What changed in this filing

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Item 1. Financial Statements

2020-11-13 compared with 2020-08-13 · 493 added, 290 removed, 746 unchanged (51% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2020 and December 31, 2019

June 30, 2020

December 31, 2019

As of September 30, 2020 and December 31, 2019

September 30, 2020 December 31, 2019

Real estate investments, net $ 928,066,000 $ 895,060,000

6 unchanged sentences

Other assets, net 73,967,000 62,620,000

1,122,994,000

1,068,327,000

Total assets $ 1,111,490,000 $ 1,068,327,000

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

12 unchanged sentences

200,000,000 shares authorized;

none issued and outstanding

no ne issued and outstanding

Class T common stock, $ 0.01 par value per share;

900,000,000 shares authorized;

74,975,127 and 74,244,823 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively

75,357,680 and 74,244,823 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

753,000 742,000

Class I common stock, $ 0.01 par value per share;

100,000,000 shares authorized;

5,624,179 and 5,655,051 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively

5,630,314 and 5,655,051 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

56,000 56,000

Additional paid-in capital 729,923,000 719,894,000

1 unchanged sentence

Total stockholders’ equity

558,296,000 590,079,000

Noncontrolling interest (Note 12) 920,000 —

Total liabilities, redeemable noncontrolling interests and equity

559,216,000 590,079,000

Total liabilities, redeemable noncontrolling interests and equity

$ 1,111,490,000 $ 1,068,327,000

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

As of June 30, 2020 and December 31, 2019

As of September 30, 2020 and December 31, 2019

(1) Such liabilities of Griffin-American Healthcare REIT IV, Inc.

as of June 30, 2020 and December 31, 2019 represented liabilities of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries.

as of September 30, 2020 and December 31, 2019 represented liabilities of Griffin American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries.

Griffin-American Healthcare REIT IV Holdings, LP is a variable interest entity, or VIE, and a consolidated subsidiary of Griffin-American Healthcare REIT IV, Inc.

The creditors of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries do not have recourse against Griffin-American Healthcare REIT IV, Inc., except for the 2018 Credit Facility, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $479,500,000 and $396,800,000 as of June 30, 2020 and December 31, 2019 , respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

The creditors of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries do not have recourse against Griffin-American Healthcare REIT IV, Inc., except for the 2018 Credit Facility, as defined in Note 7, held by Griffin-American Healthcare REIT IV Holdings, LP in the amount of $ 479,500,000 and $ 396,800,000 as of September 30, 2020 and December 31, 2019, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2020 and 2019

Three Months Ended June 30,

Six Months Ended June 30,

For the Three and Nine Months Ended September 30, 2020 and 2019

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Revenues and grant income:

Real estate revenue $ 21,519,000 $ 19,253,000 $ 64,824,000 $ 53,280,000

Resident fees and services 18,948,000 11,865,000 51,863,000 34,053,000

Total revenues

Grant income 864,000 — 864,000 —

Total revenues and grant income 41,331,000 31,118,000 117,551,000 87,333,000

Rental expenses 5,905,000 4,929,000 17,723,000 14,238,000

4 unchanged sentences

Total expenses

39,700,000 28,421,000 112,532,000 90,898,000

Other income (expense):

1 unchanged sentence

Interest expense (including amortization of deferred financing costs and debt discount/premium)

( 4,839,000 ) ( 4,140,000 ) ( 15,123,000 ) ( 11,532,000 )

Gain (loss) in fair value of derivative financial instruments 1,450,000 ( 402,000 ) ( 2,302,000 ) ( 5,401,000 )

Income from unconsolidated entity

Impairment of real estate investments ( 3,064,000 ) — ( 3,064,000 ) —

(Loss) income from unconsolidated entity ( 377,000 ) ( 79,000 ) 952,000 185,000

8,000 13,000 278,000 162,000

Loss before income taxes ( 5,191,000 ) ( 1,911,000 ) ( 14,240,000 ) ( 20,151,000 )

Income tax expense

Income tax benefit (expense) 39,000 ( 7,000 ) — ( 17,000 )

Net loss ( 5,152,000 ) ( 1,918,000 ) ( 14,240,000 ) ( 20,168,000 )

net loss attributable to noncontrolling interests 232,000 19,000 608,000 76,000

Net loss attributable to controlling interest

$ ( 4,920,000 ) $ ( 1,899,000 ) $ ( 13,632,000 ) $ ( 20,092,000 )

Net loss per Class T and Class I common share attributable to controlling interest — basic and diluted

$ ( 0.06 ) $ ( 0.02 ) $ ( 0.17 ) $ ( 0.26 )

Weighted average number of Class T and Class I common shares outstanding — basic and diluted

80,788,359 79,502,193 80,498,693 77,894,326

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three and Six Months Ended June 30, 2020 and 2019

Three Months Ended June 30, 2020

For the Three and Nine Months Ended September 30, 2020 and 2019

Three Months Ended September 30, 2020

Stockholders’ Equity

Class T and Class I Common Stock

Paid-In Capital

of Shares Amount Additional

Paid-In Capital Accumulated

Deficit Total

Stockholders’

Noncontrolling

BALANCE — March 31, 2020

Equity Noncontrolling

Interest Total Equity

BALANCE — June 30, 2020

80,599,306 $ 805,000 $ 726,516,000 $ ( 159,366,000 ) $ 567,955,000 $ 1,047,000 $ 569,002,000

Offering costs — common stock

— — 5,000 — 5,000 — 5,000

Issuance of common stock under the DRIP

445,239 4,000 4,243,000 — 4,247,000 — 4,247,000

Issuance of vested and nonvested restricted common stock

15,000 — 29,000 — 29,000 — 29,000

Amortization of nonvested common stock compensation

— — 44,000 — 44,000 — 44,000

Repurchase of common stock

( 71,551 ) — ( 706,000 ) — ( 706,000 ) — ( 706,000 )

Distributions to noncontrolling interest

— — — — — ( 22,000 ) ( 22,000 )

Fair value adjustment to redeemable noncontrolling interests

— — ( 208,000 ) — ( 208,000 ) — ( 208,000 )

