Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41951 AMERICAN HEALTHCARE REIT, INC. (Exact name of registrant as specified in its charter) Maryland 47-2887436 (S ...

Certain statements contained in this supplemental, filed in conjunction with the Fourth Quarter 2023 Earnings Press Release, to American Healthcare REIT, Inc.'s (the "Company") expectations regarding its portfolio growth, interest expense savings, b share, FFO per share, NFFO per share, total portfolio SS NOI growth, occupancy, NOI growth, revenue growth, and marqin e forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of 1 1934, as amended ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-55775 AMERICAN HEALTHCARE REIT, INC. (Exact name of registrant as specified in its charter) (State or oth ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-55775 AMERICAN HEALTHCARE REIT, INC. (Exact name of registrant as specified in its charter) (State or other ju ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or (Address of principal executive offices) (Zip Code) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (949) 270-9200 For the transition period from to Commission File Number: 000-55775 AMERICAN HEALTHCARE REIT, INC. (Exac ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-55775 AMERICAN HEALTHCARE REIT, INC. (Exact name of registrant as specified in its charter) (State or other jurisd ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-55775 AMERICAN HEALTHCARE REIT, INC. (Exact name of registrant as specified in its charter) (State or oth ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-55775 AMERICAN HEALTHCARE REIT, INC. (Exact name of registrant as specified in its charter) (State or other ju ...

Merger and Acquisition - The merger between Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT IV, Inc. was completed on October 1, 2021, resulting in the formation of the Combined Company, now known as American Healthcare REIT, Inc.[205] - The AHI Acquisition, which occurred simultaneously with the merger, involved the acquisition of American Healthcare Opps Holdings, LLC, valued at approximately $131.67 million, with a reference value of $8.71 per unit[208] - The merger and acquisition activities are expected to enhance the company's operational capabilities and market position in the healthcare real estate sector[202] - Following the merger, the company became self-managed, eliminating fees that would have been payable to the former advisor[211] - The financial information post-merger reflects the results of the Combined Company, making period-to-period comparisons prior to the merger less meaningful[201] Portfolio and Operations - The company operates a diversified portfolio of clinical healthcare real estate properties, focusing on medical office buildings, skilled nursing facilities, and senior housing[204] - As of March 31, 2022, the company owned and/or operated 182 properties, comprising 191 buildings and 122 integrated senior health campuses, totaling approximately 19,461,000 square feet of gross leasable area (GLA) with an aggregate contract purchase price of $4,299,872,000[217] - The acquisition of GAHR IV's portfolio added 87 properties, comprising 92 buildings and approximately 4,799,000 square feet of GLA, significantly impacting the company’s operational scale[235] - The company’s integrated senior health campuses had a leased percentage of 80.0% as of March 31, 2022, compared to 70.7% in 2021, indicating a recovery in occupancy rates[235] - The company’s properties were 92.7% leased as of March 31, 2022, with 6.5% of the leased GLA scheduled to expire during the remainder of 2022[230] Financial Performance - The company reported total revenues and grant income of $376,131,000 for the three months ended March 31, 2022, compared to $291,278,000 for the same period in 2021, representing a year-over-year increase of approximately 29.2%[239] - Resident fees and services revenue increased to $318,974,000 in Q1 2022 from $253,026,000 in Q1 2021, driven by improved occupancy and higher reimbursement rates from Medicare and Medicaid[239] - For the three months ended March 31, 2022, total property operating expenses increased to $287,160,000, representing 88.6% of resident fees and services revenue, compared to $245,142,000 and 93.8% in the same period of 2021[242] - General and administrative expenses rose to $11,119,000 for the three months ended March 31, 2022, up from $7,257,000 in 2021, primarily due to a $6,468,000 increase in payroll and compensation costs from acquired employees[243] - The company recognized $5,214,000 in grant income for Q1 2022, down from $8,229,000 in Q1 2021, related