American Healthcare REIT Slashes NAV and Distributions
American Healthcare REIT Inc., a non-traded real estate investment trust formerly known as Griffin-American Healthcare REIT IV Inc., announced the company’s board of directors unanimously approved and established an updated estimated per share net asset value of the company’s Class T and Class I common stock of $31.40, calculated as of Dec. 31, 2022.
The board previously determined an estimated per share NAV of the company’s common stock of $37.16 (or the equivalent of $9.29 per share prior to AHR’s one-for-four reverse stock split executed in November of last year) calculated as of Dec. 31, 2021.
The reduction represents more than a 15% decline in the year-over-year net asset value of American Healthcare REIT. Publicly traded healthcare REITs have fared worse over the same time period, of course, with average shares prices among that cohort having declined by nearly 30%.
The company largely attributed the significant decline in NAV to “headwinds from powerful market 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.
On March 15, 2023, the board also authorized a reduced quarterly distribution from $0.40 per share to $0.25 per share to the company’s Class T and Class I common stockholders of record as of the close of business on April 4, 2023, for the quarter commencing Jan. 1, 2023 to March 31, 2023. According to the company, the distribution reduction was adopted “to preserve the company’s liquidity, better align distributions with available cash flows and position the company to achieve its long-term strategic goals.”
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.
American Healthcare REIT oversees a 20 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 $4.6 billion.
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