Acquisition Expenses

We reimburse our advisor or its affiliates for acquisition expenses related to selecting, evaluating and acquiring assets, which are reimbursed regardless of whether an asset is acquired. The reimbursement of acquisition expenses, acquisition fees, total development costs, real estate commissions and other fees paid to unaffiliated third parties will not exceed, in the aggregate, 6.0% of the contract purchase price of the property or real estate-related investments, unless fees in excess of such limits are approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction. These fees and expenses paid did not exceed 6.0% of the contract purchase price of our property acquisitions, except with respect to our acquisitions of Athens MOB and Northern California Senior Housing Portfolio for the nine months ended September 30, 2018, and Auburn MOB, Pottsville MOB and Lafayette Assisted Living Portfolio for the nine months ended September 30, 2017, which excess fees were determined to be commercially fair and reasonable to us and were approved by our directors as set forth above.

Reimbursements of acquisition expenses in connection with the acquisition of properties accounted for as business combinations in accordance with ASC Topic 805 are expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations. Reimbursements of acquisition expenses in connection with the acquisition of properties accounted for as asset acquisitions in accordance with ASU 2017-01 or the acquisition of real estate-related investments are capitalized as part of the associated investment in our accompanying condensed consolidated balance sheets. For the three months ended September 30, 2018 and 2017, we did not incur any acquisition expenses to our advisor or its affiliates and for the nine months ended September 30, 2018 and 2017, we incurred $1,000 and $2,000, respectively, in acquisition expenses to our advisor or its affiliates.

Operational Stage

Asset Management Fee

We pay our advisor or its affiliates a monthly fee for services rendered in connection with the management of our assets equal to one-twelfth of 0.80% of average invested assets. For such purposes, average invested assets means the average of the aggregate book value of our assets invested in real estate properties and real estate-related investments, before deducting depreciation, amortization, bad debt and other similar non-cash reserves, computed by taking the average of such values at the end of each month during the period of calculation.

For the three months ended September 30, 2018 and 2017, we incurred $1,271,000 and $700,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $3,299,000 and $1,505,000, respectively, in asset

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management fees to our advisor, which are included in general and administrative in our accompanying condensed consolidated statements of operations.

Property Management Fee

American Healthcare Investors or its designated personnel may provide property management services with respect to our properties or may sub-contract these duties to any third party and provide oversight of such third-party property manager. We pay American Healthcare Investors a monthly management fee equal to a percentage of the gross monthly cash receipts of such property as follows: (i) a property management oversight fee of 1.0% of the gross monthly cash receipts of any stand-alone, single-tenant, net leased property, except for such properties operated utilizing a RIDEA structure, for which we pay a property management oversight fee of 1.5% of the gross monthly cash receipts with respect to such property; (ii) a property management oversight fee of 1.5% of the gross monthly cash receipts of any property that is not a stand-alone, single-tenant, net leased property and for which American Healthcare Investors or its designated personnel provide oversight of a third party that performs the duties of a property manager with respect to such property; or (iii) a fair and reasonable property management fee that is approved by a majority of our directors, including a majority of our independent directors, that is not less favorable to us than terms available from unaffiliated third parties for any property that is not a stand-alone, single-tenant, net leased property and for which American Healthcare Investors or its designated personnel directly serve as the property manager without sub-contracting such duties to a third party.

Property management fees are included in property operating and rental expenses in our accompanying condensed consolidated statements of operations. For the three months ended September 30, 2018 and 2017, we incurred property management fees of $200,000 and $103,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred property management fees of $506,000 and $249,000, respectively, to American Healthcare Investors.

Lease Fees

We may pay our advisor or its affiliates a separate fee for any leasing activities in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. Such fee is generally expected to range from 3.0% to 6.0% of the gross revenues generated during the initial term of the lease.

Lease fees are capitalized as lease commissions, which are included in other assets, net in our accompanying condensed consolidated balance sheets, and amortized over the term of the lease. For the three and nine months ended September 30, 2018, we incurred lease fees of $6,000 and $83,000, respectively. For the three and nine months ended September 30, 2017, we incurred lease fees of $12,000.

Construction Management Fee

In the event that our advisor or its affiliates assist with planning and coordinating the construction of any capital or tenant improvements, we pay our advisor or its affiliates a construction management fee of up to 5.0% of the cost of such improvements. 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. For the three and nine months ended September 30, 2018, we incurred construction management fees of $11,000 and $13,000, respectively. For the three and nine months ended September 30, 2017, we did not incur any construction management fees to our advisor or its affiliates.

Operating Expenses

We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. However, we cannot reimburse our advisor or its affiliates at the end of any fiscal quarter for total operating expenses that, in the four consecutive fiscal quarters then ended, exceed the greater of: (i) 2.0% of our average invested assets, as defined in the Advisory Agreement; or (ii) 25.0% of our net income, as defined in the Advisory Agreement, unless our independent directors determined that such excess expenses were justified based on unusual and nonrecurring factors which they deem sufficient.

Our operating expenses as a percentage of average invested assets and as a percentage of net income were 1.3% and 26.6%, respectively, for the 12 months ended September 30, 2018; however, our operating expenses did not exceed the aforementioned limitation as 2.0% of our average invested assets was greater than 25.0% of our net income.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

For the three months ended September 30, 2018 and 2017, our advisor incurred operating expenses on our behalf of $10,000 and $21,000, respectively, and for the nine months ended September 30, 2018 and 2017, our advisor incurred operating expenses on our behalf of $43,000 and $62,000, respectively. Operating expenses are generally included in general and administrative in our accompanying condensed consolidated statements of operations.

Compensation for Additional Services

We pay our advisor and its affiliates for services performed for us other than those required to be rendered by our advisor or its affiliates under the Advisory Agreement. The rate of compensation for these services has to be approved by a majority of our board of directors, including a majority of our independent directors, and cannot exceed an amount that would be paid to unaffiliated third parties for similar services. For the three and nine months ended September 30, 2018 and 2017, our advisor and its affiliates were not compensated for any additional services.

Liquidity Stage

Disposition Fees

For services relating to the sale of one or more properties, we pay our advisor or its affiliates a disposition fee up to the lesser of 2.0% of the contract sales price or 50.0% of a customary competitive real estate commission given the circumstances surrounding the sale, in each case as determined by our board of directors, including a majority of our independent directors, upon the provision of a substantial amount of the services in the sales effort. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated third parties, will not exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. For the three and nine months ended September 30, 2018 and 2017, we did not incur any disposition fees to our advisor or its affiliates.

Subordinated Participation Interest

Subordinated Distribution of Net Sales Proceeds

In the event of liquidation, we will pay our advisor a subordinated distribution of net sales proceeds. The distribution will be equal to 15.0% of the remaining net proceeds from the sales of properties, after distributions to our stockholders, in the aggregate, of: (i) a full return of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan); plus (ii) an annual 6.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock, as adjusted for distributions of net sales proceeds. Actual amounts to be received depend on the sale prices of properties upon liquidation. For the three and nine months ended September 30, 2018 and 2017, we did not pay any such distributions to our advisor.

Subordinated Distribution Upon Listing

Upon the listing of shares of our common stock on a national securities exchange, in redemption of our advisor’s limited partnership units, we will pay our advisor a distribution equal to 15.0% of the amount by which: (i) the market value of our outstanding common stock at listing plus distributions paid prior to listing exceeds (ii) the sum of the total amount of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan) and the amount of cash equal to an annual 6.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock through the date of listing. Actual amounts to be received depend upon the market value of our outstanding stock at the time of listing, among other factors. For the three and nine months ended September 30, 2018 and 2017, we did not pay any such distributions to our advisor.

Subordinated Distribution Upon Termination

Pursuant to the Agreement of Limited Partnership, as amended, of our operating partnership upon termination or non-renewal of the Advisory Agreement, our advisor will also be entitled to a subordinated distribution in redemption of its limited partnership units from our operating partnership equal to15.0%of the amount, if any, by which: (i) the appraised value of our assets on the termination date, less any indebtedness secured by such assets, plus total distributions paid through the termination date, exceeds (ii) the sum of the total amount of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan) and the total amount of cash equal to an annual 6.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock through the termination date. In addition, our advisor may elect to defer its right to receive a subordinated distribution upon termination until either a listing or other liquidity event, including a liquidation, sale of substantially all of our assets or merger in which our stockholders receive in exchange for their shares of our common stock, shares of a company that are traded on a national securities exchange.

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GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As of September 30, 2018 and December 31, 2017, we did not have any liability related to the subordinated distribution upon termination.

Stock Purchase Plans

On December 30, 2016, our Chief Executive Officer and Chairman of the Board of Directors, Jeffrey T. Hanson, our President and Chief Operating Officer, Danny Prosky, and our Executive Vice President and General Counsel, Mathieu B. Streiff, each executed stock purchase plans, or the 2017 Stock Purchase Plans, whereby they each irrevocably agreed to invest 100% of their net after-tax base salary and cash bonus compensation earned as employees of American Healthcare Investors directly into our company by purchasing shares of our Class I common stock. In addition, on December 30, 2016, three Executive Vice Presidents of American Healthcare Investors, including our Executive Vice President of Acquisitions, Stefan K.L. Oh, as well as our Executive Vice Presidents of Asset Management, Wendie Newman and Christopher M. Belford, each executed similar 2017 Stock Purchase Plans whereby they each irrevocably agreed to invest a portion of their net after-tax base salary or a portion of their net after-tax base salary and cash bonus compensation, ranging from 5.0% to 15.0%, earned as employees of American Healthcare Investors directly into our company by purchasing shares of our Class I common stock. The 2017 Stock Purchase Plans terminated on December 31, 2017.

Purchases of shares of our Class I common stock pursuant to the 2017 Stock Purchase Plans commenced beginning with the officers’ regularly scheduled payroll payment on January 23, 2017. The shares of Class I common stock were purchased pursuant to the 2017 Stock Purchase Plans at a price of $9.21 per share, reflecting the purchase price of shares of Class I common stock offered to the public reduced by the dealer manager fees funded by us, as applicable. No selling commissions, dealer manager fees (including the portion of such dealer manager fees funded by our advisor) or stockholder servicing fees were paid with respect to such sales of our Class I common stock.

On December 31, 2017, Messrs. Hanson, Prosky, and Streiff each executed stock purchase plans for the purchase of shares of our Class I common stock, or the 2018 Stock Purchase Plans, on terms similar to their 2017 Stock Purchase Plans. In addition, on December 31, 2017, four Executive Vice Presidents of American Healthcare Investors, including Messrs. Oh and Belford, Ms. Newman and our Chief Financial Officer, Brian S. Peay, each executed similar 2018 Stock Purchase Plans whereby they each irrevocably agreed to invest a portion of their net after-tax base salary or a portion of their net after-tax base salary and cash bonus compensation, ranging from 5.0% to 15.0%, earned on or after January 1, 2018 as employees of American Healthcare Investors directly into shares of our Class I common stock. The 2018 Stock Purchase Plans terminate on December 31, 2018 or earlier upon the occurrence of certain events, such as any earlier termination of our public offering of securities, unless otherwise renewed or extended.

Purchases of shares of our Class I common stock pursuant to the 2018 Stock Purchase Plans commenced beginning with the first regularly scheduled payroll payment on January 22, 2018. The shares of Class I common stock were or will be purchased pursuant to the 2018 Stock Purchase Plans at a per share purchase price equal to the per share purchase price of our Class I common stock offered to the public, which was $9.21 per share prior to April 11, 2018 and is currently $9.65 per share effective April 11, 2018. No selling commissions, dealer manager fees (including the portion of such dealer manager fees funded by our advisor) or stockholder servicing fees will be paid with respect to such sales of our Class I common stock.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

For the three and nine months ended September 30, 2018 and 2017, our officers invested the following amounts and we issued the following shares of our Class T and Class I common stock pursuant to the applicable stock purchase plan:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Officer’s Name	Title	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares
Jeffrey T. Hanson	Chief Executive Officer and Chairman of the Board of Directors	$	70,000	7,292	$	70,000	7,553	$	258,000	27,398	$	193,000	20,910
Danny Prosky	President and Chief Operating Officer	78,000		7,993	72,000		7,825	275,000		29,118	199,000		21,571
Mathieu B. Streiff	Executive Vice President and General Counsel	66,000		6,826	67,000		7,293	254,000		26,971	194,000		21,065
Brian S. Peay	Chief Financial Officer	5,000		578	—		—	24,000		2,565	—		—
Stefan K.L. Oh	Executive Vice President of Acquisitions	8,000		886	8,000		857	25,000		2,648	24,000		2,558
Christopher M. Belford	Executive Vice President of Asset Management	7,000		657	6,000		653	49,000		5,209	59,000		6,361
Wendie Newman	Executive Vice President of Asset Management	3,000		249	2,000		221	7,000		718	6,000		607
Total		$	237,000	24,481	$	225,000	24,402	$	892,000	94,627	$	675,000	73,072

Accounts Payable Due to Affiliates

The following amounts were outstanding to our affiliates as of September 30, 2018 and December 31, 2017:

Fee	September 30, 2018		December 31, 2017
Contingent Advisor Payment	$	7,750,000	$	7,744,000
Asset management fees	457,000		316,000
Property management fees	125,000		43,000
Construction management fees	9,000		1,000
Lease commissions	6,000		8,000
Operating expenses	3,000		6,000
Total	$	8,350,000	$	8,118,000

13. Fair Value Measurements

Our accompanying condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, accounts and other receivables, restricted cash, real estate deposits, accounts payable and accrued liabilities, accounts payable due to affiliates, mortgage loans payable and borrowings under the Corporate Line of Credit.

We consider the carrying values of cash and cash equivalents, accounts and other receivables, restricted cash, real estate deposits and accounts payable and accrued liabilities to approximate the fair values for these financial instruments based upon the short period of time between origination of the instruments and their expected realization. The fair value of accounts payable due to affiliates is not determinable due to the related party nature of the accounts payable. These financial assets and liabilities are measured at fair value on a recurring basis based on quoted prices in active markets for identical assets and liabilities, and therefore are classified as Level 1 in the fair value hierarchy.

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GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

The fair value of our mortgage loans payable and the Corporate Line of Credit is estimated using a discounted cash flow analysis using borrowing rates available to us for debt instruments with similar terms and maturities. We have determined that the valuations of our mortgage loans payable and line of credit and term loans are classified as Level 2 within the fair value hierarchy as reliance is placed on inputs other than quoted prices that are observable, such as interest rates and yield curves. The carrying amounts and estimated fair values of such financial instruments as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Liabilities:
Mortgage loans payable	$	16,988,000	$	16,971,000	$	11,567,000	$	11,819,000
Line of credit and term loan	$	199,149,000	$	199,947,000	$	82,644,000	$	84,088,000

14. Income Taxes

As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. We have elected to treat certain of our consolidated subsidiaries as wholly-owned taxable REIT subsidiaries, or TRSs, pursuant to the Code. TRSs may participate in services that would otherwise be considered impermissible for REITs and are subject to federal and state income tax at regular corporate tax rates.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation pursuant to the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate to 21.0%, eliminating the corporate alternative minimum tax, or AMT, and changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

We adopted ASU 2018-05 which allows us to record provisional amounts during the period of enactment. Any change to the provisional amounts will be recorded as an adjustment to the provision for income taxes in the period the amounts are determined. The measurement period ends when we have obtained, prepared and analyzed the information necessary to finalize the provision, but cannot extend beyond one year of the enactment date. 

The components of income tax expense for the three and nine months ended September 30, 2018 were as follows:

	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Federal deferred	$	(796,000	)	$	(2,178,000	)
State deferred	(146,000		)	(432,000		)
State current	4,000			4,000
Valuation allowance	942,000			2,610,000
Total income tax expense	$	4,000		$	4,000

Current Income Tax

Federal and state income taxes are generally a function of the level of income recognized by our TRSs.

Deferred Taxes

Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating losses that may be realized in future periods depending on sufficient taxable income.

We recognize the financial statement effects of an uncertain tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. As of September 30, 2018 and December 31, 2017, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A valuation allowance is established if we believe it is more likely than not that all or a

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GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

portion of the deferred tax assets are not realizable. As of September 30, 2018, our valuation allowance fully reserves the net deferred tax asset due to inherent uncertainty of future income. We will continue to monitor industry and economic conditions, and our ability to generate taxable income based on our business plan and available tax planning strategies, which would allow us to utilize the tax benefits of the net deferred tax assets and thereby allow us to reverse all, or a portion of, our valuation allowance in the future.

15. Segment Reporting

As of September 30, 2018, we evaluated our business and made resource allocations based on four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities.

Our medical office buildings are typically leased to multiple tenants under separate leases in each building, thus requiring active management and responsibility for many of the associated operating expenses (although many of these are, or can effectively be, passed through to the tenants). Our senior housing facilities and skilled nursing facilities are primarily single-tenant properties for which we lease the facilities to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all facility operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant. Our senior housing — RIDEA properties include senior housing facilities that are owned and operated utilizing a RIDEA structure.

We evaluate performance based upon segment net operating income. We define segment net operating income as total revenues, less rental expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses and interest expense for each segment. We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment net operating income serves as an appropriate supplemental performance measure to net income (loss) because it allows investors and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis.

Interest expense, depreciation and amortization and other expenses not attributable to individual properties are not allocated to individual segments for purposes of assessing segment performance.

Non-segment assets primarily consist of corporate assets including cash and cash equivalents, other receivables, real estate deposits and other assets not attributable to individual properties.

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GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Summary information for the reportable segments during the three and nine months ended September 30, 2018 and 2017 was as follows:

	Medical Office Buildings		Senior Housing — RIDEA		Senior Housing		Skilled Nursing Facilities		Three Months Ended September 30, 2018
Revenues:
Real estate revenue	$	9,580,000	$	—	$	2,259,000	$	673,000	$	12,512,000
Resident fees and services	—		9,769,000		—		—		9,769,000
Total revenues	9,580,000		9,769,000		2,259,000		673,000		22,281,000
Expenses:
Rental expenses	2,812,000		—		270,000		105,000		3,187,000
Property operating expenses	—		7,987,000		—		—		7,987,000
Segment net operating income	$	6,768,000	$	1,782,000	$	1,989,000	$	568,000	$	11,107,000
Expenses:
General and administrative									$	2,105,000
Acquisition related expenses									98,000
Depreciation and amortization									9,007,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)									(1,602,000		)
Interest income									6,000
Loss before income taxes									(1,699,000		)
Income tax expense									(4,000		)
Net loss									$	(1,703,000	)

	Medical Office Buildings		Senior Housing		Three Months Ended September 30, 2017
Revenue:
Real estate revenue	$	6,330,000	$	2,158,000	$	8,488,000
Expenses:
Rental expenses	1,857,000		238,000		2,095,000
Segment net operating income	$	4,473,000	$	1,920,000	$	6,393,000
Expenses:
General and administrative					$	1,296,000
Acquisition related expenses					121,000
Depreciation and amortization					3,442,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt premium)					(780,000		)
Net income					$	754,000

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GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

	Medical Office Buildings		Senior Housing — RIDEA		Senior Housing		Skilled Nursing Facilities		Nine Months Ended September 30, 2018
Revenues:
Real estate revenue	$	24,299,000	$	—	$	6,757,000	$	1,473,000	$	32,529,000
Resident fees and services	—		26,604,000		—		—		26,604,000
Total revenues	24,299,000		26,604,000		6,757,000		1,473,000		59,133,000
Expenses:
Rental expenses	6,901,000		—		951,000		238,000		8,090,000
Property operating expenses	—		21,986,000		—		—		21,986,000
Segment net operating income	$	17,398,000	$	4,618,000	$	5,806,000	$	1,235,000	$	29,057,000
Expenses:
General and administrative									$	5,803,000
Acquisition related expenses									254,000
Depreciation and amortization									24,053,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)									(3,846,000		)
Interest income									6,000
Loss before income taxes									(4,893,000		)
Income tax expense									(4,000		)
Net loss									$	(4,897,000	)

	Medical Office Buildings		Senior Housing		Nine Months Ended September 30, 2017
Revenue:
Real estate revenue	$	15,456,000	$	3,282,000	$	18,738,000
Expenses:
Rental expenses	4,543,000		350,000		4,893,000
Segment net operating income	$	10,913,000	$	2,932,000	$	13,845,000
Expenses:
General and administrative					$	2,996,000
Acquisition related expenses					334,000
Depreciation and amortization					7,619,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt premium)					(1,607,000		)
Interest income					1,000
Net income					$	1,290,000

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GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Assets by reportable segment as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018		December 31, 2017
Medical office buildings	$	367,762,000	$	262,260,000
Senior housing — RIDEA	142,481,000		115,402,000
Senior housing	98,078,000		98,519,000
Skilled nursing facilities	115,829,000		—
Other	32,572,000		3,972,000
Total assets	$	756,722,000	$	480,153,000

16. Concentration of Credit Risk

Financial instruments that potentially subject us to a concentration of credit risk are primarily cash and cash equivalents, accounts and other receivables, restricted cash and real estate deposits. Cash and cash equivalents are generally invested in investment-grade, short-term instruments with a maturity of three months or less when purchased. We have cash and cash equivalents in financial institutions that are insured by the Federal Deposit Insurance Corporation, or FDIC. As of September 30, 2018 and December 31, 2017, we had cash and cash equivalents in excess of FDIC insured limits. We believe this risk is not significant. Concentration of credit risk with respect to accounts receivable from tenants is limited. In general, we perform credit evaluations of prospective tenants and security deposits are obtained at the time of property acquisition and upon lease execution.

Based on leases in effect as of September 30, 2018, two states in the United States accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income. Our properties located in Missouri and Florida accounted for approximately 16.1% and 12.1%, respectively, of our total property portfolio’s annualized base rent or annualized net operating income. Accordingly, there is a geographic concentration of risk subject to fluctuations in each state’s economy.

Based on leases in effect as of September 30, 2018, our four reportable business segments, medical office buildings, skilled nursing facilities, senior housing — RIDEA and senior housing accounted for 54.0%, 17.7%, 15.6% and 12.7%, respectively, of our total property portfolio’s annualized base rent or annualized net operating income.

As of September 30, 2018, we had one tenant that accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income as follows:

Tenant	Annualized Base Rent(1)		Percentage of Annualized Base Rent	Acquisition	Reportable Segment	GLA (Sq Ft)	Lease Expiration Date
RC Tier Properties, LLC	$	7,629,000	14.4%	Missouri SNF Portfolio	Skilled Nursing	385,000	09/30/33

___________

(1) Annualized base rent is based on contractual base rent from leases in effect as of September 30, 2018. The loss of this tenant or its inability to pay rent could have a material adverse effect on our business and results of operations.

17. Per Share Data

Basic earnings (loss) per share for all periods presented are computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of our common stock outstanding during the period. Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $6,000 and $4,000, respectively, for the three months ended September 30, 2018 and 2017, and $14,000 and $8,000, respectively, for the nine months ended September 30, 2018 and 2017. Diluted earnings (loss) per share are computed based on the weighted average number of shares of our common stock and all potentially dilutive securities, if any. Nonvested shares of our restricted common stock and redeemable limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock. As of September 30, 2018 and 2017, there were 37,500 and 27,000 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during these periods. As of September 30, 2018 and 2017, there were 208 units of redeemable limited partnership units

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

of our operating partnership outstanding, but such units were excluded from the computation of diluted earnings per share because such units were anti-dilutive during these periods.

18. Subsequent Events

Status of Our Offering

As of November 9, 2018, we had received and accepted subscriptions in our offering for 61,861,351 aggregate shares of our Class T and Class I common stock, or $616,374,000, excluding shares of our common stock issued pursuant to the DRIP.

Acquisition of Joint Venture

Effective October 1, 2018, we, through GAHC4 Trilogy JV, LLC, a wholly-owned subsidiary of our operating partnership, purchased 6.0% of the total membership interests in Trilogy REIT Holdings, LLC, or the Trilogy Joint Venture, for $48,000,000 in cash, based on an estimated gross enterprise value of $93,154,000 consisting of our equity investment and a calculated pro rata share of the debt of the Trilogy Joint Venture based on our ownership interest, from an unaffiliated third party. The Trilogy Joint Venture, through a 96.7% owned subsidiary, owns and operates purpose-built integrated senior healthcare facilities, including skilled nursing facilities and assisted living facilities, located across several states, as well as certain ancillary businesses, which we believe complement our existing real estate portfolio. In addition to our membership interests, the Trilogy Joint Venture is 70.0% indirectly owned by Griffin-American Healthcare REIT III, Inc., or GAHR III, and the remaining 24.0% continues to be owned by the unaffiliated third party that sold 6.0% of the membership interests to us. GAHR III, through a wholly-owned subsidiary, serves as the manager of the Trilogy Joint Venture and both GAHR III and us are sponsored by American Healthcare Investors. We financed the acquisition of the Trilogy Joint Venture membership interests using net proceeds from our offering and borrowings under our lines of credit with Bank of America and KeyBank.

In connection with the purchase of the Trilogy Joint Venture membership interests, we paid to our advisor a base acquisition fee of approximately $2,096,000, or 2.25% of the estimated gross enterprise value of the Trilogy Joint Venture membership interests acquired by us. Additionally, we have accrued for a contingent advisor payment of approximately $2,096,000, or 2.25% of the estimated gross enterprise value of the Trilogy Joint Venture membership interests acquired by us, which shall be paid to our advisor, subject to the satisfaction of certain conditions.

34

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The use of the words “we,” “us” or “our” refers to Griffin-American Healthcare REIT IV, Inc. and its subsidiaries, including Griffin-American Healthcare REIT IV Holdings, LP, except where otherwise noted.

The following discussion should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and in our 2017 Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission, or the SEC, on March 8, 2018. Such condensed consolidated financial statements and information have been prepared to reflect our financial position as of September 30, 2018 and December 31, 2017, together with our results of operations and cash flows for the three and nine months ended September 30, 2018 and 2017.

Forward-Looking Statements

Historical results and trends should not be taken as indicative of future operations. Our statements contained in this report that are not historical facts are forward-looking. Actual results may differ materially from those included in the forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations, are generally identifiable by use of the words “expect,” “project,” “may,” “will,” “should,” “could,” “would,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future investments on a consolidated basis include, but are not limited to: changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs; the availability of capital; changes in interest rates; competition in the real estate industry; the supply and demand for operating properties in our proposed market areas; changes in accounting principles generally accepted in the United States of America, or GAAP, policies and guidelines applicable to REITs; the success of our best efforts initial public offering; the availability of properties to acquire; the availability of financing; and our ongoing relationship with American Healthcare Investors, LLC, or American Healthcare Investors, and Griffin Capital Company, LLC, or Griffin Capital, and their affiliates. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview and Background

Griffin-American Healthcare REIT IV, Inc., a Maryland corporation, was incorporated on January 23, 2015 and therefore we consider that our date of inception. We were initially capitalized on February 6, 2015. We invest in a diversified portfolio of real estate properties, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. We also operate healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code of 1986, as amended, or the Code, authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008). We may also originate and acquire secured loans and real estate-related investments on an infrequent and opportunistic basis. We generally seek investments that produce current income. We qualified to be taxed as a REIT under the Code for federal income tax purposes beginning with our taxable year ended December 31, 2016, and we intend to continue to qualify to be taxed as a REIT.

On February 16, 2016, we commenced our initial public offering, or our offering, in which we were initially offering to the public up to $3,150,000,000 in shares of our Class T common stock, consisting of up to $3,000,000,000 in shares of our Class T common stock in our primary offering and up to $150,000,000 in shares of our Class T common stock pursuant to our distribution reinvestment plan, as amended, or the DRIP. Effective June 17, 2016, we reallocated certain of the unsold shares of Class T common stock being offered and began offering shares of Class I common stock, such that we are currently offering up to approximately $2,800,000,000 in shares of Class T common stock and $200,000,000 in shares of Class I common stock in our primary offering, and up to an aggregate of $150,000,000 in shares of our Class T and Class I common stock pursuant to the DRIP, aggregating up to $3,150,000,000 or the maximum offering amount.

The shares of our Class T common stock in our primary offering were being offered at a price of $10.00 per share prior to April 11, 2018. The shares of our Class I common stock in our primary offering were being offered at a price of $9.30 per share prior to March 1, 2017 and $9.21 per share from March 1, 2017 to April 10, 2018. The shares of our Class T and Class I common stock issued pursuant to the DRIP were sold at a price of $9.50 per share prior to January 1, 2017 and $9.40 per share from January 1, 2017 to April 10, 2018. On April 6, 2018, our board of directors, at the recommendation of the audit committee of our board of directors, comprised solely of independent directors, unanimously approved and established an estimated per share net asset value, or NAV, of our common stock of $9.65, as discussed further below. As a result, on April 6, 2018, our

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board of directors unanimously approved revised offering prices for each class of shares of our common stock to be sold in the primary portion of our initial public offering based on the estimated per share NAV of our Class T and Class I common stock of $9.65 plus any applicable per share up-front selling commissions and dealer manager fees funded by us, effective April 11, 2018. Accordingly, the revised offering price for shares of our Class T common stock and Class I common stock sold pursuant to our primary offering on or after April 11, 2018 is $10.05 per share and $9.65 per share, respectively. Effective April 11, 2018, the shares of our Class T and Class I common stock issued pursuant to the DRIP are sold at a price of $9.65 per share, the most recent estimated per share NAV approved and established by our board of directors.

We will sell shares of our Class T and Class I common stock in our offering until the earlier of February 16, 2019 or the date on which the maximum offering amount has been sold. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the DRIP, and among classes of stock. As of September 30, 2018, we had received and accepted subscriptions in our offering for 59,008,261 aggregate shares of our Class T and Class I common stock, or approximately $587,815,000, excluding shares of our common stock issued pursuant to the DRIP.

On April 6, 2018, our board of directors, at the recommendation of the audit committee of our board of directors, comprised solely of independent directors, unanimously approved and established an estimated per share NAV of our common stock of $9.65. We provide this estimated per share NAV to assist broker-dealers in connection with their obligations under National Association of Securities Dealers Conduct Rule 2340, as required by the Financial Industry Regulatory Authority, or FINRA, with respect to customer account statements. The estimated per share NAV is based on the estimated value of our assets less the estimated value of our liabilities, divided by the number of shares outstanding on a fully diluted basis, calculated as of December 31, 2017. This valuation was performed in accordance with the methodology provided in Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Institute for Portfolio Alternatives, or the IPA, in April 2013, in addition to guidance from the SEC. Going forward, we intend to publish an updated estimated per share NAV on at least an annual basis. See our Current Report on Form 8-K filed with the SEC on April 9, 2018, for more information on the methodologies and assumptions used to determine, and the limitations and risks of, our estimated per share NAV.

We conduct substantially all of our operations through Griffin-American Healthcare REIT IV Holdings, LP, or our operating partnership. We are externally advised by Griffin-American Healthcare REIT IV Advisor, LLC, or our advisor, pursuant to an advisory agreement, or the Advisory Agreement, between us and our advisor. The Advisory Agreement was effective as of February 16, 2016 and had a one-year term, subject to successive one-year renewals upon the mutual consent of the parties. The Advisory Agreement was last renewed pursuant to the mutual consent of the parties on February 14, 2018 and expires on February 16, 2019. Our advisor uses its best efforts, subject to the oversight and review of our board of directors, to, among other things, research, identify, review and make investments in and dispositions of properties and securities on our behalf consistent with our investment policies and objectives. Our advisor performs its duties and responsibilities under the Advisory Agreement as our fiduciary. Our advisor is 75.0% owned and managed by American Healthcare Investors and 25.0% owned by a wholly owned subsidiary of Griffin Capital, or collectively, our co-sponsors. American Healthcare Investors is 47.1% owned by AHI Group Holdings, LLC, or AHI Group Holdings, 45.1% indirectly owned by Colony Capital, Inc. (NYSE: CLNY), or Colony Capital, and 7.8% owned by James F. Flaherty III, a former partner of Colony Capital. We are not affiliated with Griffin Capital, Griffin Capital Securities, LLC, or our dealer manager, Colony Capital or Mr. Flaherty; however, we are affiliated with Griffin-American Healthcare REIT IV Advisor, American Healthcare Investors and AHI Group Holdings.

We currently operate through four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities. As of September 30, 2018, we had completed 28 property acquisitions whereby we owned 56 properties, comprising 58 buildings, or approximately 3,389,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $714,490,000.

Critical Accounting Policies

The complete listing of our Critical Accounting Policies was previously disclosed in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018, and there have been no material changes to our Critical Accounting Policies as disclosed therein, except as noted below.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results to be expected

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for the full year; such full year results may be less favorable. Our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, which has been codified to Accounting Standards Codification, or ASC, Topic 606, or ASC Topic 606. We evaluate all of our revenue streams to identify whether each revenue stream would be subject to the provisions of ASC Topic 606 and whether there are any differences in the timing, measurement or presentation of revenue recognition. Based on a review of our various revenue streams, certain components of resident fees and services, such as revenues that are ancillary to the contractual rights of residents within our senior housing facilities operated utilizing a RIDEA structure, are subject to ASC Topic 606. While these revenue streams are subject to the provisions of ASC Topic 606, we believe that the pattern and timing of recognition of income are consistent with the previous accounting model. Virtually all resident fees and services are earned over a period of time and the majority of these revenues are paid by private payor types with the residual being paid by Medicaid. We adopted ASC Topic 606 on January 1, 2018 using the modified retrospective adoption method and the adoption did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see Note 2, Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements, to our accompanying condensed consolidated financial statements.

Acquisitions in 2018

For a discussion of our property acquisitions in 2018, see Note 3, Real Estate Investments, Net, to our accompanying condensed consolidated financial statements.

Factors Which May Influence Results of Operations

We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition, management and operation of properties other than those listed in Part II, Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q and those Risk Factors previously disclosed in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018.

Real Estate Revenue

The amount of revenue generated by our properties depends principally on our ability to maintain the occupancy rates of leased space and to lease available space and space available from lease terminations at the then existing rental rates. Negative trends in one or more of these factors could adversely affect our revenue in the future.

Offering Proceeds

If we fail to raise significant additional proceeds in our offering, we will not have enough proceeds to invest in a diversified real estate portfolio. Our real estate portfolio would be concentrated in a small number of properties, resulting in increased exposure to local and regional economic downturns and the poor performance of one or more of our properties and, therefore, expose our stockholders to increased risk. In addition, many of our expenses are fixed regardless of the size of our real estate portfolio. Therefore, depending on the amount of proceeds we raise from our offering, we would expend a larger portion of our income on operating expenses. This would reduce our profitability and, in turn, the amount of net income available for distribution to our stockholders.

Scheduled Lease Expirations

Excluding our senior housing — RIDEA facilities, as of September 30, 2018, our properties were 95.5% leased and during the remainder of 2018, 0.7% of the leased GLA is scheduled to expire. For the three and nine months ended September 30, 2018, our senior housing — RIDEA facilities were 77.0% and 76.7% leased, respectively. Substantially all of our leases with residents at such properties are for a term of one year or less. Our leasing strategy focuses on negotiating renewals for leases scheduled to expire during the next 12 months. In the future, if we are unable to negotiate renewals, we will try to identify new tenants or collaborate with existing tenants who are seeking additional space to occupy.

As of September 30, 2018, our remaining weighted average lease term was 9.5 years, excluding our senior housing — RIDEA facilities.

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Discussion of Operating Results

Our operating results are primarily comprised of income derived from our portfolio of properties and expenses in connection with the acquisition and operation of such properties. In general, we expect amounts related to our portfolio of operating properties to increase in the future based on a full year of operations of newly acquired properties as well as any additional real estate and real estate-related investments we may acquire.

We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. Accordingly, when we acquired our first medical office building in June 2016; senior housing facility in December 2016; senior housing — RIDEA facility in November 2017; and skilled nursing facility in March 2018, we added a new reporting segment at each such time. As of September 30, 2018, we operated through four reportable business segments, with activities related to investing in medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities.

Comparison of the Three and Nine Months Ended September 30, 2018 and 2017

Changes in our operating results are primarily due to owning 58 buildings as of September 30, 2018, as compared to owning 30 buildings as of September 30, 2017. As of September 30, 2018 and 2017, we owned the following types of properties:

	September 30,
	2018					2017
	Number of Buildings	Aggregate Contract Purchase Price		Leased %		Number of Buildings	Aggregate Contract Purchase Price		Leased %
Medical office buildings	24	$	372,240,000	93.1	%	18	$	262,290,000	94.0	%
Senior housing — RIDEA	12	137,100,000		(1	)	—	—		—	%
Senior housing	12	94,350,000		100	%	12	94,350,000		100	%
Skilled nursing facilities	10	110,800,000		100	%	—	—		—	%
Total/weighted average(2)	58	$	714,490,000	95.5	%	30	$	356,640,000	95.7	%

___________

(1) For the three and nine months ended September 30, 2018, the leased percentage for the resident units of our senior housing — RIDEA facilities was 77.0% and 76.7%, respectively, based on daily average occupancy of licensed beds/units, and substantially all of our leases with residents at such properties are for a term of one year or less.

(2) Weighted average leased percentage excludes our senior housing — RIDEA facilities.

Revenues

Our primary sources of revenue include rent and resident fees and services from our properties. Revenue by reportable segment consisted of the following for the periods then ended:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Real Estate Revenue
Medical office buildings	$	9,580,000	$	6,330,000	$	24,299,000	$	15,456,000
Senior housing	2,259,000		2,158,000		6,757,000		3,282,000
Skilled nursing facilities	673,000		—		1,473,000		—
Total real estate revenue	12,512,000		8,488,000		32,529,000		18,738,000
Resident Fees and Services
Senior housing — RIDEA	9,769,000		—		26,604,000		—
Total resident fees and services	9,769,000		—		26,604,000		—
Total revenues	$	22,281,000	$	8,488,000	$	59,133,000	$	18,738,000

For the three months ended September 30, 2018 and 2017, real estate revenue was $12,512,000 and $8,488,000, respectively, and primarily comprised of base rent of $9,138,000 and $6,295,000, respectively, and expense recoveries of $2,599,000 and $1,579,000, respectively. For the nine months ended September 30, 2018 and 2017, real estate revenue was

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$32,529,000 and $18,738,000, respectively, and primarily comprised of base rent of $23,915,000 and $13,894,000, respectively, and expense recoveries of $6,336,000 and $3,586,000, respectively. The increase in real estate revenue for the three and nine months ended September 30, 2018, compared to the corresponding prior year periods, is primarily due to the acquisition of six medical office buildings and 10 skilled nursing facilities subsequent to September 30, 2017.

For the three and nine months ended September 30, 2018, resident fees and services consisted of rental fees related to resident leases and extended health care fees. We did not own or operate any senior housing — RIDEA facilities prior to November 2017.

Rental Expenses and Property Operating Expenses

Rental expenses and rental expenses as a percentage of real estate revenue, as well as property operating expenses and property operating expenses as a percentage of resident fees and services, by reportable segment, consisted of the following for the periods then ended:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2018				2017				2018				2017
Rental Expenses
Medical office buildings	$	2,812,000	29.4	%	$	1,857,000	29.3	%	$	6,901,000	28.4	%	$	4,543,000	29.4	%
Senior housing	270,000		12.0	%	238,000		11.0	%	951,000		14.1	%	350,000		10.7	%
Skilled nursing facilities	105,000		15.6	%	—		—	%	238,000		16.2	%	—		—	%
Total rental expenses	$	3,187,000	25.5	%	$	2,095,000	24.7	%	$	8,090,000	24.9	%	$	4,893,000	26.1	%
Property Operating Expenses
Senior housing — RIDEA	$	7,987,000	81.8	%	$	—	—	%	$	21,986,000	82.6	%	$	—	—	%
Total property operating expenses	$	7,987,000	81.8	%	$	—	—	%	$	21,986,000	82.6	%	$	—	—	%

The increase in rental expenses for the three and nine months ended September 30, 2018, compared to the corresponding prior year periods, is commensurate with the increase in real estate revenue and growth of our portfolio of properties, as further indicated by the consistency in rental expenses as a percentage of real estate revenue over the periods shown in the table above.

Senior housing — RIDEA facilities typically have a higher percentage of direct operating expenses to revenue than medical office buildings, senior housing facilities and skilled nursing facilities due to the nature of RIDEA facilities where we conduct day-to-day operations.

General and Administrative

General and administrative expenses consisted of the following for the periods then ended:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Asset management fees — affiliates	$	1,271,000	$	700,000	$	3,299,000	$	1,505,000
Professional and legal fees	425,000		310,000		1,160,000		646,000
Transfer agent services	90,000		57,000		253,000		141,000
Bank charges	80,000		—		200,000		—
Restricted stock compensation	70,000		61,000		145,000		100,000
Board of directors fees	69,000		53,000		184,000		163,000
Directors’ and officers’ liability insurance	53,000		53,000		159,000		161,000
Bad debt expense, net	35,000		25,000		181,000		94,000
Other	12,000		37,000		222,000		186,000
Total	$	2,105,000	$	1,296,000	$	5,803,000	$	2,996,000

The increase in general and administrative expenses for the three and nine months ended September 30, 2018, compared to the corresponding prior year periods, is primarily due to the acquisition of additional properties from the fourth quarter of 2017 through the third quarter of 2018 and thus, incurring higher asset management fees to our advisor or its affiliates and

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higher professional and legal fees. In addition, we incurred higher transfer agent service fees for the three and nine months ended September 30, 2018, compared to the corresponding prior year periods, due to an increase in the number of investors in connection with the on-going equity raise pursuant to our offering throughout 2017 and 2018. Accordingly, we expect general and administrative expenses to continue to increase as we acquire additional properties and raise additional equity.

Acquisition Related Expenses

For the three and nine months ended September 30, 2018, acquisition related expenses were $98,000 and $254,000, respectively, and for the three and nine months ended September 30, 2017, acquisition related expenses were $121,000 and $334,000, respectively, and were related primarily to costs incurred in pursuit of properties that did not result in an acquisition.

Depreciation and Amortization

For the three and nine months ended September 30, 2018, depreciation and amortization was $9,007,000 and $24,053,000, respectively, and consisted primarily of depreciation on our operating properties of $4,384,000 and $11,581,000, respectively, and amortization on our identified intangible assets of $4,602,000 and $12,433,000, respectively.

For the three and nine months ended September 30, 2017, depreciation and amortization was $3,442,000 and $7,619,000, respectively, and consisted primarily of depreciation on our operating properties of $2,305,000 and $5,110,000, respectively, and amortization on our identified intangible assets of $1,134,000 and $2,506,000, respectively.

Interest Expense

Interest expense consisted of the following for the periods then ended. See Note 6, Mortgage Loans Payable, Net and Note 7, Line of Credit and Term Loan, to our accompanying condensed consolidated financial statements, for a further discussion.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018		2017
Interest expense:
Line of credit and term loan	$	1,155,000	$	531,000		$	2,612,000	$	1,059,000
Mortgage loans payable	200,000		146,000			517,000		267,000
Amortization of deferred financing costs:
Line of credit and term loan	221,000		90,000			658,000		267,000
Mortgage loans payable	20,000		15,000			53,000		23,000
Amortization of debt discount/premium	6,000		(2,000		)	6,000		(9,000		)
Total	$	1,602,000	$	780,000		$	3,846,000	$	1,607,000

Liquidity and Capital Resources

Our sources of funds will be the net proceeds of our offering, operating cash flows and borrowings. We believe that these resources will be sufficient to satisfy our cash requirements for the foreseeable future, and we do not anticipate a need to raise funds from other sources within the next 12 months.

We are dependent upon the net proceeds to be received from our offering to conduct our proposed activities. Our ability to raise funds through our offering is dependent on general economic conditions, general market conditions for REITs and our operating performance. We expect a relative increase in liquidity as additional subscriptions for shares of our common stock are received and a relative decrease in liquidity as net offering proceeds are expended in connection with the acquisition, management and operation of our investments in real estate and real estate-related investments.

Our principal demands for funds will be for acquisitions of real estate and real estate-related investments, payment of operating expenses and interest on our current and future indebtedness and payment of distributions to our stockholders. We estimate that we will require approximately $2,215,000 to pay interest on our outstanding indebtedness for the remainder of 2018, based on interest rates in effect and borrowings outstanding as of September 30, 2018, and that we will require $126,000 to pay principal on our outstanding indebtedness for the remainder of 2018. In addition, we require resources to make certain payments to our advisor and our dealer manager, which during our offering will include payments to our dealer manager and its affiliates for selling commissions, the dealer manager fee and the stockholder servicing fee. See Note 11, Equity — Offering Costs, and Note 12, Related Party Transactions, to our accompanying condensed consolidated financial statements, for a further discussion of our payments to our advisor and our dealer manager.

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Generally, cash needs for items other than acquisitions of real estate and real estate-related investments will be met from operations, borrowings and the net proceeds of our offering, including the proceeds raised through the DRIP. However, there may be a delay between the sale of our shares of common stock and our investments in real estate and real estate-related investments, which could result in a delay in the benefits to our stockholders, if any, of returns generated from our investments.

Our advisor evaluates potential investments and engages in negotiations with real estate sellers, developers, brokers, investment managers, lenders and others on our behalf. Investors should be aware that after a purchase contract for a property is executed that contains specific terms, the property will not be purchased until the successful completion of due diligence, which includes review of the title insurance commitment, market evaluation, review of leases, review of financing options and an environmental analysis. In some instances, the proposed acquisition will require the negotiation of final binding agreements, which may include financing documents. Until we invest the proceeds of our offering in real estate and real estate-related investments, we may invest in short-term, highly liquid or other authorized investments. Such short-term investments will not earn significant returns, and we cannot predict how long it will take to fully invest the proceeds in real estate and real estate related-investments. The number of properties we may acquire and other investments we will make will depend upon the number of shares of our common stock sold and the resulting amount of the net proceeds available for investment from our offering as well as our ability to arrange debt financing.

When we acquire a property, our advisor prepares a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan will also set forth the anticipated sources of the necessary capital, which may include a line of credit or other loan established with respect to the investment, other borrowings, operating cash generated by the investment, additional equity investments from us or joint venture partners or, when necessary, capital reserves. Any capital reserve would be established from the net proceeds of our offering, proceeds from sales of other investments, operating cash generated by other investments or other cash on hand. In some cases, a lender may require us to establish capital reserves for a particular investment. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs.

Based on the properties we own as of September 30, 2018, we estimate that our discretionary expenditures for capital and tenant improvements will be $743,000 for the remaining three months of 2018. As of September 30, 2018, we had $182,000 of restricted cash in reserve accounts for such capital expenditures. We cannot provide assurance, however, that we will not exceed these estimated expenditure and distribution levels or be able to obtain additional sources of financing on commercially favorable terms or at all.

Other Liquidity Needs

In the event that there is a shortfall in net cash available due to various factors, including, without limitation, the timing of distributions or the timing of the collection of receivables, we may seek to obtain capital to pay distributions by means of secured or unsecured debt financing through one or more third parties, or our advisor or its affiliates. There are currently no limits or restrictions on the use of proceeds from our advisor or its affiliates which would prohibit us from making the proceeds available for distribution. We may also pay distributions from cash from capital transactions, including, without limitation, the sale of one or more of our properties.

If we experience lower occupancy levels, reduced rental rates, reduced revenues as a result of asset sales, or increased capital expenditures and leasing costs compared to historical levels due to competitive market conditions for new and renewed leases, the effect would be a reduction of net cash provided by operating activities. If such a reduction of net cash provided by operating activities is realized, we may have a cash flow deficit in subsequent periods. Our estimate of net cash available is based on various assumptions which are difficult to predict, including the levels of leasing activity and related leasing costs. Any changes in these assumptions could impact our financial results and our ability to fund working capital and unanticipated cash needs.

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Cash Flows

The following table sets forth changes in cash flows:

	Nine Months Ended September 30,
	2018			2017
Cash, cash equivalents and restricted cash — beginning of period	$	7,103,000		$	2,237,000
Net cash provided by operating activities	15,677,000			8,849,000
Net cash used in investing activities	(257,761,000		)	(222,102,000		)
Net cash provided by financing activities	266,004,000			215,429,000
Cash, cash equivalents and restricted cash — end of period	$	31,023,000		$	4,413,000

The following summary discussion of our changes in our cash flows is based on our accompanying condensed consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.

Operating Activities

For the nine months ended September 30, 2018 and 2017, cash flows provided by operating activities primarily related to the cash flows provided by our property operations, offset by payments of general and administrative expenses. See “Results of Operations” above for a further discussion. We anticipate cash flows from operating activities to increase in 2018 as we acquire additional real estate investments.

Investing Activities

For the nine months ended September 30, 2018, cash flows used in investing activities related primarily to our 10 property acquisitions in the amount of $248,423,000 and the payment of $5,166,000 for capital expenditures and $3,750,000 for real estate deposits. For the nine months ended September 30, 2017, cash flows used in investing activities related primarily to our eight property acquisitions in the amount of $215,738,000. Cash flows used in investing activities are heavily dependent upon the investment of our net offering proceeds in real estate investments. We anticipate cash flows used in investing activities to increase as we acquire additional properties and real estate-related investments.

Financing Activities

For the nine months ended September 30, 2018, cash flows provided by financing activities related primarily to funds raised from investors in our offering in the amount of $176,417,000 as well as net borrowings on our line of credit and term loan of $115,900,000, partially offset by the payment of offering costs of $14,030,000 in connection with our offering and distributions to our common stockholders of $9,833,000. For the nine months ended September 30, 2017, cash flows provided by financing activities related primarily to funds raised from investors in our offering in the amount of $241,647,000, partially offset by the payment of offering costs of $13,673,000 in connection with our offering, net payments on the Line of Credit of $7,900,000 and distributions to our common stockholders of $4,006,000. We anticipate cash flows from financing activities to increase in the future as we raise additional funds from investors and incur debt to acquire properties.

Distributions

Our board of directors authorized, on a quarterly basis, a daily distribution to our stockholders of record as of the close of business on each day of the period commencing on May 1, 2016 and ending on December 31, 2018. The daily distributions were or will be calculated based on 365 days in the calendar year and are equal to $0.001643836 per share of our Class T and Class I common stock, which is equal to an annualized distribution of $0.60 per share. These distributions were or will be aggregated and paid in cash or shares of our common stock pursuant to our DRIP monthly in arrears, only from legally available funds.

The amount of distributions paid to our stockholders is determined quarterly by our board of directors and is dependent on a number of factors, including funds available for payment of distributions, our financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our qualification as a REIT under the Code. We have not established any limit on the amount of offering proceeds that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (i) cause us to be unable to pay our debts as they become due in the usual course of business; or (ii) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences.

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The distributions paid for the nine months ended September 30, 2018 and 2017, along with the amount of distributions reinvested pursuant to the DRIP and the sources of distributions as compared to cash flows from operations were as follows:

	Nine Months Ended September 30,
	2018				2017
Distributions paid in cash	$	9,833,000			$	4,006,000
Distributions reinvested	12,435,000				5,492,000
	$	22,268,000			$	9,498,000
Sources of distributions:
Cash flows from operations	$	15,677,000	70.4	%	$	8,849,000	93.2	%
Offering proceeds	6,591,000		29.6		649,000		6.8
	$	22,268,000	100	%	$	9,498,000	100	%

Under GAAP, certain acquisition related expenses, such as expenses incurred in connection with property acquisitions accounted for as business combinations, are expensed, and therefore, subtracted from cash flows from operations. However, these expenses may be paid from offering proceeds or debt.

Our distributions of amounts in excess of our current and accumulated earnings and profits have resulted in a return of capital to our stockholders, and all or any portion of a distribution to our stockholders may be paid from offering proceeds. The payment of distributions from our offering proceeds could reduce the amount of capital we ultimately invest in assets and negatively impact the amount of income available for future distributions.

As of September 30, 2018, we had an amount payable of $8,341,000 to our advisor or its affiliates primarily for the 2.25% Contingent Advisor Payment portion of the total acquisition fee payable to our advisor or its affiliates, which will be paid from cash flows from operations in the future as it becomes due and payable by us in the ordinary course of business consistent with our past practice. See Note 12, Related Party Transactions — Acquisition and Development Stage — Acquisition Fee, to our accompanying condensed consolidated financial statements, for a further discussion.

As of September 30, 2018, no amounts due to our advisor or its affiliates had been deferred, waived or forgiven other than $80,000 in asset management fees waived by our advisor in 2016, which was equal to the amount of distributions payable from May 1, 2016 through June 27, 2016, the day prior to our first property acquisition. Other than such waiver of asset management fees by our advisor to provide us with additional funds to pay initial distributions to our stockholders through June 27, 2016, our advisor and its affiliates, including our co-sponsors, have no obligation to defer or forgive fees owed by us to our advisor or its affiliates or to advance any funds to us. In the future, if our advisor or its affiliates do not defer or continue to defer, waive or forgive amounts due to them, this would negatively affect our cash flows from operations, which could result in us paying distributions, or a portion thereof, using borrowed funds. As a result, the amount of proceeds available for investment and operations would be reduced, or we may incur additional interest expense as a result of borrowed funds.

The distributions paid for the nine months ended September 30, 2018 and 2017, along with the amount of distributions reinvested pursuant to the DRIP and the sources of our distributions as compared to funds from operations attributable to controlling interest, or FFO, were as follows:

	Nine Months Ended September 30,
	2018				2017
Distributions paid in cash	$	9,833,000			$	4,006,000
Distributions reinvested	12,435,000				5,492,000
	$	22,268,000			$	9,498,000
Sources of distributions:
FFO attributable to controlling interest	$	19,132,000	85.9	%	$	8,909,000	93.8	%
Offering proceeds	3,136,000		14.1		589,000		6.2
	$	22,268,000	100	%	$	9,498,000	100	%

The payment of distributions from sources other than FFO may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds. For a further discussion of FFO, a non-GAAP financial measure, including a reconciliation of our GAAP net income (loss) to FFO, see Funds from Operations and Modified Funds from Operations below.

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Financing

We intend to continue to finance a portion of the purchase price of our investments in real estate and real estate-related investments by borrowing funds. We anticipate that, after an initial phase of our operations (prior to the investment of all of the net proceeds of our offering) when we may employ greater amounts of leverage to enable us to acquire properties more quickly and therefore generate distributions for our stockholders sooner, our overall leverage will not exceed 50.0% of the combined market value of all of our properties and other real estate-related investments, as determined at the end of each calendar year beginning with our first full year of operations. For these purposes, the fair market value of each asset will be equal to the contract purchase price paid for the asset or, if the asset was appraised subsequent to the date of purchase, then the fair market value will be equal to the value reported in the most recent independent appraisal of the asset. Our policies do not limit the amount we may borrow with respect to any individual investment. As of September 30, 2018, our aggregate borrowings were 28.4% of the combined market value of all of our real estate investments.

Under our charter, we have a limitation on borrowing that precludes us from borrowing in excess of 300% of our net assets without the approval of a majority of our independent directors. Net assets for purposes of this calculation are defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation, amortization, bad debt and other non-cash reserves, less total liabilities. Generally, the preceding calculation is expected to approximate 75.0% of the aggregate cost of our real estate and real estate-related investments before depreciation, amortization, bad debt and other similar non-cash reserves. In addition, we may incur mortgage debt and pledge some or all of our real properties as security for that debt to obtain funds to acquire additional real estate or for working capital. We may also borrow funds to satisfy the REIT tax qualification requirement that we distribute at least 90.0% of our annual taxable income, excluding net capital gains, to our stockholders. Furthermore, we may borrow if we otherwise deem it necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes. As of November 13, 2018 and September 30, 2018, our leverage did not exceed 300% of the value of our net assets.

Mortgage Loans Payable, Net

For a discussion of our mortgage loans payable, net, see Note 6, Mortgage Loans Payable, Net, to our accompanying condensed consolidated financial statements.

Line of Credit and Term Loan

For a discussion of our line of credit and term loan, see Note 7, Line of Credit and Term Loan, to our accompanying condensed consolidated financial statements.

REIT Requirements

In order to maintain our qualification as a REIT for federal income tax purposes, we are required to make distributions to our stockholders of at least 90.0% of our annual taxable income, excluding net capital gains. In the event that there is a shortfall in net cash available due to factors including, without limitation, the timing of such distributions or the timing of the collection of receivables, we may seek to obtain capital to pay distributions by means of secured debt financing through one or more unaffiliated third parties. We may also pay distributions from cash from capital transactions including, without limitation, the sale of one or more of our properties or from the proceeds of our offering.

Commitments and Contingencies

For a discussion of our commitments and contingencies, see Note 9, Commitments and Contingencies, to our accompanying condensed consolidated financial statements.

Debt Service Requirements

Typically, a significant liquidity need is the payment of principal and interest on our outstanding indebtedness. As of September 30, 2018, we had $17,382,000 ($16,988,000, including discount/premium and deferred financing costs, net) of fixed-rate mortgage loans payable outstanding secured by our properties. As of September 30, 2018, we had $200,000,000 outstanding, and $150,000,000 remained available under our line of credit and term loan. See Note 6, Mortgage Loans Payable, Net, and Note 7, Line of Credit and Term Loan, to our accompanying condensed consolidated financial statements.

We are required by the terms of certain loan documents to meet certain covenants, such as leverage ratios, net worth ratios, debt service coverage ratios, fixed charge coverage ratios and reporting requirements. As of September 30, 2018, we were in compliance with all such covenants and requirements on our mortgage loans payable and our line of credit and term loan. As of September 30, 2018, the weighted average effective interest rate on our outstanding debt was 4.01% per annum.

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Contractual Obligations

The following table provides information with respect to: (i) the maturity and scheduled principal repayment of our secured mortgage loans payable and our line of credit and term loan; (ii) interest payments on our mortgage loans payable and our line of credit and term loan; and (iii) ground and other lease obligations as of September 30, 2018:

	Payments Due by Period
	2018		2019-2020		2021-2022		Thereafter		Total
Principal payments — fixed-rate debt	$	126,000	$	8,669,000	$	889,000	$	7,698,000	$	17,382,000
Interest payments — fixed-rate debt	197,000		1,278,000		694,000		810,000		2,979,000
Principal payments — variable-rate debt	—		200,000,000		—		—		200,000,000
Interest payments — variable-rate debt (based on rates in effect as of September 30, 2018)	2,018,000		5,390,000		—		—		7,408,000
Ground and other lease obligations	24,000		496,000		496,000		10,697,000		11,713,000
Total	$	2,365,000	$	215,833,000	$	2,079,000	$	19,205,000	$	239,482,000

Off-Balance Sheet Arrangements

As of September 30, 2018, we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

Inflation

During the nine months ended September 30, 2018 and 2017, inflation has not significantly affected our operations because of the moderate inflation rate; however, we expect to be exposed to inflation risk as income from future long-term leases will be the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that will protect us from the impact of inflation. These provisions include negotiated rental increases, reimbursement billings for operating expense pass-through charges, and real estate tax and insurance reimbursements on a per square foot allowance. However, due to the long-term nature of the anticipated leases, among other factors, the leases may not re-set frequently enough to cover inflation.

Related Party Transactions

For a discussion of related party transactions, see Note 12, Related Party Transactions, to our accompanying condensed consolidated financial statements.

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, a non-GAAP measure, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. The use of funds from operations is recommended by the REIT industry as a supplemental performance measure, and our management uses FFO to evaluate our performance over time. FFO is not equivalent to our net income (loss) as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on funds from operations approved by the Board of Governors of NAREIT, as revised in February 2004, or the White Paper. The White Paper defines funds from operations as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and asset impairment writedowns, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, which is the case if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or as requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. In addition, we believe it is appropriate to exclude impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions, which can change over time. Testing

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for an impairment of an asset is a continuous process and is analyzed on a quarterly basis. If certain impairment indications exist in an asset, and if the asset’s carrying, or book value, exceeds the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property and any other ancillary cash flows at a property or group level under GAAP) from such asset, an impairment charge would be recognized. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that due to the fact that impairments are based on estimated future undiscounted cash flows and that we intend to have a relatively limited term of our operations, it could be difficult to recover any impairment charges through the eventual sale of the property.

Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization and impairments, provides a further understanding of our performance to investors and to our management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which may not be immediately apparent from net income (loss).

However, FFO and modified funds from operations attributable to controlling interest, or MFFO, as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

Changes in the accounting and reporting rules under GAAP that were put into effect and other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses, as items that are expensed as operating expenses under GAAP. We believe these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start up entities may also experience significant acquisition activity during their initial years, we believe that publicly registered, non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after the acquisition activity ceases. We will use the proceeds raised in our offering to acquire properties, and we intend to begin the process of achieving a liquidity event (i.e., listing of our shares of common stock on a national securities exchange, a merger or sale, the sale of all or substantially all of our assets, or another similar transaction) within five years after the completion of our offering stage, which is generally comparable to other publicly registered, non-listed REITs. Thus, we do not intend to continuously purchase assets and intend to have a limited life. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Institute for Portfolio Alternatives, or the IPA, an industry trade group, has standardized a measure known as modified funds from operations, which the IPA has recommended as a supplemental performance measure for publicly registered, non-listed REITs, and which we believe to be another appropriate supplemental performance measure to reflect the operating performance of a publicly registered, non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income (loss) as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes expensed acquisition fees and expenses that affect our operations only in periods in which properties are acquired and that we consider more reflective of investing activities, as well as other non-operating items included in FFO, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring our properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our offering stage has been completed and our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the publicly registered, non-listed REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance after our offering stage and acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that MFFO should only be used to assess the sustainability of our operating performance after our offering stage has been completed and properties have been acquired, as it excludes expensed acquisition fees and expenses that have a negative effect on our operating performance during the periods in which properties are acquired.

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We define MFFO, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines modified funds from operations as funds from operations further adjusted for the following items included in the determination of GAAP net income (loss): acquisition fees and expenses; amounts relating to deferred rent and amortization of above- and below-market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to closer to an expected to be received cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income (loss); gains or losses included in net income (loss) from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan; unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting; and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect modified funds from operations on the same basis. The accretion of discounts and amortization of premiums on debt investments, unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income (loss) in calculating cash flows from operations and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. We are responsible for managing interest rate, hedge and foreign exchange risk, and we do not rely on another party to manage such risk. In as much as interest rate hedges will not be a fundamental part of our operations, we believe it is appropriate to exclude such gains and losses in calculating MFFO, as such gains and losses are based on market fluctuations and may not be directly related or attributable to our operations.

Our MFFO calculation complies with the IPA’s Practice Guideline described above. In calculating MFFO, we exclude acquisition related expenses, amortization of above- and below-market leases, change in deferred rent and the adjustments of such items related to redeemable noncontrolling interests. The other adjustments included in the IPA’s Practice Guideline are not applicable to us for the three and nine months ended September 30, 2018 and 2017. Acquisition fees and expenses are paid in cash by us, and we have not set aside or put into escrow any specific amount of proceeds from our offering to be used to fund acquisition fees and expenses. The purchase of real estate and real estate-related investments, and the corresponding expenses associated with that process, is a key operational feature of our business plan in order to generate operating revenues and cash flows to make distributions to our stockholders. However, we do not intend to fund acquisition fees and expenses in the future from operating revenues and cash flows, nor from the sale of properties and subsequent redeployment of capital and concurrent incurring of acquisition fees and expenses. Acquisition fees and expenses include payments to our advisor or its affiliates and third parties. Such fees and expenses are not reimbursed by our advisor or its affiliates and third parties, and therefore if there is no further cash on hand from the proceeds from the sale of shares of our common stock to fund future acquisition fees and expenses, such fees and expenses will need to be paid from either additional debt, operational earnings or cash flows, net proceeds from the sale of properties or from ancillary cash flows. Certain acquisition related expenses under GAAP, such as expenses incurred in connection with property acquisitions accounted for as business combinations, are considered operating expenses and as expenses included in the determination of net income (loss), which is a performance measure under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property. In the future, we may pay acquisition fees or reimburse acquisition expenses due to our advisor and its affiliates, or a portion thereof, with net proceeds from borrowed funds, operational earnings or cash flows, net proceeds from the sale of properties or ancillary cash flows. As a result, the amount of proceeds from borrowings available for investment and operations would be reduced, or we may incur additional interest expense as a result of borrowed funds. Nevertheless, our advisor or its affiliates will not accrue any claim on our assets if acquisition fees and expenses are not paid from the proceeds of our offering.

Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss) in determining cash flows from operations. In addition, we view fair value adjustments of derivatives and gains and losses from dispositions of assets as items which are unrealized and may not ultimately be realized or as items which are not reflective of on-going operations and are therefore typically adjusted for when assessing operating performance.

Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other publicly registered, non-listed REITs which intend to have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to publicly registered, non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence, that the use of such measures may be useful to investors. For example, acquisition fees and expenses are intended to be funded from the proceeds of our offering and other financing sources and not from operations. By excluding expensed acquisition fees and expenses, the use of MFFO provides information consistent with management’s analysis of the operating

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performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such charges that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate funds from operations and modified funds from operations the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) as an indication of our performance, as an alternative to cash flows from operations, which is an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other measurements as an indication of our performance. MFFO has limitations as a performance measure in offerings such as ours where the price of a share of common stock is a stated value. MFFO may be useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete. FFO and MFFO are not useful measures in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO and MFFO.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the publicly registered, non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.

The following is a reconciliation of net (loss) income, which is the most directly comparable GAAP financial measure, to FFO and MFFO for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net (loss) income	$	(1,703,000	)	$	754,000		$	(4,897,000	)	$	1,290,000
Add:
Depreciation and amortization — consolidated properties	9,007,000			3,442,000			24,053,000			7,619,000
Net loss attributable to redeemable noncontrolling interests	72,000			—			197,000			—
Less:
Depreciation and amortization related to redeemable noncontrolling interests	(82,000		)	—			(221,000		)	—
FFO attributable to controlling interest	$	7,294,000		$	4,196,000		$	19,132,000		$	8,909,000
Acquisition related expenses(1)	$	98,000		$	121,000		$	254,000		$	334,000
Amortization of above- and below-market leases(2)	(38,000		)	(30,000		)	(164,000		)	(99,000		)
Change in deferred rent(3)	(709,000		)	(569,000		)	(2,045,000		)	(1,124,000		)
Adjustments for redeemable noncontrolling interests(4)	—			—			—			—
MFFO attributable to controlling interest	$	6,645,000		$	3,718,000		$	17,177,000		$	8,020,000
Weighted average Class T and Class I common shares outstanding — basic and diluted	57,769,964			32,593,321			51,441,064			23,827,175
Net (loss) income per Class T and Class I common share — basic and diluted	$	(0.03	)	$	0.02		$	(0.10	)	$	0.05
FFO attributable to controlling interest per Class T and Class I common share — basic and diluted	$	0.13		$	0.13		$	0.37		$	0.37
MFFO attributable to controlling interest per Class T and Class I common share — basic and diluted	$	0.12		$	0.11		$	0.33		$	0.34

___________

(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

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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. Certain acquisition related expenses under GAAP, such as expenses incurred in connection with property acquisitions accounted for as business combinations, are considered operating expenses and as expenses included in the determination of net income (loss), which is a performance measure under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property.

(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, rental revenue or rental expense is recognized on a straight-line basis over the terms of the related lease (including rent holidays). This may result in income or expense recognition that is significantly different than the underlying contract terms. By adjusting for the change in deferred rent, 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.

(4) Includes all adjustments to eliminate the redeemable noncontrolling interests’ share of the adjustments described in notes (1) – (3) above to convert our FFO to MFFO.

Net Operating Income

Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, acquisition related expenses, depreciation and amortization, interest expense and interest income. Acquisition fees and expenses are paid in cash by us, and we have not set aside or put into escrow any specific amount of proceeds from our offering to be used to fund acquisition fees and expenses. The purchase of real estate and real estate-related investments, and the corresponding expenses associated with that process, is a key operational feature of our business plan in order to generate operating revenues and cash flows to make distributions to our stockholders. However, we do not intend to fund acquisition fees and expenses in the future from operating revenues and cash flows, nor from the sale of properties and subsequent redeployment of capital and concurrent incurring of acquisition fees and expenses. Acquisition fees and expenses include payments to our advisor or its affiliates and third parties. Such fees and expenses are not reimbursed by our advisor or its affiliates and third parties, and therefore, if there is no further cash on hand from the proceeds from the sale of shares of our common stock to fund future acquisition fees and expenses, such fees and expenses will need to be paid from either additional debt, operational earnings or cash flows, net proceeds from the sale of properties or from ancillary cash flows. As a result, the amount of proceeds available for investment, operations and non-operating expenses would be reduced, or we may incur additional interest expense as a result of borrowed funds. Nevertheless, our advisor or its affiliates will not accrue any claim on our assets if acquisition fees and expenses are not paid from the proceeds of our offering. Certain acquisition related expenses under GAAP, such as expenses incurred in connection with property acquisitions accounted for as business combinations, are considered operating expenses and as expenses included in the determination of net income (loss), which is a performance measure under GAAP. All paid and accrued acquisition fees and expenses have negative effects on returns to investors, the potential for future distributions and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property.

NOI is not equivalent to our net income (loss) as determined under GAAP and may not be a useful measure in measuring operational income or cash flows. Furthermore, NOI is not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) or in its applicability in evaluating our operating performance. Investors are also cautioned that NOI should only be used to assess our operational performance in periods in which we have not incurred or accrued any acquisition related expenses.

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We believe that NOI is an appropriate supplemental performance measure to reflect the operating performance of our operating assets because NOI excludes certain items that are not associated with the management of the properties. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.

To facilitate understanding of this financial measure, the following is a reconciliation of net (loss) income, which is the most directly comparable GAAP financial measure, to NOI for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Net (loss) income	$	(1,703,000	)	$	754,000	$	(4,897,000	)	$	1,290,000
General and administrative	2,105,000			1,296,000		5,803,000			2,996,000
Acquisition related expenses	98,000			121,000		254,000			334,000
Depreciation and amortization	9,007,000			3,442,000		24,053,000			7,619,000
Interest expense	1,602,000			780,000		3,846,000			1,607,000
Interest income	(6,000		)	—		(6,000		)	(1,000		)
Net operating income	$	11,103,000		$	6,393,000	$	29,053,000		$	13,845,000

Subsequent Events

For a discussion of our subsequent events, see Note 18, Subsequent Events, to our accompanying condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk. There were no material changes in our market risk exposures, or in the methods we use to manage market risk, from those that were provided for in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018.

Interest Rate Risk

We are exposed to the effects of interest rate changes primarily as a result of long-term debt used to acquire properties and make loans and other permitted investments. Our interest rate risk is monitored using a variety of techniques. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk. To achieve our objectives, we may borrow or lend at fixed or variable rates. We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. We will not enter into derivatives or interest rate transactions for speculative purposes.

As of September 30, 2018, the table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes.

	Expected Maturity Date
	2018			2019			2020			2021			2022			Thereafter			Total			Fair Value
Fixed-rate debt — principal payments	$	126,000		$	518,000		$	8,151,000		$	434,000		$	455,000		$	7,698,000		$	17,382,000		$	16,971,000
Weighted average interest rate on maturing fixed-rate debt	4.81		%	4.81		%	4.77		%	4.83		%	4.84		%	4.17		%	4.51		%	—
Variable-rate debt — principal payments	$	—		$	200,000,000		$	—		$	—		$	—		$	—		$	200,000,000		$	199,947,000
Weighted average interest rate on maturing variable-rate debt (based on rates in effect as of September 30, 2018)	—		%	3.97		%	—		%	—		%	—		%	—		%	3.97		%	—

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Mortgage Loans Payable, Net and Line of Credit and Term Loan

Mortgage loans payable were $17,382,000 ($16,988,000, including discount/premium and deferred financing costs, net) as of September 30, 2018. As of September 30, 2018, we had three fixed-rate mortgage loans with interest rates ranging from 3.75% to 5.25% per annum. In addition, as of September 30, 2018, we had $200,000,000 outstanding under our line of credit and term loan at a weighted average interest rate of 3.97% per annum.

As of September 30, 2018, the weighted average effective interest rate on our outstanding debt was 4.01% per annum. An increase in the variable interest rate on our variable-rate line of credit and term loan constitutes a market risk. As of September 30, 2018, a 0.50% increase in the market rates of interest would have increased our overall annualized interest expense on our variable-rate line of credit and term loan by $1,014,000, or 24.30% of total annualized interest expense on our mortgage loans payable and our line of credit and term loan. See Note 6, Mortgage Loans Payable, Net, and Note 7, Line of Credit and Term Loan, to our accompanying condensed consolidated financial statements, for a further discussion.

Other Market Risk

In addition to changes in interest rates, the value of our future investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt if necessary.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily were required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of September 30, 2018 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures, as of September 30, 2018, were effective at the reasonable assurance level.

(b) Changes in internal control over financial reporting. There were no changes in internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

There were no material changes from the risk factors previously disclosed in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018, except as noted below.

We have not had sufficient cash available from operations to pay distributions, and therefore, we have paid a portion of distributions from the net proceeds of our offering, and in the future, may pay distributions from borrowings in anticipation of future cash flows or from other sources. Any such distributions may reduce the amount of capital we ultimately invest in assets, may negatively impact the value of our stockholders’ investment and may cause subsequent investors to experience dilution.

Distributions payable to our stockholders may include a return of capital, rather than a return on capital, and it is likely that we will use net offering proceeds to fund a majority of our initial distributions. We have not established any limit on the amount of net proceeds from our offering that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (i) cause us to be unable to pay our debts as they become due in the usual course of business; or (ii) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences. The actual amount and timing of distributions will be determined by our board of directors in its sole discretion and typically will depend on the amount of funds available for distribution, which will depend on items such as our financial condition, current and projected capital expenditure requirements, tax considerations and annual distribution requirements needed to maintain our qualification as a REIT. As a result, our distribution rate and payment frequency vary from time to time.

We have used the net proceeds from our offering and our advisor has waived certain fees payable to it as discussed below, and in the future, may use the net proceeds from our offering, borrowed funds, or other sources, to pay cash distributions to our stockholders in order to maintain our qualification as a REIT, which may reduce the amount of proceeds available for investment and operations, cause us to incur additional interest expense as a result of borrowed funds or cause subsequent investors to experience dilution. Further, if the aggregate amount of cash distributed in any given year exceeds the amount of our current and accumulated earnings and profits, the excess amount will be deemed a return of capital.

Our board of directors authorized, on a quarterly basis, a daily distribution to our stockholders of record as of the close of business on each day of the period commencing on May 1, 2016 and ending on December 31, 2018. The daily distributions were or will be calculated based on 365 days in the calendar year and are equal to $0.001643836 per share of our Class T and Class I common stock, which is equal to an annualized distribution of $0.60 per share. These distributions were or will be aggregated and paid in cash or shares of our common stock pursuant to the DRIP monthly in arrears, only from legally available funds.

The amount of distributions paid to our stockholders is determined quarterly by our board of directors and is dependent on a number of factors, including funds available for payment of distributions, our financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our qualification as a REIT under the Code. We have not established any limit on the amount of net offering proceeds that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (i) cause us to be unable to pay our debts as they become due in the usual course of business; or (ii) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences.

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The distributions paid for the nine months ended September 30, 2018 and 2017, along with the amount of distributions reinvested pursuant to the DRIP and the sources of distributions as compared to cash flows from operations were as follows:

	Nine Months Ended September 30,
	2018				2017
Distributions paid in cash	$	9,833,000			$	4,006,000
Distributions reinvested	12,435,000				5,492,000
	$	22,268,000			$	9,498,000
Sources of distributions:
Cash flows from operations	$	15,677,000	70.4	%	$	8,849,000	93.2	%
Offering proceeds	6,591,000		29.6		649,000		6.8
	$	22,268,000	100	%	$	9,498,000	100	%

Under GAAP, certain acquisition related expenses, such as expenses incurred in connection with property acquisitions accounted for as business combinations, are expensed, and therefore, subtracted from cash flows from operations. However, these expenses may be paid from offering proceeds or debt.

Our distributions of amounts in excess of our current and accumulated earnings and profits have resulted in a return of capital to our stockholders, and all or any portion of a distribution to our stockholders may be paid from net offering proceeds. The payment of distributions from our net offering proceeds could reduce the amount of capital we ultimately invest in assets and negatively impact the amount of income available for future distributions.

As of September 30, 2018, we had an amount payable of $8,341,000 to our advisor or its affiliates primarily for the 2.25% Contingent Advisor Payment portion of the total acquisition fee payable to our advisor or its affiliates, which will be paid from cash flows from operations in the future as it becomes due and payable by us in the ordinary course of business consistent with our past practice.

