American Healthcare Investors Completes Acquisition of 21 Buildings for $141 Million on Behalf of Griffin-American Healthcare REIT II
REIT portfolio reaches $1.56 billion in assets
NEWPORT BEACH, Calif. (June 17, 2013) – American Healthcare Investors and Griffin Capital Corporation, the co-sponsors of Griffin-American Healthcare REIT II, Inc., announced today the acquisition of 21 healthcare-related buildings by the REIT for an aggregate purchase price of approximately $141.3 million. The acquisitions include a total of 17 medical office buildings and four skilled nursing facilities located in Georgia, Illinois, Indiana, Pennsylvania and Texas.
The REIT’s portfolio currently totals 174 buildings acquired for approximately $1.56 billion, diversified across 28 states and all four clinical asset classes: medical office buildings, skilled nursing facilities, hospitals and assisted living facilities. Since Jan. 1, 2012, the portfolio has grown by approximately 255 percent, based on purchase price. As of March 31, 2013, the Griffin-American Healthcare REIT II property portfolio was 96 percent leased with a weighted average remaining lease term of approximately nine years and leverage (total debt divided by total assets) of 21.7 percent.
“We continue to source attractive acquisitions on behalf of Griffin-American Healthcare REIT II and its stockholders,” said Danny Prosky, a principal of American Healthcare Investors and president and chief operating officer of the REIT. “In a competitive market, we are proud to be among the most active buyers of healthcare real estate as we continue to build a diverse portfolio on behalf of stockholders.”
Griffin-American Healthcare REIT II’s most recent acquisitions since April 26, 2013 include:
Central Indiana Medical Office Building Portfolio – Indianapolis, Indiana
Griffin-American Healthcare REIT II acquired 11 medical office buildings located in and around Indianapolis for approximately $80.7 million. Acquired in multiple tranches, this latest acquisition completes the REIT’s purchase of the 17 building, $123 million portfolio, based on purchase price, from entities affiliated with Cornerstone Companies, Inc., an unaffiliated third party. In total, Central Indiana Medical Office Building Portfolio comprises approximately 594,000 square feet of medical office space located in the Indiana cities of Avon, Bloomington, Carmel, Fishers, Indianapolis, Lafayette, Muncie and Noblesville. As of May 31, 2013, the portfolio has an occupancy rate of 94.6 percent and is leased to a total of 80 tenants primarily comprised of area hospitals and large physician groups.
Pennsylvania Skilled Nursing Portfolio – Milton and Watsontown, Penn.
Pennsylvania Skilled Nursing Portfolio consists of two skilled nursing facilities totaling approximately 75,000 square feet and 263 licensed beds located in Milton and Watsontown, Pennsylvania. Acquired for $13 million from Millennium Management, an unaffiliated third party represented by Mark Davis of Healthcare Transactions Group, Inc., the portfolio is currently 100 percent master leased to Mid-Atlantic Health Care, LLC under a 15-year absolute net lease. The lease has been cross-collateralized and cross-defaulted with to the existing master lease between Griffin-American Healthcare REIT II and Mid-Atlantic for the five-building Philadelphia Skilled Nursing Facility Portfolio which they operate and that was acquired by the REIT in 2011. As a result, the lease term for that five building portfolio has been extended by approximately two years.
Rockwall Medical Office Building II – Rockwall, Texas
Built in 2009, Rockwall Medical Office Building II is a single-story, multi-tenant medical office building consisting of approximately 18,000 square feet located on the campus of Texas Health Presbyterian Hospital in the Dallas-suburb of Rockwall, Texas. The building is currently 100 percent leased to three tenants, the largest of which is the hospital, an affiliate of Texas Health Resources, one of the nation’s largest faith-based, non-profit healthcare delivery systems and the largest in North Texas in term of patients served. Texas Health Presbyterian Hospital leases approximately 47 percent of the building through April 2023. Griffin-American Healthcare REIT II acquired Rockwall Medical Center, an approximately 85,000-square-foot medical office building also located on the hospital campus in 2012. The $5.4 million Rockwall Medical Office Building II was acquired from RockMed Partners LP, an unaffiliated third party represented by Jeff Matulis and Toby Scrivner of Stan Johnson Company.
Pittsfield Skilled Nursing Facility – Pittsfield, Mass.
Pittsfield Skilled Nursing Facility is an approximately 42,000-square-foot building in the Western Massachusetts city of Pittsfield. The one-story, 115-bed skilled nursing facility was originally built in 1980 and underwent a comprehensive renovation in 1995. Additional capital improvements totaling $1.5 million were performed in 2011 and 2012. Acquired off-market for approximately $16 million from Sheehan Health Group, an unaffiliated third party, the building is currently 100 percent master leased to Trinity Health Systems, LLC under a 15-year absolute net lease with annual 3 percent rent escalations. The lease has been cross-collateralized and cross-defaulted with the existing master lease between Griffin-American Healthcare REIT II and Trinity for the seven-building Massachusetts Senior Care Portfolio which they operate and that was acquired by the REIT in 2012. As a result, the lease term for that portfolio has been extended through 2028.
