Griffin-American Healthcare REIT III Reports Significant Growth in 2Q15

Griffin-American Healthcare REIT III Inc., a publicly registered non-traded real estate investment trust sponsored by American Healthcare Investors and Griffin Capital Corp., released its operating results for the second quarter ended June 30, 2015.

“During the second quarter, Griffin-American Healthcare REIT III continued to build its portfolio with more than $300 million invested for the second consecutive quarter,” said Jeff Hanson, chairman and chief executive officer. “Our acquisition pipeline remains robust and we expect to complete additional acquisitions in the coming months.”

President, chief operating officer and interim chief financial officer Danny Prosky added, “Our growing portfolio continues to perform well at the close of the second quarter, as evidenced by the occupancy enjoyed by our RIDEA and non-RIDEA portfolios, as well as our growing net operating income and modified funds from operations.”

Second Quarter 2015 Highlights and Recent Accomplishments:

• The company declared and paid daily distributions equal to an annualized rate of 6.0 percent to stockholders of record, based upon a $10.00 per share purchase price, from April 1 to June 30, 2015.

• Completed second quarter acquisitions totaling approximately $311.3 million, which resulted in portfolio growth of approximately 49.3 percent during the quarter, from approximately $631.4 million as of March 31, 2015 to approximately $942.8 million as of June 30, 2015.

• As of June 30, 2015, the company’s non-RIDEA property portfolio achieved an aggregate average occupancy of 95.5 percent and weighted average remaining lease term of 8.3 years. The company’s RIDEA portfolio achieved an aggregate average occupancy of 86.8 percent, while total portfolio leverage was 3.1 percent.

• Modified funds from operations, or MFFO, equaled $8.3 million for the quarter ended June 30, 2015, representing quarter-over-quarter growth of approximately 41.1 percent compared to $5.8 million during the first quarter 2015. Funds from operations, or FFO, equaled $(4.7) million during the second quarter 2015, representing a decrease of approximately 37.5 percent over first quarter 2015 FFO of $(3.4) million. The decrease in FFO and negative FFO is due largely to the significant acquisition related expenses incurred during the quarter.

• Net operating income, or NOI, totaled $11.2 million for the quarter ended June 30, 2015, representing an increase of approximately 23.0 percent over first quarter 2015 NOI of $9.1 million. Net loss during the quarter was $12.8 million, compared to a net loss of $8.1 million during the first quarter 2015. 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.

• Subsequent to the close of the second quarter, the company completed the acquisition of five additional medical office buildings located in Waterloo, Illinois and Napa, California, as well as one senior housing facility in Mishawaka, Indiana for an aggregate purchase price of approximately $48 million. As of August 13, 2015, the company has acquired a diversified portfolio of medical office buildings, hospitals and senior housing facilities totaling 66 buildings and one collateralized debt instrument for an aggregate purchase price of approximately $991 million.

Griffin-American Healthcare REIT III is a publicly registered real estate investment trust that focuses on healthcare real estate assets, including medical office buildings, senior housing facilities, skilled nursing facilities and hospitals. The REIT is co-sponsored by American Healthcare Investors and Griffin Capital Corporation.