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 fourth quarter 2020 and year-end financials and provided a letter to its shareholders outlining the results.
Modified funds from operations, or MFFO, equaled $35.4 million for the year-ended December 31, 2020, representing year-over-year growth of 4.8 percent compared to MFFO of $33.8 million for 2019.
During the fourth quarter of 2020, MFFO equaled $6.6 million, a decline of 37.7 percent compared to MFFO of $10.6 million during the fourth quarter 2019.
Funds from operations, or FFO, equaled $38.5 million for 2020, representing year-over-year growth of 27.9 percent compared to FFO of $30.1 million in 2019.
During the fourth quarter of 2020, FFO equaled $9.1 million, a decline of 25 percent compared to FFO of $12.2 million for the same period of 2019.
Net operating income, or NOI, equaled $71.4 million for 2020, an increase of 11.4 percent compared to NOI of $64.1 million in 2019.
During the fourth quarter of 2020, NOI equaled $16.5 million, a decrease of 14.2 percent over fourth quarter 2019 NOI of $19.2 million.
Net loss for both 2020 and 2019 was ($18.9 million). Net loss for the fourth quarter of 2020 was ($4.7 million) compared to net income of $1.3 million during the fourth quarter of 2019.
As of December 31, 2020, the company’s non-RIDEA property portfolio achieved a leased percentage of 95.7 percent and weighted average remaining lease term of 8.3 years. The company’s portfolio of senior housing — RIDEA facilities achieved a leased percentage of 68.1 percent. Portfolio leverage was 39.5 percent.
The REIT completed acquisitions totaling $66.2 million during 2020.
In March 2021, the REIT declared a net asset value per share of $9.22, as of September 30, 2020, a decline of 3.4 percent compared to the pre-pandemic NAV per share of $9.54, as of December 31, 2019.
In a letter to shareholders, Jeff Hanson, chairman and chief executive officer, said that the 3.4 percent decline is “relatively mild” and a “sign of strength given the dramatic impact of the COVID-19 pandemic” and the timing of the portfolio valuation, which was performed during the worst months of the pandemic.
“As such, our confidence in the future prospects for this company remains steadfast – the reality is that the quality of our portfolio, the underlying demographics of the world’s aging population and the growing demand for healthcare services have not changed,” stated Hanson. “The impact to our NAV is almost entirely due to what we believe are temporary disruptions wrought by the COVID-19 pandemic and which we are confident will fade over time once the pandemic has been brought to heel and the nation returns to a post-pandemic environment.”
Last month, REIT disclosed that its board formed a special committee of independent directors to investigate and analyze strategic alternatives, and later suspended the distribution reinvestment plan, beginning with the April 2021 distributions. Stockholders will receive their full distributions in cash at an annualized rate of $0.40 per share. The board also suspended all repurchase requests received after February 28, 2021, including repurchases resulting from the death or qualifying disability of stockholders.
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.
The company also reported that occupancy within its senior housing—RIDEA properties fell from 84.7 percent at the close of 2019 to 68.1 percent at the end of 2020. The company pointed to higher operating costs at these facilities, due to the greater reliance on personal protective equipment and expanded labor costs that continue to negatively impact the company’s overall performance. The REIT noted that its medical office buildings have fared better during the pandemic.
“Since the close of 2020, the dramatic surge in COVID-19 cases that began during the fall has abated and we have experienced an equally dramatic decline in case counts in recent months,” said Hanson. “This decline has coincided with a rapidly expanding nationwide vaccination program, and we are optimistic that the worst days of the pandemic are behind us.”
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 December 31, 2020, the company’s 4.9 million-square-foot portfolio was comprised of 94 healthcare buildings, as well as an interest in a joint venture, purchased for roughly $1.1 billion and now valued at more than $1.3 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.