Des Plaines Surgical Center – Des Plaines, Illinois
Des Plaines Surgical Center is a three-story, approximately 47,000-square-foot medical office building located within one mile of Advocate Lutheran General Hospital in the Chicago-suburb of Des Plaines, Illinois. The multi-tenant medical office building is currently 100 percent leased to eleven tenants, the largest of which is Golf Surgical Center, a multi-specialty freestanding ambulatory surgical center owned and operated by a joint venture of physicians and Advocate Lutheran, one of Greater Chicago’s largest hospitals and a member of the Aa2 Moody’s credit-rated Advocate Health Care system. The building was acquired from AAC Golf Road, LLC, an unaffiliated third party represented by John Abuja and John Smelter of Marcus & Millichap.
Fairview Skilled Nursing Facility – Grants Pass, Oregon
Fairview Skilled Nursing Facility is a single-story, 43-unit skilled nursing facility licensed to operate up to 102 beds. The approximately 25,000-square-foot building is located within three miles of Asante Three Rivers Medical Center. Acquired for approximately $6.6 million from an entity affiliated with Regency Pacific, the building is currently 100 percent master leased to Regency Pacific pursuant to a 13-year absolute net lease. The lease has been cross-collateralized and cross-defaulted with the existing master lease between Griffin-American Healthcare REIT II and Regency Pacific for the 13-building Pacific Northwest Senior Care Portfolio which they operate and that was acquired by the REIT in 2012. As a result, the lease term for the entire portfolio has been extended to 2026. Regency Pacific, an unaffiliated third party, was represented by Don Ambrose and Chris Urban of Ambrose Capital Group, Inc.
Winn Medical Center Medical Office Portfolio – Decatur, Georgia
Located in the Atlanta suburb of Decatur, Georgia, Winn Medical Center Medical Portfolio is comprised of four two-story medical office buildings adjacent to the campus of DeKalb Medical Center and approximately two miles east of Emory University Hospital. Totaling approximately 65,000 square feet, the portfolio is currently 79 percent leased to 15 tenants, the largest of which are Emory Healthcare, Fresenius Medical Care, Saint Joseph’s Medical Group and DeKalb Regional Hospital System. Built in 1976, Winn Medical Center Medical Office Portfolio underwent a comprehensive renovation between 2010 and 2012. The portfolio was acquired from Ackerman Winn Way, LLC, an unaffiliated third party represented by Andrew Murphy and Spencer Coan of Ackerman & Company.
Griffin-American Healthcare REIT II financed the acquisitions using cash on hand, the assumption of existing mortgage loan payables totaling $53 million and limited partnership units of Griffin-American Healthcare REIT II Holdings, LP, the REIT’s operating partnership. The units of the operating partnership were issued to the sellers of Central Indiana Medical Office Building Portfolio as partial payment for the acquisition.
About American Healthcare Investors LLC
American Healthcare Investors is an investment management firm that specializes in the acquisition and management of healthcare-related real estate, including medical office buildings, skilled nursing facilities, assisted living facilities and hospitals. The company was founded by nationally recognized real estate investment executives Jeff Hanson, Danny Prosky and Mathieu Streiff, who have completed in excess of $15 billion in aggregate acquisition and disposition transactions during their careers, approximately $5.5 billion of which has been healthcare-related real estate transactions. American Healthcare Investors is committed to providing investors with access to the potential benefits that healthcare-related real estate ownership can provide. For more information regarding American Healthcare Investors, please visit http://www.americanhealthcareinvestors.com/.
About Griffin-American Healthcare REIT II, Inc.
Griffin-American Healthcare REIT II, Inc. is a real estate investment trust organized to invest in a diversified portfolio of real estate properties, focusing primarily on medical office buildings and healthcare-related facilities. The REIT is co-sponsored by American Healthcare Investors and Griffin Capital Corporation. For more information regarding Griffin-American Healthcare REIT II, please visit www.HealthcareREIT2.com.
About Griffin Capital Corporation
Griffin Capital Corporation is a privately‐owned real estate investment company headquartered in Los Angeles. Led by senior executives each with more than two decades of real estate experience collectively encompassing more than $16.0 billion of transaction value and 650 transactions, Griffin Capital and its affiliates have acquired or constructed in excess of 17 million square feet of space since 1996. Griffin Capital and its affiliates currently own and manage a portfolio consisting of more than 13.4 million square feet of space, located in 28 states and representing approximately $2.2 billion in asset value.
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