As of September 30, 2018, no amounts due to our advisor or its affiliates had been deferred, waived or forgiven other than $80,000 in asset management fees waived by our advisor in 2016, which was equal to the amount of distributions payable from May 1, 2016 through June 27, 2016, the day prior to our first property acquisition. Other than the waiver of such asset management fees by our advisor to provide us with additional funds to pay initial distributions to our stockholders through June 27, 2016, our advisor and its affiliates, including our co-sponsors, have no obligation to defer or forgive fees owed by us to our advisor or its affiliates or to advance any funds to us. In the future, if our advisor or its affiliates do not defer or continue to defer, waive or forgive amounts due to them, this would negatively affect our cash flows from operations, which could result in us paying distributions, or a portion thereof, using borrowed funds. As a result, the amount of proceeds available for investment and operations would be reduced, or we may incur additional interest expense as a result of borrowed funds.

The distributions paid for the nine months ended September 30, 2018 and 2017, along with the amount of distributions reinvested pursuant to the DRIP and the sources of our distributions as compared to FFO were as follows:

	Nine Months Ended September 30,
	2018				2017
Distributions paid in cash	$	9,833,000			$	4,006,000
Distributions reinvested	12,435,000				5,492,000
	$	22,268,000			$	9,498,000
Sources of distributions:
FFO attributable to controlling interest	$	19,132,000	85.9	%	$	8,909,000	93.8	%
Offering proceeds	3,136,000		14.1		589,000		6.2
	$	22,268,000	100	%	$	9,498,000	100	%

The payment of distributions from sources other than FFO may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds. For a further discussion of FFO, a non-GAAP financial measure, including a reconciliation of our GAAP net income (loss) to FFO, see Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds from Operations and Modified Funds from Operations.

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The estimated per share NAV may not be an accurate reflection of the fair value of our assets and liabilities and likely will not represent the amount of net proceeds that would result if we were liquidated or dissolved or completed a merger or other sale of our company.

On April 6, 2018, our board of directors, at the recommendation of the audit committee, which is comprised solely of independent directors, unanimously approved and established an estimated per share NAV of our common stock of $9.65. We are providing this estimated per share NAV to assist broker-dealers in connection with their obligations under National Association of Securities Dealers Conduct Rule 2340, as required by FINRA with respect to customer account statements. The valuation was performed in accordance with the methodology provided in Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the IPA in April 2013, in addition to guidance from the SEC.

The estimated per share NAV was determined after consultation with our advisor and an independent third-party valuation firm, the engagement of which was approved by the audit committee. FINRA rules provide no guidance on the methodology an issuer must use to determine its estimated per share NAV. As with any valuation methodology, our independent valuation firm’s methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated per share NAV, and these differences could be significant.

The estimated per share NAV is not audited or reviewed by our independent registered public accounting firm and does not represent the fair value of our assets or liabilities according to GAAP. Accordingly, with respect to the estimated per share NAV, we can give no assurance that:

• a stockholder would be able to resell his or her shares at our estimated per share NAV;

• a stockholder would ultimately realize distributions per share equal to our estimated per share NAV upon liquidation of our assets and settlement of our liabilities or a sale of the company;

• our shares of common stock would trade at our 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 board of directors to assist in its determination of the estimated per share NAV, would agree with our estimated per share NAV; or

• the methodology used to estimate our per share NAV would be acceptable to FINRA or comply with the Employee Retirement Income Security Act of 1974, or ERISA, reporting requirements.

Further, the estimated per share NAV is based on the estimated value of our assets less the estimated value of our liabilities, divided by the number of shares outstanding on a fully diluted basis, calculated as of December 31, 2017. The value of our shares may fluctuate over time in response to developments related to individual assets in the portfolio and the management of those assets and in response to the real estate and finance markets. Going forward, we intend to engage an independent valuation firm to assist us with publishing an updated estimated per share NAV on at least an annual basis.

For a full description of the methodologies used to value our assets and liabilities in connection with the calculation of the estimated per share NAV, see our Current Report on Form 8-K filed with the SEC on April 9, 2018.

It may be difficult to accurately reflect material events that may impact our estimated per share NAV between valuations and accordingly, we may be selling and repurchasing shares at too high or too low a price.

Our independent valuation firm will calculate estimates of the market value of our real estate investments, and our board of directors will determine the net value of our real estate investments and liabilities taking into consideration such estimate provided by the independent valuation firm. Our board of directors is ultimately responsible for determining the estimated per share NAV. Since our board of directors will determine our estimated per share NAV at least annually, there may be changes in the value of our assets that are not fully reflected in the most recent estimated per share NAV. As a result, the published estimated per share NAV may not fully reflect changes in value that may have occurred since the prior valuation. Furthermore, our advisor will monitor our portfolio, but it may be difficult to reflect changing market conditions or material events that may impact the value of our portfolio between valuations, or to obtain timely or complete information regarding any such events. Therefore, the estimated per share NAV published before the announcement of an extraordinary event may differ significantly from our actual per share NAV until such time as sufficient information is available and analyzed, the financial impact is fully evaluated, and the appropriate adjustment is made to our estimated per share NAV, as determined by our board of directors. Any resulting disparity may be to the detriment of a purchaser of our shares or a stockholder selling shares pursuant to our share repurchase plan.

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A high concentration of our properties in a particular geographic area would magnify the effects of downturns in that geographic area.

To the extent that we have a concentration of properties in any particular geographic area, any adverse situation that disproportionately effects that geographic area would have a magnified adverse effect on our portfolio. As of November 13, 2018, our properties located in Missouri and Florida accounted for approximately 15.8% and 13.3%, respectively, of our total property portfolio’s annualized base rent or annualized net operating income. Accordingly, there is a geographic concentration of risk subject to fluctuations in each state’s economy.

A significant portion of our annual base rent may be concentrated in a small number of tenants. Therefore, non-renewals, terminations or lease defaults by any of these significant tenants could reduce our net income and have a negative effect on our ability to pay distributions to our stockholders.

As of November 13, 2018, rental payments by our tenant, RC Tier Properties, LLC, accounted for approximately 14.2% of our total property portfolio’s annualized base rent or annualized net operating income. The success of our investments materially depends upon the financial stability of the tenants leasing the properties we own. Therefore, a non-renewal after the expiration of a lease term, termination, default or other failure to meet rental obligations by significant tenants, such as RC Tier Properties, LLC would significantly lower our net income. These events could cause us to reduce the amount of distributions to our stockholders.

Reductions in reimbursement from third party payors, including Medicare and Medicaid, could adversely affect the profitability of our tenants and hinder their ability to make rental payments to us, and comprehensive healthcare reform legislation could materially adversely affect our business, financial condition and results of operations and our ability to pay distributions to our stockholders.

Sources of revenue for our tenants may include the federal Medicare program, state Medicaid programs, private insurance carriers and health maintenance organizations, among others. Efforts by such payors to reduce healthcare costs will likely continue, which may result in reductions or slower growth in reimbursement for certain services provided by some of our tenants. In addition, the healthcare billing rules and regulations are complex, and the failure of any of our tenants to comply with various laws and regulations could jeopardize their ability to continue participating in Medicare, Medicaid and other government sponsored payment programs. Moreover, the state and federal governmental healthcare programs are subject to reductions by state and federal legislative actions. The American Taxpayer Relief Act of 2012 prevented the reduction in physician reimbursement of Medicare from being implemented in 2013. The Protecting Access to Medicare Act of 2014 prevented the reduction of 24.4% in the physician fee schedule by replacing the scheduled reduction with a 0.5% increase to the physician fee schedule through December 31, 2014, and no increase from January 1, 2015 through March 31, 2015. The potential 21.0% cut in reimbursement that was to be effective April 1, 2015 was removed by the Medicare Access & CHIP Reauthorization Act of 2015, or MACRA, and replaced with two new methodologies that will focus upon payment based upon quality outcomes. The first model is the Merit-Based Incentive Payment System, or MIPS, which combines the Physician Quality Reporting System, or PQRS, and Meaningful Use program with the Value Based Modifier program to provide for one payment model based upon (i) quality, (ii) resource use, (iii) clinical practice improvement and (iv) advancing care information through the use of certified Electronic Health Record, or EHR, technology. The second model is the Advanced Alternative Payment Models, or APM, which requires the physician to participate in a risk share arrangement for reimbursement related to his or her patients while utilizing a certified health record and reporting on specific quality metrics. There are a number of physicians that will not qualify for the APM payment method. Therefore, this change in reimbursement models may impact our tenants’ payments and create uncertainty in the tenants’ financial condition.

The healthcare industry continues to face various challenges, including increased government and private payor pressure on healthcare providers to control or reduce costs. It is possible that our tenants will continue to experience a shift in payor mix away from fee-for-service payors, resulting in an increase in the percentage of revenues attributable to reimbursement based upon value-based principles and quality driven managed care programs, and general industry trends that include pressures to control healthcare costs. The federal government's goal is to move approximately 90.0% of its reimbursement for providers to be based upon quality outcome models. Pressures to control healthcare costs and a shift away from traditional health insurance reimbursement based upon a fee for service payment to payment based upon quality outcomes have increased the uncertainty of payments.

In addition, the Patient Protection and Affordable Care Act of 2010, or the Healthcare Reform Act, is intended to reduce the number of individuals in the U.S. without health insurance and effect significant other changes to the ways in which healthcare is organized, delivered and reimbursed. Included within the legislation is a limitation on physician-owned hospitals from expanding, unless the facility satisfies very narrow federal exceptions to this limitation. Therefore, if our tenants are physicians that own and refer to a hospital, the hospital would be limited in its operations and expansion potential, which may limit the hospital’s services and resulting revenues and may impact the owner’s ability to make rental payments.

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Furthermore, the healthcare legislation passed in 2010 included new payment models with new shared savings programs and demonstration programs that include bundled payment models and payments contingent upon reporting on satisfaction of quality benchmarks. The new payment models will likely change how physicians are paid for services. These changes could have a material adverse effect on the financial condition of some of our tenants. Also, on December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law and repeals the individual mandate portion of the Healthcare Reform Act beginning in 2019. Therefore, our tenants may have more patients that do not have insurance coverage, which may adversely impact the tenants’ collections and revenues. The financial impact on our tenants could restrict their ability to make rent payments to us, which would have a material adverse effect on our business, financial condition and results of operations and our ability to pay distributions to stockholders.

Furthermore, beginning in 2016, the Centers for Medicare and Medicaid Services has applied a negative payment adjustment to individual eligible professionals, Comprehensive Primary Care practice sites, and group practices participating in the PQRS group practice reporting option (including Accountable Care Organizations) that do not satisfactorily report PQRS in 2014. Program participation during a calendar year will affect payments two years after the reporting cycle, such that individuals and groups that do not satisfy the PQRS reporting metrics in 2016 will be impacted by a two percent negative payment adjustment in 2018. Providers can appeal the determination, but if the provider is not successful, the provider’s reimbursement may be adversely impacted, which could adversely impact a tenant’s ability to make rent payments to us.

In 2014, state insurance exchanges were implemented, which provide a new mechanism for individuals to obtain insurance. At this time, the number of payers that are participating in the state insurance exchanges varies, and in some regions there are very limited insurance plans available for individuals to choose from when purchasing insurance. In addition, not all healthcare providers will maintain participation agreements with the payers that are participating in the state health insurance exchange. Therefore, it is possible that our tenants may incur a change in their reimbursement if the tenant does not have a participation agreement with the state insurance exchange payers and a large number of individuals elect to purchase insurance from the state insurance exchange. Further, the rates of reimbursement from the state insurance exchange payers to healthcare providers will vary greatly. The rates of reimbursement will be subject to negotiation between the healthcare provider and the payer, which may vary based upon the market, the healthcare provider’s quality metrics, the number of providers participating in the area and the patient population, among other factors. Therefore, it is uncertain whether healthcare providers will incur a decrease in reimbursement from the state insurance exchange, which may impact a tenant’s ability to pay rent.

The insurance plans that participated on the health insurance exchanges created by the Healthcare Reform Act were expecting to receive risk corridor payments to address the high risk claims that they paid through the exchange product. However, the federal government currently owes the insurance companies approximately $12.3 billion under the risk corridor payment program that is currently disputed by the federal government. In addition, the health insurance exchange program included risk adjustment payments that allocated payments to insurers that had the most complex patients. Effective July 7, 2018, the federal government suspended $10.4 billion of the risk adjustment payments based upon a court order that the payment methodology was flawed. However, on July 24, 2018, the federal government reissued a previous rule regarding risk adjustment payments, including as part of the reissuance additional explanation regarding the methodology used in determining risk adjustment payments. As part of the reissuance, the federal government resumed its operation of the risk adjustment program. The federal government is currently defending several lawsuits from the insurance plans that participate on the health insurance exchange regarding the failure to remit payment for the risk corridor subsidies. The federal government is also subject to pending litigation regarding the risk adjustment payments. If the insurance companies do not receive payments, the insurance companies may also cease to participate on the insurance exchange, which limits insurance options for patients. If patients do not have access to insurance coverage, it may adversely impact the tenants’ revenues and the tenants’ ability to pay rent.

In addition to the failure to remit payment for the risk corridor payment and the recent suspension of the risk adjustment payments, the federal government also ceased to provide the cost-share subsidies to the insurance companies that offered the silver plan benefits on the Health Information Exchange. The termination of the cost-share subsidies would impact the subsidy payments due in 2017 and will likely adversely impact the insurance companies, causing an increase in the premium payments for the individual beneficiaries in 2018. Nineteen State Attorneys General filed suit to force the Trump Administration to reinstate the cost share subsidy payments. On October 25, 2017, a California Judge ruled in favor of the Trump Administration and found that the federal government was not required to immediately reinstate payment for the cost shares subsidy. The injunction sought by the Attorneys’ General lawsuit was denied. Subsequently, several insurers filed suit in the U.S. Court of Federal Claims to recover cost-share reduction payments, and in two of the matters, the Court of Federal Claims ruled in favor of the insurers. Nevertheless, because of the government’s refusal to make cost-share reduction payments, our tenants will likely see an increase in individuals who are self-pay or have a lower health benefit plan due to the increase in the premium payments. Our tenants’ collections and revenues may be adversely impacted by the change in the payor mix of their patients and it may adversely impact the tenants’ ability to make rent payments.

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There are multiple lawsuits in several judicial districts brought by qualified health plans, or QHPs, to recover the prior risk corridor payments that were anticipated to be paid as part of the health insurance exchange program. In June 2018, the Court of Appeals for the Federal Circuit issued an opinion in Moda Health Plan v. United States, concluding that the government does not have to pay health insurers that offered QHPs the full amount owed to them in risk corridors payments. Several insurers have requested a rehearing as to the matters addressed in the Moda case in front of a full panel of appellate judges. At this time, at least two key cases have been determined in favor of the government withholding payment of the risk corridor payment. If the Administration or the court system decisions that risk corridor or risk share payments are not required to be paid to the QHPs offering insurance coverage on the health insurance exchange program remain in effect and binding, the insurance companies may cease offering the Health Insurance Exchange product to the current beneficiaries. Therefore, our tenants may have an increase of self-pay patients and collections may decline, adversely impacting the tenants’ ability to pay rent.

In 2017, Congressional activities to attempt to repeal the Healthcare Reform Act failed. However, President Trump signed several Executive Orders that address different aspects of the Healthcare Reform Act. First, on January 20, 2017 an Executive Order was signed to “ease the burden of Obamacare.” Furthermore, on October 12, 2017, President Trump signed an Executive Order the purpose of which was to, among other things, (i) cut healthcare cost-sharing reduction subsidies, (ii) allow more small businesses to join together to purchase insurance coverage, (iii) extend short-term coverage policies, and (iv) expand employers’ ability to provide workers cash to buy coverage elsewhere. The Executive Order required the government agencies to draft regulations for consideration related to Associated Health Plans (AHP), short term limited duration insurance (STLDI) and health reimbursement arrangements (HRA). Some, but not all, of the required regulations have been drafted. If the Healthcare Reform Act is modified through Executive Orders, the healthcare industry will continue to change and new regulations may further modify payment models, jeopardizing our tenants’ ability to remit the rental payments.

On January 11, 2018, the Centers for Medicare and Medicaid Services, or CMS, issued guidance to support state efforts to improve Medicaid enrollee health outcomes by incentivizing community engagement among able-bodied, working-age Medicaid beneficiaries. The policy excludes individuals eligible for Medicaid due to a disability, elderly beneficiaries, children and pregnant women. CMS has received proposals from 10 states seeking requirements for able bodied Medicaid beneficiaries to engage in employment and community engagement initiatives. Kentucky, Indiana, Arkansas and New Hampshire have been granted a waiver for their programs and require Medicaid beneficiaries to work or get ready for employment. However, in June 2018, the Federal District Court in the District of Columbia vacated the CMS approval of the Kentucky waiver, finding the approval was arbitrary and capricious and the Court referred it back to CMS. In response to CMS’s willingness to entertain Medicaid program waivers, states are seeking waivers to impose other Medicaid eligibility requirements, such as drug testing and eligibility time limits. If the “work requirement” and other eligibility requirements expand to the states’ Medicaid programs, it may decrease the number of patients eligible for Medicaid. The patients that are no longer eligible for Medicaid may become self-pay patients, which may adversely impact our tenant’s ability to receive reimbursement. If our tenants’ patient payor mix becomes more self-pay patients, it may impact our tenants’ ability to collect revenues and pay rent. In addition, beginning in 2018, CMS cut funding to the 340B Program, which is intended to lower drug costs for certain healthcare providers. The cuts in the 340B Program may result in some of our tenants having less money available to cover operational costs.

In February of 2018, Congress passed the Bipartisan Balanced Budget Act of 2018. Some of the most notable provisions of the Bipartisan Balanced Budget Act include: (i) the permanent extension of Medicare Special Needs Plans, or SNPs, which provide tailored care for certain qualifying Medicare beneficiaries; (ii) guaranteed funding for the Children’s Health Insurance Program, or CHIP, through 2027; (iii) expansion of Medicare coverage for tele-medicine services; and (iv) expanded testing of certain value-based care models. The extension of SNPs and funding for CHIP secure coverage for patients of our tenants and may reduce the number of uninsured patients treated by our tenants. The expansion of coverage for tele-medicine services could impact the demand for medical properties. If more patients can be treated remotely, providers may have less demand for real property.

The proposed SEC standard of conduct for investment professionals could impact our ability to raise capital.

On April 18, 2018, the SEC proposed “Regulation Best Interest,” a new standard of conduct for broker-dealers under the Exchange Act that includes: (i) the requirement that broker-dealers refrain from putting the financial or other interests of the broker-dealer ahead of the retail customer, (ii) a new disclosure document, the consumer or client relationship summary, or Form CRS, which would require both investment advisers and broker-dealers to provide disclosure highlighting details about their services and fee structures and (iii) proposed interpretative guidance that would establish a federal fiduciary standard for investment advisers. The public comment period on Regulation Best Interest ended on August 7, 2018.

Proposed Regulation Best Interest is complex and may be subject to revision or withdrawal. Plan fiduciaries and the beneficial owners of IRAs are urged to consult with their own advisors regarding the impact that proposed Regulation Best Interest may have on purchasing and holding interests in our company. Proposed Regulation Best Interest or any other

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legislation or regulations that may be introduced or become law in the future could have negative implications on our ability to raise capital from potential investors, including those investing through IRAs.

We, our tenants and our operators for our senior housing and skilled nursing facilities are subject to various government reviews, audits and investigations that could adversely affect our business, including an obligation to refund amounts previously paid to us, potential criminal charges, the imposition of fines, and/or the loss of the right to participate in Medicare and Medicaid programs.

As a result of our tenants’ participation in the Medicaid and Medicare programs, we, our tenants and our operators for our senior housing and skilled nursing facilities are subject to various governmental reviews, audits and investigations to verify compliance with these programs and applicable laws and regulations. We, our tenants and our operators for our senior housing and skilled nursing facilities are also subject to audits under various government programs, including Recovery Audit Contractors, Zone Program Integrity Contractors, Program Safeguard Contractors and Medicaid Integrity Contractors programs, in which third party firms engaged by CMS conduct extensive reviews of claims data and medical and other records to identify potential improper payments under the Medicare and Medicaid programs. Private pay sources also reserve the right to conduct audits. Billing and reimbursement errors and disagreements occur in the healthcare industry. We, our tenants and our operators for our senior housing and skilled nursing facilities may be engaged in reviews, audits and appeals of claims for reimbursement due to the subjectivities inherent in the process related to patient diagnosis and care, record keeping, claims processing and other aspects of the patient service and reimbursement processes, and the errors and disagreements those subjectivities can produce. An adverse review, audit or investigation could result in:

• an obligation to refund amounts previously paid to us, our tenants or our operators pursuant to the Medicare or Medicaid programs or from private payors, in amounts that could be material to our business;

• state or federal agencies imposing fines, penalties and other sanctions on us, our tenants or our operators;

• loss of our right, our tenants’ right or our operators’ right to participate in the Medicare or Medicaid programs or one or more private payor networks;

• an increase in private litigation against us, our tenants or our operators; and

• damage to our reputation in various markets.

While we, our tenants and our operators for our senior housing and skilled nursing facilities have always been subject to post-payment audits and reviews, more intensive “probe reviews” appear to be a permanent procedure with our fiscal intermediaries. Generally, findings of overpayment from CMS contractors are eligible for appeal through the CMS defined continuum, but there may be rare instances that are not eligible for appeal. We, our tenants and our operators for our senior housing and skilled nursing facilities utilize all defenses at our disposal to demonstrate that the services provided meet all clinical and regulatory requirements for reimbursement.

If the government or a court were to conclude that such errors, deficiencies or disagreements constituted criminal violations, or were to conclude that such errors, deficiencies or disagreements resulted in the submission of false claims to federal healthcare programs, or if the government were to discover other problems in addition to the ones identified by the probe reviews that rose to actionable levels, we and certain of our officers, and our tenants and operators for our senior housing and skilled nursing facilities and certain of their officers, might face potential criminal charges and/or civil claims, administrative sanctions and penalties for amounts that could be material to our business, results of operations and financial condition. In addition, we and/or some of the key personnel of our operating subsidiaries, or those of our tenants and operators for our senior housing and skilled nursing facilities, could be temporarily or permanently excluded from future participation in state and federal healthcare reimbursement programs such as Medicaid and Medicare. In any event, it is likely that a governmental investigation alone, regardless of its outcome, would divert material time, resources and attention from our management team and our staff, or those of our tenants and our operators for our senior housing and skilled nursing facilities and could have a materially detrimental impact on our results of operations during and after any such investigation or proceedings.

In cases where claim and documentation review by any CMS contractor results in repeated poor performance, a facility can be subjected to protracted oversight. This oversight may include repeat education and re-probe, extended pre-payment review, referral to recovery audit or integrity contractors, or extrapolation of an error rate to other reimbursement outside of specifically reviewed claims. Sustained failure to demonstrate improvement towards meeting all claim filing and documentation requirements could ultimately lead to Medicare and Medicaid decertification, which could have a materially detrimental impact on our results of operations. Adverse actions by CMS may also cause third party payor or licensure authorities to audit our tenants. These additional audits could result in termination of third party payor agreements or licensure of the facility, which would also adversely impact our operations.

58

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities

On July 1, 2018, we issued an aggregate of 15,000 shares of restricted Class T common stock to our independent directors. These shares of restricted Class T common stock were issued pursuant to our incentive plan in a private transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, or the Securities Act. The restricted Class T common stock awards vested 20.0% on the grant date and 20.0% will vest on each of the first four anniversaries of the grant date.

Use of Public Offering Proceeds

Our Registration Statement on Form S-11 (File No. 333-205960), registering a public offering of up to $3,150,000,000 in shares of our common stock, was declared effective under the Securities Act on February 16, 2016. Griffin Capital Securities, LLC is the dealer manager of our offering. Commencing on February 16, 2016, we offered to the public up to $3,150,000,000 in shares of our Class T common stock consisting of up to $3,000,000,000 in shares of our Class T common stock in our primary offering and up to $150,000,000 in shares of our Class T common stock pursuant to the DRIP. Effective June 17, 2016, we reallocated certain of the unsold shares of Class T common stock being offered and began offering shares of Class I common stock, such that we are currently offering up to approximately $2,800,000,000 in shares of Class T common stock and $200,000,000 in shares of Class I common stock in our primary offering, and up to an aggregate of $150,000,000 in shares of our Class T and Class I common stock pursuant to the DRIP, aggregating up to $3,150,000,000.

The shares of our Class T common stock in our primary offering were being offered at a price of $10.00 per share prior to April 11, 2018, and are being offered at a price of $10.05 per share for all shares issued effective April 11, 2018. The shares of our Class I common stock in our primary offering were being offered at a price of $9.30 per share prior to March 1, 2017 and $9.21 per share from March 1, 2017 to April 10, 2018. Effective April 11, 2018, the shares of our Class I common stock in our primary offering are being offered at a price of $9.65 per share, the estimated per share NAV unanimously approved and established by our board of directors on April 6, 2018. The shares of our Class T and Class I common stock issued pursuant to the DRIP were sold at a price of $9.50 per share prior to January 1, 2017 and $9.40 per share from January 1, 2017 to April 10, 2018. Effective April 11, 2018, the shares of our Class T and Class I common stock issued pursuant to the DRIP are sold at a price of $9.65 per share, the most recent estimated per share NAV approved and established by our board of directors.

As of September 30, 2018, we had received and accepted subscriptions in our offering for 55,429,868 shares of Class T common stock and 3,578,393 shares of Class I common stock, or approximately $554,397,000 and $33,418,000, respectively, excluding shares of our common stock issued pursuant to the DRIP. As of September 30, 2018, a total of $21,156,000 in Class T distributions and $764,000 in Class I distributions were reinvested pursuant to the DRIP and 2,229,840 shares of Class T common stock and 80,506 shares of Class I common stock were issued pursuant to the DRIP.

Our equity raise as of September 30, 2018 resulted in the following:

	Amount
Gross offering proceeds — Class T and Class I common stock	$	587,815,000
Gross offering proceeds from Class T and Class I shares issued pursuant to the DRIP	21,920,000
Total gross offering proceeds	609,735,000
Less public offering expenses:
Selling commissions	16,231,000
Dealer manager fees	17,053,000
Advisor funding of dealer manager fees	(11,455,000		)
Other organizational and offering expenses	5,954,000
Advisor funding of other organizational and offering expenses	(5,954,000		)
Net proceeds from our offering	$	587,906,000

The cost of raising funds in our offering as a percentage of gross proceeds received in our primary offering was 3.7% as of September 30, 2018. As of September 30, 2018, we had used $489,923,000 in net proceeds from our offering to acquire properties from unaffiliated third parties, $25,709,000 to pay acquisition fees and acquisition related expenses to affiliated parties, $10,522,000 to pay acquisition related expenses to unaffiliated third parties, $6,310,000 for capital expenditures on our acquired properties, $4,250,000 to pay real estate deposits for proposed future acquisitions and $2,406,000 to pay deferred financing costs on our mortgage loans payable and our line of credit and term loan.

59

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

Our share repurchase plan allows for repurchases of shares of our common stock by us when certain criteria are met. Share repurchases will be made at the sole discretion of our board of directors. All share repurchases are subject to a one-year holding period, except for repurchases made in connection with a stockholder’s death or “qualifying disability,” as defined in our share repurchase plan. Funds for the repurchase of shares of our common stock will come exclusively from the cumulative proceeds we receive from the sale of shares of our common stock pursuant to the DRIP.

The price per share at which we will repurchase shares of our common stock will range, depending on the length of time the stockholder held such shares, from 92.5% to 100% of the price paid per share to acquire such shares from us. However, if shares of our common stock are to be repurchased in connection with a stockholder’s death or qualifying disability, the repurchase price will be no less than 100% of the price paid to acquire the shares of our common stock from us.

During the three months ended September 30, 2018, we repurchased shares of our common stock as follows:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased As Part of Publicly Announced Plan or Program	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2018 to July 31, 2018	—	$	—	—	(1	)
August 1, 2018 to August 31, 2018	—	$	—	—	(1	)
September 1, 2018 to September 30, 2018	115,847	$	9.58	115,847	(1	)
Total	115,847	$	9.58	115,847

___________

(1) Subject to funds being available, we will limit the number of shares of our common stock repurchased during any calendar year to 5.0% of the weighted average number of shares of our common stock outstanding during the prior calendar year; provided however, shares of our common stock subject to a repurchase requested upon the death of a stockholder will not be subject to this cap.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

60

Item 6. Exhibits.

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the period ended September 30, 2018 (and are numbered in accordance with Item 601 of Regulation S-K).

3.1	Third Articles of Amendment and Restatement of Griffin-American Healthcare REIT IV, Inc., dated December 28, 2015 (included as Exhibit 3.1 to Pre-effective Amendment No. 2 to our Registration Statement on Form S-11 (File No. 333-205960) filed January 5, 2016 and incorporated herein by reference)
3.2	Articles Supplementary of Griffin-American Healthcare REIT IV, Inc. filed May 25, 2016 (included as Exhibit 3.1 to our Current Report on Form 8-K filed May 26, 2016 and incorporated herein by reference)
3.3	Second Amended and Restated Bylaws of Griffin-American Healthcare REIT IV, Inc. (included as Exhibit 3.2 to Pre-effective Amendment No. 2 to our Registration Statement on Form S-11 (File No. 333-205960) filed January 5, 2016 and incorporated herein by reference)
4.1	Form of Subscription Agreement of Griffin-American Healthcare REIT IV, Inc. (included as Exhibit 4.1 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
4.2	Amended and Restated Distribution Reinvestment Plan of Griffin-American Healthcare REIT IV, Inc. (included as Exhibit 4.2 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
4.3	Share Repurchase Plan of Griffin-American Healthcare REIT IV, Inc. (included as Exhibit 4.3 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
4.4	Escrow Agreement by and among Griffin-American Healthcare REIT IV, Inc., Griffin Capital Securities, LLC and UMB Bank, N.A., dated February 16, 2016 (included as Exhibit 4.4 to our Annual Report on Form 10-K for the year ended December 31, 2015 filed March 7, 2016 and incorporated herein by reference)
10.1	First Amendment to Purchase and Sale Agreement and Escrow Instructions by and among Bridgewood Associates, L.L.C., Salisbury Associates LLC, Crestwood Associates, L.L.C., Sedalia Associates, L.P., Milan Associates, L.L.C., Eastview Associates, L.L.C., M-S Associates, L.P. and BKY Properties of St. Elizabeth LLC, Bridgewood Health Care Center, L.L.C., Chariton Park Health Care Center, L.L.C., Crestwood Health Care Center, L.L.C., Four Seasons Living Center, L.L.C., BKY Healthcare of Milan, Inc., Eastview Manor, Inc., North Village Park, L.L.C., and MMA Healthcare of St. Elizabeth, Inc., and TLG II, L.L.P., and GAHC4 Missouri SNF Portfolio, LLC and First American Title Insurance Company dated July 18, 2018 (included as Exhibit 10.79 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
10.2	Purchase and Sale Agreement by and among GAHC4 Songbird SNF Portfolio, LLC, Midwest Health Properties, LLC, Petersen - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care III, LLC, Petersen Health Care VIII, LLC, Petersen Health Care XI, LLC, Petersen Health Care XIII, LLC, Petersen Health Group, LLC, Petersen Health Care XII, LLC, Robings, LLC, Midwest Health Operations, LLC, Petersen Health & Wellness, LLC, Petersen Health Business, LLC, Petersen Health Care - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care VII, LLC, Petersen Health Group, LLC, Petersen Health Quality, LLC, POP, LLC and Mark B. Petersen dated July 24, 2018 (included as Exhibit 10.80 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
10.3	Second Amendment to Purchase and Sale Agreement and Escrow Instructions by and among Bridgewood Associates, L.L.C., Salisbury Associates LLC, Crestwood Associates, L.L.C., Sedalia Associates, L.P., Milan Associates, L.L.C., Eastview Associates, L.L.C., M-S Associates, L.P. and BKY Properties of St. Elizabeth LLC, Bridgewood Health Care Center, L.L.C., Chariton Park Health Care Center, L.L.C., Crestwood Health Care Center, L.L.C., Four Seasons Living Center, L.L.C., BKY Healthcare of Milan, Inc., Eastview Manor, Inc., North Village Park, L.L.C., and MMA Healthcare of St. Elizabeth, Inc., and TLG II, L.L.P., and GAHC4 Missouri SNF Portfolio, LLC and First American Title Insurance Company dated August 7, 2018 (included as Exhibit 10.81 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
10.4	Third Amendment to Purchase and Sale Agreement and Escrow Instructions by and among Bridgewood Associates, L.L.C., Salisbury Associates LLC, Crestwood Associates, L.L.C., Sedalia Associates, L.P., Milan Associates, L.L.C., Eastview Associates, L.L.C., M-S Associates, L.P. and BKY Properties of St. Elizabeth LLC, Bridgewood Health Care Center, L.L.C., Chariton Park Health Care Center, L.L.C., Crestwood Health Care Center, L.L.C., Four Seasons Living Center, L.L.C., BKY Healthcare of Milan, Inc., Eastview Manor, Inc., North Village Park, L.L.C., and MMA Healthcare of St. Elizabeth, Inc., and TLG II, L.L.P., and GAHC4 Missouri SNF Portfolio, LLC and First American Title Insurance Company dated August 10, 2018 (included as Exhibit 10.82 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)

61

10.5	Fourth Amendment to Purchase and Sale Agreement and Escrow Instructions by and among Bridgewood Associates, L.L.C., Salisbury Associates LLC, Crestwood Associates, L.L.C., Sedalia Associates, L.P., Milan Associates, L.L.C., Eastview Associates, L.L.C., M-S Associates, L.P. and BKY Properties of St. Elizabeth LLC, Bridgewood Health Care Center, L.L.C., Chariton Park Health Care Center, L.L.C., Crestwood Health Care Center, L.L.C., Four Seasons Living Center, L.L.C., BKY Healthcare of Milan, Inc., Eastview Manor, Inc., North Village Park, L.L.C., and MMA Healthcare of St. Elizabeth, Inc., and TLG II, L.L.P., and GAHC4 Missouri SNF Portfolio, LLC and First American Title Insurance Company dated August 13, 2018 (included as Exhibit 10.83 to Post-effective Amendment No. 13 to our Registration Statement on Form S-11 (File No. 333-205960) filed August 29, 2018 and incorporated herein by reference)
10.6*	First Amendment to Purchase and Sale Agreement by and among GAHC4 Songbird SNF Portfolio, LLC, Midwest Health Properties, LLC, Petersen - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care III, LLC, Petersen Health Care VIII, LLC, Petersen Health Care XI, LLC, Petersen Health Care XIII, LLC, Petersen Health Group, LLC, Petersen Health Care XII, LLC, Robings, LLC, Midwest Health Operations, LLC, Petersen Health & Wellness, LLC, Petersen Health Business, LLC, Petersen Health Care - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care VII, LLC, Petersen Health Group, LLC, Petersen Health Quality, LLC, POP, LLC and Mark B. Petersen dated August 30, 2018
10.7*	Second Amendment to Purchase and Sale Agreement by and among GAHC4 Songbird SNF Portfolio, LLC, Midwest Health Properties, LLC, Petersen - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care III, LLC, Petersen Health Care VIII, LLC, Petersen Health Care XI, LLC, Petersen Health Care XIII, LLC, Petersen Health Group, LLC, Petersen Health Care XII, LLC, Robings, LLC, Midwest Health Operations, LLC, Petersen Health & Wellness, LLC, Petersen Health Business, LLC, Petersen Health Care - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care VII, LLC, Petersen Health Group, LLC, Petersen Health Quality, LLC, POP, LLC and Mark B. Petersen dated September 13, 2018
10.8*	Third Amendment to Purchase and Sale Agreement by and among GAHC4 Songbird SNF Portfolio, LLC, Midwest Health Properties, LLC, Petersen - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care III, LLC, Petersen Health Care VIII, LLC, Petersen Health Care XI, LLC, Petersen Health Care XIII, LLC, Petersen Health Group, LLC, Petersen Health Care XII, LLC, Robings, LLC, Midwest Health Operations, LLC, Petersen Health & Wellness, LLC, Petersen Health Business, LLC, Petersen Health Care - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care VII, LLC, Petersen Health Group, LLC, Petersen Health Quality, LLC, POP, LLC and Mark B. Petersen dated September 21, 2018
10.9*	Fourth Amendment to Purchase and Sale Agreement by and among GAHC4 Songbird SNF Portfolio, LLC, Midwest Health Properties, LLC, Petersen - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care III, LLC, Petersen Health Care VIII, LLC, Petersen Health Care XI, LLC, Petersen Health Care XIII, LLC, Petersen Health Group, LLC, Petersen Health Care XII, LLC, Robings, LLC, Midwest Health Operations, LLC, Petersen Health & Wellness, LLC, Petersen Health Business, LLC, Petersen Health Care - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care VII, LLC, Petersen Health Group, LLC, Petersen Health Quality, LLC, POP, LLC and Mark B. Petersen dated September 28, 2018
10.10*	Second Amendment to Credit Agreement by and among Griffin-American Healthcare REIT IV Holdings, LP, certain subsidiary guarantors, certain lender parties and Bank of America, N.A., dated September 28, 2018
10.11*	Fifth Amendment to Purchase and Sale Agreement by and among GAHC4 Songbird SNF Portfolio, LLC, Midwest Health Properties, LLC, Petersen - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care III, LLC, Petersen Health Care VIII, LLC, Petersen Health Care XI, LLC, Petersen Health Care XIII, LLC, Petersen Health Group, LLC, Petersen Health Care XII, LLC, Robings, LLC, Midwest Health Operations, LLC, Petersen Health & Wellness, LLC, Petersen Health Business, LLC, Petersen Health Care - Farmer City, LLC, Petersen Health Care II, Inc., Petersen Health Care VII, LLC, Petersen Health Group, LLC, Petersen Health Quality, LLC, POP, LLC and Mark B. Petersen dated September 28, 2018
31.1*	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

62

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

___________

*

Filed herewith.