Distributions declared ($ 0.10 per share)

BALANCE — June 30, 2020

Three Months Ended June 30, 2019

— — — ( 8,150,000 ) ( 8,150,000 ) — ( 8,150,000 )

— — — ( 4,920,000 ) ( 4,920,000 ) ( 105,000 ) ( 5,025,000 ) (1)

BALANCE — September 30, 2020 80,987,994 $ 809,000 $ 729,923,000 $ ( 172,436,000 ) $ 558,296,000 $ 920,000 $ 559,216,000

Three Months Ended September 30, 2019

Stockholders’ Equity

Class T and Class I Common Stock

Paid-In Capital

of Shares Amount Additional

Paid-In Capital Accumulated

Deficit Total

Stockholders’

BALANCE — March 31, 2019

BALANCE — June 30, 2019

79,084,339 $ 791,000 $ 712,076,000 $ ( 105,918,000 ) $ 606,949,000

Issuance of common stock

( 1,393 ) — ( 14,000 ) — ( 14,000 )

Offering costs — common stock

— — 66,000 — 66,000

Issuance of common stock under the DRIP

691,703 7,000 6,592,000 — 6,599,000

Issuance of vested and nonvested restricted common stock

15,000 — 29,000 — 29,000

Amortization of nonvested common stock compensation

— — 43,000 — 43,000

Repurchase of common stock

( 308,837 ) ( 3,000 ) ( 2,820,000 ) — ( 2,823,000 )

Fair value adjustment to redeemable noncontrolling interests

— — ( 23,000 ) — ( 23,000 )

Distributions declared ($ 0.15 per share)

BALANCE — June 30, 2019

— — — ( 12,030,000 ) ( 12,030,000 )

— — — ( 1,899,000 ) ( 1,899,000 ) (1)

BALANCE — September 30, 2019 79,480,812 $ 795,000 $ 715,949,000 $ ( 119,847,000 ) $ 596,897,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2020 and 2019

Six Months Ended June 30, 2020

For the Three and Nine Months Ended September 30, 2020 and 2019

Nine Months Ended September 30, 2020

Stockholders’ Equity

Class T and Class I Common Stock

Paid-In Capital

of Shares Amount Additional

Paid-In Capital Accumulated

Deficit Total

Stockholders’

Noncontrolling

Equity Noncontrolling

Interest Total Equity

BALANCE — December 31, 2019

79,899,874 $ 798,000 $ 719,894,000 $ ( 130,613,000 ) $ 590,079,000 $ — $ 590,079,000

Offering costs — common stock

— — 67,000 — 67,000 — 67,000

Issuance of common stock under the DRIP

1,643,731 16,000 15,665,000 — 15,681,000 — 15,681,000

Issuance of vested and nonvested restricted common stock

22,500 — 43,000 — 43,000 — 43,000

Amortization of nonvested common stock compensation

— — 128,000 — 128,000 — 128,000

Repurchase of common stock

( 578,111 ) ( 5,000 ) ( 5,344,000 ) — ( 5,349,000 ) — ( 5,349,000 )

Contribution from noncontrolling interest

— — — — — 1,250,000 1,250,000

Distributions to noncontrolling interest

— — — — — ( 54,000 ) ( 54,000 )

Fair value adjustment to redeemable noncontrolling interests

— — ( 530,000 ) — ( 530,000 ) — ( 530,000 )

Distributions declared ($ 0.35 per share)

BALANCE — June 30, 2020

Six Months Ended June 30, 2019

— — — ( 28,191,000 ) ( 28,191,000 ) — ( 28,191,000 )

— — — ( 13,632,000 ) ( 13,632,000 ) ( 276,000 ) ( 13,908,000 ) (1)

BALANCE — September 30, 2020 80,987,994 $ 809,000 $ 729,923,000 $ ( 172,436,000 ) $ 558,296,000 $ 920,000 $ 559,216,000

Nine Months Ended September 30, 2019

Stockholders’ Equity

Class T and Class I Common Stock

Paid-In Capital

of Shares Amount Additional

Paid-In Capital Accumulated

Deficit Total

Stockholders’

BALANCE — December 31, 2018

69,254,971 $ 692,000 $ 621,759,000 $ ( 64,779,000 ) $ 557,672,000

Issuance of common stock

8,884,165 89,000 88,626,000 — 88,715,000

Offering costs — common stock

— — ( 7,385,000 ) — ( 7,385,000 )

Issuance of common stock under the DRIP

1,987,822 20,000 19,036,000 — 19,056,000

Issuance of vested and nonvested restricted common stock

22,500 — 43,000 — 43,000

Amortization of nonvested common stock compensation

— — 121,000 — 121,000

Repurchase of common stock

( 668,646 ) ( 6,000 ) ( 6,186,000 ) — ( 6,192,000 )

Fair value adjustment to redeemable noncontrolling interests

— — ( 65,000 ) — ( 65,000 )

Distributions declared ($ 0.45 per share)

BALANCE — June 30, 2019

Amount excludes $122,000 and $32,000 for the three months ended June 30, 2020 and 2019, respectively, and $205,000 and $57,000 for the six months ended June 30, 2020 and 2019, respectively, of net loss attributable to redeemable noncontrolling interests.

— — — ( 34,976,000 ) ( 34,976,000 )

— — — ( 20,092,000 ) ( 20,092,000 ) (1)

BALANCE — September 30, 2019

79,480,812 $ 795,000 $ 715,949,000 $ ( 119,847,000 ) $ 596,897,000

(1) Amount excludes $ 127,000 and $ 19,000 for the three months ended September 30, 2020 and 2019, respectively, and $ 332,000 and $ 76,000 for the nine months ended September 30, 2020 and 2019, respectively, of net loss attributable to redeemable noncontrolling interests.

