American Healthcare REIT, an Irvine-based investor in various clinical healthcare properties, is making another attempt to go public.
The unlisted real estate investment trust — whose shares are now registered with the Securities and Exchange Commission but are not traded on major securities exchanges, limiting liquidity for its investors — announced plans last week to go public on the New York Stock Exchange.
The company plans to raise about $756 million by offering 56 million shares at a price between $12 and $15, regulatory filings show.
At the midpoint of the proposed range for the IPO, American Healthcare would expect a market capitalization of $1.7 billion.
$1.8 billion in debt
The approximately $700 million in proceeds from the offering will be used to pay down debt, the filings show. American Healthcare has about $1.8 billion in outstanding debt.
The IPO is guaranteed by BofA Securities and Morgan Stanley, among others.
The Company's shares trade under the ticker symbol “AHR”; According to industry reports, the IPO could become effective as early as the week of February 5th.
Thawing market?
American Healthcare initially planned its IPO for the end of 2022 – the terms of the planned listing were not set at that time – but it was put on hold amid the turbulent market for new listings.
The cool market for companies going public has thawed somewhat as 2024 begins, with Irvine-based CG Oncology Inc.'s (Nasdaq: CGON) initial public offering last month standing out. The clinical-stage drug maker went public on Jan. 25 at $19 per share, above the expected IPO price. The enlarged offering raised nearly $440 million.
CG Oncology stock is currently trading at around $37, giving it a market cap of $2.4 billion.
Housing option for seniors
American Healthcare specializes in physician offices, senior living facilities, skilled nursing facilities, hospitals and other healthcare facilities. It counts 298 properties in the US and UK, up from 313 in 2022. These properties total approximately 18.9 million square feet. None of their holdings are in Orange County.
American Healthcare's assets total $4.6 billion, making it the ninth-largest publicly traded healthcare REIT by total assets, according to the company.
Other large operators in the space include Tustin's Sabra Health Care REIT Inc. (Nasdaq: SBRA), which was valued at about $3.2 billion last week, and CareTrust REIT Inc. (NYSE: CTRE). San Clemente, which was valued at around $2.5 billion.
American Healthcare has more than 10,200 senior living beds and 9,400 skilled nursing beds, as well as 4.5 million square feet of medical office space, according to its registration statement.
Senior housing is proving to be a source of new offerings. The filings show that American Healthcare has entered into a deal to buy a dozen senior living facilities in Oregon for $94.5 million.
“We have seen an increase in opportunities to purchase senior properties from distressed sellers and we believe current conditions support our view that such opportunities will continue to exist in 2024,” the company said.
“We expect well-capitalized, opportunistic senior real estate investors to capitalize on these opportunities, which are primarily driven by upcoming loan maturities and a tight senior real estate debt market.”
American Healthcare reported revenue of $1.6 billion in 2022 and $1.3 billion in the nine months ended Sept. 30, 2023.
According to regulatory filings, adjusted EBITDA was $275 million for the 12 months ended Sept. 30.
Local ties
The REIT's ownership structure has changed over the years.
American Healthcare was previously known as Griffin-American Healthcare REIT IV until three years ago when it merged with another unlisted REIT that also went by the name Griffin-American.
The American Healthcare team has several connections to the region's real estate sector. Chief Executive Officer Danny Prosky, as well as Chief Executive Officer Jeff Hanson, Chief Investment Officer Stefan Oh and Principal Mathieu Streiff, previously worked on the investment side of commercial brokerage firm Grubb & Ellis, which was temporarily based in Orange County.
Members of American Healthcare's management team have overseen the acquisition of approximately $9.6 billion (based on the total contract purchase price) of healthcare real estate investments over the past 17 years on behalf of the existing REIT and other previously publicly reporting REITs.
The company's notable directors include Wil Smith, founder and CEO of Irvine real estate investor Greenlaw Partners.
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