**

Furnished herewith. In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

63

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Griffin-American Healthcare REIT IV, Inc. (Registrant)
November 13, 2018	By:	/s/ JEFFREYT. HANSON
Date		Jeffrey T. Hanson
		Chief Executive Officer and Chairman of the Board of Directors
		(Principal Executive Officer)
November 13, 2018	By:	/s/ BRIAN S. PEAY
Date		Brian S. Peay
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

64

EX-10.6

Exhibit 10.6

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT

THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is entered into effective as of September 4, 2018, by and among (i) the “Sellers” identified on the signature pages attached hereto (each a “Seller”, and together, “Sellers”), (ii) the “Existing Operators” identified on the signature pages attached hereto (each an “Existing Operator”, and together, “Existing Operators”), and (iii) GAHC4 Songbird SNF Portfolio, LLC, a Delaware limited liability company (“Purchaser” and, together with Sellers and Existing Operators, the “Parties”, and each, a “Party”).

WHEREAS, the Parties entered into that certain Purchase and Sale Agreement dated as of July 24, 2018 (the “PSA”); and

WHEREAS, the Parties desire to amend the PSA in accordance with the terms of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Defined Terms. All capitalized terms used and not defined herein shall have the meanings given to such terms in the PSA.

2.Due Diligence Period. The “Due Diligence Period”, as defined in Section 1(f) of the PSA, is hereby extended so that the Due Diligence Period shall expire at 5:00 p.m. (Pacific Time) on September 14, 2018. All references in the PSA to the Due Diligence Period shall mean the Due Diligence Period as extended by this Amendment.

3.Form of Master Lease. The following Sections of and Schedules to the form of Master Lease attached to the PSA as Exhibit F are modified as shown on Schedule 1 attached to this Amendment: Section 9.1; Sections 12.1(k), (l) and (p); Sections 19.1(a) and (b); Section 21.24(b); and Schedule D (only as to the definition of the term “Land”). Additionally, Schedule F of the Master Lease (Form of Guaranty) is hereby deleted and replaced with the Schedule F attached to this Amendment.

4.Ratification. Except as expressly modified hereby, the terms of the PSA are hereby ratified and shall remain in full force and effect, enforceable in accordance with its terms.

5.Execution. This Amendment may be executed in a number of identical counterparts. Signatures may be delivered by facsimile or electronic delivery, and such signatures shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.

[Remainder of page intentionally left blank.]

1

NOW, THEREFORE, the parties hereto have executed this Amendment as of the date first set forth above.

SELLERS:

Midwest Health Properties, LLC

Petersen - Farmer City, LLC

Petersen Health Care III, LLC

Petersen Health Care VIII, LLC

Petersen Health Care XI, LLC

Petersen Health Care XIII, LLC

Petersen Health Group, LLC

Petersen Health Care XII, LLC

Robings, LLC

Each an Illinois limited liability company

For each, by:    /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title:     Manager

Petersen Health Care II, Inc.

By:    /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title:     President

The remainder of this page is intentionally blank. Signatures follow on the next page.

S-2

EXISTING OPERATORS:

Midwest Health Operations, LLC

Petersen Health & Wellness, LLC

Petersen Health Business, LLC

Petersen Health Care - Farmer City, LLC

Petersen Health Care VII, LLC

Petersen Health Group, LLC

Petersen Health Quality, LLC

Each an Illinois limited liability company

For each, by: /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title: Manager

Petersen Health Care II, Inc.

By: /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title: President

The remainder of this page is intentionally blank. Signatures follow on the next page

S-3

PURCHASER:

GAHC4 Songbird SNF Portfolio, LLC,

a Delaware limited liability company

By: /s/ Danny Prosky                

Name: Danny Prosky

Title: Authorized Signatory

S-4

EX-10.7

Exhibit 10.7

SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT

THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is entered into effective as of September 13, 2018, by and among (i) the “Sellers” identified on the signature pages attached hereto (each a “Seller”, and together, “Sellers”), (ii) the “Existing Operators” identified on the signature pages attached hereto (each an “Existing Operator”, and together, “Existing Operators”), and (iii) GAHC4 Songbird SNF Portfolio, LLC, a Delaware limited liability company (“Purchaser” and, together with Sellers and Existing Operators, the “Parties”, and each, a “Party”).

WHEREAS, the Parties entered into that certain Purchase and Sale Agreement dated as of July 24, 2018, as amended by that certain First Amendment to Purchase and Sale Agreement dated as of September 4, 2018 (collectively, the “PSA”); and

WHEREAS, the Parties desire to amend the PSA in accordance with the terms of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Defined Terms. All capitalized terms used and not defined herein shall have the meanings given to such terms in the PSA.

2.Due Diligence Period. The “Due Diligence Period”, as defined in Section 1(f) of the PSA, is hereby extended so that the Due Diligence Period shall expire at 5:00 p.m. (Pacific Time) on September 21, 2018. All references in the PSA to the Due Diligence Period shall mean the Due Diligence Period as extended by this Amendment.

3.Ratification. Except as expressly modified hereby, the terms of the PSA are hereby ratified and shall remain in full force and effect, enforceable in accordance with its terms.

4.Execution. This Amendment may be executed in a number of identical counterparts. Signatures may be delivered by facsimile or electronic delivery, and such signatures shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.

[Remainder of page intentionally left blank.]

1

NOW, THEREFORE, the parties hereto have executed this Amendment as of the date first set forth above.

SELLERS:

Midwest Health Properties, LLC

Petersen - Farmer City, LLC

Petersen Health Care III, LLC

Petersen Health Care VIII, LLC

Petersen Health Care XI, LLC

Petersen Health Care XIII, LLC

Petersen Health Group, LLC

Petersen Health Care XII, LLC

Robings, LLC

Each an Illinois limited liability company

For each, by:    /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title:     Manager

Petersen Health Care II, Inc.

By:    /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title:     President

The remainder of this page is intentionally blank. Signatures follow on the next page.

S-2

EXISTING OPERATORS:

Midwest Health Operations, LLC

Petersen Health & Wellness, LLC

Petersen Health Business, LLC

Petersen Health Care - Farmer City, LLC

Petersen Health Care VII, LLC

Petersen Health Group, LLC

Petersen Health Quality, LLC

Each an Illinois limited liability company

For each, by: /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title: Manager

Petersen Health Care II, Inc.

By: /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title: President

The remainder of this page is intentionally blank. Signatures follow on the next page

S-3

PURCHASER:

GAHC4 Songbird SNF Portfolio, LLC,

a Delaware limited liability company

By: /s/ Danny Prosky                

Name: Danny Prosky

Title: Authorized Signatory

S-4

EX-10.8

Exhibit 10.8

THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT

THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is entered into effective as of September 21, 2018, by and among (i) the “Sellers” identified on the signature pages attached hereto (each a “Seller”, and together, “Sellers”), (ii) the “Existing Operators” identified on the signature pages attached hereto (each an “Existing Operator”, and together, “Existing Operators”), and (iii) GAHC4 Songbird SNF Portfolio, LLC, a Delaware limited liability company (“Purchaser” and, together with Sellers and Existing Operators, the “Parties”, and each, a “Party”).

WHEREAS, the Parties entered into that certain Purchase and Sale Agreement dated as of July 24, 2018, as amended by that certain First Amendment to Purchase and Sale Agreement dated as of September 4, 2018, and that certain Second Amendment to Purchase and Sale Agreement dated as of September 13, 2018 (collectively, the “PSA”); and

WHEREAS, the Parties desire to amend the PSA in accordance with the terms of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Defined Terms. All capitalized terms used and not defined herein shall have the meanings given to such terms in the PSA.

2.Due Diligence Period. The “Due Diligence Period”, as defined in Section 1(f) of the PSA, is hereby extended so that the Due Diligence Period shall expire at 5:00 p.m. (Pacific Time) on September 28, 2018. All references in the PSA to the Due Diligence Period shall mean the Due Diligence Period as extended by this Amendment.

3.Ratification. Except as expressly modified hereby, the terms of the PSA are hereby ratified and shall remain in full force and effect, enforceable in accordance with its terms.

4.Execution. This Amendment may be executed in a number of identical counterparts. Signatures may be delivered by facsimile or electronic delivery, and such signatures shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.

[Remainder of page intentionally left blank.]

1

NOW, THEREFORE, the parties hereto have executed this Amendment as of the date first set forth above.

SELLERS:

Midwest Health Properties, LLC

Petersen - Farmer City, LLC

Petersen Health Care III, LLC

Petersen Health Care VIII, LLC

Petersen Health Care XI, LLC

Petersen Health Care XIII, LLC

Petersen Health Group, LLC

Petersen Health Care XII, LLC

Robings, LLC

Each an Illinois limited liability company

For each, by:    /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title:     Manager

Petersen Health Care II, Inc.

By:    /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title:     President

The remainder of this page is intentionally blank. Signatures follow on the next page.

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EXISTING OPERATORS:

Midwest Health Operations, LLC

Petersen Health & Wellness, LLC

Petersen Health Business, LLC

Petersen Health Care - Farmer City, LLC

Petersen Health Care VII, LLC

Petersen Health Group, LLC

Petersen Health Quality, LLC

Each an Illinois limited liability company

For each, by: /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title: Manager

Petersen Health Care II, Inc.

By: /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title: President

The remainder of this page is intentionally blank. Signatures follow on the next page.

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PURCHASER:

GAHC4 Songbird SNF Portfolio, LLC,

a Delaware limited liability company

By: /s/ Danny Prosky                 

Name: Danny Prosky

Title: Authorized Signatory

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EX-10.9

Exhibit 10.9

FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT

THIS FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is entered into effective as of September 28, 2018, by and among (i) the “Sellers” identified on the signature pages attached hereto (each a “Seller”, and together, “Sellers”), (ii) the “Existing Operators” identified on the signature pages attached hereto (each an “Existing Operator”, and together, “Existing Operators”), and (iii) GAHC4 Songbird SNF Portfolio, LLC, a Delaware limited liability company (“Purchaser” and, together with Sellers and Existing Operators, the “Parties”, and each, a “Party”).

WHEREAS, the Parties entered into that certain Purchase and Sale Agreement dated as of July 24, 2018, as amended by that certain First Amendment to Purchase and Sale Agreement dated as of September 4, 2018, and that certain Second Amendment to Purchase and Sale Agreement dated as of September 13, 2018, and that certain Third Amendment to Purchase and Sale Agreement dated as of September 21, 2018 (collectively, the “PSA”); and

WHEREAS, the Parties desire to amend the PSA in accordance with the terms of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Defined Terms. All capitalized terms used and not defined herein shall have the meanings given to such terms in the PSA.

2.Due Diligence Period. The “Due Diligence Period”, as defined in Section 1(f) of the PSA, is hereby extended so that the Due Diligence Period shall expire at 5:00 p.m. (Pacific Time) on October 5, 2018. All references in the PSA to the Due Diligence Period shall mean the Due Diligence Period as extended by this Amendment.

3.Ratification. Except as expressly modified hereby, the terms of the PSA are hereby ratified and shall remain in full force and effect, enforceable in accordance with its terms.

4.Execution. This Amendment may be executed in a number of identical counterparts. Signatures may be delivered by facsimile or electronic delivery, and such signatures shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.

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NOW, THEREFORE, the parties hereto have executed this Amendment as of the date first set forth above.

SELLERS:

Midwest Health Properties, LLC

Petersen - Farmer City, LLC

Petersen Health Care III, LLC

Petersen Health Care VIII, LLC

Petersen Health Care XI, LLC

Petersen Health Care XIII, LLC

Petersen Health Group, LLC

Petersen Health Care XII, LLC

Robings, LLC

Each an Illinois limited liability company

For each, by:    /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title:     Manager

Petersen Health Care II, Inc.

By:    /s/ Mark B. Petersen                

Name: Mark B. Petersen

Title:     President

The remainder of this page is intentionally blank. Signatures follow on the next page.

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EXISTING OPERATORS:

Midwest Health Operations, LLC

Petersen Health & Wellness, LLC

Petersen Health Business, LLC

Petersen Health Care - Farmer City, LLC

Petersen Health Care VII, LLC

Petersen Health Group, LLC

Petersen Health Quality, LLC

Each an Illinois limited liability company

For each, by: /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title: Manager

Petersen Health Care II, Inc.

By: /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title: President

The remainder of this page is intentionally blank. Signatures follow on the next page.

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PURCHASER:

GAHC4 Songbird SNF Portfolio, LLC,

a Delaware limited liability company

By: /s/ Jeffrey T. Hanson                 

Name: Jeffrey T. Hanson

Title: Chief Executive Officer

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EX-10.10

Exhibit 10.10

Execution Version

SECOND AMENDMENT AND COMMITMENT INCREASE AGREEMENT

THIS SECOND AMENDMENT AND COMMITMENT INCREASE AGREEMENT, effective as of September 28, 2018 (this “Agreement”), is by and among GRIFFIN-AMERICAN HEALTHCARE REIT IV HOLDINGS, LP, a Delaware limited partnership (the “Borrower”), GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC., a Maryland corporation (the “Parent”), the Subsidiary Guarantors identified on the signature pages hereto, the Lenders identified on the signature pages hereto, BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and KEYBANK, NATIONAL ASSOCIATION, as an L/C Issuer.

W I T N E S E T H

WHEREAS, a $50,000,000 term loan credit facility and a $150,000,000 revolving credit facility were established pursuant to that Credit Agreement dated as of August 25, 2016 (as amended by that certain First Amendment to Credit Agreement dated as of October 31, 2017, and as further amended and modified, the “Credit Agreement”) among the Borrower, the Parent, certain subsidiaries of the Parent identified therein as Guarantors, the Lenders identified therein, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and Keybank, National Association, as an L/C Issuer;

WHEREAS, the Borrower has requested an increase in the Term Loan Commitment in an aggregate amount equal to $150,000,000 pursuant to the provisions of Section 2.01(e) of the Credit Agreement (the “Commitment Increase”);

WHEREAS, the Lenders party to this Agreement have agreed to provide the Commitment Increase on the terms and conditions provided herein;

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

Section 1.    Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement. Section references are to sections and subsections in the Credit Agreement.

Section 2.    Changes in the Term Loan Commitment. Subject to the terms and conditions provided herein, the Term Loan Commitment is hereby modified and the Credit Agreement is modified in the following respects.

2.1    The following definitions are hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order:

“Beneficial Ownership Certification”: a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.

“Benefit Plan”: any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Internal Revenue Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Internal Revenue Code) the assets of any such “employee benefit plan” or “plan”.

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“Commitment Increase Amendment” means that certain Second Amendment and Commitment Increase Agreement, dated as of the Commitment Increase Effective Date, by and among the Borrower, the Guarantors, the Lenders and the Administrative Agent.

“Commitment Increase Effective Date” means September 28, 2018.

“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page the Administrative Agent designates to determine LIBOR (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time).

“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Borrower).

“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

2.2    The following definitions set forth in Section 1.01 of the Credit Agreement are hereby amended and restated in their entireties to read as follows:

“Designated Jurisdiction” means any country, territory or region to the extent that such country, territory or region itself is the subject of any Sanction.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition, including, without limitation, any effective transfer or other disposition as a result of a division of any Credit Party or Subsidiary, (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, the United Kingdom and Norway.

“Eurodollar Rate” means:

(a)    for any Interest Period with respect to a Eurodollar Loan, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) (in such case, the “LIBOR Rate”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(b)    for any interest calculation with respect to a Base Rate Loan on any date, the rate

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per annum equal to the LIBOR Rate, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits with a term of one month commencing that day;

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied as otherwise reasonably determined by the Administrative Agent; and if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Credit Agreement.

Notwithstanding anything to the contrary in this Agreement or any other Credit Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:

(i)adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or

(ii) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”), or

(iii) syndicated loans currently being executed, or that include language similar to that contained in this Section, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein) (any such proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes and any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment.

If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable),the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Loans shall be suspended, (to the extent of the affected Eurodollar Loans or Interest Periods), and (y) the Eurodollar Rate component shall no longer be utilized in determining the Base Rate.  Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Loans (to the extent of the affected Eurodollar Loans or Interest Periods) or, failing that, will be deemed to have converted

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such request into a request for a Borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.

Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.

“Fee Letter” means that certain letter agreement dated as of August 23,2016, among the Administrative Agent, MLPFS and the Parent, as amended and/or supplemented by that certain Amendment to Fee Letter, dated as of October 18, 2017 and that certain Second Amendment to Fee Letter, dated as of September 28, 2018 (and as may be further amended, restated, supplemented or otherwise modified from time to time).

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent. Notwithstanding the foregoing, if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

“Interest Period” means, as to each Eurodollar Loan, the period commencing on the date such Eurodollar Loan is disbursed or converted to or continued as a Eurodollar Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice; provided, that:

(a)    any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the immediately succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day;

(b)    any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;

(c)    no Interest Period shall extend beyond the Termination Date; and

(d)    with respect to the continuation of a one month Eurodollar Loan when any Swap Contract of any Credit Party to which a Lender or any Affiliate of a Lender is a party is in effect, notwithstanding clause (a) above, the Interest Period applicable to such continued Eurodollar Loan shall commence on the last day of the preceding one month Interest Period (the “Commencement Date”) and end on the earlier of (x) one month from such Commencement Date and (y) a day when a payment is due from either counterparty under any such Swap Contract.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

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“Term Loan Commitment” means, with respect to each Term Loan Lender, the commitment of such Term Loan Lender to make its portion of the Term Loan to the Borrower pursuant to Section 2.01(d), in the principal amount set forth opposite such Term Loan Lender’s name on Schedule 2.01; provided that, at any time after funding of a Term Loan, the determinations “Required Lender” shall also be based on the outstanding principal amount of the such Term Loan.

“Term Loan Commitment Percentage” means, at any time, for each Term Loan Lender, a fraction (expressed as a percentage carried to the ninth decimal place), the numerator of which is the aggregate amount of Term Loans (and/or aggregate Term Loan Commitment, prior to the termination thereof) held by such Term Loan Lender and the denominator of which is the aggregate amount of Term Loans (and/or aggregate Term Loan Commitments) held by all Term Loan Lenders. The Term Loan Commitment Percentages are set forth on Schedule 2.01 (as such schedule reads as of the Commitment Increase Effective Date).

2.3    Section 2.01(d) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(d)    Term Loans. (i) the applicable Term Loan Lenders severally made a term loan to the Borrower in Dollars on the First Amendment Effective Date in the principal amount set forth opposite the applicable Term Loan Lender’s name on Schedule 2.01, and (ii) the applicable Term Loan Lenders agree to make a term loan to the Borrower of $150,000,000 on the Commitment Increase Effective Date (each a “Term Loan”); provided, that after giving effect to any such Term Loan, with regard to each Term Loan Lender individually, such Term Loan Lender’s Term Loan Commitment Percentage of outstanding Term Loans shall not exceed its respective Term Loan Commitment. Term Loans may consist of Base Rate Loans, Eurodollar Loans, or a combination thereof, as provided herein. Term Loans may be repaid in whole or in part at any time but amounts repaid on the Term Loan may not be reborrowed.

2.4    Section 2.02 of the Credit Agreement is hereby amended to add a new clause (f) immediately following Section 2.02(e) and shall read as follows:

(f)    Notwithstanding the foregoing provisions of this Section 2.02 or any other provisions in any other Credit Document to the contrary, at all times when any Swap Contract of any Credit Party to which a Lender or any Affiliate of a Lender is a party is in effect, Borrower shall elect Interest Periods of one month in duration for all Eurodollar Rate Loans. Borrower shall time its rate election so that each Interest Period with respect to such Eurodollar Rate Loans ends on a day when a payment is due from either counterparty under any such Swap Contract.

2.5    Article V of the Credit Agreement is hereby amended to add a new Section 5.25 and shall read as follows:

5.25    Beneficial Ownership Certification.

As of the Commitment Increase Effective Date, the information included in the Beneficial Ownership Certification, if applicable, is true and correct in all respects.

2.6    The first sentence of Section 7.04 of the Credit Agreement is hereby amended to add the words “(in each case, pursuant to a division of such Credit Party or Subsidiary or otherwise)” immediately before “consolidate with or into another Person”.

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2.7    Article IX of the Credit Agreement is hereby amended to add a new Section 9.13 and shall read as follows:

9.13    Certain ERISA Matters.

(a)    Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Credit Party, that at least one of the following is and will be true:

(i)    such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA, or otherwise) of one or more Benefit Plans in connection with the Loans, Commitments or Letters of Credit,

(ii)    the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, Commitments, Letters of Credit and this Agreement,

(iii)    (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, Commitments, Letters of Credit and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, Commitments, Letters of Credit and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, Commitments, Letters of Credit and this Agreement, or

(iv)    such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)    In addition, unless either (x) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (y) a Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Credit Party, that:

(i)    none of the Administrative Agent or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender involved in the Loans, Commitments, Letters of Credit and this Agreement (including in connection with the

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reservation or exercise of any rights by the Administrative Agent or any Arranger under this Agreement, any Credit Document or any documents related to hereto or thereto),

(ii)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, Commitments, Letters of Credit and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

(iii)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, Commitments, Letters of Credit and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations),

(iv)    the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, Commitments, Letters of Credit and this Agreement is a fiduciary under ERISA or the Internal Revenue Code, or both, with respect to the Loans, Commitments, Letters of Credit and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

(v)    no fee or other compensation is being paid directly to the Administrative Agent or any Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, Commitments, Letters of Credit or this Agreement.

(c)    The Administrative Agent and each Arranger hereby inform the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, Commitments, Letters of Credit and this Agreement, (ii) may recognize a gain if it extended the Loans, Commitments or Letters of Credit for an amount less than the amount being paid for an interest in such Loans, Commitments or Letters of Credit by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Credit Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

2.8    The last sentence of Section 10.22 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the Act and the Beneficial Ownership Regulation.

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2.9    Schedule 2.01 to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex I.

2.10    Schedule 5.10 to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex II.

2.11    Schedule 5.11 to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex III.

Section 3.    Representations and Warranties. Each of the Credit Parties hereby represents and warrants that:

3.1    It has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby.

3.2    It has executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by Debtor Relief Laws and subject to equitable principles.

3.3    The representations and warranties of the Credit Parties made in or pursuant to the Credit Agreement and the other Credit Documents shall be true in all material respects (except to the extent that any representation and warranty is qualified by materiality, in which case such representation and warranty shall be true and correct in all respects) as of the date hereof, other than those representations and warranties which expressly relate to an earlier date, in which case, they were true and correct in all material respects (except to the extent that any representation and warranty is qualified by materiality, in which case such representation and warranty shall be true and correct in all respects) as of such earlier date.

3.4    No Default or Event of Default exists immediately before, or will exist immediately after, giving effect to this Agreement.

Section 4.    Acknowledgment, Reaffirmation and Confirmation. Each Credit Party (a) acknowledges and consents to all of the terms and conditions of this Agreement, (b) affirms all of its obligations under the Credit Documents and (c) agrees that this Agreement and all documents, agreements and instruments executed in connection with this Agreement do not operate to reduce or discharge such Credit Party’s obligations under the Credit Documents.

Section 5.    Lender Acknowledgment and Agreement. Each of the Lenders acknowledge and agree to an increase in their respective Term Loan Commitments as shown on Schedule 2.01, as revised and attached hereto.

Section 6.    Conditions Precedent. The effectiveness of this Agreement is subject to satisfaction of all of the following conditions precedent, each in form and substance satisfactory to the Administrative Agent and the Lenders:

6.1    Receipt by the Administrative Agent of copies of this Agreement duly executed by the Borrower, the Parent, the Subsidiary Guarantors, the Administrative Agent and the Lenders.

6.2    Receipt by the Administrative Agent of amended and restated Notes (to the extent requested by any Lender) duly executed by the Borrower to reflect the Commitment Increase hereunder.

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6.3    Receipt by the Administrative Agent of that a copy of that certain Second Amendment to Fee Letter duly executed by the Parent, the Administrative Agent and MLPFS.

6.4    Receipt of a certificate of a responsible officer or director (as appropriate based on the applicable jurisdiction of organization) of the Borrower as of the Commitment Increase Effective Date (i) attaching copies of the Organization Documents certified by a secretary or assistant secretary to be true and correct as of the date hereof (or, if such Organization Documents have not been amended, modified or supplemented since such Organization Documents were last certified and delivered to the Administrative Agent, certifying that such Organization Documents have not been amended, modified or supplemented since such delivery and remain true, correct and complete and in full force and effect as of the date hereof), (ii) attaching copies of the resolutions of its board of directors or managers (or analogous governing body) approving and adopting the transactions contemplated by this Agreement, and authorizing the execution and delivery thereof (which in each case may be included in the resolutions approving the Credit Agreement and the transactions contemplated thereby), certified by a secretary or assistant secretary to be true and correct as of the date hereof and (iii) attaching an incumbency certification identifying the responsible officers that are authorized to execute this Agreement and related documents and to act on their behalf in connection with this Agreement and the Credit Documents.

6.5    Receipt by the Administrative Agent for the benefit of the Lenders and for the benefit of MLPFS all fees and expenses relating to the Commitment Increase.

6.6    Receipt by the Administrative Agent and each Lender of, in each case, at least five days prior to the Commitment Increase Effective Date:

(a)     all documentation and other information requested by the Administrative Agent or any Lender under applicable “know your customer” or anti‑money laundering rules, regulations or policies, including the Patriot Act; and

(b)    a Beneficial Ownership Certification in relation to each Credit Party that qualifies as a “legal entity customer” under the Beneficial Ownership Certification.

6.7    Receipt of a certificate or certificates executed by a Responsible Officer of the Borrower as of the Commitment Increase Effective Date, stating that (i) each Credit Party is in compliance in all material respects with all existing financial obligations (whether pursuant to the terms and conditions of the Credit Agreement or otherwise), (ii) all governmental, stockholder and third party consents and approvals, if any, with respect to this Agreement and the transactions contemplated hereby have been obtained, (iii) no action, suit, investigation or proceeding is pending, or to the knowledge of the Credit Parties threatened, in any court or before any arbitrator or governmental instrumentality that purports to affect any Consolidated Party or any transaction contemplated by the Credit Documents, if such action, suit, investigation or proceeding could have a Material Adverse Effect, (iv) immediately prior to and following the transactions contemplated herein, each of the Credit Parties shall be Solvent, and (v) immediately after the execution of this Amendment, (A) no Default or Event of Default exists and (B) all representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects (except to the extent that any representation and warranty is qualified by materiality, in which case such representation and warranty shall be true and correct in all respects), other than those representations and warranties which expressly relate to an earlier date, in which case, they were true and correct in all material respects (except to the extent that any such representation and warranty is qualified by materiality, in which case such representation and warranty was true and correct in all respects) as of such earlier date.

9

6.8    Receipt of an opinion of counsel, in form and substance reasonably satisfactory to the Administrative Agent, of Venable LLP, special local counsel for the Credit Parties for the state of Maryland, addressed to the Administrative Agent and the Lenders.

Section 7.    Agreement is a “Credit Document”. This Agreement is a Credit Document and all references to a “Credit Document” in the Credit Agreement and the other Credit Documents (including, without limitation, all such references in the representations and warranties in the Credit Agreement and the other Credit Documents) shall be deemed to include this Agreement.

Section 8.    Full Force and Effect. Except as modified hereby, all of the terms and provisions of the Credit Agreement and the other Credit Documents (including schedules and exhibits thereto) shall remain in full force and effect.

Section 9.    Expenses. The Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Agreement, including the reasonable fees and expenses of Cadwalader, Wickersham & Taft, LLP, and local counsel to the Administrative Agent in the various jurisdictions where the Credit Parties are located.

Section 10.    Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Delivery by any party hereto of an executed counterpart of this Agreement by facsimile or other electronic imaging shall be effective as such party’s original executed counterpart.

Section 11.    Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York applicable to agreements made and to be performed entirely within such state, without regard to conflict of laws principles; provided that the Administrative Agent and the Lenders shall retain all rights arising under federal law.

[Remainder of page intentionally left blank]

10

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

BORROWER:

Griffin-American Healthcare REIT IV Holdings, LP,

a Delaware limited partnership

By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

PARENT:

Griffin-American Healthcare REIT IV , Inc.,

a Maryland corporation

By:	/s/ Brian S. Peay
Name:	Brian S. Peay
Its:	Chief Financial Officer

SUBSIDIARY GUARANTORS:

GAHC4 Auburn CA MOB, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Pottsville PA MOB, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Charlottesville VA MOB, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Cullman AL MOB I, LLC,

a Delaware limited liability company

By:	GAHC4 Iron MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Cullman AL MOB II, LLC,

a Delaware limited liability company

By:	GAHC4 Iron MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Cullman AL MOB III, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Sylacauga AL MOB, LLC,

a Delaware limited liability company

By:	GAHC4 Iron MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Iron MOB Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Mint Hill NC MOB, LP,

a Delaware limited liability partnership

By:	GAHC4 Mint Hill NC MOB GP, LLC,
	a Delaware limited partnership,
	its General Partner
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Mint Hill NC MOB GP, LLC,

a Delaware limited liability partnership

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Lafayette LA ALF Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Evendale OH MOB, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Lafayette LA ALF, LLC,

a Delaware limited liability company

By:	GAHC4 Lafayette LA ALF Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Lafayette LA MC, LLC,

a Delaware limited liability company

By:	GAHC4 Lafayette LA ALF Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Battle Creek MI MOB, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Reno NV MOB, LLC,

a Delaware limited liability company

By:	GAHC4 Reno NV MOB Sole Member, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Reno NV MOB Sole Member, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Athens GA MOB Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Athens GA MOB I, LLC,

a Delaware limited liability company

By:	GAHC4 Athens MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Athens GA MOB II, LLC,

a Delaware limited liability company

By:	GAHC4 Athens MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 SW Illinois Senior Housing Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Columbia IL SH, LLC,

a Delaware limited liability company

By:	GAHC4 SW Illinois Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Columbia IL MC, LLC,

a Delaware limited liability company

By:	GAHC4 SW Illinois Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Millstadt IL SH, LLC,

a Delaware limited liability company

By:	GAHC4 SW Illinois Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Red Bud IL SH, LLC,

a Delaware limited liability company

By:	GAHC4 SW Illinois Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Waterloo IL SH, LLC,

a Delaware limited liability company

By:	GAHC4 SW Illinois Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Northern CA Senior Housing Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Belmont CA ALF, LLC,

a Delaware limited liability company

By:	GAHC4 Northern CA Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Fairfield CA MC, LLC,

a Delaware limited liability company

By:	GAHC4 Northern CA Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Menlo Park CA MC, LLC,

a Delaware limited liability company

By:	GAHC4 Northern CA Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Sacramento CA ALF, LLC,

a Delaware limited liability company

By:	GAHC4 Northern CA Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Roseburg OR MOB Sole Member, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Roseburg OR MOB, LLC,

a Delaware limited liability company

By:	GAHC4 Roseburg OR MOB Sole Member, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Fairfield County CT MOB Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Stratford CT MOB, LLC,

a Delaware limited liability company

By:	GAHC4 Fairfield County CT MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Trumbull CT MOB, LLC,

a Delaware limited liability company

By:	GAHC4 Fairfield County CT MOB Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Central Wisconsin SC Portfolio, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Sun Prairie WI SC, LLC,

a Delaware limited liability company

By:	GAHC4 Central Wisconsin SC Portfolio, LLC,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Waunakee WI SC, LLC,

a Delaware limited liability company

By:	GAHC4 Central Wisconsin SC Portfolio, LLC,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Peninsula FL JV Partner, LLC,

a Delaware limited liability company

By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Peninsula FL JV, LLC,

a Delaware limited liability company

By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Central FL Senior Housing Portfolio, LLC,

a Delaware limited liability company

By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Bayside FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Grande FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Spring Oaks FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Balmoral FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Bradenton FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Lake Morton FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Renaissance FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

GAHC4 Spring Haven FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

GAHC4 Forest Oaks FL SH, LLC,

a Delaware limited liability company

By:	GAHC4 Central FL Senior Housing Portfolio, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV, LLC,
	a Delaware limited liability company,
	its Sole Member
By:	GAHC4 Peninsula FL JV Partner, LLC,
	a Delaware limited liability company,
	its Managing Member
By:	Griffin-American Healthcare REIT IV Holdings, LP,
	a Delaware limited partnership,
	its Sole Member
By:	Griffin-American Healthcare REIT IV, Inc.
	a Maryland corporation,
	its General Partner
	By:	/s/ Brian S. Peay
	Name:	Brian S. Peay
	Its:	Chief Financial Officer

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

ADMINISTRATIVE AGENT AND

LENDERS:

BANK OF AMERICA, N.A., as Administrative Agent

By:	/s/ Keegan Koch
Name:	Keegan Koch
Title:	SVP

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

BANK OF AMERICA, N.A., as a Lender, an L/C Issuer

and Swing Line Lender

By:	/s/ Keegan Koch
Name:	Keegan Koch
Title:	SVP

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

KEYBANK, NATIONAL ASSOCIATION, as a Lender

and an L/C Issuer

By:	/s/ Brian Heagler
Name:	Brian Heagler
Title:	Senior Vice President

COMMITMENT INCREASE AMENDMENT

GRIFFIN IV

EX-10.11

Exhibit 10.11

FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT

THIS FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is entered into effective as of October 5, 2018, by and among (i) the “Sellers” identified on the signature pages attached hereto (each a “Seller”, and together, “Sellers”), (ii) the “Existing Operators” identified on the signature pages attached hereto (each an “Existing Operator”, and together, “Existing Operators”), and (iii) GAHC4 Songbird SNF Portfolio, LLC, a Delaware limited liability company (“Purchaser” and, together with Sellers and Existing Operators, the “Parties”, and each, a “Party”).

WHEREAS, the Parties entered into that certain Purchase and Sale Agreement dated as of July 24, 2018, as amended by that certain First Amendment to Purchase and Sale Agreement dated as of September 4, 2018, and that certain Second Amendment to Purchase and Sale Agreement dated as of September 13, 2018, that certain Third Amendment to Purchase and Sale Agreement dated as of September 21, 2018, and that certain Fourth Amendment to Purchase and Sale Agreement dated as of September 28, 2018 (collectively, the “PSA”); and

WHEREAS, the Parties desire to amend the PSA in accordance with the terms of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Defined Terms. All capitalized terms used and not defined herein shall have the meanings given to such terms in the PSA.

2.Due Diligence Period. The “Due Diligence Period”, as defined in Section 1(f) of the PSA, is hereby extended so that the Due Diligence Period shall expire at 5:00 p.m. (Pacific Time) on October 9, 2018. All references in the PSA to the Due Diligence Period shall mean the Due Diligence Period as extended by this Amendment.

3.Ratification. Except as expressly modified hereby, the terms of the PSA are hereby ratified and shall remain in full force and effect, enforceable in accordance with its terms.

4.Execution. This Amendment may be executed in a number of identical counterparts. Signatures may be delivered by facsimile or electronic delivery, and such signatures shall be binding on the parties hereto, with original signatures to be delivered as soon as reasonably practical thereafter.

[Remainder of page intentionally left blank.]

1

NOW, THEREFORE, the parties hereto have executed this Amendment as of the date first set forth above.

SELLERS:

Midwest Health Properties, LLC

Petersen - Farmer City, LLC

Petersen Health Care III, LLC

Petersen Health Care VIII, LLC

Petersen Health Care XI, LLC

Petersen Health Care XIII, LLC

Petersen Health Group, LLC

Petersen Health Care XII, LLC

Robings, LLC

Each an Illinois limited liability company

For each, by:    /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title:     Manager

Petersen Health Care II, Inc.

By:    /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title:     President

The remainder of this page is intentionally blank. Signatures follow on the next page.

Signature Page to Fifth Amendment to Purchase and Sale Agreement

S-2

EXISTING OPERATORS:

Midwest Health Operations, LLC

Petersen Health & Wellness, LLC

Petersen Health Business, LLC

Petersen Health Care - Farmer City, LLC

Petersen Health Care VII, LLC

Petersen Health Group, LLC

Petersen Health Quality, LLC

Each an Illinois limited liability company

For each, by: /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title: Manager

Petersen Health Care II, Inc.

By: /s/ Mark B. Petersen                 

Name: Mark B. Petersen

Title: President

The remainder of this page is intentionally blank. Signatures follow on the next page.

Signature Page to Fifth Amendment to Purchase and Sale Agreement

S-3

PURCHASER:

GAHC4 Songbird SNF Portfolio, LLC,

a Delaware limited liability company

By: /s/ Danny Prosky                 

Name: Danny Prosky    

Title: Authorized Signatory

[End of signatures.]

