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]
American Healthcare REIT(AHR) - 2022 Q1 - Quarterly Report