IRVINE, Calif. - American Healthcare REIT, Inc. (NYSE: AHR) has fully acquired Trilogy REIT Holdings, LLC ("Trilogy Holdings"), buying out the 24% stake previously held by its joint venture partner, an affiliate of NorthStar Healthcare Income, Inc. The transaction, which took place on Monday, saw the healthcare-focused real estate investment trust (REIT) become the sole proprietor of Trilogy Holdings and its Integrated Senior Health Campuses (ISHC).
The purchase, valued at approximately $258 million, was an all-cash deal. This sum included the pre-negotiated base price of $247 million and an additional $11 million pro-rata distribution to the joint venture partner up to the closing date. To fund this acquisition, American Healthcare REIT utilized the net proceeds from its equity offering, which also concluded on Monday. The remaining funds from this offering were allocated to repay around $194 million of debt on the company's credit lines.
The acquisition's impact is notable when considering American Healthcare REIT's financials for the quarter ending June 30, 2024. Had the acquisition been completed at the start of that quarter, the ISHC segment would have represented over half (approximately 55.3%) of the company's total portfolio cash net operating income.
President and CEO Danny Prosky expressed enthusiasm about the acquisition's completion, highlighting its accretive nature and the financial flexibility it provides. Prosky also emphasized the company's ongoing commitment to quality care in its communities, as well as the potential for future growth opportunities.
American Healthcare REIT specializes in a diversified portfolio of healthcare real estate, including outpatient medical buildings, senior housing, skilled nursing facilities, and other healthcare-related properties across the United States, the United Kingdom, and the Isle of Man.
This news is based on a press release statement from American Healthcare REIT, Inc. The company has made forward-looking statements regarding the transaction's potential benefits, cautioning that such statements involve risks and uncertainties and are subject to change.
In other recent news, American Healthcare REIT has been making significant strides in the healthcare real estate market. Following the company's announcement of an upsized follow-on common equity offering aimed at acquiring the remaining interest in Trilogy and repaying existing debt, KeyBanc Capital Markets adjusted their price target for the company, raising it to $28. This change, according to the KeyBanc analyst, is expected to yield high-single-digit range based on the net operating income as of the second quarter of 2024.
Simultaneously, Truist Securities increased their price target on American Healthcare REIT to $27, reflecting the company's recent equity offering and the anticipated exercise of its Trilogy purchase option. The company's decision to proceed with the Trilogy option was seen as a prudent move given the future cost of capital's uncertainty.
In addition, American Healthcare REIT launched a public offering of 14.5 million shares of common stock. The proceeds from this offering are earmarked for the acquisition of the remaining 24% minority interest in Trilogy Holdings, LLC and for the repayment of debt under its credit facilities.
Furthermore, American Healthcare REIT has provided guidance for a 3.3% increase in 2024 Normalized Funds From Operations (FFO) and a significant rise in same-store net operating income (SSNOI) growth for 2024.
Lastly, the company has announced the date for its 2024 annual meeting of stockholders and the deadline for stockholder proposals. These recent developments highlight American Healthcare REIT's strategic positioning and growth potential in the healthcare real estate market.
InvestingPro Insights
The recent acquisition by American Healthcare REIT, Inc. (NYSE: AHR) of Trilogy REIT Holdings, LLC is a strategic move that positions the company for potential growth. To provide a deeper financial context to this development, InvestingPro data indicates that as of Q2 2024, AHR has a market capitalization of $4 billion and a revenue growth of 9.24% from the last twelve months. Despite a negative P/E ratio of -59.07, which suggests that the company is not currently profitable, the revenue growth hints at an expanding business footprint.
InvestingPro Tips highlight that AHR's net income is expected to grow this year, aligning with the company's optimistic outlook post-acquisition. Additionally, with a significant return over the last week of 8.14% and a robust year-to-date price total return of 105.8%, the stock has demonstrated strong recent performance. However, it is important to note that the RSI suggests the stock is in overbought territory, which could indicate a potential pullback in the near term.
The company's commitment to growth and quality care in its communities is reflected in the analysts' predictions that AHR will be profitable this year. For investors seeking more detailed analysis and additional insights, InvestingPro offers a comprehensive list of tips, with 13 more tips available on the platform.
For those interested in the future financial trajectory of American Healthcare REIT, Inc., the next earnings date is set for November 27, 2024, which will likely provide further clarity on the impact of the Trilogy Holdings acquisition and the company's overall performance.
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