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 first quarter 2021 financials and provided a letter to its shareholders outlining the results.
Modified funds from operations, or MFFO, equaled $7.6 million for the quarter-ended March 31, 2021, representing year-over-year decline of 17.3 percent compared to MFFO of $9.1 million during the same period last year.
The company said that the decline was primarily due to the “significant” increase in property operating expenses at its senior housing facilities related to the COVID-19 pandemic.
During the first quarter of 2021, funds from operations equaled $9.4 million, an increase of 72.7 percent compared to FFO of $5.4 million during the first quarter 2020. The change was attributed to fluctuations in the fair market value of its interest rate swaps, offset by the increase in property operating expenses at its senior housing facilities.
Net operating income, or NOI, equaled $16.6 million for the quarter, a decline of 11.1 percent compared to NOI of $18.7 million for the same period last year. Increased property operating expenses was given as the reason for the change.
First quarter 2021 net loss was ($4 million) compared to ($7.9 million) during the first quarter of 2020.
As of March 31, 2021, the company’s non-RIDEA property portfolio had a leased percentage of 95.7 percent and weighted average remaining lease term of 8.0 years. The company’s portfolio of senior housing — RIDEA facilities had a leased percentage of 68.1 percent, unchanged from the end of 2020. Portfolio leverage was 39.7 percent.
In a letter to shareholders, Danny Prosky, president and chief operating officer, said that occupancy at the senior housing portfolio began to recover near the end of the first quarter and has continued into the second quarter.
He added that the REIT “remains well-capitalized and equipped to weather the waning months of the pandemic.”
In March 2021, the 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.
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 March 31, 2021, 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.