Signature Page to Fifth Amendment to Purchase and Sale Agreement

S-3

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey T. Hanson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Griffin-American Healthcare REIT IV, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 13, 2018	By:	/s/ JEFFREYT. HANSON
Date		Jeffrey T. Hanson
		Chief Executive Officer and Chairman of the Board of Directors
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Brian S. Peay, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Griffin-American Healthcare REIT IV, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 13, 2018	By:	/s/ BRIAN S. PEAY
Date		Brian S. Peay
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Griffin-American Healthcare REIT IV, Inc., or the Company, hereby certifies, to his knowledge, that:

(1) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 13, 2018	By:	/s/ JEFFREYT. HANSON
Date		Jeffrey T. Hanson
		Chief Executive Officer and Chairman of the Board of Directors
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Griffin-American Healthcare REIT IV, Inc., or the Company, hereby certifies, to his knowledge, that:

(1) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 13, 2018	By:	/s/ BRIAN S. PEAY
Date		Brian S. Peay
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 09, 2018
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	gahr4
Entity Registrant Name	Griffin-American Healthcare REIT IV, Inc.
Entity Central Index Key	0001632970
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Small Business	false
Entity Ex Transition Period	true
Common Class T [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		60,387,726
Common Class I [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		3,903,987

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)		Sep. 30, 2018	Dec. 31, 2017
ASSETS
Real estate investments, net		$ 638,570,000	$ 419,665,000
Cash and cash equivalents		30,841,000	7,087,000
Accounts and other receivables, net		10,661,000	2,838,000
Restricted cash		182,000	16,000
Real estate deposits		4,250,000	500,000
Identified intangible assets, net		64,095,000	44,821,000
Other assets, net		8,123,000	5,226,000
Total assets		756,722,000	480,153,000
Liabilities:
Mortgage loans payable, net	[1]	16,988,000	11,567,000
Line of credit and term loan	[1]	200,000,000	84,100,000
Accounts payable and accrued liabilities	[1]	29,574,000	19,428,000
Accounts payable due to affiliates	[1]	8,350,000	8,118,000
Identified intangible liabilities, net		1,486,000	1,737,000
Security deposits, prepaid rent and other liabilities	[1]	2,508,000	977,000
Total liabilities		258,906,000	125,927,000
Commitments and contingencies (Note 9)
Redeemable noncontrolling interests (Note 10)		1,278,000	1,002,000
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 200,000,000 shares authorized; none issued and outstanding		0	0
Additional paid-in capital		547,221,000	376,284,000
Accumulated deficit		(51,293,000)	(23,482,000)
Total stockholders’ equity		496,538,000	353,224,000
Total liabilities, redeemable noncontrolling interests and stockholders’ equity		756,722,000	480,153,000
Common Class T [Member]
Stockholders’ equity:
Common stock, $0.01 par value per share		574,000	400,000
Common Class I [Member]
Stockholders’ equity:
Common stock, $0.01 par value per share		$ 36,000	$ 22,000

[1] Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Line of credit and term loan	[1]	$ 200,000,000	$ 84,100,000
Preferred stock, par value (usd per share)		$ 0.01	$ 0.01
Preferred Stock, Shares Authorized		200,000,000	200,000,000
Preferred stock, shares issued		0	0
Preferred stock, shares outstanding		0	0
Common stock, par value (usd per share)		$ 0.01	$ 0.01
Common stock, shares authorized		1,000,000,000	1,000,000,000
Common Class T [Member]
Common stock, par value (usd per share)		$ 0	$ 0
Common stock, shares authorized		900,000,000	900,000,000
Common stock, shares, issued		57,454,294	39,972,049
Common stock, shares outstanding		57,454,294	39,972,049
Common Class I [Member]
Common stock, par value (usd per share)		$ 0	$ 0
Common stock, shares authorized		100,000,000	100,000,000
Common stock, shares, issued		3,631,170	2,235,111
Common stock, shares outstanding		3,631,170	2,235,111

[1] Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Real estate revenue	$ 12,512,000	$ 8,488,000	$ 32,529,000	$ 18,738,000
Resident fees and services	9,769,000	0	26,604,000	0
Total revenues	22,281,000	8,488,000	59,133,000	18,738,000
Expenses:
Rental expenses	3,187,000	2,095,000	8,090,000	4,893,000
Property operating expenses	7,987,000	0	21,986,000	0
General and administrative	2,105,000	1,296,000	5,803,000	2,996,000
Acquisition related expenses	98,000	121,000	254,000	334,000
Depreciation and amortization	9,007,000	3,442,000	24,053,000	7,619,000
Total expenses	22,384,000	6,954,000	60,186,000	15,842,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)	(1,602,000)	(780,000)	(3,846,000)	(1,607,000)
Interest income	6,000	0	6,000	1,000
(Loss) income before income taxes	(1,699,000)	754,000	(4,893,000)	1,290,000
Income tax expense	(4,000)	0	(4,000)	0
Net (loss) income	(1,703,000)	754,000	(4,897,000)	1,290,000
Less: net loss attributable to redeemable noncontrolling interests	72,000	0	197,000	0
Net (loss) income attributable to controlling interest	$ (1,631,000)	$ 754,000	$ (4,700,000)	$ 1,290,000
Net (loss) income per Class T and Class I common share attributable to controlling interest — basic and diluted	$ (0.03)	$ 0.02	$ (0.09)	$ 0.05
Weighted average number of Class T and Class I common shares outstanding — basic and diluted	57,769,964	32,593,321	51,441,064	23,827,175
Distributions declared per Class T and Class I common share	$ 0.15	$ 0.15	$ 0.45	$ 0.45

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($)	Total	Total Stockholders’ Equity		Class T and Class I Common Stock	Additional Paid-In Capital	Accumulated Deficit
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests	$ 0
Beginning balance, Shares at Dec. 31, 2016				11,377,439
Beginning balance Stockholders' Equity, including Portion Attributable to Noncontrolling Interest at Dec. 31, 2016		$ 92,255,000		$ 114,000	$ 99,492,000	$ (7,351,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, shares				24,264,521		0
Stock Repurchased During Period, Value		(178,000)		$ 0	(178,000)
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures		45,000			45,000
Amortization of nonvested common stock compensation		55,000			55,000
Issuance of common stock		241,435,000		$ 242,000	241,193,000
Offering costs - common stock		(23,544,000)			(23,544,000)
Issuance of common stock under the DRIP, shares				584,318
Issuance of common stock under the DRIP	5,492,000	5,492,000		$ 6,000	5,486,000
Dividends, Common Stock, Cash		(10,705,000)				$ (10,705,000)
Net Income (Loss) Attributable to Parent	(1,290,000)	1,290,000				1,290,000
Ending balance Stockholders' Equity, including Portion Attributable to Noncontrolling Interest at Sep. 30, 2017		306,145,000		$ 362,000	322,549,000	(16,766,000)
Ending balance, Shares at Sep. 30, 2017				36,230,395
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Repurchased During Period, Shares				(18,383)
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures				22,500
Adjustments to Additional Paid in Capital, Fair Value Adjustment to Redeemable Noncontrolling Interests	0
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests	(197,000)
Beginning balance, Shares at Dec. 31, 2017				42,207,160
Beginning balance Stockholders' Equity, including Portion Attributable to Noncontrolling Interest at Dec. 31, 2017	353,224,000	353,224,000		$ 422,000	376,284,000	$ (23,482,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, shares				17,789,763		0
Stock Repurchased During Period, Value		(2,242,000)		$ (2,000)	(2,240,000)
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures		45,000			45,000
Amortization of nonvested common stock compensation		100,000			100,000
Issuance of common stock		177,663,000		$ 177,000	177,486,000
Offering costs - common stock		16,679,000			16,679,000
Issuance of common stock under the DRIP, shares				1,302,271
Issuance of common stock under the DRIP	12,435,000			$ 13,000	12,422,000
Dividends, Common Stock, Cash		(23,111,000)				$ (23,111,000)
Net Income (Loss) Attributable to Parent	4,700,000	(4,700,000)	[1]			(4,700,000)
Ending balance Stockholders' Equity, including Portion Attributable to Noncontrolling Interest at Sep. 30, 2018	496,538,000	496,538,000		$ 610,000	547,221,000	$ (51,293,000)
Ending balance, Shares at Sep. 30, 2018				61,085,464
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Repurchased During Period, Shares				(236,230)
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures				22,500
Adjustments to Additional Paid in Capital, Fair Value Adjustment to Redeemable Noncontrolling Interests	$ 197,000	$ (197,000)			$ (197,000)

[1] Amount excludes $197,000 of net loss attributable to redeemable noncontrolling interests for the nine months ended September 30, 2018. See Note 10, Redeemable Noncontrolling Interests, for a further discussion.

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parentheticals) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Stockholders' Equity [Abstract]
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests	$ (72,000)	$ 0	$ (197,000)	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income	$ (4,897,000)	$ 1,290,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	24,053,000	7,619,000
Other amortization (including deferred financing costs, above/below-market leases, leasehold interests, above-market leasehold interests and debt discount/premium)	620,000	251,000
Deferred rent	(2,045,000)	(1,124,000)
Stock based compensation	145,000	100,000
Share discounts	0	3,000
Bad debt expense, net	181,000	94,000
Changes in operating assets and liabilities:
Accounts and other receivables	(5,863,000)	(362,000)
Other assets	(430,000)	(305,000)
Accounts payable and accrued liabilities	4,176,000	1,394,000
Accounts payable due to affiliates	217,000	169,000
Security deposits, prepaid rent and other liabilities	(480,000)	(280,000)
Net cash provided by operating activities	15,677,000	8,849,000
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate investments	(248,423,000)	(215,738,000)
Capital expenditures	(5,166,000)	(845,000)
Real estate deposits	(3,750,000)	(4,821,000)
Pre-acquisition expenses	(422,000)	(698,000)
Net cash used in investing activities	(257,761,000)	(222,102,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgage loans payable	(323,000)	(189,000)
Borrowings under the line of credit and term loan	425,500,000	192,600,000
Payments on the line of credit and term loan	(309,600,000)	(200,500,000)
Deferred financing costs	(145,000)	(175,000)
Proceeds from issuance of common stock	176,417,000	241,647,000
Repurchase of common stock	(2,242,000)	(178,000)
Contribution from noncontrolling interest	276,000	0
Payment of offering costs	(14,030,000)	(13,673,000)
Security deposits	(16,000)	(97,000)
Distributions paid	(9,833,000)	(4,006,000)
Net cash provided by financing activities	266,004,000	215,429,000
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	23,920,000	2,176,000
Cash and cash equivalents at beginning of period	7,087,000	2,237,000
Restricted cash at beginning of period	16,000	0
CASH, CASH EQUIVALENTS, RESTRICTED CASH - Beginning of period	7,103,000	2,237,000
Cash and cash equivalents at end of period	30,841,000	4,397,000
Restricted cash at end of period	182,000	16,000
CASH, CASH EQUIVALENTS, RESTRICTED CASH - Ending of period	31,023,000	4,413,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	3,010,000	1,356,000
Income taxes	12,000	7,000
Investing Activities:
Accrued capital expenditures	2,531,000	931,000
Accrued pre-acquisition expenses	805,000	601,000
Tenant improvement overage	435,000	0
The following represents the increase in certain assets and liabilities in connection with our acquisitions of real estate investments:
Other assets	200,000	213,000
Mortgage loans payable, net	5,808,000	8,000,000
Accounts payable and accrued liabilities	589,000	803,000
Security deposits and prepaid rent	1,592,000	545,000
Financing Activities:
Issuance of common stock under the DRIP	12,435,000	5,492,000
Distributions declared but not paid	2,960,000	1,739,000
Accrued Contingent Advisor Payment	7,750,000	7,759,000
Accrued stockholder servicing fee	15,203,000	11,496,000
Accrued deferred financing costs	34,000	22,000
Receivable from transfer agent	$ 1,667,000	$ 807,000

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Organization and Description of Business

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

1. Organization and Description of Business

Griffin-American Healthcare REIT IV, Inc., a Maryland corporation, was incorporated on January 23, 2015 and therefore we consider that our date of inception. We were initially capitalized on February 6, 2015. We invest in a diversified portfolio of real estate properties, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. We also operate healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code of 1986, as amended, or the Code, authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008). We may also originate and acquire secured loans and real estate-related investments on an infrequent and opportunistic basis. We generally seek investments that produce current income. We qualified to be taxed as a real estate investment trust, or REIT, under the Code for federal income tax purposes beginning with our taxable year ended December 31, 2016, and we intend to continue to qualify to be taxed as a REIT.

On February 16, 2016, we commenced our initial public offering, or our offering, in which we were initially offering to the public up to $3,150,000,000 in shares of our Class T common stock, consisting of up to $3,000,000,000 in shares of our Class T common stock at a price of $10.00 per share in our primary offering and up to $150,000,000 in shares of our Class T common stock for $9.50 per share pursuant to our distribution reinvestment plan, as amended, or the DRIP. Effective June 17, 2016, we reallocated certain of the unsold shares of Class T common stock being offered and began offering shares of Class I common stock, such that we are currently offering up to approximately $2,800,000,000 in shares of Class T common stock and $200,000,000 in shares of Class I common stock in our primary offering, and up to an aggregate of $150,000,000 in shares of our Class T and Class I common stock pursuant to the DRIP, aggregating up to $3,150,000,000, or the maximum offering amount.

The shares of our Class T common stock in our primary offering were being offered at a price of $10.00 per share prior to April 11, 2018. The shares of our Class I common stock in our primary offering were being offered at a price of $9.30 per share prior to March 1, 2017 and $9.21 per share from March 1, 2017 to April 10, 2018. The shares of our Class T and Class I common stock issued pursuant to the DRIP were sold at a price of $9.50 per share prior to January 1, 2017 and $9.40 per share from January 1, 2017 to April 10, 2018. On April 6, 2018, our board of directors, at the recommendation of the audit committee of our board of directors, comprised solely of independent directors, unanimously approved and established an estimated per share net asset value, or NAV, of our common stock of $9.65. As a result, on April 6, 2018, our board of directors unanimously approved revised offering prices for each class of shares of our common stock to be sold in the primary portion of our initial public offering based on the estimated per share NAV of our Class T and Class I common stock of $9.65 plus any applicable per share up-front selling commissions and dealer manager fees funded by us, effective April 11, 2018. Accordingly, the revised offering price for shares of our Class T common stock and Class I common stock sold pursuant to our primary offering on or after April 11, 2018 is $10.05 per share and $9.65 per share, respectively. Effective April 11, 2018, the shares of our Class T and Class I common stock issued pursuant to the DRIP are sold at a price of $9.65 per share, the most recent estimated per share NAV approved and established by our board of directors.

We will sell shares of our Class T and Class I common stock in our offering until the earlier of February 16, 2019 or the date on which the maximum offering amount has been sold. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the DRIP, and among classes of stock. As of September 30, 2018, we had received and accepted subscriptions in our offering for 59,008,261 aggregate shares of our Class T and Class I common stock, or approximately $587,815,000, excluding shares of our common stock issued pursuant to the DRIP.

We conduct substantially all of our operations through Griffin-American Healthcare REIT IV Holdings, LP, or our operating partnership. We are externally advised by Griffin-American Healthcare REIT IV Advisor, LLC, or our advisor, pursuant to an advisory agreement, or the Advisory Agreement, between us and our advisor. The Advisory Agreement was effective as of February 16, 2016 and had a one-year term, subject to successive one-year renewals upon the mutual consent of the parties. The Advisory Agreement was last renewed pursuant to the mutual consent of the parties on February 14, 2018 and expires on February 16, 2019. Our advisor uses its best efforts, subject to the oversight and review of our board of directors, to, among other things, research, identify, review and make investments in and dispositions of properties and securities on our behalf consistent with our investment policies and objectives. Our advisor performs its duties and responsibilities under the Advisory Agreement as our fiduciary. Our advisor is 75.0% owned and managed by American Healthcare Investors, LLC, or American Healthcare Investors, and 25.0% owned by a wholly owned subsidiary of Griffin Capital Company, LLC, or Griffin Capital, or collectively, our co-sponsors. American Healthcare Investors is 47.1% owned by AHI Group Holdings, LLC, or AHI Group Holdings, 45.1% indirectly owned by Colony Capital, Inc. (NYSE: CLNY), or Colony Capital, and 7.8% owned by James F. Flaherty III, a former partner of Colony Capital. We are not affiliated with Griffin Capital, Griffin Capital Securities, LLC, or our dealer manager, Colony Capital or Mr. Flaherty; however, we are affiliated with Griffin-American Healthcare REIT IV Advisor, LLC, American Healthcare Investors and AHI Group Holdings.

We currently operate through four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities. As of September 30, 2018, we had completed 28 property acquisitions whereby we owned 56 properties, comprising 58 buildings, or approximately 3,389,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $714,490,000.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

2. Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding our condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing our accompanying condensed consolidated financial statements.

Basis of Presentation

Our accompanying condensed consolidated financial statements include our accounts and those of our operating partnership and the wholly owned subsidiaries of our operating partnership, as well as any variable interest entities, or VIEs, in which we are the primary beneficiary. We evaluate our ability to control an entity, and whether the entity is a VIE and of which we are the primary beneficiary, by considering substantive terms of the arrangement and identifying which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance.

We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, or wholly owned subsidiaries of our operating partnership, will own substantially all of the interests in properties acquired on our behalf. We are the sole general partner of our operating partnership, and as of September 30, 2018 and December 31, 2017, we owned greater than a 99.99% general partnership interest therein. Our advisor is a limited partner, and as of September 30, 2018 and December 31, 2017, owned less than a 0.01% noncontrolling limited partnership interest in our operating partnership.

Because we are the sole general partner of our operating partnership and have unilateral control over its management and major operating decisions (even if additional limited partners are admitted to our operating partnership), the accounts of our operating partnership are consolidated in our condensed consolidated financial statements. All intercompany accounts and transactions are eliminated in consolidation.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the United States Securities and Exchange Commission, or SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results that may be expected for the full year; such full year results may be less favorable.

In preparing our accompanying condensed consolidated financial statements, management has evaluated subsequent events through the financial statement issuance date. We believe that although the disclosures contained herein are adequate to prevent the information presented from being misleading, our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018.

Use of Estimates

The preparation of our accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions, allowance for doubtful accounts, impairment of long-lived assets, and contingencies. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.

Revenue Recognition

In May 2014, the, Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, which has been codified to Accounting Standards Codification, or ASC, Topic 606. We evaluate all of our revenue streams to identify whether each revenue stream would be subject to the provisions of ASC Topic 606 and whether there are any differences in the timing, measurement or presentation of revenue recognition. Based on a review of our various revenue streams, certain components of resident fees and services, such as revenues that are ancillary to the contractual rights of residents within our senior housing facilities operated utilizing a RIDEA structure, are subject to ASC Topic 606. While these revenue streams are subject to the provisions of ASC Topic 606, we believe that the pattern and timing of recognition of income are consistent with the previous accounting model. Virtually all resident fees and services are earned over a period of time and the majority of these revenues are paid by private payor types with the residual being paid by Medicaid. We adopted ASC Topic 606 on January 1, 2018 using the modified retrospective adoption method and the adoption did not have a material impact on our consolidated financial statements. Included within resident fees and services for the three and nine months ended September 30, 2018 was $219,000 and $639,000, respectively, of ancillary service revenue.

Segment Information

We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. Accordingly, when we acquired our first medical office building in June 2016; senior housing facility in December 2016; senior housing — RIDEA facility in November 2017; and skilled nursing facility in March 2018, we added a new reporting segment at each such time. As of September 30, 2018, we operate through four reportable business segments, with activities related to investing in medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities. See Note 15, Segment Reporting, for a further discussion.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, or ASU 2016-02, which amends the guidance on accounting for leases, including extensive amendments to the disclosure requirements. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02 from a lessor perspective, the guidance will require bifurcation of lease revenues into lease components and non-lease components and to separately recognize and disclose non-lease components that are executory in nature. Lease components will continue to be recognized on a straight-line basis over the lease term and certain non-lease components may be accounted for under the new revenue recognition guidance in ASC Topic 606. In addition, ASU 2016-02 provides a practical expedient that allows an entity to not reassess the following upon adoption (must be elected as a group): (i) whether an expired or existing contract contains a lease arrangement; (ii) the lease classification related to expired or existing lease arrangements; or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. We plan to elect this practical expedient.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10, and ASU 2018-11, Leases (Topic 842) Targeted Improvements, or ASU 2018-11, which update the guidance on accounting for leases under ASU 2016-02. ASU 2018-10 was issued to increase stockholders’ awareness of narrow aspects of the guidance issued in the amendments and to expedite the improvements under ASU 2016-02. ASU 2018-11 provides (a) an alternative transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, in addition to the modified retrospective transition method prescribed by ASU 2016-02, which requires application of the new leases standard at the beginning of the earliest period presented in the financial statements for comparative purposes; and (b) a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. We completed a preliminary assessment of predominance for our medical office buildings, senior housing, and skilled nursing segments and, effective upon the adoption of ASU 2016-02 (codified under ASC Topic 842), we expect to recognize revenue from these segments under ASC Topic 842. We are still in the process of completing our preliminary assessment related to senior housing — RIDEA and plan to finalize our assessment for all reporting segments during the fourth quarter of 2018.

ASU 2016-02, ASU 2018-10 and ASU 2018-11 are effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted for financial statements that have not yet been made available for issuance. As a result of the adoption of the new leases standard on January 1, 2019, we: (i) will recognize all of our operating leases for which we are the lessee, including facilities leases and ground leases, on our consolidated balance sheets; and (ii) may be required to increase our revenue and expense for the amount of real estate taxes and insurance paid by our tenants under triple-net leases; however, we are still evaluating the complete impact of the adoption of the new leases standard and its related expedients, in addition to the transition method, on January 1, 2019 to our consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted after December 15, 2018. We do not expect the adoption of ASU 2016-13 on January 1, 2020 to have a material impact on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income, or ASU 2018-02, which amends the reclassification requirements from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017, or the Tax Act. Under ASU 2018-02, an entity will be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of ASU 2018-02 on January 1, 2019 to have a material impact on our consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Amendments to the SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, or ASU 2018-05, which updates the income tax accounting in GAAP to reflect the SEC’s interpretive guidance with regards to the Tax Act. See Note 14, Income Taxes, for a further discussion.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), orASU 2018-13, which modifies the disclosure requirements in ASC Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We are currently evaluating this guidance to determine the impact on our disclosures.

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Real Estate Investments, Net

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

Real Estate Investments, Net

3. Real Estate Investments, Net

Our real estate investments, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
Building and improvements	$	580,961,000		$	371,890,000
Land	72,979,000			52,202,000
Furniture, fixtures and equipment	4,900,000			4,458,000
	658,840,000			428,550,000
Less: accumulated depreciation	(20,270,000		)	(8,885,000		)
Total	$	638,570,000		$	419,665,000

Depreciation expense for the three months ended September 30, 2018 and 2017 was $4,384,000 and $2,305,000, respectively. Depreciation expense for the nine months ended September 30, 2018 and 2017 was $11,581,000 and $5,110,000, respectively. In addition to the property acquisitions discussed below, for the three and nine months ended September 30, 2018, we incurred capital expenditures of $1,434,000 and $2,650,000, respectively, on our medical office buildings and $1,837,000 and $4,127,000, respectively, on our senior housing — RIDEA facilities. We did not incur any capital expenditures on our senior housing facilities and skilled nursing facilities for the three and nine months ended September 30, 2018.

Acquisitions in 2018

For the nine months ended September 30, 2018, using net proceeds from our offering and debt financing, we completed 10 property acquisitions comprising 18 buildings from unaffiliated third parties. The following is a summary of our property acquisitions for the nine months ended September 30, 2018:

Acquisition(1)	Location	Type	Date Acquired	Contract Purchase Price		Mortgage Loan Payable(2)		Corporate Line of Credit(3)		Total Acquisition Fee(4)
Central Wisconsin Senior Care Portfolio	Sun Prairie and Waunakee, WI	Skilled Nursing	03/01/18	$	22,600,000	$	—	$	22,600,000	$	1,018,000
Sauk Prairie MOB	Prairie du Sac, WI	Medical Office	04/09/18	19,500,000		—		19,500,000		878,000
Surprise MOB	Surprise, AZ	Medical Office	04/27/18	11,650,000		—		8,000,000		524,000
Southfield MOB	Southfield, MI	Medical Office	05/11/18	16,200,000		6,071,000		10,000,000		728,000
Pinnacle Beaumont ALF(5)	Beaumont, TX	Senior Housing — RIDEA	07/01/18	19,500,000		—		19,400,000		868,000
Grand Junction MOB	Grand Junction, CO	Medical Office	07/06/18	31,500,000		—		31,400,000		1,418,000
Edmonds MOB	Edmonds, WA	Medical Office	07/30/18	23,500,000		—		22,000,000		1,058,000
Pinnacle Warrenton ALF(5)	Warrenton, MO	Senior Housing — RIDEA	08/01/18	8,100,000		—		8,100,000		360,000
Glendale MOB	Glendale, WI	Medical Office	08/13/18	7,600,000		—		7,000,000		342,000
Missouri SNF Portfolio	Various cities, MO	Skilled Nursing	09/28/18	88,200,000		—		87,000,000		3,970,000
Total				$	248,350,000	$	6,071,000	$	235,000,000	$	11,164,000

___________

(1) We own 100% of our properties acquired for the nine months ended September 30, 2018, with the exception of Pinnacle Beaumont ALF and Pinnacle Warrenton ALF.

(2) Represents the principal balance of the mortgage loan payable assumed by us at the time of acquisition.

(3) Represents a borrowing under the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan, 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 2.25% of the portion of the aggregate contract purchase price paid by us. In addition, the total acquisition fee includes a Contingent Advisor Payment, as defined in Note 12, Related Party Transactions, in the amount of 2.25% of the portion of the aggregate contract purchase price paid by us, which shall be paid by us to our advisor, subject to the satisfaction of certain conditions. See Note 12, Related Party Transactions — Acquisition and Development Stage — Acquisition Fee, for a further discussion.

(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 98%.

We accounted for the 10 property acquisitions we completed for the nine months ended September 30, 2018 as asset acquisitions. We incurred and capitalized base acquisition fees and direct acquisition related expenses of $9,548,000. In addition, we incurred Contingent Advisor Payments of $5,582,000 to our advisor for such property acquisitions. The following table summarizes the purchase price of the assets acquired and liabilities assumed at the time of acquisition from our 10 property acquisitions in 2018 based on their relative fair values:

	2018 Acquisitions
Building and improvements	$	203,774,000
Land	20,773,000
Furniture, fixtures and equipment	79,000
In-place leases	31,355,000
Certificates of need	349,000
Above-market leases	200,000
Total assets acquired	256,530,000
Mortgage loan payable (including debt discount of $263,000)	(5,808,000		)
Below-market leases	(42,000		)
Total liabilities assumed	(5,850,000		)
Net assets acquired	$	250,680,000

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Identified Intangible Assets, Net

9 Months Ended

Sep. 30, 2018

Finite-Lived Intangible Assets, Net [Abstract]

Identified Intangible Assets, Net

4. Identified Intangible Assets, Net

Identified intangible assets, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Amortized intangible assets:
In-place leases, net of accumulated amortization of $17,576,000 and $5,832,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 9.8 years and 7.3 years as of September 30, 2018 and December 31, 2017, respectively)	$	56,688,000	$	37,766,000
Leasehold interests, net of accumulated amortization of $193,000 and $119,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 69.9 years and 70.6 years as of September 30, 2018 and December 31, 2017, respectively)	6,219,000		6,292,000
Above-market leases, net of accumulated amortization of $277,000 and $173,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 4.7 years and 5.6 years as of September 30, 2018 and December 31, 2017, respectively)	839,000		763,000
Unamortized intangible assets:
Certificates of need	349,000		—
Total	$	64,095,000	$	44,821,000

Amortization expense on identified intangible assets for the three months ended September 30, 2018 and 2017 was $4,673,000 and $1,196,000, respectively, which included $47,000 and $38,000, respectively, of amortization recorded against real estate revenue for above-market leases and $24,000 and $24,000, respectively, of amortization recorded to rental expenses for leasehold interests in our accompanying condensed consolidated statements of operations.

Amortization expense on identified intangible assets for the nine months ended September 30, 2018 and 2017 was $12,630,000 and $2,683,000, respectively, which included $124,000 and $104,000, respectively, of amortization recorded against real estate revenue for above-market leases and $73,000 and $73,000, respectively, of amortization recorded to rental expenses for leasehold interests in our accompanying condensed consolidated statements of operations.

The aggregate weighted average remaining life of the identified intangible assets was 15.6 years and 16.2 years as of September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, estimated amortization expense on the identified intangible assets for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter was as follows:

Year	Amount
2018	$	3,419,000
2019	8,978,000
2020	7,063,000
2021	6,356,000
2022	5,468,000
Thereafter	32,462,000
Total	$	63,746,000

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Other Assets, Net

9 Months Ended

Sep. 30, 2018

Other Assets, Net [Abstract]

Other Assets, Net

5. Other Assets, Net

Other assets, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Deferred rent receivables	$	3,958,000	$	1,912,000
Prepaid expenses and deposits	2,762,000		1,532,000
Deferred financing costs, net of accumulated amortization of $1,212,000 and $554,000 as of September 30, 2018 and December 31, 2017, respectively(1)	851,000		1,456,000
Lease commissions, net of accumulated amortization of $42,000 and $9,000 as of September 30, 2018 and December 31, 2017, respectively	552,000		326,000
Total	$	8,123,000	$	5,226,000

___________

(1) Deferred financing costs, net only include costs related to the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan.

Amortization expense on deferred financing costs of the Corporate Line of Credit for the three months ended September 30, 2018 and 2017 was $221,000 and $90,000, respectively, and for the nine months ended September 30, 2018 and 2017 was $658,000 and $267,000, respectively. Amortization expense on deferred financing costs of the Corporate Line of Credit is recorded to interest expense in our accompanying condensed consolidated statements of operations. Amortization expense on lease commissions for the three months ended September 30, 2018 and 2017 was $21,000 and $3,000, respectively, and for the nine months ended September 30, 2018 and 2017 was $39,000 and $3,000, respectively.

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Mortgage Loans Payable, Net

9 Months Ended

Sep. 30, 2018

Mortgage Loans Payable, Net [Abstract]

Mortgage Loans Payable, Net

6. Mortgage Loans Payable, Net

As of September 30, 2018 and December 31, 2017, mortgage loans payable were $17,382,000 ($16,988,000, including discount/premium and deferred financing costs, net) and $11,634,000 ($11,567,000, including premium and deferred financing costs, net), respectively. As of September 30, 2018, we had three fixed-rate mortgage loans with interest rates ranging from 3.75% to 5.25% per annum, maturity dates ranging from April 1, 2020 to August 1, 2029 and a weighted average effective interest rate of 4.51%. As of December 31, 2017, we had two fixed-rate mortgage loans with interest rates ranging from 4.77% to 5.25% per annum, maturity dates ranging from April 1, 2020 to August 1, 2029 and a weighted average effective interest rate of 4.92%.

The changes in the carrying amount of mortgage loans payable, net consisted of the following for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Beginning balance	$	11,567,000		$	3,965,000
Additions:
Assumptions of mortgage loans payable, net	5,808,000			8,000,000
Amortization of deferred financing costs(1)	53,000			23,000
Deductions:
Deferred financing costs(1)	(123,000		)	(151,000		)
Scheduled principal payments on mortgage loans payable	(323,000		)	(189,000		)
Amortization of discount/premium on mortgage loans payable	6,000			(9,000		)
Ending balance	$	16,988,000		$	11,639,000

___________

(1) Deferred financing costs only include costs related to our mortgage loans payable.

As of September 30, 2018, the principal payments due on our mortgage loans payable for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter were as follows:

Year	Amount
2018	$	126,000
2019	518,000
2020	8,151,000
2021	434,000
2022	455,000
Thereafter	7,698,000
Total	$	17,382,000

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Line of Credit and Term Loan

9 Months Ended

Sep. 30, 2018

Line of Credit Facility [Abstract]

Line of Credit and Term Loan

7. Line of Credit and Term Loan

On August 25, 2016, we, through our operating partnership, as borrower, and certain of our subsidiaries, or the subsidiary guarantors, and us, collectively as guarantors, entered into a credit agreement, or the Credit Agreement, with Bank of America, N.A., or Bank of America, as administrative agent, swing line lender and letters of credit issuer; and KeyBank, National Association, or KeyBank, as syndication agent and letters of credit issuer, to obtain a revolving line of credit with an aggregate maximum principal amount of $100,000,000, or the Line of Credit, subject to certain terms and conditions.

On August 25, 2016, we also entered into separate revolving notes, or the Revolving Notes, with each of Bank of America and KeyBank, whereby we promised to pay the principal amount of each revolving loan and accrued interest to the respective lender or its registered assigns, in accordance with the terms and conditions of the Credit Agreement. The proceeds of loans made under the Line of Credit may be used for general working capital (including acquisitions), capital expenditures and other general corporate purposes not inconsistent with obligations under the Credit Agreement. We may obtain up to $20,000,000 in the form of standby letters of credit and up to $25,000,000 in the form of swing line loans. The Line of Credit matures on August 25, 2019, and we have the right to extend for one12-month period during the term of the Credit Agreement subject to satisfaction of certain conditions, including payment of an extension fee.

On October 31, 2017, we entered into an amendment to the Credit Agreement, or the First Amendment, with Bank of America, as administrative agent, and the subsidiary guarantors and lenders named therein. The material terms of the Amendment provide for: (i) a $50,000,000 increase in the Line of Credit from an aggregate principal amount of $100,000,000 to $150,000,000; (ii) a term loan with an aggregate maximum principal amount of $50,000,000, or the Term Loan Credit Facility, that matures on August 25, 2019, and we have the right to extend for one12-month period during the term of the Credit Agreement subject to satisfaction of certain conditions, including payment of an extension fee; (iii) our right, upon at least five business days’ prior written notice to Bank of America, to increase the Line of Credit or Term Loan Credit Facility provided that the aggregate principal amount of all such increases and additions shall not exceed $300,000,000; (iv) a revision to the definition of Threshold Amount, as defined in the Credit Agreement, to reflect an increase in such amount for any Recourse Indebtedness, as defined in the Credit Agreement, to $20,000,000, and an increase in such amount for any Non-Recourse Indebtedness, as defined in the Credit Agreement, to $50,000,000; (v) the revision of certain Unencumbered Property Pool Criteria, as defined and set forth in the Credit Agreement; and (vi) an increase in the maximum Consolidated Secured Leverage Ratio, as defined in the Credit Agreement, to be equal to or less than 40.0%. As a result of the First Amendment, our aggregate borrowing capacity under the Line of Credit and the Term Loan Credit Facility, or collectively, the Corporate Line of Credit, was $200,000,000.

On September 28, 2018, we entered into a Second Amendment to Credit Agreement with Bank of America, as administrative agent, and the subsidiary guarantors and lenders named therein. The material terms of the Second Amendment to Credit Agreement provide for an increase in the term loan commitment by an aggregate amount equal to $150,000,000. As a result of the Second Amendment to Credit Agreement, the aggregate borrowing capacity under the Corporate Line of Credit is $350,000,000. Except as modified by the Second Amendment to Credit Agreement, the material terms of the Credit Agreement, as amended, remain in full force and effect.

At our option, the Corporate Line of Credit bears interest at per annum rates equal to (a) (i) the Eurodollar Rate (as defined in the Credit Agreement, as amended) plus (ii) a margin ranging from 1.75% to 2.25% based on our Consolidated Leverage Ratio (as defined in the Credit Agreement, as amended), or (b) (i) the greater of: (1) the prime rate publicly announced by Bank of America, (2) the Federal Funds Rate (as defined in the Credit Agreement, as amended) plus 0.50%, (3) the one-month Eurodollar Rate plus 1.00%, and (4) 0.00%, plus (ii) a margin ranging from 0.55% to 1.05% based on our Consolidated Leverage Ratio. Accrued interest on the Corporate Line of Credit is payable monthly. The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.

We are required to pay a fee on the unused portion of the lenders’ commitments under the Credit Agreement, as amended, at a per annum rate equal to 0.20% if the average daily used amount is greater than 50.0% of the commitments and 0.25% if the average daily used amount is less than or equal to 50.0% of the commitments, which fee shall be measured and payable on a quarterly basis.

The Credit Agreement, as amended, contains various affirmative and negative covenants that are customary for credit facilities and transactions of this type, including limitations on the incurrence of debt by our operating partnership and its subsidiaries. The Credit Agreement, as amended, also imposes certain financial covenants based on the following criteria, which are specifically defined in the Credit Agreement, as amended: (a) Consolidated Leverage Ratio; (b) Consolidated Secured Leverage Ratio; (c) Consolidated Tangible Net Worth; (d) Consolidated Fixed Charge Coverage Ratio; (e) Unencumbered Indebtedness Yield; (f) Consolidated Unencumbered Leverage Ratio; (g) Consolidated Unencumbered Interest Coverage Ratio; (h) Secured Recourse Indebtedness; and (i) Consolidated Unsecured Indebtedness.

The Credit Agreement, as amended, permits us to add additional subsidiaries as guarantors. In the event of default, Bank of America has the right to terminate its obligations under the Credit Agreement, as amended, including the funding of future loans, and to accelerate the payment on any unpaid principal amount of all outstanding loans and interest thereon. Additionally, in connection with the Credit Agreement, as amended, we also entered into a Pledge Agreement on August 25, 2016, pursuant to which we pledged the capital stock of our subsidiaries which own the real property to be included in the Unencumbered Property Pool, as such term is defined in the Credit Agreement, as amended. The pledged collateral will be released upon achieving a consolidated total asset value of at least $750,000,000.

As of September 30, 2018 and December 31, 2017, our aggregate borrowing capacity under the Corporate Line of Credit was $350,000,000 and $200,000,000, respectively. As of September 30, 2018 and December 31, 2017, borrowings outstanding totaled $200,000,000 and $84,100,000, respectively, and the weighted average interest rate on such borrowings outstanding was 3.97% and 3.45% per annum, respectively.

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Identified Intangible Liabilities, Net

9 Months Ended

Sep. 30, 2018

Identified Intangible Liabilities [Abstract]

Identified Intangible Liabilities Net

8. Identified Intangible Liabilities, Net

Identified intangible liabilities, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Below-market leases, net of accumulated amortization of $594,000 and $345,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 6.1 years and 6.4 years as of September 30, 2018 and December 31, 2017, respectively)	$	1,102,000	$	1,349,000
Above-market leasehold interests, net of accumulated amortization of $12,000 and $6,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 51.4 years and 52.2 years as of September 30, 2018 and December 31, 2017, respectively)	384,000		388,000
Total	$	1,486,000	$	1,737,000

Amortization expense on identified intangible liabilities for the three months ended September 30, 2018 and 2017 was $170,000 and $70,000, respectively, which included $168,000 and $68,000, respectively, of amortization recorded to real estate revenue for below-market leases and $2,000 and $2,000, respectively, of amortization recorded against rental expenses for above-market leasehold interests in our accompanying condensed consolidated statements of operations.

Amortization expense on identified intangible liabilities for the nine months ended September 30, 2018 and 2017 was $294,000 and $207,000, respectively, which included $288,000 and $203,000, respectively, of amortization recorded to real estate revenue for below-market leases and $6,000 and $4,000, respectively, of amortization recorded to rental expenses for above-market leasehold interests in our accompanying condensed consolidated statements of operations.

The aggregate weighted average remaining life of the identified intangible liabilities was 17.8 years and 16.7 years as of September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, estimated amortization expense on identified intangible liabilities for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter was as follows:

Year	Amount
2018	$	87,000
2019	318,000
2020	154,000
2021	129,000
2022	120,000
Thereafter	678,000
Total	$	1,486,000

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Litigation

We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Environmental Matters

We follow a policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency.