to government grants received through the CARES Act[240] Cash Flow and Debt Management - Cash and cash equivalents at the end of the period were $119,170,000, down from $125,486,000 at the beginning of the period, with net cash provided by operating activities of $22,360,000[255] - The company recorded a decrease in net cash used in investing activities by $79,474,000, primarily due to a reduction in property acquisitions and an increase in proceeds from real estate dispositions[257] - The company’s aggregate borrowing capacity under its credit facilities was $1,410,000,000 as of March 31, 2022, with outstanding borrowings of $1,239,134,000[254] - The company experienced a net cash used in financing activities of $1,307,000 for the three months ended March 31, 2022, compared to net cash provided of $89,605,000 in the prior year period[258] - The total contractual obligations as of March 31, 2022, amounted to $3,069,900,000, including principal and interest payments on fixed-rate and variable-rate debts[251] Interest Expense and Risk Management - The company’s interest expense for the three months ended March 31, 2022, was $22,825,000, compared to $18,544,000 in 2021, reflecting an increase of 12.3%[298] - The company is exposed to interest rate risk primarily due to long-term debt used for property acquisition and development[300] - A 0.50% increase in market interest rates would raise the annualized interest expense on variable-rate mortgage loans and lines of credit by $7,597,000, representing an 11.7% increase in total annualized interest expense[309] - The company is monitoring risks associated with the discontinuation of LIBOR, which could potentially increase borrowing costs[304] - The transition to an alternative reference rate from LIBOR may pose challenges and could accelerate risks if LIBOR becomes unavailable before June 30, 2023[304] Operational Metrics - Funds from operations (FFO) for the three months ended March 31, 2022, totaled $26,314,000, reflecting the company's operational performance[266] - FFO attributable to controlling interest for the three months ended March 31, 2022, was $32,616,000, up from $10,252,000 in 2021, representing a 218% increase[291] - MFFO attributable to controlling interest for the same period was $37,094,000, compared to $10,501,000 in 2021, indicating a 253% increase[291] - NOI for the three months ended March 31, 2022, was $73,684,000, significantly higher than $38,081,000 in 2021, reflecting a 93% increase[298] - Without government grants, FFO would have been approximately $28,244,000 for Q1 2022, compared to $4,458,000 in Q1 2021[287]

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) A self-managed REIT owning a diversified portfolio of clinical healthcare real estate including MOBs, SNFs, and senior housing [Company Overview and Key Transactions](index=3&type=section&id=Company%20Overview%20and%20Key%20Transactions) The company formed through a 2021 merger and concurrently acquired its external advisor, AHI, to become a self-managed entity - On October 1, 2021, GAHR III and GAHR IV completed a merger, creating a combined company named American Healthcare REIT, Inc, and **GAHR III was determined to be the accounting acquirer**[12](index=12&type=chunk)[18](index=18&type=chunk) - Simultaneously with the merger, the company acquired its external advisor, AHI, in a transaction valued at approximately **$131.7 million**, paid in operating partnership units, resulting in the company becoming **self-managed**[14](index=14&type=chunk)[16](index=16&type=chunk) - The company owns a diversified portfolio of clinical healthcare properties, including medical office buildings, skilled nursing facilities, and senior housing, and operates some facilities under a **RIDEA structure**[11](index=11&type=chunk) - Following the transactions, the company reinstated its Distribution Reinvestment Plan (DRIP) and authorized monthly distributions equal to an annualized rate of **$0.40 per share**[28](index=28&type=chunk) [Investment Objectives and Strategy](index=6&type=section&id=Investment%20Objectives%20and%20Strategy) The company aims to preserve capital, pay distributions, and grow value by acquiring a diversified portfolio of clinical healthcare real estate - The company's core investment objectives are: to **preserve, protect and return stockholders' capital**; to **pay regular cash distributions**; and to **realize growth in the value of its investments**[31](index=31&type=chunk)[35](index=35&type=chunk) - The investment strategy targets a **diversified portfolio of clinical healthcare real estate**, including MOBs, SNFs, senior housing, hospitals, and other related