Sila Realty Trust Reports Second Quarter 2022 Results

Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, has reported its financial results for the second quarter of 2022.

Net income attributable to common stockholders was $12 million for the quarter ended June 30, 2022, a decrease of 25 percent compared to net income attributable to common stockholders of $16.1 million for the same quarter in 2021.

Funds from operations attributable to common stockholders was $29.8 million for the second quarter of 2022, a decrease of 33 percent compared to $44.2 million for the second quarter of 2021.

Adjusted funds from operations attributable to common stockholders was $29.4 million for the second quarter of 2022, a decrease of 29 percent compared to $41.3 million for the second quarter of 2021.

Sila Realty Trust noted that the decreases are primarily due to it owning a substantially smaller portfolio of properties subsequent to selling the data center portfolio in July 2021, which was partially offset by an increase in rental revenue from the acquisition of nine operating properties and the placement of one development property in service since April 1, 2021.

Net operating income attributable to operating healthcare properties was $41.9 million for the quarter ended June 30, 2022, an increase of 3 percent compared to $40.5 million for the quarter ended June 30, 2021.

Rental revenue attributable to operating healthcare properties was $44.9 million for the quarter ended June 30, 2022, an increase of 3 percent compared to $43.7 million for the quarter ended June 30, 2021.

Same store NOI attributable to operating healthcare properties was $39.8 million for the second quarter 2022, a decrease of (0.3) percent compared to $39.9 million for the same quarter in 2021.

The REIT explained that the increase in NOI and rental revenue is primarily attributable to the acquisition of nine operating properties and the placement of one development property in service since April 1, 2021.

“We are excited with the continuing strong performance of the company as evidenced by higher rental revenue and net operating income, when compared to the second quarter of 2021 resulting from our carefully assembled portfolio of healthcare properties. These increases resulted from both the durability of the rental revenue from our same store properties and property acquisitions completed while adhering to our underwriting and capital allocation strategy”, stated Michael Seton, president and chief executive officer. “We have also taken key steps to further strengthen our balance sheet by closing a new term loan agreement during the quarter, which resulted in the extension of our debt maturities to 2028 and the significant reduction of our debt cost of capital. We remain focused on maximizing stockholder value and achieving liquidity, which may include a public listing of the company…”

During the second quarter of 2022, the company purchased four healthcare properties, located in the Pittsburgh and Prosser, Washington markets, for a total of $22.9 million. The properties are composed of 54,300 rentable square feet and are fully leased to five tenants.

As of June 30, 2022, the REIT owned 130 operating real estate properties and two undeveloped land parcels, located in 57 markets, composed of approximately 5.4 million rentable square feet with a total real estate investment of approximately $2.2 billion. The company’s properties had a weighted average occupancy of 99.4 percent and weighted-average remaining lease term of 9.4 years.

As of June 30, 2022, the company had liquidity of approximately $593.1 million, consisting of $23.1 million in cash and cash equivalents and $570.0 million in borrowing base availability under its credit facility.

As of June 30, 2022, Sila Realty Trust had total principal debt outstanding of $505.0 million under its credit facility, with a net debt leverage ratio, which is the ratio of principal debt outstanding less cash to fair value of real estate plus the total aggregate cost of properties acquired after the net asset value date of May 31, 2021, of 20.7 percent. The  company’s outstanding debt was composed of 96 percent fixed rate debt through the use of interest rate swaps and 4 percent variable rate debt.

Sila Realty Trust owned 130 operating healthcare properties and two undeveloped land parcels located in 57 markets across the United States, as of the second quarter of 2022. The REIT raised approximately $1.2 billion in investor equity after launching its initial offering in May 2014. Its follow-on offering closed in November 2018 after raising $129.3 million.

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Northstar Healthcare Reports Resignation of CEO, President and Vice Chairman

NorthStar Healthcare Income Inc., a non-traded real estate investment trust, has reported that Ronald Jeanneault has submitted his resignation as chief executive officer, president, and vice chairman and member of the board, effective August 12, 2022, according to a filing with the Securities and Exchange Commission.

NorthStar Healthcare said that Jeanneault’s decision to resign was not a result of any disagreement the firm.

The board has appointed Ann Harrington as interim chief executive officer and president, effective upon Jeanneault’s resignation. She has served as general counsel and secretary since May 2016 and will continue to act in those roles.

Harrington is also a managing director, general counsel and secretary of NRF Holdco LLC, NorthStar Healthcare’s new sponsor, a position she has held since March 2022.

Prior to this role, Harrington was a managing director, deputy general counsel of NorthStar Healthcare’s former sponsor, DigitalBridge Group Inc. (formerly known as Colony Capital and NorthStar Asset Management Group), and previously served as senior vice president, deputy general counsel, and senior corporate counsel.

Prior to joining NorthStar Asset Management Group Inc., Harrington served as an associate in the corporate and financial services group of Willkie Farr & Gallagher LLP, where she advised public and private corporate clients with respect to capital markets transactions, mergers and acquisitions, securities laws compliance, corporate governance and other general corporate matters.

Harrington holds a bachelor’s degree from Princeton University and a Juris Doctor from The Ohio State University Moritz College of Law.

NorthStar Healthcare Income was formed to acquire, originate and asset manage a portfolio of equity, debt and securities investments in healthcare real estate. From inception in February 2013 through March 31, 2022 and raised $2 billion, including $232.6 million through its distribution reinvestment plan.

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American Healthcare REIT Appoints New General Counsel

American Healthcare REIT Inc., a non-traded real estate investment trust formerly known as Griffin-American Healthcare REIT IV Inc., has hired Mark E. Foster as executive vice president, general counsel.

Foster succeeds Gabriel Willhite, who was promoted to chief operating officer last month. Willhite replaced Mathieu Streiff, a co-founder of the company, who will continue as an executive vice president for the remainder of 2022 before stepping down on January 1, 2023. Streiff will continue as a member of the company’s board of directors.

Foster has more than 23 years of experience representing institutional owners, operators and developers in connection with joint venture formations, acquisitions, dispositions, leasing, and real estate-related lending. Prior to American Healthcare REIT, Foster was a partner at Snell & Wilmer LLP, concentrating primarily on the representation of institutional owners, operators and developers, as well as financial institutions and investors.

He also previously served as vice president, general counsel and corporate secretary to Sabal Financial Group LP, which was a subsidiary of Oaktree Capital Management, where he was responsible for all legal matters related to the company’s management of more than $6 billion in real estate and debt assets.

Prior to Sabal, Foster served as regional general counsel with Toll Brothers, Inc. (NYSE: TOL) before holding a senior counsel position with Rockefeller Group Development Corporation. He began his legal career in real estate at the law firm of Allen Matkins LLP.

“Mark’s background in private practice where he focused on real estate and corporate law, coupled with his work as in-house counsel to major real estate investment and development companies, makes him an exceptional addition to our executive team,” said Danny Prosky, president and chief executive officer of American Healthcare REIT. “His extensive experience and expertise in the commercial real estate industry adds tremendous value to our company as we continue to pursue our strategic plan on behalf of investors.”

Foster received a bachelor’s degree in international relations, political science and economics from the University of Southern California, and a juris doctorate from the University of Southern California, Gould School of Law. He is a member of the State Bar of California.

American Healthcare REIT, Inc., a self-managed, publicly registered, healthcare real estate investment trust, owns and manages a portfolio of healthcare real estate assets totaling approximately 19.5 million square feet as of March 31, 2022, with a gross investment value of approximately $4.2 billion.

As of March 31, 2022, the REIT’s portfolio includes 313 buildings comprised of medical office buildings, senior housing communities, skilled nursing facilities, and other real estate-related investments across 36 states and the United Kingdom.

In October 2021, the company completed a merger with affiliated REIT, Griffin-American Healthcare REIT III Inc. In conjunction with the merger, American Healthcare REIT became self-managed following the acquisition of American Healthcare Investors, the co-sponsor of both REITs.

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American Healthcare REIT Names Chief Operating Officer, Co-Founder to Step

American Healthcare REIT Inc., a non-traded real estate investment trust formerly known as Griffin-American Healthcare REIT IV Inc., has promoted Gabriel Willhite to chief operating officer.

Willhite replaces Mathieu Streiff, a co-founder of American Healthcare Investors, will continue with the company as an executive vice president for the remainder of 2022 before stepping down as an executive of American Healthcare REIT on January 1, 2023. He will continue as a member of the company’s board of directors.

Willhite has been involved with the company since its inception, having joined American Healthcare Investors, the company’s former sponsor and one of the entities that comprised the tri-party transaction that formed American Healthcare REIT.

In 2016, Willhite served as senior vice president, assistant general counsel before being named executive vice president, general counsel in 2020, and was subsequently appointed to executive vice president, general counsel of the newly formed American Healthcare REIT in 2021.

He has been involved in the management and oversight of the company’s largest investments and transactions, including serving on the board of Trilogy Investors since 2020 and negotiating the transaction that formed American Healthcare REIT in 2021, the company said in a statement.

Prior to his involvement with the company, Willhite served as legal counsel for Sabal Financial Group L.P., where he was responsible for overseeing portfolio acquisitions, financings, joint ventures, dispositions and strategic workout transactions. He previously worked as an associate in the transactional practice group of Greenberg Traurig, LLP.

“Over the past six years, Gabe has consistently displayed a keen acumen for navigating complex transactional and operational matters for the company, making him an invaluable member of our executive management team,” said Danny Prosky, president and chief executive officer. “He combines a skill set that encompasses healthcare real estate operations, real estate transactions and legal judgment that makes him an important member of our management team and central to our effort to drive ever-greater value to our stockholders and other key partners.”

Willhite holds a bachelor’s degree in political science and communication from the University of Southern California, and a juris doctorate from the University of Minnesota Law School. He is a member of the California State Bar Association.

American Healthcare REIT, Inc., a self-managed, publicly registered, healthcare real estate investment trust, owns and manages a portfolio of healthcare real estate assets totaling approximately 19.5 million square feet as of March 31, 2022, with a gross investment value of approximately $4.2 billion.

As of March 31, 2022, the REIT’s portfolio includes 313 buildings comprised of medical office buildings, senior housing communities, skilled nursing facilities, and other real estate-related investments across 36 states and the United Kingdom.

In October 2021, the company completed a merger with affiliated REIT, Griffin-American Healthcare REIT III Inc. In conjunction with the merger, American Healthcare REIT became self-managed following the acquisition of American Healthcare Investors, the co-sponsor of both REITs.

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Sila Realty Trust Appoints REIT Veteran as Chief Accounting Officer Ahead of Potential Listing

Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, has appointed Robert Labenski as chief accounting officer.

Labenski replaces Jamie Yoakum, who was terminated from the position in late May, as reported by The DI Wire.

Labenski has 35 years of accounting and regulatory experience, focusing on real estate companies, and more specifically, real estate investment trusts.

“Mr. Labenski’s vast experience with REITs, including public REITs, is paramount, as he brings important expertise critical to our company and we look forward to leveraging his broad accounting, audit, regulatory and advisory background as a key member of the leadership team,” said Kay Neely, executive vice president and chief financial officer.

Michael Seton, president and chief executive officer, believes that Labenski’s accounting background and knowledge of public REITs will be beneficial to Sila Realty Trust as it pursues a liquidity event, particularly, a public market listing of its shares.

Prior to joining the company, Labenski served as lead audit partner on various real estate companies, including REITs, at RSM US LLP, a position he held since January 2020. Before RSM, he was an audit partner with KPMG LLP where he spent more than 32 years.

According to the company, he was the lead audit partner on 17 different public REITs during the course of his career, with experience in various real estate sectors, including healthcare, hotels, office, retail, self-storage, multifamily, single-family rental and industrial.

He was a member of KPMG’s national real estate leadership team for 20 years, and was responsible for the audit functions of the U.S. building, construction and real estate practice in both the mid-Atlantic and Southeast regions.

Labenski also held various other positions within KPMG, including the Jacksonville, Florida office managing partner, Southeast region asset management practice leader, and Southeast partner in charge of university recruiting.

The company said that he is “well versed” in the rules and regulations issued by the  Securities and Exchange Commission, The Public Company Accounting Oversight Board (PCAOB), The Financial Accounting Standards Board (FASB), and The American Institute of Certified Public Accountants (AICPA), and has provided guidance to REITs on proposed transactions, internal control structuring, corporate governance, and technical accounting and reporting matters.

Labenski has been an active member of the National Association of Real Estate Investment Trusts (NAREIT) since 1998. While at KPMG, he served as that firm’s representative on the NAREIT Best Financial Practices Council, and currently acts in that role representing RSM.

He graduated from Boston College with a bachelor’s degree in accounting, is a certified public accountant in the State of Florida, and is a member of the AICPA.

Sila Realty Trust invests in healthcare real estate and oversees a portfolio of 126 properties and two land parcels, as of March 31, 2022. The REIT raised approximately $1.2 billion in investor equity after launching its initial offering in May 2014. Its follow-on offering closed in November 2018 after raising $129.3 million.

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CNL Healthcare Properties Reports COO Resignation and New Appointments

CNL Healthcare Properties Inc., a publicly registered non-traded real estate investment trust focused on senior housing, reported that John Starr has resigned as chief operating officer and senior vice president, effective July 22, 2022. His job duties will be split between three current executives.