Other

Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business, which include calls/puts to sell/acquire properties. In our view, these matters are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

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Redeemable Noncontrolling Interests

9 Months Ended

Sep. 30, 2018

Redeemable Noncontrolling Interests [Line Items]

Redeemable Noncontrolling Interests

10. Redeemable Noncontrolling Interests

On February 6, 2015, our advisor made an initial capital contribution of $2,000 to our operating partnership in exchange for Class T partnership units. Upon the effectiveness of the Advisory Agreement on February 16, 2016, Griffin-American Healthcare REIT IV Advisor, LLC became our advisor. As of September 30, 2018 and December 31, 2017, our advisor owned all of our 208 Class T partnership units outstanding. As of September 30, 2018 and December 31, 2017, we owned greater than a 99.99% general partnership interest in our operating partnership, and our advisor owned less than a 0.01% limited partnership interest in our operating partnership. As our advisor, Griffin-American Healthcare REIT IV Advisor, LLC is entitled to redemption rights of its limited partnership units. The noncontrolling interest of our advisor in our operating partnership, which has redemption features outside of our control, is accounted for as a redeemable noncontrolling interest and is presented outside of permanent equity in our accompanying condensed consolidated balance sheets. See Note 12, Related Party Transactions — Liquidity Stage — Subordinated Participation Interest — Subordinated Distribution Upon Listing, and Note 12, Related Party Transactions — Subordinated Distribution Upon Termination, for a further discussion of the redemption features of the limited partnership units.

On November 1, 2017, we completed the acquisition of Central Florida Senior Housing Portfolio pursuant to a joint venture with an affiliate of Meridian, an unaffiliated third party. Our ownership of the joint venture is approximately 98%. 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. Our ownership of the joint venture is approximately 98%. The noncontrolling interest held by Meridian has redemption features outside of our control and is accounted for as redeemable noncontrolling interest in our accompanying condensed consolidated balance sheets. In addition, Meridian will be entitled to an incentive fee, subject to the satisfaction of certain terms and conditions set forth in the joint venture agreement.

We record the carrying amount of redeemable noncontrolling interests at the greater of: (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and distributions; or (ii) the redemption value. The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Beginning balance	$	1,002,000		$	2,000
Additions	276,000			—
Net loss attributable to redeemable noncontrolling interests	(197,000		)	—
Fair value adjustment to redemption value	197,000			—
Ending balance	$	1,278,000		$	2,000

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Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Equity

11. Equity

Preferred Stock

Our charter authorizes us to issue 200,000,000 shares of our preferred stock, par value $0.01 per share. As of September 30, 2018 and December 31, 2017, no shares of our preferred stock were issued and outstanding.

Common Stock

Our charter authorizes us to issue 1,000,000,000 shares of our common stock, par value $0.01 per share. We commenced our public offering of shares of our common stock on February 16, 2016, and as of such date we were initially offering to the public up to $3,150,000,000 in shares of our Class T common stock, consisting of up to $3,000,000,000 in shares of our Class T common stock in our primary offering and up to $150,000,000 in shares of our Class T common stock pursuant to the DRIP. Effective June 17, 2016, we reallocated certain of the unsold shares of our Class T common stock being offered and began offering shares of our Class I common stock, such that we are currently offering up to approximately $2,800,000,000 in shares of Class T common stock and $200,000,000 in shares of Class I common stock in our primary offering, and up to an aggregate of $150,000,000 in shares of our Class T and Class I common stock pursuant to the DRIP. Subsequent to the reallocation, of the 1,000,000,000 shares of common stock authorized, 900,000,000 shares are classified as Class T common stock and 100,000,000 shares are classified as Class I common stock. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the DRIP, and among classes of stock.

Each share of our common stock, regardless of class, will be entitled to one vote per share on matters presented to the common stockholders for approval; provided, however, that stockholders of one share class shall have exclusive voting rights on any amendment to our charter that would alter only the contract rights of that share class, and no stockholders of another share class shall be entitled to vote thereon.

On February 6, 2015, our advisor acquired shares of our Class T common stock for total cash consideration of $200,000 and was admitted as our initial stockholder. We used the proceeds from the sale of shares of our Class T common stock to our advisor to make an initial capital contribution to our operating partnership. As of September 30, 2018 and December 31, 2017, our advisor owned 20,833 shares of our Class T common stock.

Through September 30, 2018, we had issued 59,008,261 aggregate shares of our Class T and Class I common stock in connection with the primary portion of our offering and 2,310,346 aggregate shares of our Class T and Class I common stock pursuant to the DRIP. We also granted an aggregate of 60,000 shares of our restricted Class T common stock to our independent directors and repurchased 313,976 shares of our common stock under our share repurchase plan through September 30, 2018. As of September 30, 2018 and December 31, 2017, we had 61,085,464 and 42,207,160 aggregate shares of our Class T and Class I common stock, respectively, issued and outstanding.

As of September 30, 2018, we had a receivable of $1,667,000 for offering proceeds, net of selling commissions and dealer manager fees, from our transfer agent, which was received in October 2018.

Distribution Reinvestment Plan

We have registered and reserved $150,000,000 in shares of our common stock for sale pursuant to the DRIP in our offering. The DRIP allows stockholders to purchase additional Class T shares and Class I shares of our common stock through the reinvestment of distributions during our offering. Pursuant to the DRIP, distributions with respect to Class T shares are reinvested in Class T shares and distributions with respect to Class I shares are reinvested in Class I shares.

For the three and nine months ended September 30, 2018, $4,668,000 and $12,435,000, respectively, in distributions were reinvested and 483,737 and 1,302,271 shares of our common stock, respectively, were issued pursuant to the DRIP. For the three and nine months ended September 30, 2017, $2,618,000 and $5,492,000, respectively, in distributions were reinvested and 278,520 and 584,318 shares of our common stock, respectively, were issued pursuant to the DRIP. As of September 30, 2018 and December 31, 2017, a total of $21,920,000 and $9,485,000, respectively, in distributions were reinvested that resulted in 2,310,346 and 1,008,075 shares of our common stock, respectively, being issued pursuant to the DRIP.

Share Repurchase Plan

In February 2016, our board of directors approved a share repurchase plan. The share repurchase plan allows for repurchases of shares of our common stock by us when certain criteria are met. Share repurchases will be made at the sole discretion of our board of directors. Subject to the availability of the funds for share repurchases, we will limit the number of shares of our common stock repurchased during any calendar year to 5.0% of the weighted average number of shares of our common stock outstanding during the prior calendar year; provided, however, that shares subject to a repurchase requested upon the death of a stockholder will not be subject to this cap. Funds for the repurchase of shares of our common stock will come exclusively from the cumulative proceeds we receive from the sale of shares of our common stock pursuant to the DRIP.

All repurchases of our shares of common stock are subject to a one-year holding period, except for repurchases made in connection with a stockholder’s death or “qualifying disability,” as defined in our share repurchase plan. Further, all share repurchases are repurchased following a one-year holding period at a price between 92.5% to 100% of each stockholder’s repurchase amount depending on the period of time their shares have been held. During our offering, the repurchase amount for shares repurchased under our share repurchase plan shall be equal to the lesser of (i) the amount per share that a stockholder paid for their shares of our common stock, or (ii) the per share offering price in our offering. If we are no longer engaged in an offering, the repurchase amount for shares repurchased under our share repurchase plan will be determined by our board of directors. However, if shares of our common stock are repurchased in connection with a stockholder’s death or qualifying disability, the repurchase price will be no less than 100% of the price paid to acquire the shares of our common stock from us. Furthermore, our share repurchase plan provides that if there are insufficient funds to honor all repurchase requests, pending requests will be honored among all requests for repurchase in any given repurchase period, as follows: first, pro rata as to repurchases sought upon a stockholder’s death; next, pro rata as to repurchases sought by stockholders with a qualifying disability; and, finally, pro rata as to other repurchase requests.

For the three and nine months ended September 30, 2018, we received share repurchase requests and repurchased 115,847 and 236,230 shares of our common stock, respectively, for an aggregate of $1,110,000 and $2,242,000, respectively, at an average repurchase price of $9.58 and $9.49 per share, respectively. For the three and nine months ended September 30, 2017, we received share repurchase requests and repurchased 11,209 and 18,383 shares of our common stock, respectively, for an aggregate of $109,000 and $178,000, respectively, at an average repurchase price of $9.69 and $9.68 per share, respectively. 

As of September 30, 2018 and December 31, 2017, we received share repurchase requests and repurchased 313,976 and 77,746 shares of our common stock, respectively, for an aggregate of $2,977,000 and $735,000, respectively, at an average repurchase price of $9.48 and $9.45 per share, respectively. All shares were repurchased using proceeds we received from the sale of shares of our common stock pursuant to the DRIP.

2015 Incentive Plan

In February 2016, we adopted our incentive plan, pursuant to which our board of directors or a committee of our independent directors may grant options, shares of our restricted common stock, stock purchase rights, stock appreciation rights or other share-based awards to our independent directors, employees and consultants. The maximum number of shares of our common stock that may be issued pursuant to our incentive plan is 4,000,000 shares. For the three and nine months ended September 30, 2018, we have granted 15,000 and 22,500 shares of our restricted Class T common stock, respectively, at a weighted average grant date fair value of $10.05 per share, to our independent directors in connection with their election or re-election to our board of directors, or in consideration for their past services rendered. Such shares vested 20.0% immediately on the grant date and 20.0% will vest on each of the first four anniversaries of the grant date. For the three and nine months ended September 30, 2018, we recognized stock compensation expense of $70,000 and $145,000, respectively, and for the three and nine months ended September 30, 2017, we recognized stock compensation expense of $61,000 and $100,000, respectively, which is included in general and administrative in our accompanying condensed consolidated statements of operations.

Offering Costs

Selling Commissions

Generally, we pay our dealer manager selling commissions of up to 3.0% of the gross offering proceeds from the sale of Class T shares of our common stock pursuant to our primary offering. To the extent that selling commissions are less than 3.0% of the gross offering proceeds for any Class T shares sold, such reduction in selling commissions will be accompanied by a corresponding reduction in the applicable per share purchase price for purchases of such shares. No selling commissions are payable on Class I shares or shares of our common stock sold pursuant to the DRIP. Our dealer manager may re-allow all or a portion of these fees to participating broker-dealers. For the three and nine months ended September 30, 2018, we incurred $1,717,000 and $4,858,000, respectively, and for the three and nine months ended September 30, 2017, we incurred $2,059,000 and $6,763,000, respectively, in selling commissions to our dealer manager. Such commissions were charged to stockholders’ equity as such amounts were paid to our dealer manager from the gross proceeds of our offering.

Dealer Manager Fee

With respect to shares of our Class T common stock, our dealer manager generally receives a dealer manager fee of up to 3.0% of the gross offering proceeds from the sale of Class T shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds is funded by us and up to an amount equal to 2.0% of the gross offering proceeds is funded by our advisor. With respect to shares of our Class I common stock, prior to March 1, 2017, our dealer manager generally received a dealer manager fee up to 3.0% of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds was funded by us and an amount equal to 2.0% of the gross offering proceeds was funded by our advisor. Effective March 1, 2017, our dealer manager generally receives a dealer manager fee up to an amount equal to 1.5% of the gross offering proceeds from the sale of Class I shares pursuant to our primary offering, all of which is funded by our advisor. Our advisor intends to recoup the portion of the dealer manager fee it funds through the receipt of the Contingent Advisor Payment from us, as described below, through the payment of acquisition fees. Our dealer manager may enter into participating dealer agreements with participating dealers that provide for a reduction or waiver of dealer manager fees. To the extent that the dealer manager fee is less than 3.0% of the gross offering proceeds for any Class T shares sold and less than 1.5% of the gross offering proceeds for any Class I shares sold, such reduction will be applied first to the portion of the dealer manager fee funded by our advisor. To the extent that any reduction in dealer manager fee exceeds the portion of the dealer manager fee funded by our advisor, such excess reduction will be accompanied by a corresponding reduction in the applicable per share purchase price for purchases of such shares. No dealer manager fee is payable on shares of our common stock sold pursuant to the DRIP. Our dealer manager may re-allow all or a portion of these fees to participating broker-dealers.

For the three and nine months ended September 30, 2018, we incurred $587,000 and $1,648,000, respectively, and for the three and nine months ended September 30, 2017, we incurred $689,000 and $2,311,000, respectively, in dealer manager fees to our dealer manager. Such fees were charged to stockholders’ equity as such amounts were paid to our dealer manager or its affiliates from the gross proceeds of our offering. See Note 12, Related Party Transactions — Offering Stage — Dealer Manager Fee, for a further discussion of the dealer manager fee funded by our advisor.

Stockholder Servicing Fee

We pay our dealer manager a quarterly stockholder servicing fee with respect to our Class T shares sold as additional compensation to the dealer manager and participating broker-dealers. No stockholder servicing fee shall be paid with respect to Class I shares or shares of our common stock sold pursuant to the DRIP. The stockholder servicing fee accrues daily in an amount equal to 1/365th of 1.0% of the purchase price per share of our Class T shares sold in our primary offering and, in the aggregate will not exceed an amount equal to 4.0% of the gross proceeds from the sale of Class T shares in our primary offering. We will cease paying the stockholder servicing fee with respect to our Class T shares sold in our offering upon the occurrence of certain defined events. Our dealer manager may re-allow to participating broker-dealers all or a portion of the stockholder servicing fee for services that such participating broker-dealers perform in connection with the shares of our Class T common stock. By agreement with participating broker-dealers, such stockholder servicing fee may be reduced or limited.

For the three and nine months ended September 30, 2018, we incurred $1,984,000 and $5,602,000, respectively, and for the three and nine months ended September 30, 2017, we incurred $2,430,000 and $8,568,000, respectively, in stockholder servicing fees to our dealer manager. As of September 30, 2018 and December 31, 2017, we accrued $15,203,000 and $12,611,000, respectively, in connection with the stockholder servicing fee payable, which is included in accounts payable and accrued liabilities with a corresponding offset to stockholders’ equity in our accompanying condensed consolidated balance sheets.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

12. Related Party Transactions

Fees and Expenses Paid to Affiliates

All of our executive officers and one of our non-independent directors are also executive officers and employees and/or holders of a direct or indirect interest in our advisor, one of our co-sponsors or other affiliated entities. We are affiliated with our advisor, American Healthcare Investors and AHI Group Holdings; however, we are not affiliated with Griffin Capital, our dealer manager, Colony Capital or Mr. Flaherty. We entered into the Advisory Agreement, which entitles our advisor and its affiliates to specified compensation for certain services, as well as reimbursement of certain expenses. Our board of directors, including a majority of our independent directors, has reviewed the material transactions between our affiliates and us during the nine months ended September 30, 2018 and 2017. Set forth below is a description of the transactions with affiliates. We believe that we have executed all of the transactions set forth below on terms that are fair and reasonable to us and on terms no less favorable to us than those available from unaffiliated third parties. For the three months ended September 30, 2018 and 2017, we incurred $6,968,000 and $2,856,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $14,097,000 and $12,633,000, respectively, in fees and expenses to our affiliates as detailed below.

Offering Stage

Dealer Manager Fee

With respect to shares of our Class T common stock, our dealer manager generally receives a dealer manager fee of up to 3.0% of the gross offering proceeds from the sale of Class T shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds is funded by us and up to an amount equal to 2.0% of the gross offering proceeds is funded by our advisor. With respect to shares of our Class I common stock, prior to March 1, 2017, our dealer manager generally received a dealer manager fee up to 3.0% of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to our primary offering, of which 1.0% of the gross offering proceeds was funded by us and an amount equal to 2.0% of the gross offering proceeds was funded by our advisor. Effective March 1, 2017, our dealer manager generally receives a dealer manager fee up to an amount equal to 1.5% of the gross offering proceeds from the sale of Class I shares pursuant to our primary offering, all of which is funded by our advisor. Our dealer manager may enter into participating dealer agreements with participating dealers that provide for a reduction or waiver of dealer manager fees. To the extent that the dealer manager fee is less than 3.0% of the gross offering proceeds for any Class T shares sold and less than 1.5% of the gross offering proceeds for any Class I shares sold, such reduction will be applied first to the portion of the dealer manager fee funded by our advisor. To the extent that any reduction in dealer manager fee exceeds the portion of the dealer manager fee funded by our advisor, such excess reduction will be accompanied by a corresponding reduction in the applicable per share purchase price for purchases of such shares. No dealer manager fee is payable on shares of our common stock sold pursuant to the DRIP. Our advisor intends to recoup the portion of the dealer manager fee it funds through the receipt of the Contingent Advisor Payment from us, as described below, through the payment of acquisition fees.

For the three months ended September 30, 2018 and 2017, we incurred $1,193,000 and $1,414,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $3,393,000 and $4,751,000, respectively, payable to our advisor as part of the Contingent Advisor Payment in connection with the dealer manager fee that our advisor had incurred. Such fee was charged to stockholders’ equity as incurred with a corresponding offset to accounts payable due to affiliates in our accompanying condensed consolidated balance sheets. See Note 11, Equity — Offering Costs — Dealer Manager Fee, for a further discussion of the dealer manager fee funded by us.

Other Organizational and Offering Expenses

Our other organizational and offering expenses in connection with our offering (other than selling commissions, the dealer manager fee and the stockholder servicing fee) are funded by our advisor. Our advisor intends to recoup such expenses it funds through the receipt of the Contingent Advisor Payment from us, as described below, through the payment of acquisition fees. We anticipate that our other organizational and offering expenses will not exceed 1.0% of the gross offering proceeds for shares of our common stock sold pursuant to our primary offering. No other organizational and offering expenses will be paid with respect to shares of our common stock sold pursuant to the DRIP.

For the three months ended September 30, 2018 and 2017, we incurred $270,000 and $259,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $1,178,000 and $1,151,000, respectively, payable to our advisor as part of the Contingent Advisor Payment in connection with the other organizational and offering expenses that our advisor had incurred. Such expenses were charged to stockholders’ equity as incurred with a corresponding offset to accounts payable due to affiliates in our accompanying condensed consolidated balance sheets.

Acquisition and Development Stage

Acquisition Fee

We pay our advisor an acquisition fee of up to 4.50% of the contract purchase price, including any contingent or earn-out payments that may be paid, of each property we acquire or, with respect to any real estate-related investment we originate or acquire, up to 4.25% of the origination or acquisition price, including any contingent or earn-out payments that may be paid. The 4.50% or 4.25% acquisition fees consist of a 2.25% or 2.00% base acquisition fee, or the base acquisition fee, for real estate and real estate-related acquisitions, respectively, and an additional 2.25% contingent advisor payment, or the Contingent Advisor Payment. The Contingent Advisor Payment allows our advisor to recoup the portion of the dealer manager fee and other organizational and offering expenses funded by our advisor. Therefore, the amount of the Contingent Advisor Payment paid upon the closing of an acquisition shall not exceed the then outstanding amounts paid by our advisor for dealer manager fees and other organizational and offering expenses at the time of such closing. For these purposes, the amounts paid by our advisor and considered as “outstanding” are reduced by the amount of the Contingent Advisor Payment previously paid. Notwithstanding the foregoing, the initial $7,500,000 of amounts paid by our advisor to fund the dealer manager fee and other organizational and offering expenses, or the Contingent Advisor Payment Holdback, shall be retained by us until the later of the termination of our last public offering or the third anniversary of the commencement date of our initial public offering, at which time such amount shall be paid to our advisor or its affiliates. In connection with any subsequent public offering of shares of our common stock, the Contingent Advisor Payment Holdback may increase, based upon the maximum offering amount in such subsequent public offering and the amount sold in prior offerings. Our advisor or its affiliates will be entitled to receive these acquisition fees for properties and real estate-related investments acquired with funds raised in our offering, including acquisitions completed after the termination of the Advisory Agreement (including imputed leverage of 50.0% on funds raised in our offering), or funded with net proceeds from the sale of a property or real estate-related investment, subject to certain conditions. Our advisor may waive or defer all or a portion of the acquisition fee at any time and from time to time, in our advisor’s sole discretion.

The base acquisition fee in connection with the acquisition of properties accounted for as business combinations in accordance with ASC Topic 805, Business Combinations, or ASC Topic 805, is expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations. The base acquisition fee in connection with the acquisition of properties accounted for as asset acquisitions in accordance with ASU 2017-01 or the acquisition of real estate-related investments is capitalized as part of the associated investment in our accompanying condensed consolidated balance sheets. For the three months ended September 30, 2018 and 2017, we paid base acquisition fees of $4,007,000 and $347,000, respectively, and for the nine months ended September 30, 2018 and 2017, we paid base acquisition fees of $5,581,000 and $4,901,000, respectively, to our advisor. As of September 30, 2018 and December 31, 2017, we recorded $7,750,000 and $7,744,000, respectively, as part of the Contingent Advisor Payment, which is included in accounts payable due to affiliates with a corresponding offset to stockholders’ equity in our accompanying condensed consolidated balance sheets. As of September 30, 2018, we have paid $9,659,000 in Contingent Advisor Payments to our advisor. For a further discussion of amounts paid in connection with the Contingent Advisor Payment, see “Dealer Manager Fee” and “Other Organizational and Offering Expenses,” above. In addition, see Note 3, Real Estate Investments, Net, for a further discussion.

Development Fee

In the event our advisor or its affiliates provide development-related services, we pay our advisor or its affiliates a development fee in an amount that is usual and customary for comparable services rendered for similar projects in the geographic market where the services are provided; however, we will not pay a development fee to our advisor or its affiliates if our advisor or its affiliates elect to receive an acquisition fee based on the cost of such development.

For the three and nine months ended September 30, 2018 and 2017, we did not incur any development fees to our advisor or its affiliates.

Reimbursement of Acquisition Expenses

We reimburse our advisor or its affiliates for acquisition expenses related to selecting, evaluating and acquiring assets, which are reimbursed regardless of whether an asset is acquired. The reimbursement of acquisition expenses, acquisition fees, total development costs, real estate commissions and other fees paid to unaffiliated third parties will not exceed, in the aggregate, 6.0% of the contract purchase price of the property or real estate-related investments, unless fees in excess of such limits are approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction. These fees and expenses paid did not exceed 6.0% of the contract purchase price of our property acquisitions, except with respect to our acquisitions of Athens MOB and Northern California Senior Housing Portfolio for the nine months ended September 30, 2018, and Auburn MOB, Pottsville MOB and Lafayette Assisted Living Portfolio for the nine months ended September 30, 2017, which excess fees were determined to be commercially fair and reasonable to us and were approved by our directors as set forth above.

Reimbursements of acquisition expenses in connection with the acquisition of properties accounted for as business combinations in accordance with ASC Topic 805 are expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations. Reimbursements of acquisition expenses in connection with the acquisition of properties accounted for as asset acquisitions in accordance with ASU 2017-01 or the acquisition of real estate-related investments are capitalized as part of the associated investment in our accompanying condensed consolidated balance sheets. For the three months ended September 30, 2018 and 2017, we did not incur any acquisition expenses to our advisor or its affiliates and for the nine months ended September 30, 2018 and 2017, we incurred $1,000 and $2,000, respectively, in acquisition expenses to our advisor or its affiliates.

Operational Stage

Asset Management Fee

We pay our advisor or its affiliates a monthly fee for services rendered in connection with the management of our assets equal to one-twelfth of 0.80% of average invested assets. For such purposes, average invested assets means the average of the aggregate book value of our assets invested in real estate properties and real estate-related investments, before deducting depreciation, amortization, bad debt and other similar non-cash reserves, computed by taking the average of such values at the end of each month during the period of calculation.

For the three months ended September 30, 2018 and 2017, we incurred $1,271,000 and $700,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred $3,299,000 and $1,505,000, respectively, in asset management fees to our advisor, which are included in general and administrative in our accompanying condensed consolidated statements of operations.

Property Management Fee

American Healthcare Investors or its designated personnel may provide property management services with respect to our properties or may sub-contract these duties to any third party and provide oversight of such third-party property manager. We pay American Healthcare Investors a monthly management fee equal to a percentage of the gross monthly cash receipts of such property as follows: (i) a property management oversight fee of 1.0% of the gross monthly cash receipts of any stand-alone, single-tenant, net leased property, except for such properties operated utilizing a RIDEA structure, for which we pay a property management oversight fee of 1.5% of the gross monthly cash receipts with respect to such property; (ii) a property management oversight fee of 1.5% of the gross monthly cash receipts of any property that is not a stand-alone, single-tenant, net leased property and for which American Healthcare Investors or its designated personnel provide oversight of a third party that performs the duties of a property manager with respect to such property; or (iii) a fair and reasonable property management fee that is approved by a majority of our directors, including a majority of our independent directors, that is not less favorable to us than terms available from unaffiliated third parties for any property that is not a stand-alone, single-tenant, net leased property and for which American Healthcare Investors or its designated personnel directly serve as the property manager without sub-contracting such duties to a third party.

Property management fees are included in property operating and rental expenses in our accompanying condensed consolidated statements of operations. For the three months ended September 30, 2018 and 2017, we incurred property management fees of $200,000 and $103,000, respectively, and for the nine months ended September 30, 2018 and 2017, we incurred property management fees of $506,000 and $249,000, respectively, to American Healthcare Investors.

Lease Fees

We may pay our advisor or its affiliates a separate fee for any leasing activities in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. Such fee is generally expected to range from 3.0% to 6.0% of the gross revenues generated during the initial term of the lease.

Lease fees are capitalized as lease commissions, which are included in other assets, net in our accompanying condensed consolidated balance sheets, and amortized over the term of the lease. For the three and nine months ended September 30, 2018, we incurred lease fees of $6,000 and $83,000, respectively. For the three and nine months ended September 30, 2017, we incurred lease fees of $12,000.

Construction Management Fee

In the event that our advisor or its affiliates assist with planning and coordinating the construction of any capital or tenant improvements, we pay our advisor or its affiliates a construction management fee of up to 5.0% of the cost of such improvements. 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. For the three and nine months ended September 30, 2018, we incurred construction management fees of $11,000 and $13,000, respectively. For the three and nine months ended September 30, 2017, we did not incur any construction management fees to our advisor or its affiliates.

Operating Expenses

We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. However, we cannot reimburse our advisor or its affiliates at the end of any fiscal quarter for total operating expenses that, in the four consecutive fiscal quarters then ended, exceed the greater of: (i) 2.0% of our average invested assets, as defined in the Advisory Agreement; or (ii) 25.0% of our net income, as defined in the Advisory Agreement, unless our independent directors determined that such excess expenses were justified based on unusual and nonrecurring factors which they deem sufficient.

Our operating expenses as a percentage of average invested assets and as a percentage of net income were 1.3% and 26.6%, respectively, for the 12 months ended September 30, 2018; however, our operating expenses did not exceed the aforementioned limitation as 2.0% of our average invested assets was greater than 25.0% of our net income.

For the three months ended September 30, 2018 and 2017, our advisor incurred operating expenses on our behalf of $10,000 and $21,000, respectively, and for the nine months ended September 30, 2018 and 2017, our advisor incurred operating expenses on our behalf of $43,000 and $62,000, respectively. Operating expenses are generally included in general and administrative in our accompanying condensed consolidated statements of operations.

Compensation for Additional Services

We pay our advisor and its affiliates for services performed for us other than those required to be rendered by our advisor or its affiliates under the Advisory Agreement. The rate of compensation for these services has to be approved by a majority of our board of directors, including a majority of our independent directors, and cannot exceed an amount that would be paid to unaffiliated third parties for similar services. For the three and nine months ended September 30, 2018 and 2017, our advisor and its affiliates were not compensated for any additional services.

Liquidity Stage

Disposition Fees

For services relating to the sale of one or more properties, we pay our advisor or its affiliates a disposition fee up to the lesser of 2.0% of the contract sales price or 50.0% of a customary competitive real estate commission given the circumstances surrounding the sale, in each case as determined by our board of directors, including a majority of our independent directors, upon the provision of a substantial amount of the services in the sales effort. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated third parties, will not exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. For the three and nine months ended September 30, 2018 and 2017, we did not incur any disposition fees to our advisor or its affiliates.

Subordinated Participation Interest

Subordinated Distribution of Net Sales Proceeds

In the event of liquidation, we will pay our advisor a subordinated distribution of net sales proceeds. The distribution will be equal to 15.0% of the remaining net proceeds from the sales of properties, after distributions to our stockholders, in the aggregate, of: (i) a full return of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan); plus (ii) an annual 6.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock, as adjusted for distributions of net sales proceeds. Actual amounts to be received depend on the sale prices of properties upon liquidation. For the three and nine months ended September 30, 2018 and 2017, we did not pay any such distributions to our advisor.

Subordinated Distribution Upon Listing

Upon the listing of shares of our common stock on a national securities exchange, in redemption of our advisor’s limited partnership units, we will pay our advisor a distribution equal to 15.0% of the amount by which: (i) the market value of our outstanding common stock at listing plus distributions paid prior to listing exceeds (ii) the sum of the total amount of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan) and the amount of cash equal to an annual 6.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock through the date of listing. Actual amounts to be received depend upon the market value of our outstanding stock at the time of listing, among other factors. For the three and nine months ended September 30, 2018 and 2017, we did not pay any such distributions to our advisor.

Subordinated Distribution Upon Termination

Pursuant to the Agreement of Limited Partnership, as amended, of our operating partnership upon termination or non-renewal of the Advisory Agreement, our advisor will also be entitled to a subordinated distribution in redemption of its limited partnership units from our operating partnership equal to15.0%of the amount, if any, by which: (i) the appraised value of our assets on the termination date, less any indebtedness secured by such assets, plus total distributions paid through the termination date, exceeds (ii) the sum of the total amount of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan) and the total amount of cash equal to an annual 6.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock through the termination date. In addition, our advisor may elect to defer its right to receive a subordinated distribution upon termination until either a listing or other liquidity event, including a liquidation, sale of substantially all of our assets or merger in which our stockholders receive in exchange for their shares of our common stock, shares of a company that are traded on a national securities exchange.

As of September 30, 2018 and December 31, 2017, we did not have any liability related to the subordinated distribution upon termination.

Stock Purchase Plans

On December 30, 2016, our Chief Executive Officer and Chairman of the Board of Directors, Jeffrey T. Hanson, our President and Chief Operating Officer, Danny Prosky, and our Executive Vice President and General Counsel, Mathieu B. Streiff, each executed stock purchase plans, or the 2017 Stock Purchase Plans, whereby they each irrevocably agreed to invest 100% of their net after-tax base salary and cash bonus compensation earned as employees of American Healthcare Investors directly into our company by purchasing shares of our Class I common stock. In addition, on December 30, 2016, three Executive Vice Presidents of American Healthcare Investors, including our Executive Vice President of Acquisitions, Stefan K.L. Oh, as well as our Executive Vice Presidents of Asset Management, Wendie Newman and Christopher M. Belford, each executed similar 2017 Stock Purchase Plans whereby they each irrevocably agreed to invest a portion of their net after-tax base salary or a portion of their net after-tax base salary and cash bonus compensation, ranging from 5.0% to 15.0%, earned as employees of American Healthcare Investors directly into our company by purchasing shares of our Class I common stock. The 2017 Stock Purchase Plans terminated on December 31, 2017.

Purchases of shares of our Class I common stock pursuant to the 2017 Stock Purchase Plans commenced beginning with the officers’ regularly scheduled payroll payment on January 23, 2017. The shares of Class I common stock were purchased pursuant to the 2017 Stock Purchase Plans at a price of $9.21 per share, reflecting the purchase price of shares of Class I common stock offered to the public reduced by the dealer manager fees funded by us, as applicable. No selling commissions, dealer manager fees (including the portion of such dealer manager fees funded by our advisor) or stockholder servicing fees were paid with respect to such sales of our Class I common stock.

On December 31, 2017, Messrs. Hanson, Prosky, and Streiff each executed stock purchase plans for the purchase of shares of our Class I common stock, or the 2018 Stock Purchase Plans, on terms similar to their 2017 Stock Purchase Plans. In addition, on December 31, 2017, four Executive Vice Presidents of American Healthcare Investors, including Messrs. Oh and Belford, Ms. Newman and our Chief Financial Officer, Brian S. Peay, each executed similar 2018 Stock Purchase Plans whereby they each irrevocably agreed to invest a portion of their net after-tax base salary or a portion of their net after-tax base salary and cash bonus compensation, ranging from 5.0% to 15.0%, earned on or after January 1, 2018 as employees of American Healthcare Investors directly into shares of our Class I common stock. The 2018 Stock Purchase Plans terminate on December 31, 2018 or earlier upon the occurrence of certain events, such as any earlier termination of our public offering of securities, unless otherwise renewed or extended.

Purchases of shares of our Class I common stock pursuant to the 2018 Stock Purchase Plans commenced beginning with the first regularly scheduled payroll payment on January 22, 2018. The shares of Class I common stock were or will be purchased pursuant to the 2018 Stock Purchase Plans at a per share purchase price equal to the per share purchase price of our Class I common stock offered to the public, which was $9.21 per share prior to April 11, 2018 and is currently $9.65 per share effective April 11, 2018. No selling commissions, dealer manager fees (including the portion of such dealer manager fees funded by our advisor) or stockholder servicing fees will be paid with respect to such sales of our Class I common stock.

For the three and nine months ended September 30, 2018 and 2017, our officers invested the following amounts and we issued the following shares of our Class T and Class I common stock pursuant to the applicable stock purchase plan:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Officer’s Name	Title	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares
Jeffrey T. Hanson	Chief Executive Officer and Chairman of the Board of Directors	$	70,000	7,292	$	70,000	7,553	$	258,000	27,398	$	193,000	20,910
Danny Prosky	President and Chief Operating Officer	78,000		7,993	72,000		7,825	275,000		29,118	199,000		21,571
Mathieu B. Streiff	Executive Vice President and General Counsel	66,000		6,826	67,000		7,293	254,000		26,971	194,000		21,065
Brian S. Peay	Chief Financial Officer	5,000		578	—		—	24,000		2,565	—		—
Stefan K.L. Oh	Executive Vice President of Acquisitions	8,000		886	8,000		857	25,000		2,648	24,000		2,558
Christopher M. Belford	Executive Vice President of Asset Management	7,000		657	6,000		653	49,000		5,209	59,000		6,361
Wendie Newman	Executive Vice President of Asset Management	3,000		249	2,000		221	7,000		718	6,000		607
Total		$	237,000	24,481	$	225,000	24,402	$	892,000	94,627	$	675,000	73,072

Accounts Payable Due to Affiliates

The following amounts were outstanding to our affiliates as of September 30, 2018 and December 31, 2017:

Fee	September 30, 2018		December 31, 2017
Contingent Advisor Payment	$	7,750,000	$	7,744,000
Asset management fees	457,000		316,000
Property management fees	125,000		43,000
Construction management fees	9,000		1,000
Lease commissions	6,000		8,000
Operating expenses	3,000		6,000
Total	$	8,350,000	$	8,118,000

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Measurements [Abstract]

Fair Value Measurements

13. Fair Value Measurements

Our accompanying condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, accounts and other receivables, restricted cash, real estate deposits, accounts payable and accrued liabilities, accounts payable due to affiliates, mortgage loans payable and borrowings under the Corporate Line of Credit.

We consider the carrying values of cash and cash equivalents, accounts and other receivables, restricted cash, real estate deposits and accounts payable and accrued liabilities to approximate the fair values for these financial instruments based upon the short period of time between origination of the instruments and their expected realization. The fair value of accounts payable due to affiliates is not determinable due to the related party nature of the accounts payable. These financial assets and liabilities are measured at fair value on a recurring basis based on quoted prices in active markets for identical assets and liabilities, and therefore are classified as Level 1 in the fair value hierarchy.

The fair value of our mortgage loans payable and the Corporate Line of Credit is estimated using a discounted cash flow analysis using borrowing rates available to us for debt instruments with similar terms and maturities. We have determined that the valuations of our mortgage loans payable and line of credit and term loans are classified as Level 2 within the fair value hierarchy as reliance is placed on inputs other than quoted prices that are observable, such as interest rates and yield curves. The carrying amounts and estimated fair values of such financial instruments as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Liabilities:
Mortgage loans payable	$	16,988,000	$	16,971,000	$	11,567,000	$	11,819,000
Line of credit and term loan	$	199,149,000	$	199,947,000	$	82,644,000	$	84,088,000

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Taxes [Abstract]

Income Taxes

14. Income Taxes

As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. We have elected to treat certain of our consolidated subsidiaries as wholly-owned taxable REIT subsidiaries, or TRSs, pursuant to the Code. TRSs may participate in services that would otherwise be considered impermissible for REITs and are subject to federal and state income tax at regular corporate tax rates.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation pursuant to the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate to 21.0%, eliminating the corporate alternative minimum tax, or AMT, and changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

We adopted ASU 2018-05 which allows us to record provisional amounts during the period of enactment. Any change to the provisional amounts will be recorded as an adjustment to the provision for income taxes in the period the amounts are determined. The measurement period ends when we have obtained, prepared and analyzed the information necessary to finalize the provision, but cannot extend beyond one year of the enactment date. 

The components of income tax expense for the three and nine months ended September 30, 2018 were as follows:

	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Federal deferred	$	(796,000	)	$	(2,178,000	)
State deferred	(146,000		)	(432,000		)
State current	4,000			4,000
Valuation allowance	942,000			2,610,000
Total income tax expense	$	4,000		$	4,000

Current Income Tax

Federal and state income taxes are generally a function of the level of income recognized by our TRSs.

Deferred Taxes

Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating losses that may be realized in future periods depending on sufficient taxable income.

We recognize the financial statement effects of an uncertain tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. As of September 30, 2018 and December 31, 2017, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A valuation allowance is established if we believe it is more likely than not that all or a portion of the deferred tax assets are not realizable. As of September 30, 2018, our valuation allowance fully reserves the net deferred tax asset due to inherent uncertainty of future income. We will continue to monitor industry and economic conditions, and our ability to generate taxable income based on our business plan and available tax planning strategies, which would allow us to utilize the tax benefits of the net deferred tax assets and thereby allow us to reverse all, or a portion of, our valuation allowance in the future.

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Segment Reporting

9 Months Ended

Sep. 30, 2018

Segment Reporting Information Line Items

Segment Reporting

15. Segment Reporting

As of September 30, 2018, we evaluated our business and made resource allocations based on four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities.

Our medical office buildings are typically leased to multiple tenants under separate leases in each building, thus requiring active management and responsibility for many of the associated operating expenses (although many of these are, or can effectively be, passed through to the tenants). Our senior housing facilities and skilled nursing facilities are primarily single-tenant properties for which we lease the facilities to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all facility operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant. Our senior housing — RIDEA properties include senior housing facilities that are owned and operated utilizing a RIDEA structure.

We evaluate performance based upon segment net operating income. We define segment net operating income as total revenues, less rental expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses and interest expense for each segment. We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment net operating income serves as an appropriate supplemental performance measure to net income (loss) because it allows investors and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis.

Interest expense, depreciation and amortization and other expenses not attributable to individual properties are not allocated to individual segments for purposes of assessing segment performance.