facilities[32](index=32&type=chunk)[39](index=39&type=chunk) - Key attributes for property selection include quality construction, strategic location, favorable market supply/demand, predictable capital needs, and **strong current and projected cash flows**[40](index=40&type=chunk) - The company's borrowing policy targets an overall leverage **not to exceed 50.0%** of the combined fair market value of all properties; as of December 31, 2021, aggregate borrowings were **46.8% of market value**[64](index=64&type=chunk) [Portfolio Segments and Operations](index=14&type=section&id=Portfolio%20Segments%20and%20Operations) The company operates six segments, with Medical Office Buildings and Integrated Senior Health Campuses being the largest by asset value and revenue Portfolio by Segment (as of December 31, 2021) | Reportable Segment | Number of Buildings/Campuses | GLA (Sq Ft) | % of GLA | Aggregate Contract Purchase Price | Annualized Base Rent/NOI | % of Annualized Base Rent/NOI | |---|---|---|---|---|---|---| | Integrated senior health campuses| 122 | 8,866,000 | 46.2% | $1,787,698,000 | $98,369,000 | 36.5% | | Medical office buildings | 105 | 4,986,000 | 26.0% | $1,249,658,000 | $110,884,000 | 41.1% | | SHOP | 47 | 3,338,000 | 17.4% | $708,050,000 | $15,448,000 | 5.7% | | Senior housing | 20 | 673,000 | 3.5% | $169,885,000 | $12,340,000 | 4.6% | | Skilled nursing facilities | 17 | 1,142,000 | 6.0% | $237,300,000 | $23,665,000 | 8.8% | | Hospitals | 2 | 173,000 | 0.9% | $139,780,000 | $8,964,000 | 3.3% | | **Total** | **313** | **19,178,000** | **100%** | **$4,292,371,000** | **$269,670,000** | **100%** | - The portfolio includes properties operated under a **RIDEA structure** (SHOP and Integrated Senior Health Campuses) and properties under **triple-net leases** (Senior Housing, SNFs, Hospitals)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) [Competition, Regulation, and Human Capital](index=11&type=section&id=Competition%2C%20Regulation%2C%20and%20Human%20Capital) The company faces significant competition and extensive regulation while managing approximately 100 employees post-internalization - The company competes with numerous other entities in acquiring, developing, and financing healthcare-related real estate, and its tenants' success depends on their ability to compete for patients and residents[76](index=76&type=chunk)[78](index=78&type=chunk) - Properties and tenants are subject to extensive government regulations, including healthcare licensure, Certificate of Need (CON) laws, privacy laws like **HIPAA**, and the **Americans with Disabilities Act (ADA)**[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - After becoming self-managed on October 1, 2021, the company had **approximately 100 employees** as of December 31, 2021[87](index=87&type=chunk) - As of January 31, 2022, the company reported that **69% of its employees are minorities** and **67% are female**[89](index=89&type=chunk) [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from illiquid stock, the COVID-19 pandemic's impact, heavy regulation, and rising interest rates [Investment and Business Risks](index=16&type=section&id=Investment%20and%20Business%20Risks) Key risks include illiquid common stock, adverse impacts from the COVID-19 pandemic, and operational challenges from the new self-managed structure - There is **no public market for the company's common stock**, making it difficult for stockholders to sell their shares[111](index=111&type=chunk)[113](index=113&type=chunk) - The COVID-19 pandemic has adversely impacted the business, causing an approximate **11.9% decline in resident occupancies** at SHOP facilities since February 2020 and a significant increase in costs[134](index=134&type=chunk) - The company's recent internalization of management functions could lead to **significant unforeseen costs and liabilities** associated with being an employer[138](index=138&type=chunk) - A significant portion of revenues is derived from campuses managed by TMS, and **replacing TMS would be difficult** if management agreements were terminated[144](index=144&type=chunk)[145](index=145&type=chunk) [Real Estate and Healthcare Industry Risks](index=28&type=section&id=Real%20Estate%20and%20Healthcare%20Industry%20Risks) The portfolio is subject to market downturns, geographic concentration in Indiana, and regulatory risks from Medicare/Medicaid changes - The company has a significant geographic concentration of risk, with properties in Indiana accounting for approximately **30.9% of the total portfolio's annualized base rent or annualized NOI**[171](index=171&type=chunk) - Tenants' revenue sources, including **Medicare and