Griffin-American Healthcare REIT IV Reports Second Quarter 2021 Results
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 second quarter 2021 financials.
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 second quarter 2021 financials and provided a letter to its shareholders outlining the results.
Modified funds from operations, or MFFO, equaled $7.9 million for the second quarter 2021, representing year-over-year decline of 25.9 percent compared to MFFO of $10.6 million during the same period last year. MFFO equaled $7.6 million for the first quarter of 2021.
During the second quarter of 2021, funds from operations equaled $7.9 million, a decrease of 36.2 percent compared to FFO of $12.4 million during the second quarter 2020. FFO for the first quarter of 2021 equaled $9.4 million.
The company said that the declines in MFFO and FFO were primarily due to the “significant” decline in occupancy and increased property operating expenses at its senior housing facilities related to the COVID-19 pandemic.
Net operating income, or NOI, equaled $16.6 million for the second quarter, a decline of 8.9 percent compared to NOI of $18.2 million for the same period last year. Decline in occupancy and increased property operating expenses was the given reason for the change. Net operating income also equaled $16.6 million for the first quarter of 2021.
Second quarter 2021 net loss was ($3.9 million) compared to ($1.2 million) during the second quarter of 2020. First quarter 2021 net loss was ($4 million).
As of June 30, 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 71.6 percent, compared to 68.1 percent last quarter. Portfolio leverage was 40 percent.
As previously reported, Griffin-American Healthcare REIT IV agreed to merge with Griffin-American Healthcare REIT III in a stock-for-stock transaction to create a combined company with approximately $4.2 billion in healthcare real estate assets. The combined company will be renamed American Healthcare REIT, and the merger is expected to close in October 2021 and list on a national stock exchange in 2022.
In light of the proposed merger, the board has authorized a distribution to shareholders of record as of the close of business on September 17, 2021 to be paid around September 20th.
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.
In a letter to shareholders, Danny Prosky, president and chief operating officer, said, “Our medical office building properties continued to perform well during the second quarter with impressive tenant retention but our senior housing portfolio, especially our ‘senior housing – managed,’ or RIDEA, portfolio has yet to appreciably recover from the effects of the pandemic. However, during the latter part of the first quarter this year, we began to see green shoots of recovery. Occupancy within this segment of our portfolio has experienced modest improvement since the depths of the pandemic but we anticipate the pace will be slow.”
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 June 30, 2021, the company’s 4.8 million-square-foot portfolio was comprised of 92 healthcare buildings, as well as 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.
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