Non-segment assets primarily consist of corporate assets including cash and cash equivalents, other receivables, real estate deposits and other assets not attributable to individual properties.

Summary information for the reportable segments during the three and nine months ended September 30, 2018 and 2017 was as follows:

	Medical Office Buildings		Senior Housing — RIDEA		Senior Housing		Skilled Nursing Facilities		Three Months Ended September 30, 2018
Revenues:
Real estate revenue	$	9,580,000	$	—	$	2,259,000	$	673,000	$	12,512,000
Resident fees and services	—		9,769,000		—		—		9,769,000
Total revenues	9,580,000		9,769,000		2,259,000		673,000		22,281,000
Expenses:
Rental expenses	2,812,000		—		270,000		105,000		3,187,000
Property operating expenses	—		7,987,000		—		—		7,987,000
Segment net operating income	$	6,768,000	$	1,782,000	$	1,989,000	$	568,000	$	11,107,000
Expenses:
General and administrative									$	2,105,000
Acquisition related expenses									98,000
Depreciation and amortization									9,007,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)									(1,602,000		)
Interest income									6,000
Loss before income taxes									(1,699,000		)
Income tax expense									(4,000		)
Net loss									$	(1,703,000	)

	Medical Office Buildings		Senior Housing		Three Months Ended September 30, 2017
Revenue:
Real estate revenue	$	6,330,000	$	2,158,000	$	8,488,000
Expenses:
Rental expenses	1,857,000		238,000		2,095,000
Segment net operating income	$	4,473,000	$	1,920,000	$	6,393,000
Expenses:
General and administrative					$	1,296,000
Acquisition related expenses					121,000
Depreciation and amortization					3,442,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt premium)					(780,000		)
Net income					$	754,000

	Medical Office Buildings		Senior Housing — RIDEA		Senior Housing		Skilled Nursing Facilities		Nine Months Ended September 30, 2018
Revenues:
Real estate revenue	$	24,299,000	$	—	$	6,757,000	$	1,473,000	$	32,529,000
Resident fees and services	—		26,604,000		—		—		26,604,000
Total revenues	24,299,000		26,604,000		6,757,000		1,473,000		59,133,000
Expenses:
Rental expenses	6,901,000		—		951,000		238,000		8,090,000
Property operating expenses	—		21,986,000		—		—		21,986,000
Segment net operating income	$	17,398,000	$	4,618,000	$	5,806,000	$	1,235,000	$	29,057,000
Expenses:
General and administrative									$	5,803,000
Acquisition related expenses									254,000
Depreciation and amortization									24,053,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)									(3,846,000		)
Interest income									6,000
Loss before income taxes									(4,893,000		)
Income tax expense									(4,000		)
Net loss									$	(4,897,000	)

	Medical Office Buildings		Senior Housing		Nine Months Ended September 30, 2017
Revenue:
Real estate revenue	$	15,456,000	$	3,282,000	$	18,738,000
Expenses:
Rental expenses	4,543,000		350,000		4,893,000
Segment net operating income	$	10,913,000	$	2,932,000	$	13,845,000
Expenses:
General and administrative					$	2,996,000
Acquisition related expenses					334,000
Depreciation and amortization					7,619,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt premium)					(1,607,000		)
Interest income					1,000
Net income					$	1,290,000

Assets by reportable segment as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018		December 31, 2017
Medical office buildings	$	367,762,000	$	262,260,000
Senior housing — RIDEA	142,481,000		115,402,000
Senior housing	98,078,000		98,519,000
Skilled nursing facilities	115,829,000		—
Other	32,572,000		3,972,000
Total assets	$	756,722,000	$	480,153,000

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Concentration of Credit Risk

9 Months Ended

Sep. 30, 2018

Concentration of Credit Risk [Abstract]

Concentration of Credit Risk

16. Concentration of Credit Risk

Financial instruments that potentially subject us to a concentration of credit risk are primarily cash and cash equivalents, accounts and other receivables, restricted cash and real estate deposits. Cash and cash equivalents are generally invested in investment-grade, short-term instruments with a maturity of three months or less when purchased. We have cash and cash equivalents in financial institutions that are insured by the Federal Deposit Insurance Corporation, or FDIC. As of September 30, 2018 and December 31, 2017, we had cash and cash equivalents in excess of FDIC insured limits. We believe this risk is not significant. Concentration of credit risk with respect to accounts receivable from tenants is limited. In general, we perform credit evaluations of prospective tenants and security deposits are obtained at the time of property acquisition and upon lease execution.

Based on leases in effect as of September 30, 2018, two states in the United States accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income. Our properties located in Missouri and Florida accounted for approximately 16.1% and 12.1%, respectively, of our total property portfolio’s annualized base rent or annualized net operating income. Accordingly, there is a geographic concentration of risk subject to fluctuations in each state’s economy.

Based on leases in effect as of September 30, 2018, our four reportable business segments, medical office buildings, skilled nursing facilities, senior housing — RIDEA and senior housing accounted for 54.0%, 17.7%, 15.6% and 12.7%, respectively, of our total property portfolio’s annualized base rent or annualized net operating income.

As of September 30, 2018, we had one tenant that accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income as follows:

Tenant	Annualized Base Rent(1)		Percentage of Annualized Base Rent	Acquisition	Reportable Segment	GLA (Sq Ft)	Lease Expiration Date
RC Tier Properties, LLC	$	7,629,000	14.4%	Missouri SNF Portfolio	Skilled Nursing	385,000	09/30/33

___________

(1) Annualized base rent is based on contractual base rent from leases in effect as of September 30, 2018. The loss of this tenant or its inability to pay rent could have a material adverse effect on our business and results of operations.

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Per Share Data

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Per Share Data

17. Per Share Data

Basic earnings (loss) per share for all periods presented are computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of our common stock outstanding during the period. Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $6,000 and $4,000, respectively, for the three months ended September 30, 2018 and 2017, and $14,000 and $8,000, respectively, for the nine months ended September 30, 2018 and 2017. Diluted earnings (loss) per share are computed based on the weighted average number of shares of our common stock and all potentially dilutive securities, if any. Nonvested shares of our restricted common stock and redeemable limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock. As of September 30, 2018 and 2017, there were 37,500 and 27,000 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during these periods. As of September 30, 2018 and 2017, there were 208 units of redeemable limited partnership units of our operating partnership outstanding, but such units were excluded from the computation of diluted earnings per share because such units were anti-dilutive during these periods.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

18. Subsequent Events

Status of Our Offering

As of November 9, 2018, we had received and accepted subscriptions in our offering for 61,861,351 aggregate shares of our Class T and Class I common stock, or $616,374,000, excluding shares of our common stock issued pursuant to the DRIP.

Acquisition of Joint Venture

Effective October 1, 2018, we, through GAHC4 Trilogy JV, LLC, a wholly-owned subsidiary of our operating partnership, purchased 6.0% of the total membership interests in Trilogy REIT Holdings, LLC, or the Trilogy Joint Venture, for $48,000,000 in cash, based on an estimated gross enterprise value of $93,154,000 consisting of our equity investment and a calculated pro rata share of the debt of the Trilogy Joint Venture based on our ownership interest, from an unaffiliated third party. The Trilogy Joint Venture, through a 96.7% owned subsidiary, owns and operates purpose-built integrated senior healthcare facilities, including skilled nursing facilities and assisted living facilities, located across several states, as well as certain ancillary businesses, which we believe complement our existing real estate portfolio. In addition to our membership interests, the Trilogy Joint Venture is 70.0% indirectly owned by Griffin-American Healthcare REIT III, Inc., or GAHR III, and the remaining 24.0% continues to be owned by the unaffiliated third party that sold 6.0% of the membership interests to us. GAHR III, through a wholly-owned subsidiary, serves as the manager of the Trilogy Joint Venture and both GAHR III and us are sponsored by American Healthcare Investors. We financed the acquisition of the Trilogy Joint Venture membership interests using net proceeds from our offering and borrowings under our lines of credit with Bank of America and KeyBank.

In connection with the purchase of the Trilogy Joint Venture membership interests, we paid to our advisor a base acquisition fee of approximately $2,096,000, or 2.25% of the estimated gross enterprise value of the Trilogy Joint Venture membership interests acquired by us. Additionally, we have accrued for a contingent advisor payment of approximately $2,096,000, or 2.25% of the estimated gross enterprise value of the Trilogy Joint Venture membership interests acquired by us, which shall be paid to our advisor, subject to the satisfaction of certain conditions.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Our accompanying condensed consolidated financial statements include our accounts and those of our operating partnership and the wholly owned subsidiaries of our operating partnership, as well as any variable interest entities, or VIEs, in which we are the primary beneficiary. We evaluate our ability to control an entity, and whether the entity is a VIE and of which we are the primary beneficiary, by considering substantive terms of the arrangement and identifying which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance.

We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, or wholly owned subsidiaries of our operating partnership, will own substantially all of the interests in properties acquired on our behalf. We are the sole general partner of our operating partnership

Because we are the sole general partner of our operating partnership and have unilateral control over its management and major operating decisions (even if additional limited partners are admitted to our operating partnership), the accounts of our operating partnership are consolidated in our condensed consolidated financial statements. All intercompany accounts and transactions are eliminated in consolidation.

Interim Unaudited Financial Data

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the United States Securities and Exchange Commission, or SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results that may be expected for the full year; such full year results may be less favorable.

In preparing our accompanying condensed consolidated financial statements, management has evaluated subsequent events through the financial statement issuance date. We believe that although the disclosures contained herein are adequate to prevent the information presented from being misleading, our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K, as filed with the SEC on March 8, 2018.

Use of Estimates

Use of Estimates

The preparation of our accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions, allowance for doubtful accounts, impairment of long-lived assets, and contingencies. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.

Revenue Recognition and Tenant and Resident Receivables

Revenue Recognition

In May 2014, the, Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, which has been codified to Accounting Standards Codification, or ASC, Topic 606. We evaluate all of our revenue streams to identify whether each revenue stream would be subject to the provisions of ASC Topic 606 and whether there are any differences in the timing, measurement or presentation of revenue recognition. Based on a review of our various revenue streams, certain components of resident fees and services, such as revenues that are ancillary to the contractual rights of residents within our senior housing facilities operated utilizing a RIDEA structure, are subject to ASC Topic 606. While these revenue streams are subject to the provisions of ASC Topic 606, we believe that the pattern and timing of recognition of income are consistent with the previous accounting model. Virtually all resident fees and services are earned over a period of time and the majority of these revenues are paid by private payor types with the residual being paid by Medicaid. We adopted ASC Topic 606 on January 1, 2018 using the modified retrospective adoption method and the adoption did not have a material impact on our consolidated financial statements.

Segment Disclosure

Segment Information

We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. Accordingly, when we acquired our first medical office building in June 2016; senior housing facility in December 2016; senior housing — RIDEA facility in November 2017; and skilled nursing facility in March 2018, we added a new reporting segment at each such time.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, or ASU 2016-02, which amends the guidance on accounting for leases, including extensive amendments to the disclosure requirements. Under ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU 2016-02 from a lessor perspective, the guidance will require bifurcation of lease revenues into lease components and non-lease components and to separately recognize and disclose non-lease components that are executory in nature. Lease components will continue to be recognized on a straight-line basis over the lease term and certain non-lease components may be accounted for under the new revenue recognition guidance in ASC Topic 606. In addition, ASU 2016-02 provides a practical expedient that allows an entity to not reassess the following upon adoption (must be elected as a group): (i) whether an expired or existing contract contains a lease arrangement; (ii) the lease classification related to expired or existing lease arrangements; or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs. We plan to elect this practical expedient.

In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10, and ASU 2018-11, Leases (Topic 842) Targeted Improvements, or ASU 2018-11, which update the guidance on accounting for leases under ASU 2016-02. ASU 2018-10 was issued to increase stockholders’ awareness of narrow aspects of the guidance issued in the amendments and to expedite the improvements under ASU 2016-02. ASU 2018-11 provides (a) an alternative transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, in addition to the modified retrospective transition method prescribed by ASU 2016-02, which requires application of the new leases standard at the beginning of the earliest period presented in the financial statements for comparative purposes; and (b) a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. We completed a preliminary assessment of predominance for our medical office buildings, senior housing, and skilled nursing segments and, effective upon the adoption of ASU 2016-02 (codified under ASC Topic 842), we expect to recognize revenue from these segments under ASC Topic 842. We are still in the process of completing our preliminary assessment related to senior housing — RIDEA and plan to finalize our assessment for all reporting segments during the fourth quarter of 2018.

ASU 2016-02, ASU 2018-10 and ASU 2018-11 are effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted for financial statements that have not yet been made available for issuance. As a result of the adoption of the new leases standard on January 1, 2019, we: (i) will recognize all of our operating leases for which we are the lessee, including facilities leases and ground leases, on our consolidated balance sheets; and (ii) may be required to increase our revenue and expense for the amount of real estate taxes and insurance paid by our tenants under triple-net leases; however, we are still evaluating the complete impact of the adoption of the new leases standard and its related expedients, in addition to the transition method, on January 1, 2019 to our consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted after December 15, 2018. We do not expect the adoption of ASU 2016-13 on January 1, 2020 to have a material impact on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income, or ASU 2018-02, which amends the reclassification requirements from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017, or the Tax Act. Under ASU 2018-02, an entity will be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of ASU 2018-02 on January 1, 2019 to have a material impact on our consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, Amendments to the SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, or ASU 2018-05, which updates the income tax accounting in GAAP to reflect the SEC’s interpretive guidance with regards to the Tax Act. See Note 14, Income Taxes, for a further discussion.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), orASU 2018-13, which modifies the disclosure requirements in ASC Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. ASU 2018-13 is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We are currently evaluating this guidance to determine the impact on our disclosures.

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Real Estate Investments, Net (Tables)

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

Schedule Of Real Estate Investments Table

Our real estate investments, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
Building and improvements	$	580,961,000		$	371,890,000
Land	72,979,000			52,202,000
Furniture, fixtures and equipment	4,900,000			4,458,000
	658,840,000			428,550,000
Less: accumulated depreciation	(20,270,000		)	(8,885,000		)
Total	$	638,570,000		$	419,665,000

Schedule Of Acquisitions Of Properties Table

Acquisitions in 2018

For the nine months ended September 30, 2018, using net proceeds from our offering and debt financing, we completed 10 property acquisitions comprising 18 buildings from unaffiliated third parties. The following is a summary of our property acquisitions for the nine months ended September 30, 2018:

Acquisition(1)	Location	Type	Date Acquired	Contract Purchase Price		Mortgage Loan Payable(2)		Corporate Line of Credit(3)		Total Acquisition Fee(4)
Central Wisconsin Senior Care Portfolio	Sun Prairie and Waunakee, WI	Skilled Nursing	03/01/18	$	22,600,000	$	—	$	22,600,000	$	1,018,000
Sauk Prairie MOB	Prairie du Sac, WI	Medical Office	04/09/18	19,500,000		—		19,500,000		878,000
Surprise MOB	Surprise, AZ	Medical Office	04/27/18	11,650,000		—		8,000,000		524,000
Southfield MOB	Southfield, MI	Medical Office	05/11/18	16,200,000		6,071,000		10,000,000		728,000
Pinnacle Beaumont ALF(5)	Beaumont, TX	Senior Housing — RIDEA	07/01/18	19,500,000		—		19,400,000		868,000
Grand Junction MOB	Grand Junction, CO	Medical Office	07/06/18	31,500,000		—		31,400,000		1,418,000
Edmonds MOB	Edmonds, WA	Medical Office	07/30/18	23,500,000		—		22,000,000		1,058,000
Pinnacle Warrenton ALF(5)	Warrenton, MO	Senior Housing — RIDEA	08/01/18	8,100,000		—		8,100,000		360,000
Glendale MOB	Glendale, WI	Medical Office	08/13/18	7,600,000		—		7,000,000		342,000
Missouri SNF Portfolio	Various cities, MO	Skilled Nursing	09/28/18	88,200,000		—		87,000,000		3,970,000
Total				$	248,350,000	$	6,071,000	$	235,000,000	$	11,164,000

___________

(1) We own 100% of our properties acquired for the nine months ended September 30, 2018, with the exception of Pinnacle Beaumont ALF and Pinnacle Warrenton ALF.

(2) Represents the principal balance of the mortgage loan payable assumed by us at the time of acquisition.

(3) Represents a borrowing under the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan, 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 2.25% of the portion of the aggregate contract purchase price paid by us. In addition, the total acquisition fee includes a Contingent Advisor Payment, as defined in Note 12, Related Party Transactions, in the amount of 2.25% of the portion of the aggregate contract purchase price paid by us, which shall be paid by us to our advisor, subject to the satisfaction of certain conditions. See Note 12, Related Party Transactions — Acquisition and Development Stage — Acquisition Fee, for a further discussion.

(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 98%.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the purchase price of the assets acquired and liabilities assumed at the time of acquisition from our 10 property acquisitions in 2018 based on their relative fair values:

	2018 Acquisitions
Building and improvements	$	203,774,000
Land	20,773,000
Furniture, fixtures and equipment	79,000
In-place leases	31,355,000
Certificates of need	349,000
Above-market leases	200,000
Total assets acquired	256,530,000
Mortgage loan payable (including debt discount of $263,000)	(5,808,000		)
Below-market leases	(42,000		)
Total liabilities assumed	(5,850,000		)
Net assets acquired	$	250,680,000

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Identified Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2018

Finite-Lived Intangible Assets, Net [Abstract]

Schedule of Finite-Lived Intangible Assets

Identified intangible assets, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Amortized intangible assets:
In-place leases, net of accumulated amortization of $17,576,000 and $5,832,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 9.8 years and 7.3 years as of September 30, 2018 and December 31, 2017, respectively)	$	56,688,000	$	37,766,000
Leasehold interests, net of accumulated amortization of $193,000 and $119,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 69.9 years and 70.6 years as of September 30, 2018 and December 31, 2017, respectively)	6,219,000		6,292,000
Above-market leases, net of accumulated amortization of $277,000 and $173,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 4.7 years and 5.6 years as of September 30, 2018 and December 31, 2017, respectively)	839,000		763,000
Unamortized intangible assets:
Certificates of need	349,000		—
Total	$	64,095,000	$	44,821,000

Amortization expense on identified intangible assets

As of September 30, 2018, estimated amortization expense on the identified intangible assets for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter was as follows:

Year	Amount
2018	$	3,419,000
2019	8,978,000
2020	7,063,000
2021	6,356,000
2022	5,468,000
Thereafter	32,462,000
Total	$	63,746,000

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Other Assets, Net (Tables)

9 Months Ended

Sep. 30, 2018

Other Assets, Net [Abstract]

Other Assets

Other assets, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Deferred rent receivables	$	3,958,000	$	1,912,000
Prepaid expenses and deposits	2,762,000		1,532,000
Deferred financing costs, net of accumulated amortization of $1,212,000 and $554,000 as of September 30, 2018 and December 31, 2017, respectively(1)	851,000		1,456,000
Lease commissions, net of accumulated amortization of $42,000 and $9,000 as of September 30, 2018 and December 31, 2017, respectively	552,000		326,000
Total	$	8,123,000	$	5,226,000

___________

(1) Deferred financing costs, net only include costs related to the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan.

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Mortgage Loans Payable, Net (Tables)

9 Months Ended

Sep. 30, 2018

Mortgage Loans Payable, Net [Abstract]

Schedule of Activity Related to Mortgage Notes Payable

The changes in the carrying amount of mortgage loans payable, net consisted of the following for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Beginning balance	$	11,567,000		$	3,965,000
Additions:
Assumptions of mortgage loans payable, net	5,808,000			8,000,000
Amortization of deferred financing costs(1)	53,000			23,000
Deductions:
Deferred financing costs(1)	(123,000		)	(151,000		)
Scheduled principal payments on mortgage loans payable	(323,000		)	(189,000		)
Amortization of discount/premium on mortgage loans payable	6,000			(9,000		)
Ending balance	$	16,988,000		$	11,639,000

___________

(1) Deferred financing costs only include costs related to our mortgage loans payable.

Schedule of Maturities of Long-term Debt

As of September 30, 2018, the principal payments due on our mortgage loans payable for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter were as follows:

Year	Amount
2018	$	126,000
2019	518,000
2020	8,151,000
2021	434,000
2022	455,000
Thereafter	7,698,000
Total	$	17,382,000

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Identified Intangible Liabilities, Net (Tables)

9 Months Ended

Sep. 30, 2018

Identified Intangible Liabilities [Abstract]

Schedule of Intangible Liabilities, Net

Identified intangible liabilities, net consisted of the following as of September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Below-market leases, net of accumulated amortization of $594,000 and $345,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 6.1 years and 6.4 years as of September 30, 2018 and December 31, 2017, respectively)	$	1,102,000	$	1,349,000
Above-market leasehold interests, net of accumulated amortization of $12,000 and $6,000 as of September 30, 2018 and December 31, 2017, respectively (with a weighted average remaining life of 51.4 years and 52.2 years as of September 30, 2018 and December 31, 2017, respectively)	384,000		388,000
Total	$	1,486,000	$	1,737,000

Schedule Of Expected Amortization Expense Intangible Liabilities Table

As of September 30, 2018, estimated amortization expense on identified intangible liabilities for the three months ending December 31, 2018 and for each of the next four years ending December 31 and thereafter was as follows:

Year	Amount
2018	$	87,000
2019	318,000
2020	154,000
2021	129,000
2022	120,000
Thereafter	678,000
Total	$	1,486,000

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Redeemable Noncontrolling Interests (Tables)

9 Months Ended

Sep. 30, 2018

Redeemable Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interests

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Beginning balance	$	1,002,000		$	2,000
Additions	276,000			—
Net loss attributable to redeemable noncontrolling interests	(197,000		)	—
Fair value adjustment to redemption value	197,000			—
Ending balance	$	1,278,000		$	2,000

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2018

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

For the three and nine months ended September 30, 2018 and 2017, our officers invested the following amounts and we issued the following shares of our Class T and Class I common stock pursuant to the applicable stock purchase plan:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2018			2017			2018			2017
Officer’s Name	Title	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares
Jeffrey T. Hanson	Chief Executive Officer and Chairman of the Board of Directors	$	70,000	7,292	$	70,000	7,553	$	258,000	27,398	$	193,000	20,910
Danny Prosky	President and Chief Operating Officer	78,000		7,993	72,000		7,825	275,000		29,118	199,000		21,571
Mathieu B. Streiff	Executive Vice President and General Counsel	66,000		6,826	67,000		7,293	254,000		26,971	194,000		21,065
Brian S. Peay	Chief Financial Officer	5,000		578	—		—	24,000		2,565	—		—
Stefan K.L. Oh	Executive Vice President of Acquisitions	8,000		886	8,000		857	25,000		2,648	24,000		2,558
Christopher M. Belford	Executive Vice President of Asset Management	7,000		657	6,000		653	49,000		5,209	59,000		6,361
Wendie Newman	Executive Vice President of Asset Management	3,000		249	2,000		221	7,000		718	6,000		607
Total		$	237,000	24,481	$	225,000	24,402	$	892,000	94,627	$	675,000	73,072

Schedule Of Amount Outstanding To Affiliates Table

Accounts Payable Due to Affiliates

The following amounts were outstanding to our affiliates as of September 30, 2018 and December 31, 2017:

Fee	September 30, 2018		December 31, 2017
Contingent Advisor Payment	$	7,750,000	$	7,744,000
Asset management fees	457,000		316,000
Property management fees	125,000		43,000
Construction management fees	9,000		1,000
Lease commissions	6,000		8,000
Operating expenses	3,000		6,000
Total	$	8,350,000	$	8,118,000

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Measurements [Abstract]

Fair Value, by Balance Sheet Grouping

The carrying amounts and estimated fair values of such financial instruments as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Liabilities:
Mortgage loans payable	$	16,988,000	$	16,971,000	$	11,567,000	$	11,819,000
Line of credit and term loan	$	199,149,000	$	199,947,000	$	82,644,000	$	84,088,000

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Income Taxes [Abstract]

Schedule of Deferred Tax Assets and Liabilities

The components of income tax expense for the three and nine months ended September 30, 2018 were as follows:

	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Federal deferred	$	(796,000	)	$	(2,178,000	)
State deferred	(146,000		)	(432,000		)
State current	4,000			4,000
Valuation allowance	942,000			2,610,000
Total income tax expense	$	4,000		$	4,000

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting Information Line Items

Summary Information by Reportable Segment

	Medical Office Buildings		Senior Housing — RIDEA		Senior Housing		Skilled Nursing Facilities		Three Months Ended September 30, 2018
Revenues:
Real estate revenue	$	9,580,000	$	—	$	2,259,000	$	673,000	$	12,512,000
Resident fees and services	—		9,769,000		—		—		9,769,000
Total revenues	9,580,000		9,769,000		2,259,000		673,000		22,281,000
Expenses:
Rental expenses	2,812,000		—		270,000		105,000		3,187,000
Property operating expenses	—		7,987,000		—		—		7,987,000
Segment net operating income	$	6,768,000	$	1,782,000	$	1,989,000	$	568,000	$	11,107,000
Expenses:
General and administrative									$	2,105,000
Acquisition related expenses									98,000
Depreciation and amortization									9,007,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)									(1,602,000		)
Interest income									6,000
Loss before income taxes									(1,699,000		)
Income tax expense									(4,000		)
Net loss									$	(1,703,000	)

	Medical Office Buildings		Senior Housing		Three Months Ended September 30, 2017
Revenue:
Real estate revenue	$	6,330,000	$	2,158,000	$	8,488,000
Expenses:
Rental expenses	1,857,000		238,000		2,095,000
Segment net operating income	$	4,473,000	$	1,920,000	$	6,393,000
Expenses:
General and administrative					$	1,296,000
Acquisition related expenses					121,000
Depreciation and amortization					3,442,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt premium)					(780,000		)
Net income					$	754,000

	Medical Office Buildings		Senior Housing — RIDEA		Senior Housing		Skilled Nursing Facilities		Nine Months Ended September 30, 2018
Revenues:
Real estate revenue	$	24,299,000	$	—	$	6,757,000	$	1,473,000	$	32,529,000
Resident fees and services	—		26,604,000		—		—		26,604,000
Total revenues	24,299,000		26,604,000		6,757,000		1,473,000		59,133,000
Expenses:
Rental expenses	6,901,000		—		951,000		238,000		8,090,000
Property operating expenses	—		21,986,000		—		—		21,986,000
Segment net operating income	$	17,398,000	$	4,618,000	$	5,806,000	$	1,235,000	$	29,057,000
Expenses:
General and administrative									$	5,803,000
Acquisition related expenses									254,000
Depreciation and amortization									24,053,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)									(3,846,000		)
Interest income									6,000
Loss before income taxes									(4,893,000		)
Income tax expense									(4,000		)
Net loss									$	(4,897,000	)

	Medical Office Buildings		Senior Housing		Nine Months Ended September 30, 2017
Revenue:
Real estate revenue	$	15,456,000	$	3,282,000	$	18,738,000
Expenses:
Rental expenses	4,543,000		350,000		4,893,000
Segment net operating income	$	10,913,000	$	2,932,000	$	13,845,000
Expenses:
General and administrative					$	2,996,000
Acquisition related expenses					334,000
Depreciation and amortization					7,619,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt premium)					(1,607,000		)
Interest income					1,000
Net income					$	1,290,000

Assets by Reportable Segment

Assets by reportable segment as of September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018		December 31, 2017
Medical office buildings	$	367,762,000	$	262,260,000
Senior housing — RIDEA	142,481,000		115,402,000
Senior housing	98,078,000		98,519,000
Skilled nursing facilities	115,829,000		—
Other	32,572,000		3,972,000
Total assets	$	756,722,000	$	480,153,000

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Concentration of Credit Risk Schedules of Concentration of Risk by Risk Factor (Tables)

9 Months Ended

Sep. 30, 2018

Concentration of Credit Risk [Abstract]

Schedules of Concentration of Risk, by Risk Factor

As of September 30, 2018, we had one tenant that accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income as follows:

Tenant	Annualized Base Rent(1)		Percentage of Annualized Base Rent	Acquisition	Reportable Segment	GLA (Sq Ft)	Lease Expiration Date
RC Tier Properties, LLC	$	7,629,000	14.4%	Missouri SNF Portfolio	Skilled Nursing	385,000	09/30/33

___________

(1) Annualized base rent is based on contractual base rent from leases in effect as of September 30, 2018. The loss of this tenant or its inability to pay rent could have a material adverse effect on our business and results of operations.

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Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2018

Subsequent Event [Line Items]

Schedule Of Acquisitions Of Properties Table

Acquisitions in 2018

For the nine months ended September 30, 2018, using net proceeds from our offering and debt financing, we completed 10 property acquisitions comprising 18 buildings from unaffiliated third parties. The following is a summary of our property acquisitions for the nine months ended September 30, 2018:

Acquisition(1)	Location	Type	Date Acquired	Contract Purchase Price		Mortgage Loan Payable(2)		Corporate Line of Credit(3)		Total Acquisition Fee(4)
Central Wisconsin Senior Care Portfolio	Sun Prairie and Waunakee, WI	Skilled Nursing	03/01/18	$	22,600,000	$	—	$	22,600,000	$	1,018,000
Sauk Prairie MOB	Prairie du Sac, WI	Medical Office	04/09/18	19,500,000		—		19,500,000		878,000
Surprise MOB	Surprise, AZ	Medical Office	04/27/18	11,650,000		—		8,000,000		524,000
Southfield MOB	Southfield, MI	Medical Office	05/11/18	16,200,000		6,071,000		10,000,000		728,000
Pinnacle Beaumont ALF(5)	Beaumont, TX	Senior Housing — RIDEA	07/01/18	19,500,000		—		19,400,000		868,000
Grand Junction MOB	Grand Junction, CO	Medical Office	07/06/18	31,500,000		—		31,400,000		1,418,000
Edmonds MOB	Edmonds, WA	Medical Office	07/30/18	23,500,000		—		22,000,000		1,058,000
Pinnacle Warrenton ALF(5)	Warrenton, MO	Senior Housing — RIDEA	08/01/18	8,100,000		—		8,100,000		360,000
Glendale MOB	Glendale, WI	Medical Office	08/13/18	7,600,000		—		7,000,000		342,000
Missouri SNF Portfolio	Various cities, MO	Skilled Nursing	09/28/18	88,200,000		—		87,000,000		3,970,000
Total				$	248,350,000	$	6,071,000	$	235,000,000	$	11,164,000

___________

(1) We own 100% of our properties acquired for the nine months ended September 30, 2018, with the exception of Pinnacle Beaumont ALF and Pinnacle Warrenton ALF.

(2) Represents the principal balance of the mortgage loan payable assumed by us at the time of acquisition.

(3) Represents a borrowing under the Corporate Line of Credit, as defined in Note 7, Line of Credit and Term Loan, 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 2.25% of the portion of the aggregate contract purchase price paid by us. In addition, the total acquisition fee includes a Contingent Advisor Payment, as defined in Note 12, Related Party Transactions, in the amount of 2.25% of the portion of the aggregate contract purchase price paid by us, which shall be paid by us to our advisor, subject to the satisfaction of certain conditions. See Note 12, Related Party Transactions — Acquisition and Development Stage — Acquisition Fee, for a further discussion.

(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 98%.

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Organization and Description of Business (Detail) $ / shares in Units, ft² in Thousands		8 Months Ended	9 Months Ended	12 Months Ended	30 Months Ended	31 Months Ended	44 Months Ended
	Sep. 30, 2018 ft² segment	Sep. 30, 2018 ft²	Sep. 30, 2018 ft² segment	Feb. 16, 2017	Sep. 30, 2018 USD ($) ft² shares	Nov. 09, 2018 USD ($) shares	Sep. 30, 2018 USD ($) ft² Property Acquisition Building	Sep. 30, 2018 ft²	Apr. 11, 2018 $ / shares	Jan. 22, 2018 $ / shares	Mar. 01, 2017 $ / shares	Jan. 23, 2017 $ / shares	Jan. 07, 2017 $ / shares	Jun. 17, 2016 USD ($) $ / shares	Feb. 16, 2016 USD ($) $ / shares	Mar. 01, 2015
Date of incorporation								Jan. 23, 2015
Date of capitalization		Feb. 06, 2015
Aggregate Maximum Amount Of Common Stock Issuable Under Public Offering															$ 3,150,000,000
Aggregate Reallocated Maximum Amount of Common Stock Issuable Under Primary Public Offering														$ 3,150,000,000
Advisory agreement term				1 year
Number of Reportable Segments | segment	4		4
Number of Acquisitions Completed from Unaffiliated Parties | Acquisition							28
Number of Properties Acquired from Unaffiliated Parties | Property							56
Number of buildings acquired from unaffiliated parties | Building							58
GLA (Sq Ft) | ft²	3,389	3,389	3,389		3,389		3,389	3,389
Contract purchase price							$ 714,490,000
Class T and Class I Common Stock
Subscriptions in offering of common stock received and accepted shares | shares					59,008,261
Subscriptions in offering of common stock received and accepted value					$ 587,815,000
Common Class T [Member]
Maximum dollar amount of common stock issuable under public offering															$ 3,000,000,000
Share price | $ / shares															$ 10.00
Reallocated Maximum Amount Of Common Stock Issuable Under Primary Public Offering														$ 2,800,000,000
Common Class I [Member]
Share price | $ / shares									$ 9.65	$ 9.21	$ 9.21	$ 9.21		$ 9.30
Reallocated Maximum Amount Of Common Stock Issuable Under Primary Public Offering														$ 200,000,000
Distribution Reinvestment Plan [Member]
Maximum dollar amount of common stock issuable under public offering															$ 150,000,000
Share price | $ / shares									9.65				$ 9.40		$ 9.50
American Healthcare Investors [Member]
Ownership percentage in affiliate															75.00%
Griffin Capital Corporation [Member]
Ownership percentage in affiliate															25.00%
AHI Group Holdings, LLC [Member]
Ownership percentage in affiliate																47.10%
Colony Capital Inc.
Ownership percentage in affiliate																45.10%
James F. Flaherty III [Member]
Ownership percentage in affiliate																7.80%
Subsequent Event [Member] | Class T and Class I Common Stock
Subscriptions in offering of common stock received and accepted shares | shares						61,861,351
Subscriptions in offering of common stock received and accepted value						$ 616,374,000
Class T and Class I Common Stock
Maximum dollar amount of common stock issuable under public offering															$ 3,000,000,000
Share price | $ / shares									$ 10.05						$ 10.00
Distribution Reinvestment Plan [Member]
Maximum dollar amount of common stock issuable under public offering															$ 150,000,000

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Summary of Accounting Policies (Details)		3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018 segment	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($) segment	Dec. 31, 2017
Ancillary service revenue | $		$ 219,000	$ 639,000
Number of Reportable Segments | segment	4		4
Percentage of ownership in operating partnership			99.99%	99.99%
Percentage of limited partnership interest			0.01%	0.01%

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Real Estate Investments, Net - Investments in Consolidated Properties (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Real Estate Properties [Line Items]
Real estate investment, at cost	$ 658,840,000	$ 428,550,000
Less: accumulated depreciation	(20,270,000)	(8,885,000)
Real estate investments, net	638,570,000	419,665,000
Building and Building Improvements [Member]
Real Estate Properties [Line Items]
Real estate investment, at cost	580,961,000	371,890,000
Land [Member]
Real Estate Properties [Line Items]
Real estate investment, at cost	72,979,000	52,202,000
Furniture and Fixtures [Member]
Real Estate Properties [Line Items]
Real estate investment, at cost	$ 4,900,000	$ 4,458,000

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Real Estate Investments, Net - Additional Information (Detail)	3 Months Ended		9 Months Ended		32 Months Ended	44 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Acquisition Building	Sep. 30, 2017 USD ($)	Sep. 30, 2018	Sep. 30, 2018 Acquisition Building
Real Estate Properties [Line Items]
Depreciation	$ 4,384,000	$ 2,305,000	$ 11,581,000	$ 5,110,000
Maximum percentage of fees and expenses associated with the acquisition			6.00%	6.00%	6.00%
Number of Acquisitions Completed from Unaffiliated Parties | Acquisition						28
Number of buildings acquired from unaffiliated parties | Building						58
Capitalized Acquisition Costs and Fees Additions			$ 9,548,000
Related Party Transaction, Expenses from Transactions with Related Party	6,968,000	$ 2,856,000	14,097,000	$ 12,633,000
Medical Office Building [Member]
Real Estate Properties [Line Items]
Capital Expenditures Incurred	1,434,000		2,650,000
Senior Housing-RIDEA [Member]
Real Estate Properties [Line Items]
Capital Expenditures Incurred	$ 1,837,000		$ 4,127,000
Advisor [Member]
Real Estate Properties [Line Items]
Base Acquisition Fee For Property Acquired			2.25%
Contingent Advisor Payment Fee			2.25%		2.25%
Contingent Advisor Payment Incurred [Member]
Real Estate Properties [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party			$ 5,582,000
2018 Acquisitions [Member]
Real Estate Properties [Line Items]
Number of Acquisitions Completed from Unaffiliated Parties | Acquisition			10
Number of buildings acquired from unaffiliated parties | Building			18