Medicaid**, are subject to reduction efforts by payors and legislative changes, which could hinder their ability to make rental payments[206](index=206&type=chunk)[207](index=207&type=chunk) - The trend of seniors delaying moves to senior housing facilities could lead to **decreased occupancy rates**, higher resident turnover, and increased operating costs[213](index=213&type=chunk) - Tenants are subject to federal and state fraud and abuse laws (e.g., **Anti-Kickback Statute, Stark Law**), and violations could jeopardize their ability to operate and pay rent[215](index=215&type=chunk)[216](index=216&type=chunk) [Financing and Tax Risks](index=37&type=section&id=Financing%20and%20Tax%20Risks) Financing risks include rising interest rates and the LIBOR transition, while tax risks center on maintaining REIT qualification - The company is exposed to interest rate risk from its variable-rate debt, and the planned **cessation of LIBOR** after June 30, 2023, creates uncertainty[233](index=233&type=chunk)[235](index=235&type=chunk) - **Failure to maintain qualification as a REIT** would subject the company to federal income tax at corporate rates, substantially reducing its ability to pay distributions[254](index=254&type=chunk)[255](index=255&type=chunk) - The use of Taxable REIT Subsidiaries (TRSs) subjects that income to corporate-level taxes, and transactions between the REIT and its TRSs are subject to a **100% excise tax** if not conducted at arm's-length[257](index=257&type=chunk) - The 2021 REIT Merger is intended to qualify as a tax-free reorganization; **failure to qualify could have adverse tax consequences** for the company and its stockholders[270](index=270&type=chunk) [Item 1B. Unresolved Staff Comments](index=45&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - Not applicable[278](index=278&type=chunk) [Item 2. Properties](index=45&type=section&id=Item%202.%20Properties) The portfolio comprises 313 properties valued at $4.3 billion, with high concentration in MOBs, senior health campuses, and the state of Indiana Real Estate Portfolio Summary (as of December 31, 2021) | Reportable Segment | Number of Buildings/Campuses | GLA (Sq Ft) | Aggregate Contract Purchase Price | Annualized Base Rent/NOI | % of Annualized Base Rent/NOI | |---|---|---|---|---|---| | Integrated senior health campuses| 122 | 8,866,000 | $1,787,698,000 | $98,369,000 | 36.5% | | Medical office buildings | 105 | 4,986,000 | $1,249,658,000 | $110,884,000 | 41.1% | | SHOP | 47 | 3,338,000 | $708,050,000 | $15,448,000 | 5.7% | | Senior housing | 20 | 673,000 | $169,885,000 | $12,340,000 | 4.6% | | Skilled nursing facilities | 17 | 1,142,000 | $237,300,000 | $23,665,000 | 8.8% | | Hospitals | 2 | 173,000 | $139,780,000 | $8,964,000 | 3.3% | | **Total** | **313** | **19,178,000** | **$4,292,371,000** | **$269,670,000** | **100%** | Lease Expirations by Year (Excluding SHOP and Integrated Senior Health Campuses) | Year | % of Leased Area Expiring | % of Annual Base Rent Expiring | |---|---|---| | 2022 | 9.3% | 7.6% | | 2023 | 7.7% | 7.3% | | 2024 | 9.2% | 7.5% | | 2025 | 9.5% | 9.2% | | Thereafter| 64.3% | 68.4% | - The company's portfolio has a significant geographic concentration in Indiana, which represents **27.1% of total GLA** and **31.0% of total annualized base rent/NOI**[285](index=285&type=chunk) [Item 3. Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently subject to any material litigation nor is any threatened that would have a material adverse effect - The company is not presently subject to any material litigation nor is any material litigation threatened against it[288](index=288&type=chunk)[708](index=708&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[289](index=289&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=49&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) There is no public market for the common stock; the board established an estimated NAV of $9.29 per share as of December 31, 2021 - There is **no established public trading market** for the company's common stock[292](index=292&type=chunk) - On March 24, 2022, the board approved an updated estimated per share NAV of **$9.29** as of December 31, 2021, an increase from the previous NAV of $9.22[293](index=293&type=chunk) - The company authorized distributions equal to an annualized rate of **$0.40 per share** from October 2021 through March 2022, and the DRIP was reinstated[299](index=299&type=chunk)[300](index=300&type=chunk) - As of March 11, 2022, the company had approximately **48,452 stockholders of record**[295](index=295&type=chunk) [Item 6. [Reserved]](index=50&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Financial