Healthcare is a thriving business sector, and within our industry, healthcare real estate is following suit. Irvine, California–based Griffin-American Healthcare REIT III Inc.’s board of directors has approved an updated estimated per-share net asset value (NAV) of its common stock to $9.37 calculated as of June 30, 2018, according to a release from a representative of the REIT. Previous estimates had been made of $9.01 on October 5, 2016, calculated as of June 30, 2016, and, on October 4, 2017, of $9.27, calculated as of June 30, 2017, the statement says.
Jeff Hanson, chairman and CEO of Griffin-American Healthcare REIT III, is quoted in the statement as saying that the REIT had acquired its first property a little more than four years ago and has since established an international portfolio of 210 healthcare properties and real estate-related investments valued at approximately $3.44 billion. He adds, “The continued year-over-year growth in our estimated per-share net asset value demonstrates the continued maturation of our portfolio and validates our investment thesis, which is to aggregate attractive healthcare real estate assets into a significant portfolio that generates value and income for our stockholders.”
The release also says that Robert A. Stanger & Co. Inc., an independent third-party valuation firm, provided an estimated per share NAV of $9.37 to the company’s audit committee, which was based upon Stanger’s valuation analyses of Griffin-American Healthcare REIT III’s property portfolio plus cash and other assets, less the value of outstanding mortgages and other liabilities, divided by the number of shares issued and outstanding on an adjusted fully diluted basis. According to the statement, this methodology complies with the Institute for Portfolio Alternative’s practice guideline regarding valuations of publicly registered non-listed REITs. Following the recommendation of its audit committee, comprised solely of independent directors, the estimated per share NAV was determined by the board of directors.
The statement also says that, consistent with the IPA guidelines, Stanger’s valuation does not include a portfolio premium that may reasonably be expected to accrue in a typical real estate valuation process conducted for transaction purposes, nor does it reflect an enterprise value.