See Note 11, Redeemable Noncontrolling Interests, for a further discussion.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2020 and 2019

Six Months Ended June 30,

For the Nine Months Ended September 30, 2020 and 2019

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss $ ( 14,240,000 ) $ ( 20,168,000 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

37,919,000 35,561,000

Other amortization 2,084,000 1,869,000

2 unchanged sentences

Income from unconsolidated entity

( 952,000 ) ( 185,000 )

Distributions of earnings from unconsolidated entity — 75,000

Bad debt expense

Deferred income taxes

Change in fair value of derivative financial instruments 2,302,000 5,401,000

Impairment of real estate investments 3,064,000 —

Changes in operating assets and liabilities:

Accounts and other receivables 1,347,000 3,854,000

Other assets ( 1,654,000 ) 256,000

Accounts payable and accrued liabilities 3,436,000 6,023,000

4 unchanged sentences

Acquisitions of real estate investments

( 68,032,000 ) ( 153,923,000 )

Capital expenditures

( 6,729,000 ) ( 4,388,000 )

Investment in unconsolidated entity

— ( 600,000 )

Distributions in excess of earnings from unconsolidated entity

1 unchanged sentence

Pre-acquisition expenses

— ( 179,000 )

Net cash used in investing activities ( 74,761,000 ) ( 155,530,000 )

1 unchanged sentence

Payments on mortgage loans payable

( 8,166,000 ) ( 459,000 )

Borrowings under the line of credit and term loans

140,800,000 165,600,000

Payments on the line of credit and term loans

( 58,100,000 ) ( 83,100,000 )

Deferred financing costs

( 43,000 ) ( 65,000 )

Proceeds from issuance of common stock

Payment of offering costs

( 4,876,000 ) ( 17,457,000 )

Distributions paid

( 13,932,000 ) ( 15,446,000 )

Repurchase of common stock

( 5,349,000 ) ( 6,192,000 )

Contribution from noncontrolling interest

1 unchanged sentence

Contributions from redeemable noncontrolling interest

1,118,000 151,000

Distributions to redeemable noncontrolling interests

Repurchase of common stock

Payment of offering costs

Security deposits

Distributions paid

( 199,000 ) ( 94,000 )

Net cash provided by financing activities 52,368,000 133,376,000

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Six Months Ended June 30, 2020 and 2019

Six Months Ended June 30,

For the Nine Months Ended September 30, 2020 and 2019

Nine Months Ended September 30,

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

1 unchanged sentence

Cash and cash equivalents

$ 15,290,000 $ 14,388,000

Restricted cash

556,000 202,000

Cash, cash equivalents and restricted cash

$ 15,846,000 $ 14,590,000

End of period:

Cash and cash equivalents

$ 22,690,000 $ 22,448,000

Restricted cash

706,000 420,000

Cash, cash equivalents and restricted cash

$ 23,396,000 $ 22,868,000

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for:

Interest $ 13,777,000 $ 9,369,000

Income taxes $ 88,000 $ 21,000

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES

1 unchanged sentence

Accrued capital expenditures

$ 2,182,000 $ 4,205,000

Tenant improvement overage

$ 636,000 $ 195,000

Accrued pre-acquisition expenses

$ — $ 184,000

The following represents the increase in certain assets and liabilities in connection with our acquisitions of real estate investments:

Right-of-use asset

$ — $ 2,196,000

$ 196,000 $ 86,000

Mortgage loan payable, net

$ — $ 9,735,000

Accounts payable and accrued liabilities

$ 201,000 $ 783,000

Operating lease liability

$ — $ 4,489,000

Security deposits and prepaid rent

$ 11,000 $ 1,343,000

Financing Activities:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Six Months Ended June 30, 2020 and 2019

For the Three and Nine Months Ended September 30, 2020 and 2019

The use of the words “we,” “us” or “our” refers to Griffin-American Healthcare REIT IV, Inc.

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See Note 12, Equity — Distribution Reinvestment Plan, for a further discussion.

As of June 30, 2020 , a total of $33,043,000 in distributions were reinvested that resulted in 3,458,656 shares of our common stock being issued pursuant to the 2019 DRIP Offering.

As of September 30, 2020, a total of $ 37,290,000 in distributions were reinvested that resulted in 3,903,895 shares of our common stock being issued pursuant to the 2019 DRIP Offering.

We collectively refer to the DRIP portion of our initial offering and the 2019 DRIP Offering as our DRIP Offerings.

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We are not affiliated with Griffin Capital, Griffin Capital Securities, LLC, or our dealer manager, Colony Capital or Mr.

however, we are affiliated with Griffin-American Healthcare REIT IV Advisor, LLC, American Healthcare Investors and AHI Group Holdings.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

however, we are affiliated with our advisor, American Healthcare Investors and AHI Group Holdings.

We currently operate through four reportable business segments:

medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities.

As of June 30, 2020 , we had completed 46 property acquisitions whereby we owned 89 properties, comprising 94 buildings, or approximately 4,863,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $1,089,071,000 .

As of June 30, 2020 , we also owned a 6.0% interest in a joint venture which owns a portfolio of integrated senior health campuses and ancillary businesses.

As of September 30, 2020, we had completed 46 property acquisitions whereby we owned 89 properties, comprising 94 buildings, or approximately 4,863,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 1,089,071,000 .

As of September 30, 2020, we also owned a 6.0 % interest in a joint venture which owns a portfolio of integrated senior health campuses and ancillary businesses.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Summary of Significant Accounting Policies

6 unchanged sentences

We operate and intend to continue to operate in an umbrella partnership REIT structure in which our operating partnership, or wholly owned subsidiaries of our operating partnership, will own substantially all of the interests in properties acquired on our behalf.

We a re the sole general partner of our operating partnership, and as of June 30, 2020 and December 31, 2019 , we owned greater than a 99.99% general partnership interest therein.

Our advisor is a limited partner, and as of June 30, 2020 and December 31, 2019 , owned less than a 0.01% noncontrolling limited partnership interest in our operating partnership.

We a re the sole general partner of our operating partnership, and as of both September 30, 2020 and December 31, 2019, we owned greater than a 99.99 % general partnership interest therein.

Our advisor is a limited partner, and as of both September 30, 2020 and December 31, 2019, owned less than a 0.01 % noncontrolling limited partnership interest in our operating partnership.