results were impacted by the 2021 merger, leading to a net loss of $53.3 million due to acquisition costs and higher expenses [Results of Operations](index=58&type=section&id=Results%20of%20Operations) Total revenues increased to $1.28 billion in 2021, but the company reported a net loss of $53.3 million due to merger-related expenses Consolidated Results of Operations (in thousands) | Metric | 2021 | 2020 | |---|---|---| | Total revenues and grant income | $1,282,254 | $1,244,301 | | Total expenses | $1,258,330 | $1,152,180 | | Business acquisition expenses | $13,022 | $290 | | Depreciation and amortization | $133,191 | $98,858 | | Interest expense | $72,737 | $75,184 | | Net (loss) income | $(53,269) | $8,863 | - The increase in revenues was primarily due to the acquisition of GAHR IV's portfolio, while increased expenses were driven by **merger-related costs** and **higher G&A from self-management**[360](index=360&type=chunk)[367](index=367&type=chunk)[369](index=369&type=chunk) - Grant income related to CARES Act programs **decreased from $55.2 million in 2020 to $17.0 million in 2021**[363](index=363&type=chunk)[364](index=364&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is sourced from operations and borrowings, with $143.4 million available on credit facilities at year-end 2021 Cash Flow Summary (in thousands) | Cash Flow Activity | 2021 | 2020 | |---|---|---| | Net Cash from Operating | $17,913 | $219,156 | | Net Cash Used in Investing| $(138,652) | $(147,945) | | Net Cash from Financing | $94,109 | $(8,811) | | **Cash at End of Period** | **$125,486** | **$152,190** | - As of December 31, 2021, the company had aggregate borrowings of **$2.34 billion** and an available borrowing capacity of **$143.4 million** under its credit facilities[379](index=379&type=chunk)[396](index=396&type=chunk) - In January 2022, the company terminated its existing credit facilities and entered into a new credit agreement for up to **$1.05 billion**[378](index=378&type=chunk)[847](index=847&type=chunk) - For 2021, **41.2% of distributions were funded by proceeds from borrowings**, compared to 0% in 2020[387](index=387&type=chunk) [Funds from Operations (FFO) and Modified Funds from Operations (MFFO)](index=66&type=section&id=Funds%20from%20Operations%20(FFO)%20and%20Modified%20Funds%20from%20Operations%20(MFFO)) FFO and MFFO per share decreased in 2021, influenced by lower government grant income and increased costs from the merger and self-management FFO and MFFO per Share | Metric | 2021 | 2020 | |---|---|---| | FFO attributable to controlling interest | $69,678,000 | $95,675,000 | | FFO per common share | $0.35 | $0.53 | | MFFO attributable to controlling interest | $77,642,000 | $96,672,000 | | MFFO per common share | $0.39 | $0.54 | - FFO and MFFO are presented as supplemental performance measures; MFFO further adjusts FFO for items like acquisition expenses to indicate **sustainable operating performance**[401](index=401&type=chunk)[405](index=405&type=chunk)[407](index=407&type=chunk) - Excluding government grants, **FFO for 2021 and 2020 would have been approximately $54.5 million and $54.9 million**, respectively[411](index=411&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from its $1.5 billion in variable-rate debt, which it mitigates with derivatives - The company's primary market risk exposure is to **interest rate changes** on its long-term debt[422](index=422&type=chunk)[423](index=423&type=chunk) - As of December 31, 2021, a **0.50% increase in market interest rates** would increase the company's overall annualized interest expense on its variable-rate debt by approximately **$3.5 million**[432](index=432&type=chunk) - The company is managing the transition from LIBOR to alternative rates like SOFR, and its **2022 Credit Facility is based on SOFR**[425](index=425&type=chunk)[427](index=427&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=72&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and schedules located in Part IV, Item 15 of the report - This item refers to the financial statements and schedules detailed in Part IV, Item 15[436](index=436&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=72&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[437](index=437&type=chunk) [Item 9A. Controls and Procedures](index=72&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2021 - Management concluded that **disclosure controls and procedures were effective** as of December 31, 2021[439](index=439&type=chunk) - Management concluded that **internal control over financial reporting was effective** as of December 31, 2021[441](index=441&type=chunk) - There were **no changes in internal control over financial reporting** during the fourth quarter of 2021 that materially affected, or are reasonably likely to materially affect, internal controls[442](index=442&type=chunk) [Item 9B. Other Information](index=72&type=section&id=Item%209B.