Griffin-American Healthcare REIT III and Griffin-American Healthcare REIT IV Inc., two affiliated non-traded real estate investment trusts, reported to the Securities and Exchange Commission that each REIT board formed special committees comprised of independent directors in October 2020 to investigate and analyze strategic alternatives. The REITs also declared new net asset values per share for their respective common stock.
Strategic alternatives typically include the sale of the company’s assets, a listing of its shares on a national securities exchange, or a merger with another entity, including a merger with another non-traded entity.
Both REITs invest in healthcare real estate assets, including medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. The REITs are co-sponsored by American Healthcare Investors and Griffin Capital Company.
“This is an important process in the life of a non-traded real estate investment trust such as ours, and we are optimistic that the process will lead to enhanced value for you and all of our fellow stockholders,” each REIT stated in their respective letters to shareholders.
In connection with the strategic alternative review process and in order to facilitate a strategic transaction, Griffin-American Healthcare REIT IV’s board suspended the distribution reinvestment plan, beginning with the April 2021 distributions, which will be paid around May 1, 2021. Stockholders will receive their full distributions in cash at an annualized rate of $0.40 per share, the company said. The board has also suspended all repurchase requests received after February 28, 2021, including repurchases resulting from the death or qualifying disability of stockholders.
Griffin-American Healthcare REIT III previously suspended monthly distributions to shareholders after paying the May 2020 distribution on June 1, 2020. The company suspended its DRIP and SRP in early 2021, citing the effects of the COVID-19 pandemic on the healthcare sector and its portfolio.
In addition to the strategic review disclosure, the REITs each declared new NAVs per share, as of September 30, 2020. Griffin-American Healthcare REIT IV’s Class T and Class I shares were valued at $9.22 each, a decline of 3.4 percent compared to the pre-pandemic NAV per share of $9.54, as of December 31, 2019.
Griffin-American Healthcare REIT III’s shares were valued at $8.55 each, as of September 30, 2020, a decline of 9 percent compared to the previous valuation of $9.40 per share, as of June 30, 2019.
Griffin-American Healthcare REIT III launched its initial public offering in February 2014 and closed in March 2015 after raising more than $1.9 billion. As of September 30, 2019, the REIT owned a portfolio of 97 properties (101 buildings) and 118 integrated senior health campuses purchased for roughly $3 billion. In addition, the REIT had invested $60.4 million in real estate-related investments.
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.