News Release: Griffin-American Healthcare REIT II Reports First Quarter 2014 Results

Completed $105 Million in Acquisitions, Grows Portfolio to $2.9 Billion Based on Purchase Price

Funds From Operations Grows 115 Percent; Modified Funds From Operations Up 94 Percent

Net Operating Income Increases 88 Percent; Net Income Up 83 Percent

IRVINE, Calif. (May 20, 2014) – Griffin-American Healthcare REIT II, Inc. today announced operating results for the company’s first quarter ended March 31, 2014.

“During the first quarter, Griffin-American Healthcare REIT II built on the tremendous success it enjoyed in 2013, during which we concluded our capital formation with more than $2.8 billion in total equity raised and expanded our nearly $3 billion portfolio (based on aggregate acquisition price) internationally with the acquisition of a premier portfolio of senior housing in the United Kingdom,” said Jeff Hanson, chairman and chief executive officer.  “We completed acquisitions totaling nearly $105 million during the quarter, and enjoyed strong growth among several key financial metrics: funds from operations grew 115 percent, modified funds from operations grew 94 percent and net operating income grew 88 percent compared to the first quarter 2013.”

President and chief operating officer Dan Prosky added, “We continue to enjoy accretive growth and to add significant value to Griffin-American Healthcare REIT II.  We have matured to become one of the largest healthcare REITs in the country and continue to perform exceptionally well, with occupancy in excess of 95 percent*, average remaining lease term of more than nine years* and exceptionally low debt of just 15.7 percent (as a percentage of aggregate portfolio purchase price).”

First Quarter 2014 Highlights and Recent Accomplishments

• Completed first quarter acquisitions totaling approximately $104.7 million, based on purchase price.  Year-over-year, the company’s portfolio grew approximately 104 percent, based on purchase price, from approximately $1.4 billion as of March 31, 2013 to approximately $2.9 billion as of March 31, 2014.

 

• The company’s non-RIDEA property portfolio achieved an aggregate average occupancy of 95.6 percent, while the portion of its portfolio operated utilizing a RIDEA structure achieved an aggregate average occupancy of 95.0 percent as of March 31, 2014.  Portfolio leverage (total debt divided by total assets) was just 15.7 percent as of March 31, 2014, while average remaining lease term totaled 9.4 years, based on non-RIDEA leases in effect as of March 31, 2014.

 

• The company declared and paid daily distributions equal to an annualized rate of 6.65 percent to stockholders of record, based upon a $10.22 per share calculation, from January 1 to March 31, 2014.

 

• Funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts, or NAREIT, equaled approximately $43.6 million during the first quarter 2014, compared with $20.3 million during the first quarter 2013, representing year-over-year growth of approximately 115 percent. Modified funds from operations, or MFFO, as defined by the Investment Program Association, or IPA, equaled $41.9 million for the first quarter 2014, representing year-over-year growth of approximately 94 percent compared to $21.6 million during the first quarter 2013. (Year-over-year growth in FFO and MFFO is primarily due to the acquisition of additional properties. Please see financial reconciliation tables and notes at the end of this release for more information regarding FFO and MFFO.)

 

• Net operating income, or NOI, totaled approximately $60.1 million in the first quarter 2014, representing an increase of approximately 88 percent over first quarter 2013 NOI of approximately $32.0 million. Net income was $10.1 million during the first quarter 2014 as compared to $5.5 million during the first quarter 2013, representing year-over-year growth of approximately 83 percent. (Year-over-year growth in NOI and net income is primarily due to the acquisition of additional properties. Please see financial reconciliation tables and notes at the end of this release for more information regarding NOI and net income.)

 

• Subsequent to the close of the first quarter, the company acquired Humble Medical Office Building, an approximately 46,000-square-foot medical office building located in the Houston suburb of Humble, Texas, for $13.7 million.