%20Other%20Information) Executive Chairman Jeffrey T. Hanson announced his intention to transition to non-executive Chairman of the Board, effective June 30, 2022 - **Jeffrey T. Hanson will transition from Executive Chairman to non-executive Chairman** of the Board effective June 30, 2022[443](index=443&type=chunk) - In connection with his transition, Mr. Hanson will **forfeit his performance-based restricted stock units** but will retain his time-based restricted shares[446](index=446&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=73&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[448](index=448&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information concerning directors, executive officers, and corporate governance is incorporated by reference from the 2022 proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of stockholders[451](index=451&type=chunk) [Item 11. Executive Compensation](index=74&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the company's 2022 definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of stockholders[452](index=452&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=74&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information concerning security ownership is incorporated by reference from the company's 2022 definitive proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of stockholders[453](index=453&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=74&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information concerning related party transactions and director independence is incorporated by reference from the 2022 proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of stockholders[454](index=454&type=chunk) [Item 14. Principal Accountant Fees and Services](index=74&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information concerning principal accountant fees and services is incorporated by reference from the 2022 proxy statement - Information is incorporated by reference from the definitive proxy statement for the 2022 annual meeting of stockholders[455](index=455&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=75&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section contains the consolidated financial statements, the independent auditor's report, schedules, and a list of exhibits - This section includes the Report of Independent Registered Public Accounting Firm, Consolidated Financial Statements, Notes to Consolidated Financial Statements, and Schedule III for Real Estate and Accumulated Depreciation[459](index=459&type=chunk) [Report of Independent Registered Public Accounting Firm](index=76&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion, highlighting critical audit matters related to purchase price allocation and impairment testing - The auditor, Deloitte & Touche LLP, issued an **unqualified opinion**, stating the financial statements are fairly presented in accordance with GAAP[464](index=464&type=chunk) - A critical audit matter was the **purchase price allocation for the $1.13 billion of real estate investments** acquired in the REIT Merger, which involved significant management estimates[469](index=469&type=chunk) - A second critical audit matter was the **evaluation of impairment indicators** for the historical GAHR III real estate investments, which required significant auditor judgment[472](index=472&type=chunk)[473](index=473&type=chunk) [Consolidated Financial Statements](index=78&type=section&id=Consolidated%20Financial%20Statements) Total assets grew to $4.58 billion in 2021 due to the merger, while the company reported a net loss of $53.3 million Key Financial Position Data (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | |---|---|---| | Real estate investments, net | $3,514,686 | $2,330,000 | | Total assets | $4,580,339 | $3,234,937 | | Total liabilities | $2,750,768 | $2,160,114 | | Total stockholders' equity | $1,581,293 | $866,108 | | Total equity | $1,756,846 | $1,034,483 | Key Operational Data (in thousands) | Metric | 2021 | 2020 | 2019 | |---|---|---|---| | Total revenues and grant income | $1,282,254 | $1,244,301 | $1,223,116 | | Net (loss) income | $(53,269) | $8,863 | $(852) | | Net (loss) income per share | $(0.24) | $0.01 | $(0.03) | [Item 16. Form 10-K Summary](index=155&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a summary for this item - None[901](index=901&type=chunk)