Griffin-American Healthcare REITs to Merge

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Two healthcare REITs have agreed to a merger that would create a new investment trust valued at approximately $4.2 billion. Griffin-American Healthcare REIT IV is expected to acquire Griffin America Healthcare REIT III and rebrand to American Healthcare REIT, Inc.

The move would be a tax-free, stock-for-stock transaction between the two REITs and create the 11th largest healthcare-focused REIT in the world. GAHR III is also looking to acquire the business and operations of American Healthcare Investors, who are co-sponsors and external advisors for both REITs, immediately prior to the merger with GAHR IV. The merger and acquisition are expected to close in the fourth quarter of 2021, subject to certain closing conditions including the approval of the merger from stockholders of both REITs.

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The merger will allow American Healthcare REIT to offer a fully integrated platform that’s capable of acquisitions, asset management, finance, and accounting and taxes. The merger is also expected to save approximately $21 million a year in operation costs, according to the REITs.

The combined portfolio of the REITs and American Healthcare Investors will total approximately 19 million square feet of healthcare assets across the world with concentrated market presences in Midwestern, Southeastern and Northeastern U.S. markets. The portfolio also includes Northwestern properties, including a 55,000-square-foot medical office building near Seattle that GAHR IV acquired for $23.5 million in August 2018. The portfolio includes 314 medical office buildings, senior housing communities, skilled nursing facilities and others, for a combined gross investment value of $4.2 billion.

Aiming for 2022 Stock Exchange Listing

The merger will see more than 100 of America Healthcare Investors become employees of American Healthcare REIT. Jeff Hanson will serve as the executive chairman of the new REIT, while Danny Prosky will be the president & CEO, and Mathieu Streiff will be the COO. The companies’ remaining executives and employees will retain similar roles and titles, according to the REITs.

Hanson said in prepared remarks that the merger and acquisition creates a diverse portfolio, allows for significant operating efficiencies and positions American Healthcare REIT for future growth.

After the transaction is completed, American Healthcare REIT will be looking to pursue a planned future listing on a national stock exchange. The REIT’s executives are planning for a listing by the end of 2022, subject to the merger’s closing and market conditions, according to the REIT.