Griffin-American Healthcare REIT III Adds $2.1 Billion to Portfolio in 2015
Griffin-American Healthcare REIT III Inc., a publicly registered non-traded real estate investment trust co-sponsored by American Healthcare Investors and Griffin Capital Corporation, announced its operating results for the fourth quarter and year ended December 31, 2015.
“It was a year of tremendous growth for Griffin-American Healthcare REIT III in 2015, during which we completed one of the most successful equity offerings in the history of the non-traded REIT industry and acquired a multi-billion dollar portfolio of diversified healthcare real estate,” said Jeff Hanson, chairman and chief executive officer. “We couldn’t be more pleased with the progress we’ve made in such a short amount of time, and look to the future with great optimism as we pursue our strategic plan on behalf of our fellow stockholders.”
2015 Highlights and Accomplishments
• Completed fourth quarter and 2015 acquisitions totaling approximately $1.3 billion and $2.1 billion, respectively, based on purchase price. As of Dec. 31, 2015, the company had completed the acquisition of a diversified portfolio of medical office buildings, hospitals, senior housing facilities, skilled nursing facilities, integrated senior health campuses and real estate-related investments for an aggregate purchase price of approximately $2.4 billion.
• On March 12, 2015, the company concluded the primary portion of its initial public offering after raising approximately $930 million during the first six weeks of the year. In total, the company raised more than $1.84 billion from thousands of individual investors between May 12, 2014, when initial subscribers were admitted as stockholders, and the termination of its initial public offering.
• The company declared and paid daily distributions equal to an annualized rate of 6 percent to stockholders of record, based upon a $10 per share purchase price, from January 1 to December 31, 2015.
• On Dec. 1, 2015, the company completed the $1.125 billion acquisition of Trilogy Investors, LLC, the parent company of Trilogy Health Services LLC, through a majority-owned subsidiary, Trilogy Holdings, LLC. NorthStar Healthcare Income, Inc. owns a minority interest in Trilogy Holdings, LLC. Griffin-American Healthcare REIT III’s portion of the purchase price was approximately $760 million.
• As of Dec. 31, 2015, the company’s property portfolio (excluding senior housing — RIDEA facilities and integrated senior health campuses) achieved an aggregate average occupancy of 95.1 percent and weighted average remaining lease term of 8.9 years. Portfolio leverage was 26.2 percent.
• Modified funds from operations, or MFFO, as defined by the Investment Program Association attributable to controlling interest equaled $37.2 million for the year ended Dec. 31, 2015, representing growth in excess of 3,600 percent compared to MFFO attributable to controlling interest of $985,000 for the year ended December 31, 2014.
• Funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts, attributable to controlling interest equaled approximately $(30.8) million for the year ended Dec. 31, 2015, as compared to $(7.1) million for the year ended Dec. 31, 2014. According to the company, negative FFO is due largely to the significant acquisition-related expenses incurred during the year.
• Net operating income, or NOI, totaled approximately $60.1 million for the year ended Dec. 31, 2015, representing an increase of approximately 2,200 percent compared to NOI of approximately $2.6 million for the year ended December 31, 2014.
• Net loss for the year ended December 31, 2015 was approximately $115 million, as compared to net loss of $8.6 million for the year ended December 31, 2014. According to the company, the increase in net loss during 2015 is largely attributable to the significant amount of acquisitions completed during the year.
Subsequent Events
• Subsequent to the close of the fourth quarter 2015, the company completed the acquisition of a senior housing facility in Pennsylvania and seven medical office buildings located in Connecticut, Georgia, Illinois and Indiana for an aggregate purchase price of $89.6 million.
• In February 2016, the company and certain of its subsidiaries entered into credit facilities totaling $500 million with a consortium of banks, including Bank of America, N.A., KeyBank, National Association, Citizens Bank, National Association, Fifth Third Bank and The Huntington National Bank. The maximum principal amount of the credit facilities may be increased up to $1 billion in the aggregate upon meeting certain conditions.
Griffin-American Healthcare REIT III invests in a diversified portfolio of healthcare real estate assets, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. As of March 30, 2016, Griffin-American Healthcare REIT III’s portfolio is comprised of three real estate-related investments, 82 buildings and 97 integrated senior health campuses acquired for an aggregate purchase price of approximately $2.5 billion.
