Griffin-American Healthcare REIT II Expanding Abroad



I'm Matt Bashar with recom here in San Francisco for REIT world 2013 joining me for the CEO spotlight is Jeff Hanson the chairman and CEO of Griffin American health care read to Jeff thanks so much for joining us thanks for having me pleasure let's start with the fundamentals in your sector which certainly have been you know very favorable of late how do you see those trends continuing for the various property types you'll well as you know Matt we're a three billion dollar read we are diversified health care REIT so we own across what we refer to as all for clinical classes of healthcare real estate so medical office buildings assisted living facilities skilled nursing and hospitals so a I think that everybody is well aware these days of the demographic trends and that is I think the demographic trends in this nation that will literally reshape the fabric of the country over the not the next few years but the next several decades bode frankly very well for anything that's health care-related particularly the for clinical classes and earlier this year your company expanded its portfolio internationally what plans do you have to add to those offerings and are there any particular regions or markets that you're looking looking at we have 200 2.2 billion in assets today growing very rapidly that consists of 30 states throughout the US as well as as you mentioned a significant and strategic acquisition that we made earlier this year of the caring home senior housing portfolio in the UK it was roughly a 470 million dollar deal I think that what I can say is in the near term and the midterm you'll see us continue to grow with caring homes as one of the one of the best operators of senior housing in the UK well fuel as a capital partner their growth relationship is very important to us in that regard that's our goal with any single tenant operator across the other three single tenant classes whether it's here in the US or abroad I think that as we continue to round out the build-out of our portfolio prior to a strategic event you can expect to see us other than the the built-in growth that we have with carrying homes in the UK you can expect to see us continue to build the portfolio out here in the US we all know that there's over a trillion dollar inventory base in healthcare related real estate right here in our backyard an incredible aggregation opportunity it's only eight or nine percent institutionally owned which is far below any of the other product sectors so we see a lot of growth potential across all four clinical classes in the US and I think that's where we'll focus at least over the next two or three quarters if we end up selecting an IPO or a listing as the alternative to create liquidity for current shareholders you can expect us to see us I think in the long run evaluate markets that are very similar to the US and make strategic investment decisions picking up on on that last point I'm sure here real world you get asked the question quite a bit about the potential for an IPO and we've seen that window for REITs open a little bit this year what how likely is that an outcome for your company you know I'm fairly limited given where we are with the company today we just shut our equity offering down after three and a half years just a month and a half ago we raised a billion dollars in new equity capital in the third quarter prior to shutting the offering down so I'm limited in terms of how much I can elaborate there but I will tell you that the board is currently considering strategic options as we deploy the remaining capital to get to what we call full build-out prior to a strategic event but I think that I'd say two things there number one the the performance metrics that we've been able to drive in each of the sub sectors of our broader portfolio and in all four classes of real estate compare very very well to our peers are publicly traded reit peers secondly the way we've constructed our balance sheet very low leverage we've grown tremendously over the last three years yet we've been able to do it while ending the third quarter this year with just under twelve percent debt financing based upon aggregate acquisition value and I think at full build-out over the next couple quarters you'll see us max out at thirty percent leverage prior to a liquidity event with eighty to ninety percent of our entire portfolio unencumbered so suffice it to say I think that we constructed a certainly an investment grade profile balance sheet with the right performance metrics that are outsized in many respects relative to our peers and that ultimately keeps the playing field and the options wide open for the bored great well Jeff we look forward to watching the progress okay thank you for more on this and other reit news and analysis be sure to visit Rico

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