Griffin-American Healthcare REITs to Vote on Merger
July 29, 2021 | James Sprow | Blue Vault
Griffin-American Healthcare REIT III Inc. will hold a special meeting of stockholders and Griffin-American Healthcare REIT IV Inc. will hold an annual meeting of stockholders on September 30 to vote on the companies’ pending merger.
The respective boards of the real estate investment trusts unanimously recommended their stockholders vote in favor of the transaction, which is expected to close in the fourth quarter.
The two nontraded REITs — Griffin-American Health Care REIT III (GAHR III) and Griffin-American Health Care REIT IV (GAHR IV) — intend to merge in a stock-for-stock transaction. The REITs’ co-sponsor, American Healthcare Investors, also would be brought into the combined company through a separate transaction with GAHR III.
The combination represents a total gross investment value of $4.2 billion, as well as the assumption of $1.8 billion in GAHR III debt.
These transactions set up the new REIT — to be called American Healthcare REIT — for a planned initial public offering to take place by the end of 2022, according to an investor presentation.
American Healthcare REIT’s portfolio would include 314 buildings and campuses, with 35.1% being senior housing, 26.5% being skilled nursing and the remainder being medical office buildings and hospitals. The portfolio also would include a small number of debt placements.
In a $1.125 billion joint venture investment that closed in 2015, GAHR III acquired a majority stake in Louisville-based Trilogy Health Services. In 2020, Trilogy was the 12th-largest senior living provider in the United States, according to Argentum rankings.
Trilogy operates more than 100 locations across Kentucky, Indiana, Ohio, and Michigan, offering independent living, assisted living, memory care, and skilled nursing, among other services.
In October 2020, the board of directors of GAHR IV established a special committee to explore strategic alternatives, including listing the company’s shares on a national exchange. If the initial public offering takes place, it would be the largest-ever for a health care REIT, based on KeyBanc Capital Markets numbers cited in the investor presentation. By total assets, American Healthcare REIT would be the 11th-largest listed health care REIT and the 8th-largest owner of senior housing among public REITs.
Sources: S&P Market Intelligence; Senior Housing News; SEC