Because we are the sole general partner of our operating partnership and have unilateral control over its management and major operating decisions (even if additional limited partners are admitted to our operating partnership), the accounts of our operating partnership are consolidated in our accompanying condensed consolidated financial statements.

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Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC.

Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations.

Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to the SEC’s rules and regulations.

Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements.

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The preparation of our accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions, allowance for credit losses, impairment of long-lived assets and contingencies.

These estimates are made

Significant items subject to such estimates and assumptions include, but are not limited to, the initial and recurring valuation of certain assets acquired and liabilities assumed through property acquisitions, revenues and grant income, allowance for credit losses, impairment of long-lived assets and contingencies.

These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances.

Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances.

Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.

Revenue Recognition — Resident Fees and Services Revenue

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The following tables disaggregate our resident fees and services revenue by line of business, according to whether such revenue is recognized at a point in time or over time:

Three Months Ended June 30,

Point in Time

Three Months Ended September 30,

Point in Time Over Time Total Point in Time Over Time Total

Senior housing — RIDEA $ 174,000 $ 18,774,000 $ 18,948,000 $ 144,000 $ 11,721,000 $ 11,865,000

Six Months Ended June 30,

Point in Time

Nine Months Ended September 30,

Point in Time Over Time Total Point in Time Over Time Total

Senior housing — RIDEA $ 746,000 $ 51,117,000 $ 51,863,000 $ 501,000 $ 33,552,000 $ 34,053,000

The following tables disaggregate our resident fees and services revenue by payor class:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Private and other payors

$ 17,300,000 $ 10,451,000 $ 46,766,000 $ 29,553,000

1,648,000 1,414,000 5,097,000 4,500,000

Total resident fees and services

$ 18,948,000 $ 11,865,000 $ 51,863,000 $ 34,053,000

Accounts Receivable, Net — Resident Fees and Services

The beginning and ending balances of accounts receivable, net — resident fees and services are as follows:

Medicaid Private

Other Payors Total

Beginning balance — January 1, 2020

Ending balance — June 30, 2020

$ 3,154,000 $ 650,000 $ 3,804,000

Ending balance — September 30, 2020

2,317,000 1,234,000 3,551,000

(Decrease)/increase $ ( 837,000 ) $ 584,000 $ ( 253,000 )

Government Grants

We have been granted stimulus funds through various federal and state government programs, such as through the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, passed by the federal government on March 27, 2020, which were established for eligible healthcare providers to preserve liquidity in response to lost revenues and/or increased healthcare expenses (as such terms are defined in the applicable regulatory guidance) associated with the coronavirus, or COVID-19, pandemic.

Such grants are not loans and, as such, are not required to be repaid, subject to certain conditions.

We recognize government grants as grant income or as a reduction of property operating expenses, as applicable, in our accompanying condensed consolidated statements of operations when there is reasonable assurance that the grants will be received and all conditions to retain the funds will be met.

We adjust our estimates and assumptions based on the applicable guidance provided by the government and the best available information that we have.

Any stimulus or other relief funds received that are not expected to be used in accordance with such terms and conditions will be returned to the government.

For both the three and nine months ended September 30, 2020, we recognized government grants of $ 864,000 as grant income.

For both the three and nine months ended September 30, 2019, we did no t recognize any government grants.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Tenant and Resident Receivables and Allowances

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Tenant receivables and unbilled deferred rent receivables are reduced for uncollectible amounts, which are recognized as direct reductions of real estate revenue in our accompanying condensed consolidated statements of operations.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As of June 30, 2020 and December 31, 2019, we had $1,330,000 and $902,000 , respectively, in allowances, which was determined necessary to reduce receivables by our expected future credit losses.

For the six months ended June 30, 2020 and 2019, we increased allowances by $541,000 and $1,406,000 , respectively, and reduced allowances for collections or adjustments by $74,000 and $721,000 , respectively.

For the six months ended June 30, 2020 and 2019, $39,000 and $332,000 , respectively, of our receivables were written off against the related allowances.

As of September 30, 2020 and December 31, 2019, we had $ 1,653,000 and $ 902,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the nine months ended September 30, 2020 and 2019, we increased allowances by $ 937,000 and $ 1,776,000 , respectively, and reduced allowances for collections or adjustments by $ 126,000 and $ 766,000 , respectively.

For the nine months ended September 30, 2020 and 2019, $ 60,000 and $ 346,000 , respectively, of our receivables were written off against the related allowances.

We qualified, and elected to be taxed, as a REIT under the Code for federal income tax purposes beginning with our taxable year ended December 31, 2016, and we intend to continue to qualify to be taxed as a REIT.

To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute to our stockholders a minimum percentage of our annual taxable income, excluding net capital gains.

To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute to our stockholders a minimum of 90.0% of our annual taxable income, excluding net capital gains.

Such distributions are required to be paid at least 20.0% in cash and 80.0% in stock.

In May 2020, in response to the coronavirus, or COVID-19, pandemic, the Internal Revenue Service, or IRS, temporarily reduced the cash distribution requirement from a minimum of 90.0% of our taxable income to a minimum of 10.0% , which is applicable with respect to the aggregate distributions declared on or after April 1, 2020 until December 31, 2020.

In May 2020, in response to the COVID-19 pandemic, the Internal Revenue Service, or IRS, temporarily reduced the cash distribution requirement to a minimum of 10.0%, which is applicable with respect to the aggregate distributions declared on or after April 1, 2020 until December 31, 2020.

As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders.

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Accordingly, we recognize income tax benefit or expense for the federal, state and local income taxes incurred by our TRS.

We follow ASC Topic 740, Income Taxes , or ASC Topic 740, to recognize, measure, present and disclose in our accompanying condensed consolidated financial statements uncertain tax positions that we have taken or expect to take on a tax return.

As of and for the six months ended June 30, 2020 and 2019, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

We follow ASC Topic 740, Income Taxes , to recognize, measure, present and disclose in our accompanying condensed consolidated financial statements uncertain tax positions that we have taken or expect to take on a tax return.

