Griffin-American Healthcare REIT IV Inc., a publicly registered non-traded real estate investment trust co-sponsored by American Healthcare Investors and Griffin Capital Company, recently filed its third quarter 2020 financials and provided a letter to its shareholders outlining the results.
Modified funds from operations, or MFFO, equaled $9.1 million for the third quarter of 2020, representing year-over-year growth of 14.5 percent compared to MFFO of $7.9 million during the third quarter 2019.
Funds from operations, or FFO, equaled $11.5 million for the third quarter of 2020, representing year-over-year growth of 36.2 percent compared to FFO of $8.5 million during the third quarter 2019.
Net loss during the quarter was $5.2 million compared to net loss of $1.9 million during the third quarter 2019. The company said that net loss was due largely to depreciation and amortization expense of its properties.
Net operating income, or NOI, totaled $18 million for the third quarter of 2020, representing an increase of approximately 10.6 percent over third quarter 2019 NOI of $16.3 million.
As of September 30, 2020, the company’s non-RIDEA property portfolio achieved a leased percentage of 95.4 percent and weighted average remaining lease term of 8.4 years. The company’s portfolio of senior housing — RIDEA facilities achieved a leased percentage of 77.2 percent. Portfolio leverage was 39.3 percent.
The company has more than $22 million cash-on-hand, $50.5 million on its corporate line of credit, and portfolio leverage of 39.3 percent, as of September 30, 2020.
“The country as a whole, and the healthcare industry in particular, has suffered significantly as a result of the pandemic, which shows no sign of abatement…,” said Danny Prosky, chief operating officer. “As such, much of our portfolio continues to experience downward pressure on its various revenue streams. While medical office buildings continue to perform relatively well in the face of rising case counts, admission of new residents to our senior housing properties continues to be a significant problem as a result of the pandemic.”
Prosky pointed to the REIT’s “steep” year-over-year decline in occupancy at its senior housing properties, which decreased from 82.8 percent for the first nine months of 2019 to 77.2 percent for the same period in 2020.
The company declared and paid daily distributions equal to $0.40 per share annualized to its stockholders of record for the third quarter 2020.
On April 2, 2020, the board determined to maintain the estimated per share net asset value of the company’s common stock at $9.54 per share as of December 31, 2019.
In the early days of the pandemic, the REIT reduced monthly distributions to investors from an annualized rate of $0.60 per share to $0.40 per share beginning with the April 2020 distribution. It also suspended its share repurchase plan except for requests resulting from the death or qualifying disability of stockholders, and postponed non-essential capital expenditures.
“We are optimistic about the recent favorable reports regarding the efficacy of vaccines under clinical trial,” added Prosky. “However, it remains clear that we are in the midst of a worsening pandemic that will continue to test the country and our company for some time to come.”
Griffin-American Healthcare REIT IV commenced its initial public offering in February 2016 and raised $754.1 million in investor equity prior to closing the offering in February 2019. As of the third quarter of 2020, the company’s portfolio was comprised of 89 healthcare properties (94 buildings), including an interest in a joint venture, purchased for roughly $1.1 billion.
Griffin-American Healthcare REIT IV invests in healthcare real estate assets, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities.