IRVINE, Calif. (May 17, 2016) – Griffin-American Healthcare REIT III, Inc. today announced operating results for the company’s first quarter ended March 31, 2016.
“During the first quarter, Griffin-American Healthcare REIT III completed approximately $90 million in investments, growing its consolidated portfolio to approximately $2.5 billion1 in value, of which we own approximately $2.1 billion2,” said Jeff Hanson, chairman and chief executive officer. “While we have largely completed the portfolio construction phase of our strategic plan, we are in the process of completing more than $300 million3 in additional pipeline acquisitions that will further expand our diversified portfolio in the coming months.”
President and chief operating officer Danny Prosky added, “Our portfolio is now essentially built-out and matured. We are very pleased with the continued growth in our financial performance and the prospects for the future of Griffin-American Healthcare REIT III as we transition into the next phase of our strategic plan.”
First Quarter 2016 Highlights and Recent Accomplishments
- Completed first quarter acquisitions totaling approximately $90 million1, based on purchase price. As of March 31, 2016, the company had completed the acquisition of a diversified portfolio of medical office buildings, hospitals, senior housing facilities, skilled nursing facilities, integrated senior health campuses and real estate-related investments located throughout the United States and the United Kingdom for a consolidated purchase price of approximately $2.5 billion.
- The company declared and paid daily distributions equal to an annualized rate of 6.0 percent to stockholders of record, based upon a $10.00 per share purchase price, from Jan. 1 to March 31, 2016.
- As of March 31, 2016, the company’s portfolio of senior housing — RIDEA4 facilities and integrated senior health campuses achieved a leased percentage of 85.8 percent and 88.2 percent, respectively, while the company’s remaining property portfolio achieved a leased percentage of 94.5 percent and weighted average remaining lease term of 8.3 years. Portfolio leverage5 was 29.8 percent.
- Modified funds from operations, as defined by the Investment Program Association, or the IPA, attributable to controlling interest, or MFFO, equaled $26.6 million for the quarter ended March 31, 2016, representing year-over-year growth of approximately 355 percent compared to $5.8 million during the first quarter 2015. Funds from operations, as defined by the National Association of Real Estate Investment Trusts, or NAREIT, attributable to controlling interest, or FFO, equaled $21.0 million during the first quarter 2016, as compared to $(3.4) million during the first quarter 2015. (Please see financial reconciliation tables and notes at the end of this release for more information regarding MFFO and FFO.)
- Net operating income, or NOI, totaled $48.8 million for the quarter ended March 31, 2016, representing year-over-year growth of approximately 435 percent over first quarter 2015 NOI of $9.1 million. Net loss during the quarter was $47.1 million, due largely to depreciation and amortization expense of our properties, a non-cash item, in accordance with accounting principles generally accepted in the United States of America, or GAAP. (Please see financial reconciliation tables and notes at the end of this release for more information regarding NOI and net loss.)
- Subsequent to the close of the first quarter, the company completed the acquisition of an 85,000-square-foot medical office building in Joplin, MO for $11.6 million.
(1) Based on consolidated purchase price of real estate and real estate-related investments, including development projects, as of March 31, 2016.
(2) Excludes an approximate 32.4 percent noncontrolling interest in Trilogy Investors, LLC and an approximate 14.0 percent noncontrolling interest in GAHC3 Lakeview IN MOB JV, LLC.
(3) Based on the purchase price of our direct interest in prospective acquisitions for which the company has executed letters of intent and/or purchase and sale agreements as of May 17, 2016. These prospective acquisitions are subject to substantial closing conditions and the satisfaction of other requirements as detailed in the agreements. Accordingly, some or all of these pending transactions may not occur. We anticipate using proceeds from borrowings and cash flows from operations to finance such acquisitions.
(4) The operation of healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 is commonly referred to as a “RIDEA” structure.
(5) Total debt, excluding capital lease obligations, divided by total assets.
Link to Full First Quarter 2016 Results
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