As of and for the nine months ended September 30, 2020 and 2019, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns.

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A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized.

Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes us to change our judgment about the realizability of the related deferred tax asset, is included in income tax benefit or expense in our accompanying condensed consolidated statements of operations when such changes occur.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

income tax benefit or expense in our accompanying condensed consolidated statements of operations when such changes occur.

Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes us to change our judgment about expected future tax consequences of events, is recorded in income tax benefit or expense in our accompanying condensed consolidated statements of operations.

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In March 2020, the FASB issued Accounting Standards Update, or ASU, 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, or ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate, or LIBOR, or another reference rate expected to be discontinued.

ASU 2020-04 is effective for fiscal years and

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

interim periods beginning after March 12, 2020 through December 31, 2022.

ASU 2020-04 is effective for fiscal years and interim periods beginning after March 12, 2020 through December 31, 2022.

We are currently evaluating this guidance to determine the impact on our disclosures.

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Such concessions were not material to our condensed consolidated financial statements, and as such, we elected not to apply the relief from lease modification accounting provided in the Lease Modification Q&A.

We evaluate each lease concession granted as a result of COVID-19 to determine whether the concession reflects:

We evaluate each lease concession granted as a result of the COVID-19 pandemic to determine whether the concession reflects:

(i) a resolution of contractual rights in the original lease and is thus outside of the lease modification framework of ASC Topic 842;

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The application of the lease modification framework of ASC Topic 842 to lease concessions granted due to the effects of the COVID-19 pandemic did not have a material impact on our condensed consolidated financial statements.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Real Estate Investments, Net

Our real estate investments, net consisted of the following as of June 30, 2020 and December 31, 2019 :

Our real estate investments, net consisted of the following as of September 30, 2020 and December 31, 2019:

September 30,

2020 December 31,

Building and improvements $ 883,849,000 $ 836,091,000

Land 109,420,000 103,371,000

Furniture, fixtures and equipment 8,241,000 6,656,000

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accumulated depreciation ( 73,444,000 ) ( 51,058,000 )

Depreciation expense for the three months ended June 30, 2020 and 2019 was $7,893,000 and $6,490,000 , respectively, and for the six months ended June 30, 2020 and 2019 was $15,732,000 and $13,450,000 , respectively.

In addition to the property acquisition transactions discussed below, for the three and six months ended June 30, 2020 , we incurred capital expenditures of $1,796,000 and $2,947,000 , respectively, for our medical office buildings, $961,000 and $1,366,000 , respectively, for our senior housing — RIDEA facilities and $125,000 and $657,000 , respectively, for our skilled nursing facilities.

We did no t incur any capital expenditures for our senior housing facilities for the three and six months ended June 30, 2020 .

Total $ 928,066,000 $ 895,060,000

Depreciation expense for the three months ended September 30, 2020 and 2019 was $ 7,966,000 and $ 6,806,000 , respectively, and for the nine months ended September 30, 2020 and 2019 was $ 23,698,000 and $ 20,256,000 , respectively.

We determined that two senior housing — RIDEA facilities were impaired and recognized an aggregate impairment charge of $ 3,064,000 for both the three and nine months ended September 30, 2020, which reduced the total aggregate carrying value of such assets to $ 6,993,000 .

The carrying values of such senior housing — RIDEA facilities were then reclassified to properties held for sale, which is included in other assets, net in our accompanying condensed consolidated balance sheets.

The fair values of such facilities were based on their projected sales prices obtained from an independent third party using comparable market information and adjusted for anticipated selling costs of such facilities, which were considered Level 2 measurements within the fair value hierarchy.

We did no t recognize impairment charges on long-lived assets for both the three and nine months ended September 30, 2019.

In addition to the property acquisition transactions discussed below, for the three and nine months ended September 30, 2020, we incurred capital expenditures of $ 1,681,000 and $ 4,628,000 , respectively, for our medical office buildings, $ 316,000 and $ 1,682,000 , respectively, for our senior housing — RIDEA facilities and $ 0 and $ 657,000 , respectively, for our skilled nursing facilities.

We did no t incur any capital expenditures for our senior housing facilities for the three and nine months ended September 30, 2020.

In June 2020, we paid an earn-out of $ 1,483,000 in connection with Overland Park MOB, originally purchased in August 2019, which we capitalized and included in real estate investments, net in our accompanying condensed consolidated balance sheets.

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Acquisitions in 2020

For the six months ended June 30, 2020 , using cash on hand and debt financing, we completed the acquisition of seven buildings from unaffiliated third parties.

The following is a summary of our property acquisitions for the six months ended June 30, 2020 :

For the nine months ended September 30, 2020, using cash on hand and debt financing, we completed the acquisition of seven buildings from unaffiliated third parties.

The following is a summary of our property acquisitions for the nine months ended September 30, 2020:

Acquisition Location Type Date

Acquired Contract

Credit(1) Total

Catalina West Haven ALF(3)

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Senior Housing — RIDEA 01/31/20 17,900,000 17,300,000 389,000

Total $ 64,699,000 $ 62,700,000 $ 1,404,000

(1) Represents a borrowing under the 2018 Credit Facility, as defined in Note 7, Line of Credit and Term Loans, at the time of acquisition.

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Our ownership of the joint venture is approximately 90.0 %.

We accounted for our property acquisitions completed for the six months ended June 30, 2020 as asset acquisitions.

We accounted for our property acquisitions completed for the nine months ended September 30, 2020 as asset acquisitions.

We incurred and capitalized base acquisition fees and direct acquisition related expenses of $ 2,538,000 .

