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Griffin-American Healthcare REIT III Reports Fourth Quarter and Year-End 2016 Results

Griffin-American Healthcare REIT III Inc., a publicly registered non-traded real estate investment trust, announced operating results for the company’s fourth quarter and year ended Dec. 31, 2016.

“Griffin-American Healthcare REIT III continued to expand during 2016, acquiring more than $500 million of quality healthcare real estate,” said Jeff Hanson, chairman and chief executive officer. “Less than three years since our first acquisition in June 2014, we have constructed a diverse international portfolio valued at approximately $2.9 billion on behalf of our fellow stockholders.”

2016 Highlights and Accomplishments

• Completed fourth quarter and 2016 property acquisitions totaling approximately $72.3 million and $514.1 million, respectively, based on aggregate contract purchase price

• The company’s board of directors unanimously approved and established an estimated net asset value of its common stock of $9.01 per share.

• Modified funds from operations equaled approximately $96.5 million for 2016, representing growth in excess of 159.2 percent compared to MFFO of approximately $37.2 million for the year ended Dec. 31, 2015.

• MFFO during the fourth quarter 2016 equaled approximately $24.2 million, representing an 86.4 percent growth compared to MFFO of approximately $13.0 million during the same period in 2015.

• Funds from operations equaled approximately $62.9 million for 2016, as compared to approximately $(30.8) million for 2015.

• FFO equaled approximately $15.3 million during the fourth quarter 2016 compared to fourth quarter 2015 FFO of approximately $(22.2) million. The company noted that year-over-year growth in MFFO is primarily due to the acquisition of additional properties.

• Net loss for 2016 was approximately $(203.9) million, as compared to net loss of $(115.0) million for the year ended Dec. 31, 2015.

• Net loss during the fourth quarter 2016 equaled approximately $(48.6) million, compared with net loss during the fourth quarter 2015 of approximately $(76.2) million. The company said that net loss is due largely to depreciation and amortization expense of its properties, a non-cash item, in accordance with generally accepted accounting principles.

• Net operating income totaled approximately $195.0 million for 2016, representing an increase of approximately 224.3 percent compared to NOI of approximately $60.1 million for 2015.

• NOI during the fourth quarter 2016 equaled approximately $46.6 million, an increase of approximately 87.4 percent compared to fourth quarter 2015 NOI of approximately $24.9 million.

• The company declared and paid daily distributions equal to an annualized rate of 6 percent to stockholders of record, based upon a $10.00 per share purchase price, from Jan. 1 to Dec. 31, 2016.

• On Feb. 3, 2016, the company entered into credit facilities totaling $500 million with Bank of America, N.A., KeyBank, National Association, and other financial institutions. The credit facilities are comprised of a revolving line of credit with an aggregate maximum principal amount of $300 million and a term loan credit facility in the maximum principal amount of $200 million. The maximum principal amount of the credit facilities may be increased up to $1 billion in the aggregate upon meeting certain conditions.

• As of Dec. 31, 2016, the company’s non-RIDEA property portfolio achieved a leased percentage of 94.4 percent and weighted average remaining lease term of 8.9 years. The company’s portfolio of senior housing — RIDEA facilities and integrated senior health campuses achieved a leased percentage of 86.1 percent and 87.3 percent, respectively, for the 12 months ended Dec. 31, 2016. Portfolio leverage was 41.7 percent.

Subsequent Events

• On Jan. 18, 2017, the company completed the acquisition of an assisted living facility in Huntersville, North Carolina for a contract purchase price of $15 million, which was added to the company’s existing North Carolina Assisted Living Facility Portfolio. The other four buildings in the portfolio were acquired in Jan. 2015 and June 2015.

• Additionally, on Feb. 1, 2017, the company, through a majority-owned subsidiary of Trilogy Healthcare Investors, of which the company owned approximately 67.7 percent at the time of acquisition, acquired the real estate underlying six previously leased integrated senior health campuses located in Indiana, Kentucky and Ohio. The aggregate contract purchase price of these properties was $72.2 million.

Griffin-American Healthcare REIT III owns a portfolio of 201 medical office buildings, hospitals, senior housing facilities, skilled nursing facilities, integrated senior health campuses and real estate-related investments located throughout the United States and the United Kingdom valued at approximately $2.9 billion, based on total purchase price. The REIT commenced its initial public offering in February 2014 and closed in March 2015 after raising more than $1.9 billion.

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