CNL Healthcare said there was no disagreement between Starr and the company on any matter relating to its operations, policies or practices, the company said in a filing with the Securities and Exchange Commission.

John McRae, who has served as chief investment officer of the REIT’s advisor since 2015, will serve as senior vice president of the REIT, assuming Starr’s oversight and executive leadership role with respect to asset management functions.

McRae has more than 25 years of diversified real estate experience and has held numerous senior roles at CNL since 2015. CNL Healthcare noted that McRae is “well-versed” in the company’s portfolio of assets and has “extensive relationships” with its third-party operators and tenants.

In addition, Ixchell Duarte, the REIT’s chief financial officer and treasurer since February 2018, will oversee and lead the company’s financial planning, analysis, and portfolio reporting functions.

Duarte, a veteran accounting executive, has served in similar capacities at several CNL non-traded REITs, including CNL Lifestyle Properties, CNL Growth Properties, and CNL Healthcare Properties II, among others.

Lastly, Michael Tetrick, senior vice president and investment risk officer at CNL, will be named senior vice president of the REIT, assuming certain duties regarding other portfolio strategy activities and, specifically, the company’s valuation process.

Tetrick has held various positions since joining CNL in 1997, and in recent years, has been responsible for dispositions and special situations for CNL Healthcare Properties and CNL Growth Properties III LLC, as well as executive leadership of risk management and enterprise-wide insurance programs for CNL and its affiliates.

CNL Healthcare Properties closed its offering in September 2015 after raising more than $1.7 billion in investor equity. The company’s real estate portfolio consisted of interests in 72 properties, including 71 senior housing communities, one vacant land parcel.

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American Healthcare REIT Recommends Shareholders Reject CMG Tender Offer

CMG Partners and its affiliates have launched an unsolicited tender offer to purchase up to 500,000 shares of American Healthcare REIT Inc., a non-traded real estate investment trust formerly known as Griffin-American Healthcare REIT IV Inc., for $5.35 each.

American Healthcare REIT recently declared an estimated net asset value per share of $9.29 for its Class T and Class I shares, as of December 31, 2021. CMG’s offer price of $5.35 per share is 42 percent lower than the current NAV. The company has publicly expressed that one of their top goals is to list their shares on a national stock exchange.

In a letter to shareholders, the REIT recommended that they reject the CMG offer and not sell their shares.

“The board believes that the CMG offer represents an opportunistic attempt by CMG to purchase the shares at a low share price and make a profit, depriving stockholders who tender their shares of the potential opportunity to realize the long-term value of their investment in American Healthcare REIT,” the letter stated.

American Healthcare REIT oversees a 19.5 million-square-foot portfolio of 313 medical office buildings, skilled nursing facilities and integrated senior health campuses located in 36 states, the United Kingdom and the Isle of Man, in addition to a real estate-related investment. The gross investment value of the portfolio is approximately $4.2 billion.

In October 2021, the company completed a merger with affiliated REIT, Griffin-American Healthcare REIT III Inc. In conjunction with the merger, American Healthcare REIT became self-managed following the acquisition of American Healthcare Investors, the co-sponsor of both REITs.

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Syndicated Equities Buys Missouri Medical Office for DST Offering

Syndicated Equities, a sponsor of securitized 1031 exchange offerings, has purchased a 55,000-square-foot single-tenant medical office and training facility that is 100 percent leased to SSM Health Care in Fenton, Missouri.

SSM Health Care is a healthcare provider in St. Louis and the property is located across the street from one of its regional hospitals, SSM Health – St. Clare.

The property consists of two floors, each with an approximately 27,500-square-foot floor plate. SSM Health Care utilizes the first floor for medical office, including primary care, pediatrics, behavioral health, internal medicine, and a recently completed express care clinic. The second floor serves as a training and simulation center for its employees.

Syndicated purchased the property outright and structured its acquisition in a Delaware statutory trust to accommodate investors completing tax-deferred 1031 exchanges along with accredited cash investors. The acquisition was partially funded with a “low leverage” loan from Huntington National Bank.

“The property should provide investors with long term, stable cash flow from a high-quality tenant, and should benefit from continued demand given its strong location across from a regional hospital,” said Jason Schwartz, managing partner and chief operating officer.

In other company news, Syndicated Equities recently purchased a 110-space parking garage in Midtown Manhattan alongside Centerpark Realty, a New York City-based parking management and real estate firm.