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Building and improvements

Land 7,632,000

In-place leases 8,974,000

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Identified Intangible Assets, Net

Identified intangible assets, net consisted of the following as of June 30, 2020 and December 31, 2019:

Identified intangible assets, net consisted of the following as of September 30, 2020 and December 31, 2019:

September 30,

2020 December 31,

Amortized intangible assets:

In-place leases, net of accumulated amortization of $25,021,000 and $18,273,000 as of June 30, 2020 and December 31, 2019, respectively (with a weighted average remaining life of 8.7 years and 9.5 years as of June 30, 2020 and December 31, 2019, respectively)

Above-market leases, net of accumulated amortization of $829,000 and $609,000 as of June 30, 2020 and December 31, 2019, respectively (with a weighted average remaining life of 9.2 years and 9.5 years as of June 30, 2020 and December 31, 2019, respectively)

In-place leases, net of accumulated amortization of $ 28,935,000 and $ 18,273,000 as of September 30, 2020 and December 31, 2019, respectively (with a weighted average remaining life of 8.8 years and 9.5 years as of September 30, 2020 and December 31, 2019, respectively)

$ 65,593,000 $ 70,650,000

Above-market leases, net of accumulated amortization of $ 938,000 and $ 609,000 as of September 30, 2020 and December 31, 2019, respectively (with a weighted average remaining life of 9.1 years and 9.5 years as of September 30, 2020 and December 31, 2019, respectively)

2,695,000 3,025,000

Unamortized intangible assets:

Certificates of need 348,000 348,000

Amortization expense on identified intangible assets for the three months ended June 30, 2020 and 2019 was $4,877,000 and $3,480,000 , respectively, which included $110,000 and $68,000 , respectively, of amortization recorded against real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations.

Amortization expense on identified intangible assets for the six months ended June 30, 2020 and 2019 was $9,633,000 and $12,622,000 , respectively, which included $220,000 and $115,000 , respectively, of amortization recorded against real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations.

The aggregate weighted average remaining life of the identified intangible assets was 8.7 years and 9.5 years as of June 30, 2020 and December 31, 2019, respectively.

As of June 30, 2020 , estimated amortization expense on the identified intangible assets for the six months ending December 31, 2020 and for each of the next four years ending December 31 and thereafter was as follows:

Total $ 68,636,000 $ 74,023,000

Amortization expense on identified intangible assets for the three months ended September 30, 2020 and 2019 was $ 4,728,000 and $ 2,807,000 , respectively, which included $ 109,000 and $ 90,000 , respectively, of amortization recorded against real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations.

Amortization expense on identified intangible assets for the nine months ended September 30, 2020 and 2019 was $ 14,361,000 and $ 15,429,000 , respectively, which included $ 329,000 and $ 205,000 , respectively, of amortization recorded against real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations.

The aggregate weighted average remaining life of the identified intangible assets was 8.8 years and 9.5 years as of September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, estimated amortization expense on the identified intangible assets for the three months ending December 31, 2020 and for each of the next four years ending December 31 and thereafter was as follows:

2020 $ 4,535,000

2021 11,920,000

2022 8,648,000

2023 7,384,000

2024 6,155,000

Thereafter 29,646,000

Total $ 68,288,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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Other Assets, Net

Other assets, net consisted of the following as of June 30, 2020 and December 31, 2019 :

Other assets, net consisted of the following as of September 30, 2020 and December 31, 2019:

September 30,

2020 December 31,

Investment in unconsolidated entity $ 47,968,000 $ 47,016,000

Deferred rent receivables 11,458,000 8,018,000

Prepaid expenses and deposits

Deferred financing costs, net of accumulated amortization of $2,456,000 and $1,517,000 as of June 30, 2020 and December 31, 2019, respectively(1)

Lease commissions, net of accumulated amortization of $279,000 and $174,000 as of June 30, 2020 and December 31, 2019, respectively

Prepaid expenses, deposits and other assets 10,007,000 2,380,000

Lease commissions, net of accumulated amortization of $ 336,000 and $ 174,000 as of September 30, 2020 and December 31, 2019, respectively

2,340,000 1,623,000

Deferred financing costs, net of accumulated amortization of $ 2,927,000 and $ 1,517,000 as of September 30, 2020 and December 31, 2019, respectively(1)

2,194,000 3,583,000

Total $ 73,967,000 $ 62,620,000

(1) Deferred financing costs only include costs related to our line of credit and term loans.

See Note 7, Line of Credit and Term Loans, for a further discussion.

Amortization expense on deferred financing costs of our line of credit and term loans for the three months ended June 30, 2020 and 2019 was $470,000 and $562,000 , respectively, and for the six months ended June 30, 2020 and 2019 was $939,000 and $1,122,000 , respectively, which is recorded to interest expense in our accompanying condensed consolidated statements of operations.

Amortization expense on lease commissions for the three months ended June 30, 2020 and 2019 was $60,000 and $29,000 , respectively, and for the six months ended June 30, 2020 and 2019 was $105,000 and $52,000 , respectively.

As of June 30, 2020 and December 31, 2019, the unamortized basis difference of our joint venture investment in an unconsolidated entity of $17,019,000 and $17,248,000 , respectively, is primarily attributable to the difference between the amount for which we purchased our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the entity.

Amortization expense on deferred financing costs of our line of credit and term loans for the three months ended September 30, 2020 and 2019 was $ 471,000 and $ 484,000 , respectively, and for the nine months ended September 30, 2020 and 2019 was $ 1,410,000 and $ 1,606,000 , respectively, which is recorded to interest expense in our accompanying condensed consolidated statements of operations.

Amortization expense on lease commissions for the three months ended September 30, 2020 and 2019 was $ 84,000 and $ 29,000 , respectively, and for the nine months ended September 30, 2020 and 2019 was $ 189,000 and $ 81,000 , respectively.

As of September 30, 2020 and December 31, 2019, the unamortized basis difference of our joint venture investment in an unconsolidated entity of $ 16,905,000 and $ 17,248,000 , respectively, is primarily attributable to the difference between the amount for which we purchased our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the entity.

This difference is being amortized over the remaining useful life of the related assets and included in income or loss from unconsolidated entity in our accompanying condensed consolidated statements of operations.

Mortgage Loans Payable, Net

As of June 30, 2020 and December 31, 2019 , mortgage loans payable were $19,082,000 ( $18,104,000 , net of discount/premium and deferred financing costs) and $27,099,000 ( $26,070,000 , net of discount/premium and deferred financing costs), respectively.