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Real Estate Investments, Net - Summary of Acquisitions (Details) - USD ($)	9 Months Ended	32 Months Ended	44 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2018
Real Estate Properties [Line Items]
Contract purchase price			$ 714,490,000
Ownership Percentage, Properties	100.00%
Central Wisconsin Senior Care Portfolio [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 1,018,000
Type Of Property Acquired	Skilled Nursing
Date acquired	Mar. 01, 2018
Contract purchase price	$ 22,600,000
Lines Of Credit Related To Acquisition Of Properties	22,600,000
Sauk Prairie MOB [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 878,000
Type Of Property Acquired	Medical Office
Date acquired	Apr. 09, 2018
Contract purchase price	$ 19,500,000
Lines Of Credit Related To Acquisition Of Properties	19,500,000
Surprise MOB [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 524,000
Type Of Property Acquired	Medical Office
Date acquired	Apr. 27, 2018
Contract purchase price	$ 11,650,000
Lines Of Credit Related To Acquisition Of Properties	8,000,000
Southfield MOB [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 728,000
Type Of Property Acquired	Medical Office
Date acquired	May 11, 2018
Contract purchase price	$ 16,200,000
Borrowings and assumptions on mortgage loans payable	6,071,000
Lines Of Credit Related To Acquisition Of Properties	10,000,000
Pinnacle Beaumont ALF [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 868,000
Type Of Property Acquired	Senior Housing — RIDEA
Date acquired	Jul. 01, 2018
Contract purchase price	$ 19,500,000
Lines Of Credit Related To Acquisition Of Properties	$ 19,400,000
Ownership Percentage, Properties	98.00%
Grand Junction MOB [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 1,418,000
Type Of Property Acquired	Medical Office
Date acquired	Jul. 06, 2018
Contract purchase price	$ 31,500,000
Lines Of Credit Related To Acquisition Of Properties	31,400,000
Edmonds MOB [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 1,058,000
Type Of Property Acquired	Medical Office
Date acquired	Jul. 30, 2018
Contract purchase price	$ 23,500,000
Lines Of Credit Related To Acquisition Of Properties	22,000,000
Pinnacle Warrenton ALF [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 360,000
Type Of Property Acquired	Senior Housing — RIDEA
Date acquired	Aug. 01, 2018
Contract purchase price	$ 8,100,000
Lines Of Credit Related To Acquisition Of Properties	$ 8,100,000
Ownership Percentage, Properties	98.00%
Glendale MOB [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 342,000
Type Of Property Acquired	Medical Office
Date acquired	Aug. 13, 2018
Contract purchase price	$ 7,600,000
Lines Of Credit Related To Acquisition Of Properties	7,000,000
Missouri Skilled Nursing Facility Portfolio [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 3,970,000
Type Of Property Acquired	Skilled Nursing
Date acquired	Sep. 28, 2018
Contract purchase price	$ 88,200,000
Lines Of Credit Related To Acquisition Of Properties	$ 87,000,000
Advisor [Member]
Real Estate Properties [Line Items]
Base Acquisition Fee For Property Acquired	2.25%
Contingent Advisor Payment Fee	2.25%	2.25%
2018 Acquisitions [Member]
Real Estate Properties [Line Items]
Acquisition fee	$ 11,164,000
Contract purchase price	248,350,000
Borrowings and assumptions on mortgage loans payable	6,071,000
Lines Of Credit Related To Acquisition Of Properties	$ 235,000,000

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Real Estate Investments, Net - Assets and Liabilities Acquired (Details)	Sep. 30, 2018 USD ($)
2018 Acquisitions [Member]
Building and Improvements	$ 203,774,000
Land	20,773,000
Furniture, fixtures and equipment	79,000
Certificates of need	349,000
Total assets acquired	256,530,000
Total liabilities assumed	5,850,000
Net assets acquired	250,680,000
2018 Acquisitions [Member] | In-Place Leases [Member]
In-place leases	31,355,000
2018 Acquisitions [Member] | Above Market Leases [Member]
Above-market leases	200,000
2018 Acquisitions [Member] | Mortgage Loans Payable, Net [Member]
Mortgage loan payable (including debt discount of $263,000)	(5,808,000)
2018 Acquisitions [Member] | Below Market Lease [Member]
Below-market leases	$ 42,000

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Real Estate Investments, Net Phantom Real Estate Investments (Details)	Sep. 30, 2018 USD ($)
2018 Acquisitions [Member]
Debt Instrument, Unamortized Discount	$ 263,000

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Identified Intangible Assets - Summary of Identified Intangibles (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net	$ 64,095,000	$ 44,821,000
In-Place Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Net	56,688,000	37,766,000
Leasehold Interests [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Net	6,219,000	6,292,000
Above Market Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Net	839,000	763,000
Certificates Of Need [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Net	$ 349,000	$ 0

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Identified Intangible Assets - Summary of Amortization Expense on Identified Intangible Assets, Net (Detail)	Sep. 30, 2018 USD ($)
Finite-Lived Intangible Assets [Line Items]
2018	$ 3,419,000
2019	8,978,000
2020	7,063,000
2021	6,356,000
2022	5,468,000
Thereafter	32,462,000
Identified intangible assets, net	$ 63,746,000

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Identified Intangible Assets, Net Identified Intangible Assets, Net (Phantom) (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 4,673,000	$ 1,196,000	$ 12,630,000	$ 2,683,000
Finite-Lived Intangible Asset, Useful Life			15 years 7 months 6 days		16 years 2 months 12 days
In-Place Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	17,576,000		$ 17,576,000		$ 5,832,000
Finite-Lived Intangible Asset, Useful Life			9 years 9 months 18 days		7 years 3 months 18 days
Leasehold Interests [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	24,000	24,000	$ 73,000	73,000
Finite-Lived Intangible Assets, Accumulated Amortization	193,000		$ 193,000		$ 119,000
Finite-Lived Intangible Asset, Useful Life			69 years 10 months 24 days		70 years 7 months 6 days
Above Market Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	47,000	$ 38,000	$ 124,000	$ 104,000
Finite-Lived Intangible Assets, Accumulated Amortization	$ 277,000		$ 277,000		$ 173,000
Finite-Lived Intangible Asset, Useful Life			4 years 8 months 12 days		5 years 7 months 6 days

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Other Assets, Net - Other Assets, Net (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Other Assets [Abstract]
Deferred rent receivables	$ 3,958,000	$ 1,912,000
Prepaid expense and deposits	2,762,000	1,532,000
Deferred financing costs, net of accumulated amortization of $1,212,000 and $554,000 as of September 30, 2018 and December 31, 2017, respectively(1)	851,000	1,456,000
Lease commissions, net of accumulated amortization of $42,000 and $9,000 as of September 30, 2018 and December 31, 2017, respectively	552,000	326,000
Other assets, net	$ 8,123,000	$ 5,226,000

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Other Assets, Net - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Assets [Abstract]
Amortization of Debt Issuance Costs	$ 221,000	$ 90,000	$ 658,000	$ 267,000
Amortization Expense On Lease Commissions	$ 21,000	$ 3,000	$ 39,000	$ 3,000

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Other Assets, Net Other Assets, Net (Phantom) (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Other Assets, Net (Phantom) [Abstract]
Accumulated Amortization, Debt Issuance Costs	$ 1,212,000	$ 554,000
Accumulated Amortization, Lease Inducements	$ 42,000	$ 9,000

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Mortgage Loans Payable, Net - Additional Information (Detail)	Sep. 30, 2018 USD ($) MortgageLoan		Dec. 31, 2017 USD ($) MortgageLoan		Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Mortgage loans payable, gross	$ 17,382,000		$ 11,634,000
Mortgage loans payable, net	$ 16,988,000	[1]	$ 11,567,000	[1]	$ 11,639,000	$ 3,965,000
Number Of Fixed Rate Mortgage Loans Payable | MortgageLoan	3		2
Minimum [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	3.75%		4.77%
Maximum [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	5.25%		5.25%
Mortgage Loans Payable, Net [Member]
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Debt, Weighted Average Interest Rate	4.51%		4.92%

[1] Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

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Mortgage Loans Payable, Net - Mortgage Loans Payable (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2018		Sep. 30, 2017
Change in Carrying Amount of Mortgage Loans Payable [Roll Forward]
Beginning balance	$ 11,567,000	[1]	$ 3,965,000
Assumptions of mortgage loans payable, net	5,808,000		8,000,000
Amortization of deferred financing costs related to mortgage	53,000		23,000
Capitalized deferred financing costs for mortgages	(123,000)		(151,000)
Scheduled principal payments on mortgage loans payable	(323,000)		(189,000)
Amortization of discount/premium on mortgage loans payable	6,000		(9,000)
Ending balance	$ 16,988,000	[1]	$ 11,639,000

[1] Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

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Mortgage Loans Payable - Principal Payments Due on Mortgage Loans Payable (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]
2018	$ 126,000
2019	518,000
2020	8,151,000
2021	434,000
2022	455,000
Thereafter	7,698,000
Total	$ 17,382,000	$ 11,634,000

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Line of Credit and Term Loan (Detail)				1 Months Ended
		Oct. 31, 2017 USD ($) Extension_period	Aug. 25, 2016 USD ($) Extension	Nov. 03, 2017	Sep. 30, 2018 USD ($)	Sep. 28, 2018 USD ($)	Dec. 31, 2017 USD ($)
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 200,000,000			$ 350,000,000	$ 350,000,000	$ 200,000,000
Line of Credit Facility, Collateral			750000000
Line Of Credit Facility, Number Of Potential Extensions		1	1
Line Of Credit Facility, Potential Extension Term		12 months	12 months
Line of credit and term loan	[1]				$ 200,000,000		$ 84,100,000
Line of Credit [Member]
Line of Credit Facility [Line Items]
Debt, Weighted Average Interest Rate					3.97%		3.45%
Term Loan [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility, Potential Increase Amount To Borrowing Capacity		$ 50,000,000				$ 150,000,000
Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		150,000,000	$ 100,000,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility, Potential Increase Amount To Borrowing Capacity		50,000,000
Aggregate Revolving Commitments [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility, Potential Maximum Borrowing Capacity		300,000,000
Recourse Indebtedness [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility, Potential Increase Amount To Borrowing Capacity		20,000,000
Non-recourse Indebtedness [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility, Potential Increase Amount To Borrowing Capacity		$ 50,000,000
Credit Agreement [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Leverage Ratio				40.00%
Line of Credit [Member]
Line of Credit Facility [Line Items]
Commitment fee percentage condition one			0.20%
Average daily used amount percentage condition one			50.00%
Commitment fee percentage condition two			0.25%
Average daily used amount percentage condition two			50.00%
Line of Credit [Member] | Federal Funds Rate [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate			0.50%
Line of Credit [Member] | One-Month Eurodollar [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate			1.00%
Line of Credit [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Base Rate, Percent			0.00%
Line of Credit [Member] | Standby Letters of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 20,000,000
Line of Credit [Member] | Bridge Loan [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 25,000,000
Minimum [Member] | Line of Credit [Member] | Eurodollar [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate			1.75%
Minimum [Member] | Line of Credit [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate			0.55%
Maximum [Member] | Line of Credit [Member] | Eurodollar [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate			2.25%
Maximum [Member] | Line of Credit [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate			1.05%

[1] Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

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Identified Intangible Liabilities, Net - Summary of Identified Intangibles, Net (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Finite Lived Intangible Liabilities [Line Items]
Identified intangible liabilities, net	$ 1,486,000	$ 1,737,000
Below Market Lease [Member]
Finite Lived Intangible Liabilities [Line Items]
Identified intangible liabilities, net	1,102,000	1,349,000
Above-market leasehold interest [Member]
Finite Lived Intangible Liabilities [Line Items]
Identified intangible liabilities, net	$ 384,000	$ 388,000

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Identified Intangible Liabilities, Net - Summary of Amortization Expense on Below Market Leases (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Intangible Liabilities [Abstract]
2018	$ 87,000
2019	318,000
2020	154,000
2021	129,000
2022	120,000
Thereafter	678,000
Identified intangible liabilities, net	$ 1,486,000	$ 1,737,000

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Identified Intangible Liabilities, Net Identified Intangible Liabilities, Net (Phantom) (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Amortization of Identified Intangible Liabilities	$ 170,000	$ 70,000	$ 294,000	$ 207,000
Finite Lived Intangible Liabilities Useful Life			17 years 9 months 18 days		16 years 8 months 12 days
Below Market Lease [Member]
Amortization of above and below Market Leases	168,000	68,000	$ 288,000	203,000
Finite Lived Intangible Liabilities Accumulated Amortization	594,000		$ 594,000		$ 345,000
Finite Lived Intangible Liabilities Useful Life			6 years 1 month 6 days		6 years 4 months 24 days
Above-market leasehold interest [Member]
Finite Lived Intangible Liabilities Accumulated Amortization	12,000		$ 12,000		$ 6,000
Finite Lived Intangible Liabilities Useful Life			51 years 4 months 24 days		52 years 2 months 12 days
Amortization of above market leasehold interest	$ 2,000	$ 2,000	$ 6,000	$ 4,000

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Redeemable Noncontrolling Interests (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Feb. 06, 2015
Redeemable Noncontrolling Interests [Line Items]
Proceeds from redeemable noncontrolling interest			$ 276,000	$ 0
Noncontrolling Interest, Ownership Percentage by Parent	99.99%		99.99%		99.99%
Noncontrolling limited partnership interest in operating partnership	0.01%		0.01%		0.01%
Ownership Percentage, Properties			100.00%
Adjustments to Additional Paid in Capital, Fair Value Adjustment to Redeemable Noncontrolling Interests			$ 197,000	0
Changes in the carrying amount of redeemable noncontrolling interest [Roll Forward]
Beginning balance			1,002,000	2,000	$ 2,000
Net loss attributable to redeemable noncontrolling interests	$ (72,000)	$ 0	(197,000)	0
Ending balance	$ 1,278,000	$ 2,000	$ 1,278,000	$ 2,000	$ 1,002,000
Central Florida Senior Housing Portfolio [Member]
Redeemable Noncontrolling Interests [Line Items]
Ownership Percentage, Properties			98.00%
Pinnacle Warrenton ALF [Member]
Redeemable Noncontrolling Interests [Line Items]
Ownership Percentage, Properties			98.00%
Pinnacle Beaumont ALF [Member]
Redeemable Noncontrolling Interests [Line Items]
Ownership Percentage, Properties			98.00%
Limited Partner [Member]
Redeemable Noncontrolling Interests [Line Items]
Noncontrolling interest (Note 11)						$ 2,000
Stock Issued During Period, Shares, Stock Splits			208		208

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Redeemable Noncontrolling Interests Redeemable Noncontrolling Interest (Phantom) (Details)	Sep. 30, 2018	Dec. 31, 2017
Noncontrolling Interest Phantom [Abstract]
Noncontrolling Interest, Ownership Percentage by Parent	99.99%	99.99%
Noncontrolling limited partnership interest in operating partnership	0.01%	0.01%

XML

Equity (Detail) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended	13 Months Ended	21 Months Ended	30 Months Ended	31 Months Ended	32 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Feb. 28, 2017	Dec. 31, 2017	Sep. 30, 2018	Nov. 09, 2018	Sep. 30, 2018	Apr. 11, 2018	Jan. 22, 2018	Mar. 01, 2017	Jan. 23, 2017	Jan. 07, 2017	Dec. 31, 2016	Jun. 17, 2016	Apr. 13, 2016	Feb. 16, 2016	Feb. 12, 2016	Feb. 06, 2015
Preferred Stock, Shares Authorized	200,000,000		200,000,000		200,000,000		200,000,000	200,000,000		200,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.01		$ 0.01		$ 0.01		$ 0.01	$ 0.01		$ 0.01
Number of shares of common stock, authorized to be issued	1,000,000,000		1,000,000,000		1,000,000,000		1,000,000,000	1,000,000,000		1,000,000,000
Par value of common stock to be offered and sold to the public	$ 0.01		$ 0.01		$ 0.01		$ 0.01	$ 0.01		$ 0.01
Aggregate Maximum Amount Of Common Stock Issuable Under Public Offering																			$ 3,150,000,000
Maximum percentage of common stock repurchased during period										5.00%
Share repurchase plan holding period										1 year
Share repurchase plan percentage of price per-share condition one	92.50%		92.50%					92.50%		92.50%
Share repurchase plan percentage of price per-share condition two	100.00%		100.00%					100.00%		100.00%
Issuance of common stock under the DRIP	$ 4,668,000	$ 2,618,000	$ 12,435,000	$ 5,492,000
Stock based compensation			$ 145,000	$ 100,000
Issuance of vested and nonvested restricted common stock, shares								60,000
Common Stock Repuchased During Period Under Share Repurchase Plan Shares	115,847	11,209	236,230	18,383			77,746	313,976
Issuance of common stock under the DRIP, shares							1,008,075	2,310,346
Proceeds from Issuance of Common Stock, Dividend Reinvestment Plan							$ 9,485,000	$ 21,920,000
Selling commissions percentage										3.00%
Selling Commissions Expenses	$ 1,717,000	$ 2,059,000	$ 4,858,000	$ 6,763,000
Maximum percentage of dealer manager fee			3.00%			3.00%
Percentage Of Dealer Manager Fee						1.00%				1.00%
Dealer Manager Fees	587,000	689,000	$ 1,648,000	2,311,000
Stockholder daily servicing fee percentage										1.00%
Maximum percentage of stockholder servicing fee					4.00%
Stockholder Servicing Fee Incurred	1,984,000	2,430,000	5,602,000	8,568,000
Stockholder Servicing Fee Payable	15,203,000		15,203,000		$ 12,611,000		$ 12,611,000	15,203,000		$ 15,203,000
Receivable from transfer agent	$ 1,667,000	$ 807,000	$ 1,667,000	$ 807,000				$ 1,667,000		$ 1,667,000
Stock Acquired Average Cost Per Share	$ 9.58	$ 9.69	$ 9.49	$ 9.68			$ 9.45	$ 9.48
Stock Repuchased During Period Value Under the Share Repurchase Plan Value	$ 1,110,000	$ 109,000	$ 2,242,000	$ 178,000			$ 735,000	$ 2,977,000
Common Class T [Member]
Number of shares of common stock, authorized to be issued	900,000,000		900,000,000		900,000,000		900,000,000	900,000,000		900,000,000
Par value of common stock to be offered and sold to the public	$ 0		$ 0		$ 0		$ 0	$ 0		$ 0
Reallocated Maximum Amount Of Common Stock Issuable Under Primary Public Offering																	$ 2,800,000,000
Share price																			$ 10.00
Common stock, shares, issued	57,454,294		57,454,294		39,972,049		39,972,049	57,454,294		57,454,294
Common stock, shares outstanding	57,454,294		57,454,294		39,972,049		39,972,049	57,454,294		57,454,294
Maximum dollar amount of common stock issuable under public offering																			$ 3,000,000,000
Shares, Issued	20,833		20,833		20,833		20,833	20,833		20,833
Distribution Reinvestment Plan [Member]
Share price											$ 9.65				$ 9.40				$ 9.50
Maximum dollar amount of common stock issuable under public offering																			$ 150,000,000
Class T and Class I Common Stock
Subscriptions in offering of common stock received and accepted shares								59,008,261
Issuance of common stock under the DRIP, shares	483,737	278,520		584,318
Common Class I [Member]
Number of shares of common stock, authorized to be issued	100,000,000		100,000,000		100,000,000		100,000,000	100,000,000		100,000,000
Par value of common stock to be offered and sold to the public	$ 0		$ 0		$ 0		$ 0	$ 0		$ 0
Reallocated Maximum Amount Of Common Stock Issuable Under Primary Public Offering																	$ 200,000,000
Share price											$ 9.65	$ 9.21	$ 9.21	$ 9.21			$ 9.30
Common stock, shares, issued	3,631,170		3,631,170		2,235,111		2,235,111	3,631,170		3,631,170
Common stock, shares outstanding	3,631,170		3,631,170		2,235,111		2,235,111	3,631,170		3,631,170
Maximum percentage of dealer manager fee			1.50%
Griffin American Advisor [Member] | Common Class T [Member]
Value of stock purchased																					$ 200,000
Advisor [Member]
Percentage Of Dealer Manager Fee			2.00%			2.00%
Two Thousand Fifteen Incentive Plan [Member] | Class T and Class I Common Stock
Share price																			$ 10.05
Share-based compensation arrangement by share-based payment award, number of shares authorized																				4,000,000
Two Thousand Fifteen Incentive Plan [Member] | Restricted Stock [Member]
Allocated Share-based Compensation Expense	$ 70,000	$ 61,000	$ 145,000	$ 100,000
Two Thousand Fifteen Incentive Plan [Member] | Restricted Stock [Member] | Re-elected or Newly Elected Independent Directors [Member]
Issuance of vested and nonvested restricted common stock, shares	15,000		22,500
Share based compensation arrangement by share based payment award equity instruments other than options vesting percentage																		20.00%
Share based compensation arrangement by share based payment award equity instruments other than options vesting percentage on anniversary of grant date																		20.00%
Subsequent Event [Member] | Class T and Class I Common Stock
Subscriptions in offering of common stock received and accepted shares									61,861,351
Limited Partner [Member]
Stockholders equity attributable to noncontrolling interest																					$ 2,000
Stock Issued During Period, Shares, Stock Splits			208		208
Total Stockholders’ Equity
Issuance of common stock under the DRIP				5,492,000
Class T and Class I Common Stock
Issuance of common stock under the DRIP			$ 13,000	$ 6,000
Issuance of common stock, shares			17,789,763	24,264,521
Issuance of common stock under the DRIP, shares			1,302,271	584,318
Shares, Issued	61,085,464	36,230,395	61,085,464	36,230,395	42,207,160		42,207,160	61,085,464		61,085,464						11,377,439

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Equity Phantom (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Preferred Stock, Shares Authorized	200,000,000		200,000,000		200,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.01		$ 0.01		$ 0.01
Common Stock, Shares Authorized	1,000,000,000		1,000,000,000		1,000,000,000
Common stock, par value (usd per share)	$ 0.01		$ 0.01		$ 0.01
Selling Commissions Expenses	$ 1,717	$ 2,059	$ 4,858	$ 6,763
Common Class T [Member]
Common Stock, Shares Authorized	900,000,000		900,000,000		900,000,000
Common stock, par value (usd per share)	$ 0		$ 0		$ 0
Shares, Issued	20,833		20,833		20,833
Limited Partner [Member]
Stock Issued During Period, Shares, Stock Splits			208		208

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Related Party Transactions - Additional Information (Detail)	1 Months Ended	3 Months Ended		9 Months Ended		13 Months Ended	18 Months Ended	32 Months Ended
	Nov. 13, 2018	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Feb. 28, 2017	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($) Quarter	Apr. 11, 2018 $ / shares	Jan. 22, 2018 $ / shares	Dec. 31, 2017 USD ($)	Mar. 01, 2017 $ / shares	Jan. 23, 2017 $ / shares	Dec. 30, 2016	Jun. 17, 2016 $ / shares	Feb. 16, 2016 USD ($)
Related Party Transaction [Line Items]
Due to Affiliate		$ 6,968,000	$ 2,856,000	$ 14,097,000	$ 12,633,000
Condition Two: Percentage Of Operating Expense Of Net Income								25.00%
Maximum percentage of fees and expenses associated with the acquisition				6.00%	6.00%			6.00%
Maximum percentage of dealer manager fee				3.00%		3.00%
Percentage Of Dealer Manager Fee						1.00%		1.00%
Resident fees and services		9,769,000	0	$ 26,604,000	$ 0
Minimum Investment Rate By Officer EVP											5.00%			5.00%
Maximum Investment Rate By Officer EVP											15.00%			15.00%
Due to Affiliate		8,350,000		8,350,000			$ 8,350,000	$ 8,350,000			$ 8,118,000
Base Acquisition Fee Paid [Member]
Related Party Transaction [Line Items]
Due to Affiliate		4,007,000	347,000	5,581,000	4,901,000
Contingent Advisor Payment Incurred [Member]
Related Party Transaction [Line Items]
Due to Affiliate				5,582,000
Due to Affiliate		7,750,000		7,750,000			7,750,000	7,750,000			7,744,000
Operating Expense [Member]
Related Party Transaction [Line Items]
Due to Affiliate		10,000	21,000	43,000	62,000
Due to Affiliate		3,000		3,000			3,000	$ 3,000			6,000
Subordinated Distribution Of Net Sales Proceeds [Member]
Related Party Transaction [Line Items]
Percentage of distribution of net proceeds from sale of properties								15.00%
Annual cumulative non compounded return on gross proceeds from sale of shares of our common stock								6.00%
Subordinated DistributionUpon Listing [Member]
Related Party Transaction [Line Items]
Distribution rate of common stock capital to advisor								15.00%
Annual cumulative non compounded return upon listing from sale of shares of common stock								6.00%
Subordinated Distribution Upon Termination [Member]
Related Party Transaction [Line Items]
Distribution rate of partnership amount to advisor								15.00%
Annual cumulative non compounded return upon termination of shares of our common stock								6.00%
Lease Commissions [Member]
Related Party Transaction [Line Items]
Due to Affiliate		6,000		6,000			$ 6,000	$ 6,000			8,000
Contingent Advisor amount paid [Member]
Related Party Transaction [Line Items]
Due to Affiliate				$ 9,659,000
Advisor [Member]
Related Party Transaction [Line Items]
Maximum Percentage Of Construction Management Fees								5.00%
Number Of Consecutive Fiscal Quarter For Reimbursement Measurement | Quarter								4
Condition One: Percentage Of Operating Expenses Of Average Invested Asset								2.00%
Condition Two: Percentage Of Operating Expense Of Net Income								25.00%
Percentage Of Dealer Manager Fee				2.00%		2.00%
Maximum percentage of other organizational and offering expense								1.00%
Maximum acquisition fee of contract purchase price for property we acquire								4.50%
Maximum acquisition fee of real estate-related investment purchase price we originate or acquire								4.25%
Base Acquisition Fee For Property Acquired				2.25%
Base acquisition fee for real estate related investment we acquire				2.00%
Contingent Advisor Payment Fee				2.25%				2.25%
Contingent Advisor Payment Holdback																$ 7,500,000
Imputed leverage on equity raise percentage as basis of acquisition fee				50.00%
Asset management fee percentage								0.80%
Percentage of property management oversight fee								1.00%
Percentage of property management oversight fee - gross monthly cash receipts								1.50%
Percentage of property management oversight fee - multiple tenants								1.50%
Minimum percentage of lease fee								3.00%
Maximum percentage of lease fee								6.00%
Disposition fees as percentage of contract sales price								2.00%
Disposition fees as percentage of customary competitive real estate commission								50.00%
Maximum percentage of disposition fee								6.00%
Asset Management [Member]
Related Party Transaction [Line Items]
Due to Affiliate		1,271,000	700,000	$ 3,299,000	1,505,000
Construction Management Fee [Member]
Related Party Transaction [Line Items]
Due to Affiliate		11,000		13,000
Operating Expense [Member]
Related Party Transaction [Line Items]
Percentage Of Operating Expenses Of Average Invested Assets							1.30%
Percentage Of Operating Expense Of Net Income							26.60%
Lease Commissions [Member]
Related Party Transaction [Line Items]
Due to Affiliate		6,000	12,000	83,000	12,000
Property Management Fee [Member]
Related Party Transaction [Line Items]
Due to Affiliate		200,000	103,000	506,000	249,000
Reimbursement of acquisition expenses [Member]
Related Party Transaction [Line Items]
Due to Affiliate		0	0	1,000	2,000
Dealer manager fees [Member] | Contingent Advisor Payment Incurred [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction		1,193,000	1,414,000	3,393,000	4,751,000
Other organizational and offering expenses [Member] | Contingent Advisor Payment Incurred [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction		270,000	$ 259,000	1,178,000	$ 1,151,000
Due to Affiliate		$ 7,750,000		$ 7,750,000			$ 7,750,000	$ 7,750,000			$ 7,744,000
Common Class I [Member]
Related Party Transaction [Line Items]
Maximum percentage of dealer manager fee				1.50%
Share price | $ / shares									$ 9.65	$ 9.21		$ 9.21	$ 9.21		$ 9.30
Subsequent Event [Member] | Advisor [Member]
Related Party Transaction [Line Items]
Base Acquisition Fee For Property Acquired	2.25%
Contingent Advisor Payment Fee	2.25%

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Related Party Transactions - Related Party Description (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Board of Directors Chairman [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 70,000	$ 70,000	$ 258,000	$ 193,000
Issuance of common stock, shares	7,292	7,553	27,398	20,910
President [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 78,000	$ 72,000	$ 275,000	$ 199,000
Issuance of common stock, shares	7,993	7,825	29,118	21,571
Executive Vice President [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 66,000	$ 67,000	$ 254,000	$ 194,000
Issuance of common stock, shares	6,826	7,293	26,971	21,065
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 5,000	$ 0	$ 24,000	$ 0
Issuance of common stock, shares	578	0	2,565	0
Executive Vice President, Acquisitions [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 8,000	$ 8,000	$ 25,000	$ 24,000
Issuance of common stock, shares	886	857	2,648	2,558
Executive Officer [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 237,000	$ 225,000	$ 892,000	$ 675,000
Issuance of common stock, shares	24,481	24,402	94,627	73,072
Christopher M. Belford [Member] | Executive Vice President, Asset Management [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 7,000	$ 6,000	$ 49,000	$ 59,000
Issuance of common stock, shares	657	653	5,209	6,361
Wendie Newman [Member] | Executive Vice President, Asset Management [Member]
Related Party Transaction [Line Items]
Issuance of common stock	$ 3,000	$ 2,000	$ 7,000	$ 6,000
Issuance of common stock, shares	249	221	718	607

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Related Party Transactions - Schedule of Amount Outstanding to Affiliates (Detail) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Related Party Transaction [Line Items]
Due to Affiliate	$ 8,350,000	$ 8,118,000
Contingent Advisor Payment Incurred [Member]
Related Party Transaction [Line Items]
Due to Affiliate	7,750,000	7,744,000
Asset And Property Management Fees [Member]
Related Party Transaction [Line Items]
Due to Affiliate	457,000	316,000
Operating Expense [Member]
Related Party Transaction [Line Items]
Due to Affiliate	3,000	6,000
Construction Management Fee [Member]
Related Party Transaction [Line Items]
Due to Affiliate	9,000	1,000
Property Management Fee [Member]
Related Party Transaction [Line Items]
Due to Affiliate	125,000	43,000
Lease Commissions [Member]
Related Party Transaction [Line Items]
Due to Affiliate	$ 6,000	$ 8,000

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Related Party Transactions Related Party Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Due to Affiliate	$ 6,968,000	$ 2,856,000	$ 14,097,000	$ 12,633,000
Contingent Advisor Payment Incurred [Member]
Due to Affiliate			5,582,000
Base Acquisition Fee Paid [Member]
Due to Affiliate	4,007,000	347,000	5,581,000	4,901,000
Operating Expense [Member]
Due to Affiliate	10,000	21,000	43,000	62,000
Asset Management [Member]
Due to Affiliate	1,271,000	700,000	3,299,000	1,505,000
Lease Commissions [Member]
Due to Affiliate	6,000	12,000	83,000	12,000
Reimbursement of acquisition expenses [Member]
Due to Affiliate	0	0	1,000	2,000
Property Management Fee [Member]
Due to Affiliate	$ 200,000	$ 103,000	$ 506,000	$ 249,000

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)	Sep. 30, 2018		Dec. 31, 2017		Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage Loan Payable, Fair Value	$ 16,971,000		$ 11,819,000
Mortgage loans payable, net	16,988,000	[1]	11,567,000	[1]	$ 11,639,000	$ 3,965,000
Line of Credit Facility, Fair Value	199,947,000		84,088,000
Line of credit and term loan, net	$ 199,149,000		$ 82,644,000

[1] Such liabilities of Griffin-American Healthcare REIT IV, Inc. as of September 30, 2018 and December 31, 2017 represent 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 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 Corporate Line of Credit, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $200,000,000 and $84,100,000 as of September 30, 2018 and December 31, 2017, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

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Income Taxes - Deferred Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Examination [Line Items]
Federal deferred	$ (796,000)		$ (2,178,000)
State deferred	(146,000)		(432,000)
State current	4,000		4,000
Valuation allowance	942,000		2,610,000
Total income tax expense	$ 4,000	$ 0	$ 4,000	$ 0

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Segment Reporting - Summary Information for Reportable Segments (Detail)		3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) segment	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) segment	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Segment Reporting Information Line Items
Number of Reportable Segments | segment	4			4
Assets by Reportable Segment
Total assets	$ 756,722,000	$ 756,722,000		$ 756,722,000		$ 480,153,000
Revenues:
Real estate revenue		12,512,000	$ 8,488,000	32,529,000	$ 18,738,000
Resident fees and services		9,769,000	0	26,604,000	0
Revenues		22,281,000	8,488,000	59,133,000	18,738,000
Expenses:
Rental expenses		3,187,000	2,095,000	8,090,000	4,893,000
Property operating expenses		7,987,000	0	21,986,000	0
Segment net operating income		11,107,000	6,393,000	29,057,000	13,845,000
Operating Expenses
General and administrative		2,105,000	1,296,000	5,803,000	2,996,000
Acquisition related expenses		98,000	121,000	254,000	334,000
Depreciation and amortization		9,007,000	3,442,000	24,053,000	7,619,000
Other income (expense):
Interest expense (including amortization of deferred financing costs and debt discount/premium)		(1,602,000)	(780,000)	(3,846,000)	(1,607,000)
Investment Income, Interest					1,000
Net (loss) income		(1,703,000)	754,000	(4,897,000)	1,290,000
Segments, Geographical Areas
Interest income		6,000	0	6,000	1,000
(Loss) income before income taxes		(1,699,000)	754,000	(4,893,000)	1,290,000
Income tax expense		(4,000)	0	(4,000)	0
Medical Office Building [Member]
Assets by Reportable Segment
Total assets	367,762,000	367,762,000		367,762,000		262,260,000
Revenues:
Real estate revenue		9,580,000	6,330,000	24,299,000	15,456,000
Revenues		9,580,000		24,299,000
Expenses:
Rental expenses		2,812,000	1,857,000	6,901,000	4,543,000
Segment net operating income		6,768,000	4,473,000	17,398,000	10,913,000
Senior Housing-RIDEA [Member]
Assets by Reportable Segment
Total assets	142,481,000	142,481,000		142,481,000		115,402,000
Revenues:
Real estate revenue		0		0
Resident fees and services		9,769,000		26,604,000
Revenues		9,769,000		26,604,000
Expenses:
Rental expenses		0		0
Property operating expenses		7,987,000		21,986,000
Segment net operating income		1,782,000		4,618,000
Senior Housing [Member]
Assets by Reportable Segment
Total assets	98,078,000	98,078,000		98,078,000		98,519,000
Revenues:
Real estate revenue		2,259,000	2,158,000	6,757,000	3,282,000
Revenues		2,259,000		6,757,000
Expenses:
Rental expenses		270,000	238,000	951,000	350,000
Segment net operating income		1,989,000	$ 1,920,000	5,806,000	$ 2,932,000
Skilled Nursing Facilities [Member]
Assets by Reportable Segment
Total assets	115,829,000	115,829,000		115,829,000		0
Revenues:
Real estate revenue		673,000		1,473,000
Revenues		673,000		1,473,000
Expenses:
Rental expenses		105,000		238,000
Segment net operating income		568,000		1,235,000
Other Segments [Member]
Assets by Reportable Segment
Total assets	$ 32,572,000	$ 32,572,000		$ 32,572,000		$ 3,972,000

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Concentration of Credit Risk - Additional Information (Detail)		9 Months Ended
	Sep. 30, 2018 segment State	Sep. 30, 2018 segment State
Concentration of Credit Risk
Number of states with more than ten percent of tenant annual base rent | State	2	2
Minimum Percent Share Of Each State Annualized Base Rent That Company Owned	10.00%	10.00%
Number of Reportable Segments | segment	4	4
Number Of Tenants With More Than Ten Percent Of Annual Base Rent	1	1
Minimum percent share of annualized base rent accounted by tenants	10.00%	10.00%
Medical Office Building [Member]
Concentration of Credit Risk
Percentage of annual base rent	54.00%	54.00%
Senior Housing-RIDEA [Member]
Concentration of Credit Risk
Percentage of annual base rent	15.60%	15.60%
Senior Housing [Member]
Concentration of Credit Risk
Percentage of annual base rent	12.70%	12.70%
Skilled Nursing Facilities [Member]
Concentration of Credit Risk
Percentage of annual base rent	17.70%	17.70%
MISSOURI
Concentration of Credit Risk
Percentage of annual base rent	16.10%	16.10%
FLORIDA
Concentration of Credit Risk
Percentage of annual base rent	12.10%	12.10%

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Concentration of Credit Risk - Schedule of Annualized Base Rent from Tenants at Consolidated Properties (Detail) - RC Tier Properties LLC [Member]	9 Months Ended
	Sep. 30, 2018 USD ($) ft²
Lease Expiration Date	Sep. 30, 2033
Annual Base Rent | $	$ 7,629,000
Type Of Property Acquired	Skilled Nursing
GLA (Sq Ft) | ft²	385,000
Percentage of annual base rent	14.41%

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Per Share Data (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Participating Securities, Distributed and Undistributed Earnings (Loss), Basic	$ 6,000	$ 4,000	$ 14,000	$ 8,000
Restricted Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share			37,500	27,000
Redeemable Limited Partnership Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share			208	208

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Subsequent Events Subsequent Events Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended		30 Months Ended	31 Months Ended	32 Months Ended	44 Months Ended
	Nov. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Nov. 09, 2018	Sep. 30, 2018	Sep. 30, 2018	Oct. 01, 2018
Contract purchase price									$ 714,490,000
Due to Affiliate		$ 6,968,000	$ 2,856,000	$ 14,097,000	$ 12,633,000
Class T and Class I Common Stock
Subscriptions In Offering Of Common Stock Received And Accepted Shares						59,008,261
Subscriptions in offering of common stock received and accepted value						$ 587,815,000
Class T and Class I Common Stock | Subsequent Event [Member]
Subscriptions In Offering Of Common Stock Received And Accepted Shares							61,861,351
Subscriptions in offering of common stock received and accepted value							$ 616,374,000
Advisor [Member]
Base Acquisition Fee For Property Acquired				2.25%
Contingent Advisor Payment Fee				2.25%				2.25%
Advisor [Member] | Subsequent Event [Member]
Base Acquisition Fee For Property Acquired	2.25%
Contingent Advisor Payment Fee	2.25%
Griffin-American Healthcare REIT IV, Inc. [Member] | Subsequent Event [Member]
Joint venture ownership interest										6.00%
Griffin-American Healthcare REIT III, Inc. [Member] | Subsequent Event [Member]
Joint venture ownership interest										70.00%
Noncontrolling Interest [Member] | Subsequent Event [Member]
Joint venture ownership interest										24.00%
Trilogy Joint Venture [Member] | Subsequent Event [Member]
Contract purchase price	$ 48,000,000
Gross Enterprise Value	93,154,000
Ownership percentage equity interest										96.70%
Base Acquisition Fee Paid [Member]
Due to Affiliate		$ 4,007,000	$ 347,000	$ 5,581,000	$ 4,901,000
Base Acquisition Fee Paid [Member] | Trilogy Joint Venture [Member] | Subsequent Event [Member]
Due to Affiliate	2,096,000
Contingent Advisor Payment Incurred [Member]
Due to Affiliate				$ 5,582,000
Contingent Advisor Payment Incurred [Member] | Trilogy Joint Venture [Member] | Subsequent Event [Member]
Due to Affiliate	$ 2,096,000