Griffin American Healthcare REIT IV, Inc., a non-traded real estate investment trust (REIT), jointly sponsored by American Healthcare Investors and Griffin Capital Company, presented its financial statements for the fourth quarter of 2020 and provided its shareholders with a letter of bad numbers from Covid-19.
What is Griffin American Healthcare REIT IV?
Griffin American Healthcare REIT IV invests in healthcare real estate focusing on medical office buildings, hospitals, qualified nursing homes, retirement homes, and other healthcare facilities. As of December 31, 2020, its 4.9 million square foot portfolio includes 94 healthcare buildings, investments, and joint ventures acquired for approximately $1.1 billion and valued at more than $13 billion. The company began its initial public offering in February 2016 and raised $7.541 million in investor capital before closing the offering in February 2019.
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In March 2021, the REIT declared a net asset value per share of $9.22 as of September 30, 2020, a decrease of 3.4 percent from the pre-pandemic NAV per share ($9.54 as of December 31, 2019). In a letter to shareholders, Jeff Hanson, Chairman and Chief Executive Officer said: “The decline in NAV is a mild sign of strength given the dramatic impact of the COVID-19 pandemic and the timing of portfolio valuations, which performed worst in the months leading up to the pandemic.
Griffin REIT investors have filed lawsuits against financial advisors and broker-dealers because they have significant losses when they try to sell their shares. Currently, the secondary market is pricing the shares at less than $5. This represents a 50% more loss for investors. Investors looking to recover losses can call Haselkorn & Thibaut at 1 888-628-5590 for a free consultation.
The implications for riding and NAV are due to the temporary disruption that we believe has been caused by the virus. We are confident that these disruptions will subside over time as the virus is defeated. The nation returns to a post-pandemic environment. As a result, our confidence in the company’s prospects remains unshakeable, and the reality that the quality of our portfolio and the underlying demographics of an aging population and growing demand for healthcare services have not changed, “said Hanson.
“By the end of 2020, the dramatic increase in COVID-19 cases began to decline and wane, and we have seen a dramatic decline in the number of cases in recent months,” Hanson said. “This coincided with an expanded nationwide vaccination program, so we are optimistic that the worst days of the pandemic are behind us.
In the early days of the pandemic, the REIT reduced the monthly distribution to investors from an annualized price of $0.60 per share to $0.40 per share at the start of the distribution in April 2020. Shareholders will receive their full distribution in cash at the newly reduced rate. Last month, the company announced that its board of directors had formed a special committee of independent directors to explore and analyze strategic alternatives to suspending sales and reinvestment plans from April 2021. The Board of Directors has also suspended repurchase proposals received before February 28, 2021, including repurchases due to the death or disability of a shareholder.
The company said the occupancy rate of its retirement homes (RIDEA) fell from 84.7 percent at the end of 2019 to 68.1 percent at the end of 2020. The company said its medical office buildings fared better during the pandemic. However, the company pointed out that higher operating costs at RIDEA properties, greater reliance on personal protective equipment, and higher labor costs continue to affect the company’s overall performance.
More Griffin REIT Numbers
The Modified Fund of Operations (MFFO) for the year ended December 31, 2020, was $35.4 million, an increase of 4.8 percent from MFFO of $33.8 million in 2019. In the fourth quarter of 2020, adjusted Funds of Operations (FFO) were $6.6 million, a decrease of 37.7 percent from an MFFo of $1.06 million in the fourth quarter of 2019. Funds from operations (FFO) amounted to $38.5 million in 2020, increasing 27.9 percent from $30.1 million in 2018.
Net operating income (NOI) for 2020 was $71.4 million, an increase of 11.4 percent compared to NOI of $64.1 million in 2019. FFO was $9.9 million in the fourth quarter of 2010, a decrease of 2.5 percent from $12.2 million in the same period in 2019. For the quarter, net operating income (“NOI”) was $16.5 million, a decrease of 14.2% from the fourth quarter of 2019, when NOI was $192 million.
The net loss for the fourth quarter was $4.7 million, compared with a net profit of $1.3 million in the first quarter of 2019. The net loss in 2020 compared to 2019 was $18.9 million.
The company completed acquisitions for a total of $662 million in 2020. December 31, 2020, the company’s “non-Ridea real estate portfolio had a lease share of 95.7 percent, weighted by an average remaining term of 8.3 years. His portfolio of retirement homes and RIDEA facilities reached a rental share of 68.1 percent.