As of June 30, 2020 , we had three fixed-rate mortgage loans with interest rates ranging from 3.67% to 5.25% per annum, maturity dates ranging from April 1, 2025 to February 1, 2051 and a weighted average effective interest rate of 3.94% .

As of September 30, 2020 and December 31, 2019, mortgage loans payable were $ 18,933,000 ($ 17,974,000 , net of discount/premium and deferred financing costs) and $ 27,099,000 ($ 26,070,000 , net of discount/premium and deferred financing costs), respectively.

As of September 30, 2020, we ha d three fixed-rate mortgage loans with interest rates ranging from 3.67 % to 5.25 % per annum, maturity dates ranging from April 1, 2025 to February 1, 2051 and a weighted average effective interest rate of 3.94 %.

As of December 31, 2019, we had four fixed-rate mortgage loans with interest rates ranging from 3.67 % to 5.25 % per annum, maturity dates ranging from April 1, 2020 to February 1, 2051 and a weighted average effective interest rate of 4.18 %.

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We did not incur any prepayment penalties or fees in connection with such payoff.

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the six months ended June 30, 2020 and 2019:

Six Months Ended June 30,

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the nine months ended September 30, 2020 and 2019:

Nine Months Ended September 30,

Beginning balance $ 26,070,000 $ 16,892,000

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Amortization of deferred financing costs

33,000 58,000

Amortization of discount/premium on mortgage loans payable

37,000 29,000

Scheduled principal payments on mortgage loans payable

( 8,166,000 ) ( 459,000 )

Deferred financing costs

Ending balance $ 17,974,000 $ 26,229,000

As of June 30, 2020 , the principal payments due on our mortgage loans payable for the six months ending December 31, 2020 and for each of the next four years ending December 31 and thereafter were as follows:

As of September 30, 2020, the principal payments due on our mortgage loans payable for the three months ending December 31, 2020 and for each of the next four years ending December 31 and thereafter were as follows:

2020 $ 151,000

Thereafter 16,118,000

Total $ 18,933,000

Line of Credit and Term Loans

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We are required to pay a fee on the unused portion of the lenders’ commitments under the 2018 Credit Agreement, as amended, at a per annum rate equal to 0.20 % if the average daily used amount is greater than 50.00 % of the commitments and 0.25 % if the average daily used amount is less than or equal to 50.00 % of the commitments, which fee shall be measured and payable on a quarterly basis.

As of both June 30, 2020 and December 31, 2019, our aggregate borrowing capacity under the 2018 Credit Facility was $530,000,000 .

As of June 30, 2020 and December 31, 2019, borrowings outstanding totaled $479,500,000 and $396,800,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 2.14% and 3.50% , respectively, per annum.

As of both September 30, 2020 and December 31, 2019, our aggregate borrowing capacity under the 2018 Credit Facility was $ 530,000,000 .

As of September 30, 2020 and December 31, 2019, borrowings outstanding totaled $ 479,500,000 and $ 396,800,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 2.12 % and 3.50 %, respectively, per annum.

Derivative Financial Instruments

We record derivative financial instruments in our accompanying condensed consolidated balance sheets as either an asset or a liability measured at fair value.

The following table lists the derivative financial instruments held by us as of June 30, 2020 and December 31, 2019, which are included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets:

Notional Amount

Interest Rate

Maturity Date

one month LIBOR

As of both June 30, 2020 and December 31, 2019, none of our derivative financial instruments were designated as hedges.

For the three months ended June 30, 2020 and 2019, we recorded $853,000 and $(3,021,000) , respectively, and for the six months ended June 30, 2020 and 2019, we recorded $(3,752,000) and $(4,999,000) , respectively, as a decrease (increase) to interest expense in our accompanying condensed consolidated statements of operations related to the change in the fair value of our derivative financial instruments.

The following table lists the derivative financial instruments held by us as of September 30, 2020 and December 31, 2019, which are included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets:

Instrument Notional Amount Index Interest Rate Maturity Date September 30,

2020 December 31,

Swap $ 139,500,000 one month LIBOR 2.49 % 11/19/21 $ ( 3,713,000 ) $ ( 2,441,000 )

Swap 58,800,000 one month LIBOR 2.49 % 11/19/21 ( 1,565,000 ) ( 1,029,000 )

Swap 45,000,000 one month LIBOR 0.20 % 11/19/21 ( 27,000 ) —

Swap 36,700,000 one month LIBOR 2.49 % 11/19/21 ( 977,000 ) ( 642,000 )

Swap 15,000,000 one month LIBOR 2.53 % 11/19/21 ( 405,000 ) ( 273,000 )

$ 295,000,000 $ ( 6,687,000 ) $ ( 4,385,000 )

As of both September 30, 2020 and December 31, 2019, none of our derivative financial instruments were designated as hedges.

For the three months ended September 30, 2020 and 2019, we recorded $ 1,450,000 and $( 402,000 ), respectively, and for the nine months ended September 30, 2020 and 2019, we recorded $( 2,302,000 ) and $( 5,401,000 ), respectively, as a decrease (increase) to interest expense in our accompanying condensed consolidated statements of operations related to the change in the fair value of our derivative financial instruments.

See Note 14, Fair Value Measurements, for a further discussion of the fair value of our derivative financial instruments.

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Identified Intangible Liabilities, Net

As of June 30, 2020 and December 31, 2019, identified intangible liabilities, net consisted of below-market leases of $1,440,000 and $1,601,000 , respectively, net of accumulated amortization of $541,000 and $702,000 , respectively.

Amortization expense on below-market leases for the three months ended June 30, 2020 and 2019 was $69,000 and $107,000 , respectively, and for the six months ended June 30, 2020 and 2019 was $161,000 and $209,000 , respectively, which was recorded to real estate revenue in our accompanying condensed consolidated statements of operations.

The weighted average remaining life of below-market leases was 11.5 years and 11.3 years as of June 30, 2020 and December 31, 2019, respectively.

