American Healthcare REIT, an Irvine-based investor in a variety of clinical healthcare real estate properties, is taking another stab at going public.
The non-traded real estate investment trust—whose shares are now registered with the Securities and Exchange Commission but do not trade on major securities exchanges, limiting liquidity for its investors—last week announced plans for an initial public offering on the New York Stock Exchange.
The company plans to raise about $756 million by offering 56 million shares at a price range of $12 to $15, regulatory filing indicate.
At the midpoint of the proposed range for the initial public offering, American Healthcare would count a market capitalization of $1.7 billion.
$1.8B in Debt
The $700 million or so of proceeds raised in the offering would be used to pay down debt, filings indicate. American Healthcare counts some $1.8 billion of debt outstanding.
The IPO is being underwritten by BofA Securities and Morgan Stanley, among others.
The company’s shares will trade under the “AHR” ticker symbol; the IPO could become effective as early as the week of Feb. 5, according to trade industry reports.
American Healthcare first planned its IPO in late 2022—terms of the proposed listing weren’t specified at the time—but were shelved amid the rocky market for new listings.
The cool market for companies going public has thawed a bit at the start of 2024, with last month’s IPO for Irvine-based CG Oncology Inc. (Nasdaq: CGON) a standout. The clinical stage drugmaker went public on Jan. 25 at $19 a share, above its expected IPO price. The upsized offering brought in close to $440 million in proceeds.
CG Oncology’s stock now trades around $37, giving it a market cap of $2.4 billion.
Senior Housing Opportunity
American Healthcare specializes in medical offices, senior housing, skilled nursing facilities, hospitals, and other healthcare-related facilities. It counts 298 properties in the U.S. and U.K., down from 313 as of 2022. Those properties total about 18.9 million square feet. None of its holdings are in Orange County.
American Healthcare’s assets total $4.6 billion, making it the ninth-largest public reporting healthcare REIT by total assets, according to the company’s figures.
Other large operators in the space include Tustin’s Sabra Health Care REIT Inc. (Nasdaq: SBRA), valued around $3.2 billion as of last week, and San Clemente’s CareTrust REIT Inc. (NYSE: CTRE), which is valued around $2.5 billion.
American Healthcare has over 10,200 senior housing beds and 9,400 skilled nursing beds, and 4.5 million square feet of medical office space, according to its registration statement.
Senior housing is proving to be a source of new deals. American Healthcare is under contract to buy a dozen senior housing facilities in Oregon for $94.5 million, filings indicate.
“We have seen an uptick in opportunities to acquire senior housing assets from distressed sellers, and we believe current conditions support our view that there will continue to be such opportunities in 2024,” the company said.
“We expect well-capitalized, opportunistic senior housing investors will be able to pursue these opportunities that are being driven predominately by upcoming loan maturities and a tight senior housing debt market.”
American Healthcare booked $1.6 billion in revenue for 2022, and $1.3 billion for the nine months ended Sept. 30, 2023.
For the 12 months ended Sept. 30, adjusted EBITDA was $275 million, according to regulatory filings.
The REIT’s seen changes in its ownership structure over the years.
American Healthcare was previously known as Griffin-American Healthcare REIT IV until three years ago, when it merged with another non-traded REIT, which was also run under the Griffin-American name.
American Healthcare’s team counts several ties to the area’s real estate sector. Chief Executive Danny Prosky, as well as Chairman Jeff Hanson, Chief Investment Officer Stefan Oh and Director Mathieu Streiff, previously worked on the investment side of commercial brokerage Grubb & Ellis, which was for a time based in Orange County.
Members of American Healthcare’s management team have overseen the acquisition of about $9.6 billion in healthcare real estate investments, based on aggregate contract purchase price, over the last 17 years, on behalf of the existing REIT and other prior public reporting REITs.
Notable directors for the firm include Wil Smith, founder and CEO of Irvine’s real estate investor Greenlaw Partners.