Syndicated Equities provides accredited investors and family offices with commercial real estate investments. Since 1986, the firm has focused on co-investment ownership, net lease brokerage services, global real estate opportunity funds, and more recently, qualified opportunity zones. To date, Syndicated Equities has made more than 100 investments representing over $500 million of equity and $2 billion of total asset value.

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American Healthcare REIT Provides First Quarter 2022 Financial Update to Investors

American Healthcare REIT Inc., a non-traded real estate investment trust formerly known as Griffin-American Healthcare REIT IV Inc., recently filed its first quarter 2022 financials and provided a letter to its shareholders outlining the results.

Modified funds from operations equaled $37.1 million for the quarter ended March 31, 2022, representing quarter-over-quarter growth of 36.6 percent when compared to MFFO of $27.2 million during the fourth quarter 2021.

Funds from operations attributable to controlling interest equaled $32.6 million for the first quarter of 2022, an increase of 31.1 percent compared to the previous quarter’s FFO of $24.9 million.

Net operating income totaled $73.7 million for the first quarter of 2022, an increase of 0.6 percent over the fourth quarter 2021 NOI of $73.2 million.

Net loss for the quarter ended March 31, 2022 totaled $897,000, while net loss during the previous quarter was $25 million.

In October 2021, the company completed a merger with affiliated REIT, Griffin-American Healthcare REIT III Inc. In conjunction with the merger, American Healthcare REIT became self-managed following the acquisition of American Healthcare Investors, the co-sponsor of both REITs.

Danny Prosky, president and chief executive officer, explained that “while it is still very early in the lifecycle of the new company, we are already witnessing the benefits we expected as a unified self-managed company with a large and diverse property portfolio.”

Prosky said that the portfolio continues to recover from the “significant impact” of the COVID-19 pandemic, which had a negative impact on occupancy, revenues, and expenses of its long-term care properties.

“Although we have experienced a robust recovery throughout 2021 and the first part of 2022, especially with regard to occupancy, the pace has slowed. Moving forward, we expect an uneven, but persistent, rate of improvement in various segments of our portfolio throughout the remainder of 2022 and beyond.”

As of December 31, 2021, the company’s property portfolio (excluding senior housing operating properties and integrated senior health campuses), achieved a leased percentage of 92.7 percent and weighted average remaining lease term of 7.1 years. The company’s portfolio of integrated senior health campuses and senior housing operating properties achieved leased percentages of 71.9 percent and 80 percent, respectively. Portfolio leverage was 46.9 percent.

“While we remain vigilant in terms of the ongoing pandemic and the current inflationary environment, the operational cost savings we have begun to realize as self-managed company, along with the enhancement in size and scale of our portfolio as a result of the merger, have positioned us well to weather future economic turbulence and pursue additional growth,” Prosky said.

The company declared and paid distributions of $0.40 per share annualized to its stockholders of record for the first quarter 2022. In March 2022, the company’s board unanimously approved an estimated net asset value per share of its common stock of $9.29, calculated as of December 31, 2021.

American Healthcare REIT oversees a 19.5 million-square-foot portfolio of 313 medical office buildings, skilled nursing facilities and integrated senior health campuses located in 36 states, the United Kingdom and the Isle of Man, in addition to a real estate-related investment. The gross investment value of the portfolio is approximately $4.2 billion.

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Sila Realty Trust Terminates Chief Accounting Officer

Sila Realty Trust Inc., a publicly registered, non-traded real estate investment trust formerly known as Carter Validus Mission Critical REIT II, has terminated Jamie Yoakum, its chief accounting officer, according to a filing with the Securities and Exchange Commission.

Kay Neely, chief financial officer, will assume his role until a new chief accounting officer is hired.

In connection with Yoakum’s termination, if he executes a general release of claims against the company, he will receive certain benefits in accordance with its severance plan.

These include a cash severance payment equal to the product of his base salary and target annual bonus, and a severance multiple and his target annual bonus for the current year prorated for the portion of the year he was employed; full and immediate vesting of his time-based equity incentive awards; pro-rated and immediate vesting of his performance-based equity incentive awards; and a cash payment relating to dividends on his vested performance-based equity incentive awards.

Yoakum is subject to certain non-solicitation and non-competition covenants for 12 months.

Sila Realty Trust invests in healthcare real estate and oversees a portfolio of 126 properties and two land parcels, as of March 31, 2022. The REIT raised approximately $1.2 billion in investor equity after launching its initial offering in May 2014. Its follow-on offering closed in November 2018 after raising $129.3 million.

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