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American Health REIT merges with GAHR III, acquires AHI to become $4.2 billion enterprise

por John R. Fischer, Senior Reporter | October 07, 2021
Business Affairs
American Health REIT has merged with GAHR III and acquired AHI
Real estate investment trust American Healthcare REIT has merged with Griffin-American Healthcare REIT III (GAHR III) into an enterprise with a gross investment value of approximately $4.2 billion in healthcare real estate assets. It also completed its acquisition of American Healthcare Investors (AHI), the co-sponsor of both REITs.

The combined company will also be called American Healthcare REIT and will manage 314 medical office buildings, senior housing communities, skilled nursing facilities and other real estate investments across 36 states and in the U.K. This makes it the 11th largest healthcare REIT globally, according to Globe St.com, a commercial real estate news outlet.

The merger and acquisition are expected to help it save approximately $21 million annually in operational cost savings, said newly appointed company chief executive officer and president, Danny Prosky. Prosky is one of the founders of AHI and served as president and chief operating officer of GAHR III.

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"As a large, diverse, and self-managed healthcare REIT, we believe we are strategically positioned to pursue a future listing or IPO on a national stock exchange that would provide liquidity to our existing stockholders and unlock greater growth and value enhancement opportunities as a publicly traded company,” he said in a statement.

Following the closing of both deals, each of AHI’s employees, including its three founders, became employed under the new company. This will allow American Healthcare REIT to self-manage with a fully integrated management platform that allows it to oversee acquisitions, asset management, finances, accounting and tax.

The merger and acquisition were both announced back in June. The acquisition was completed right before the merger and was funded through operating partnership units of GAHR III’s operating partnership. The units were converted into American Healthcare REIT stock and were subject to customary long-term lockups, reported GlobeSt.com.

In addition to Prosky’s new role, AHI founder Jeff Hanson has become executive chairman of American Healthcare REIT and AHI founder Mathieu Streiff is now its chief operating officer.

“We believe that merging these complementary portfolios together, along with the sponsor company, will create a portfolio with meaningful scale and diversification, as well as drive significant operating efficiencies and earnings accretion for stockholders, well-positioning the company for future growth that should be rewarded in the public markets,” said Hanson, who was chairman and chief executive officer of GAHR III, in a statement back in June when the deals were announced.

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