American Healthcare REIT Reports Declining Financial Performance During 1Q23
American Healthcare REIT Inc., a non-traded real estate investment trust formed by the 2021 merger of Griffin-American Healthcare REIT III, Griffin-American Healthcare REIT IV, and American Healthcare Investors, recently filed its first quarter 2023 financials and provided an update to shareholders outlining the results.
Net operating income totaled $66.9 million, a 9.2% decrease compared to the first quarter of 2022’s NOI of $73.7 million.
Normalized funds from operations equaled $20.2 million, or $0.31 per share, compared to $37.8 million, or $0.58 per share, during the first quarter 2022.
Year-over-year funds from operations similarly declined to $11.7 million from $32.6 million during the first quarter 2022.
Net loss for the quarter totaled $27.6 million, compared to net loss of $900,000 during the first quarter 2022.
Despite the negative financial results, president and chief executive officer Danny Prosky noted that the company’s “property level results are off to a good start for the year as we continue to benefit from our diversified portfolio.”
As of March 31, 2023, the company’s property portfolio (excluding senior housing operating properties and integrated senior health campuses), achieved a leased percentage of 91.7% and weighted average remaining lease term of 6.9 years. The company’s portfolio of integrated senior health campuses and senior housing operating properties achieved leased percentages of 76.4% and 84.6.3%. Portfolio leverage was 53.4%.
“We remain committed to our goal of creating liquidity for our stockholders despite the challenging backdrop in the capital markets,” said Prosky. “While the capital markets are not in our control, we remain focused on what we can control, such as the continued recovery in our property operations and strengthening our balance sheet, both of which should help in any type of liquidity event.”
In September 2022, AHR filed a Form S-11 with the SEC, with plans for a proposed underwritten public offering connected with the potential listing of its common stock on the New York Stock Exchange.
The company paid a quarterly distribution of $0.25 per share to stockholders of record for the first quarter of 2023. AHR had previously paid quarterly distribution of $0.40 per share.
In March 2023, the company’s board unanimously approved an estimated net asset value per share of its common stock of $31.40, calculated as of December 31, 2022, a 15% decline in the year-over-year net asset value which the company previously attributed to “headwinds from powerful markets factors [that] negatively impacted our real estate values causing our estimated per share NAV to decrease. Higher capitalization rates, driven by interest rate movements, broadly and negatively impacted values across each of our property segments.” High inflation was also cited by the company as a major drag on its operating performance, particularly among its significant portfolio of senior housing facilities.
As The DI Wire previously reported, AHR recently announced that independent directors Harold H. Greene, Gerald W. Robinson and J. Grayson Sanders will retire from the company’s board of directors effective as of June 14, 2023.
American Healthcare REIT oversees a 20.0 million-square-foot portfolio of 314 medical office buildings, skilled nursing facilities and integrated senior health campuses located in 36 states, the United Kingdom and the Isle of Man, in addition to a real estate-related investment. The gross investment value of the portfolio is approximately $4.4 billion.
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