Griffin-American Healthcare REIT III Reports 3Q15 Results
Griffin-American Healthcare REIT III Inc., a publicly registered non-traded real estate investment trust, released it operating results for the third quarter ended Sept. 30, 2015.
“During the third quarter, Griffin-American Healthcare REIT III continued to expand its growing portfolio with more than $180 million of acquisitions,” said Jeff Hanson, chairman and chief executive officer. “Since the start of the year, our portfolio has grown by more than 300 percent, based on aggregate purchase price, to more than $1.1 billion. Additionally, upon the closing of our current pipeline of pending acquisitions, we anticipate that our portfolio will comprise approximately $2.2 billion of total assets.”
Third Quarter 2015 Highlights and Recent Accomplishments:
Modified funds from operations, or MFFO, equaled $10.2 million for the quarter ended Sept. 30, 2015, representing year-over-year growth of approximately 144,943 percent compared to $7,000 during the third quarter 2014. Funds from operations, or FFO, equaled $(451,000) during the third quarter 2015, representing improvement by approximately 66.3 percent over third quarter 2014 FFO of $(1.3) million. Negative FFO is due largely to the significant acquisition related expenses incurred during the quarter.
Net operating income, or NOI, totaled $14.9 million for the quarter ended Sept. 30, 2015, representing an increase of approximately 3,961 percent over third quarter 2014 NOI of $368,000. Net loss during the quarter was $17.9 million, compared to a net loss of $1.6 million during the third quarter 2014. Net loss is due largely to acquisition related expenses in connection with the purchase of our properties, as well as depreciation and amortization expense of our properties, a non-cash item, in accordance with accounting principles generally accepted in the United States of America, or GAAP.
The company declared and paid daily distributions equal to an annualized rate of 6 percent to stockholders of record, based upon a $10.00 per share purchase price, from July 1 to Sept. 30, 2015.
Completed second quarter acquisitions totaling approximately $180.1 million, which resulted in portfolio growth of approximately 19 percent during the quarter, from approximately $942.8 million as of June 30, 2015 to approximately $1.1 billion as of Sept. 30, 2015.
The company also announced during the quarter that it has entered into a definitive agreement to acquire Trilogy Investors LLC, the parent company of Trilogy Health Services LLC, for approximately $1.125 billion pursuant to a joint venture with NorthStar Healthcare Income Inc., or NHI. Griffin-American Healthcare REIT III will own 70 percent of the joint venture and will act as its manager. NHI will own 30 percent of the joint venture. The transaction is subject to third party approvals, customary closing conditions and the satisfaction of other requirements as detailed in the agreement.
As of Sept. 30, 2015, the company’s RIDEA properties achieved an aggregate average occupancy of 88.2 percent. The company’s non-RIDEA properties achieved an aggregate average occupancy of 95 percent and weighted average remaining lease term of 8.1 years, while total portfolio leverage was 5.8 percent.
Subsequent to the close of the third quarter, the company completed the acquisition of a skilled nursing facility in Washington, D.C.; an additional senior housing facility to its existing Crown Senior Care Portfolio in the United Kingdom; and a commercial mortgage-backed debt security for an aggregate purchase price of $117.7 million. As of November 16, 2015, the company has acquired a diversified portfolio of medical office buildings, hospitals, senior housing facilities and skilled nursing facilities totaling 71 buildings, two collateralized notes receivable and a commercial mortgage-backed debt security for an aggregate purchase price of approximately $1.24 billion.
Griffin-American Healthcare REIT III invests in healthcare real estate assets, focusing primarily on medical office buildings, senior housing facilities, skilled nursing facilities and hospitals. The REIT is co-sponsored by American Healthcare Investors and Griffin Capital Corporation.