As of June 30, 2020 , estimated amortization expense on below-market leases for the six months ending December 31, 2020 and for each of the next four years ending December 31 and thereafter was as follows:

As of September 30, 2020 and December 31, 2019, identified intangible liabilities, net consisted of below-market leases of $ 1,362,000 and $ 1,601,000 , respectively, net of accumulated amortization of $ 586,000 and $ 702,000 , respectively.

Amortization expense on below-market leases for the three months ended September 30, 2020 and 2019 was $ 78,000 and $ 212,000 , respectively, and for the nine months ended September 30, 2020 and 2019 was $ 239,000 and $ 421,000 , respectively, which was recorded to real estate revenue in our accompanying condensed consolidated statements of operations.

The weighted average remaining life of below-market leases was 11.6 years and 11.3 years as of September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, estimated amortization expense on below-market leases for the three months ending December 31, 2020 and for each of the next four years ending December 31 and thereafter was as follows:

2020 $ 66,000

Thereafter 475,000

Total $ 1,362,000

Commitments and Contingencies

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These efforts have significantly and adversely disrupted economic markets and impacted commercial activity worldwide, including markets in which we own and/or operate properties, and the prolonged economic impact remains uncertain.

In addition, the rapidly evolving nature of the COVID-19 pandemic makes it difficult to ascertain the long-term impact it will have on real estate markets and our portfolio of investments.

Considerable uncertainty still surrounds the COVID-19 pandemic and its effects on the population, as well as the effectiveness of any responses taken on a national and local level by government authorities and businesses.

In addition, the continuously evolving nature of the COVID-19 pandemic makes it difficult to ascertain the long-term impact it will have on real estate markets and our portfolio of investments.

In particular, government-imposed business closures and re-opening restrictions have dramatically impacted the operations of our real estate investments and our tenants across the country, such as creating declines in resident occupancy.

Further, our senior housing facilities are also experiencing dramatic increases in costs to care for residents, particularly increased labor costs to maintain staffing levels to care for the aged population during this crisis, costs of COVID-19 testing of employees and residents and costs to procure the volume of personal protective equipment and other supplies required.

Further, our senior housing facilities have also experienced dramatic increases and continue to experience increases in costs to care for residents, particularly increased labor costs to maintain staffing levels to care for the aged population during this crisis,

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

We have not received or recognized in our consolidated financial statements any stimulus funds from federal, state or local governments or from any healthcare-related regulators related to the COVID-19 pandemic.

However, we have taken actions to strengthen our balance sheet and preserve liquidity in response to the COVID-19 pandemic risks.

costs of COVID-19 testing of employees and residents and costs to procure the volume of personal protective equipment and other supplies required.

We received and recognized in our accompanying condensed consolidated financial statements stimulus funds through economic relief programs of the CARES Act, as discussed at Note 2, Summary of Significant Accounting Policies — Government Grants.

We have also taken actions to strengthen our balance sheet and preserve liquidity in response to the COVID-19 pandemic risks.

Since March 2020, we have postponed non-essential capital expenditures, reduced the stockholder distribution rate and partially suspended our share repurchase plan.

We are continuously monitoring the impact of the COVID-19 pandemic on our business, residents, tenants, operating partners, managers, portfolio of investments and on the United States and global economies.

While there were no material adjustments to our condensed consolidated financial statements as of and during the six months ended June 30, 2020 , the prolonged duration and impact of the COVID-19 pandemic could materially affect our financial performance.

See Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Which May Influence Results of Operations, for a further discussion of the adverse impact the COVID-19 pandemic has had on our business operations.

S ee Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Which May Influence Results of Operations, for a further discussion of the adverse impact the COVID-19 pandemic has had on our business operations.

Redeemable Noncontrolling Interests

As of both June 30, 2020 and December 31, 2019, our advisor owned all of the 208 limited partnership units outstanding in our operating partnership.

As of both June 30, 2020 and December 31, 2019, we owned greater than a 99.99% general partnership interest in our operating partnership, and our advisor owned less than a 0.01% limited partnership interest in our operating partnership.

As of both September 30, 2020 and December 31, 2019, our advisor owned all of the 208 limited partnership units outstanding in our operating partnership.

As of both September 30, 2020 and December 31, 2019, we owned greater than a 99.99 % general partnership interest in our operating partnership, and our advisor owned less than a 0.01 % limited partnership interest in our operating partnership.

Our advisor is entitled to special redemption rights of its limited partnership units.

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or (ii) the redemption value.

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the six months ended June 30, 2020 and 2019:

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the nine months ended September 30, 2020 and 2019:

Nine Months Ended September 30,

Beginning balance $ 1,462,000 $ 1,371,000

Additions 1,118,000 151,000

Distributions ( 81,000 ) —

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Our charter authorizes us to issue 200,000,000 shares of our preferred stock, par value $ 0.01 per share.

As of both June 30, 2020 and December 31, 2019, no shares of our preferred stock were issued and outstanding.

As of both September 30, 2020 and December 31, 2019, no shares of our preferred stock were issued and outstanding.

Our charter authorizes us to issue 1,000,000,000 shares of our common stock, par value $ 0.01 per share, whereby 900,000,000 shares are classified as Class T common stock and 100,000,000 shares are classified as Class I common stock.

Each share of our common stock, regardless of class, will be entitled to one vote per share on matters presented to the common stockholders for approval;

provided, however, that stockholders of one share class shall have exclusive voting rights on any

Each share of our common stock, regardless of class, will be entitled to one vote per share on matters presented to the common

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

amendment to our charter that would alter only the contract rights of that share class, and no stockholders of another share class shall be entitled to vote thereon.

stockholders for approval;

provided, however, that stockholders of one share class shall have exclusive voting rights on any amendment to our charter that would alter only the contract rights of that share class, and no stockholders of another share class shall be entitled to vote thereon.

On February 6, 2015, our advisor acquired shares of our Class T common stock for total cash consideration of $ 200,000 and was admitted as our initial stockholder.

We used the proceeds from the sale of shares of our Class T common stock to our advisor to make an initial capital contribution to our operating partnership.

As of both June 30, 2020 and December 31, 2019, our advisor owned 20,833 shares of our Class T common stock.

As of both September 30, 2020 and December 31, 2019, our advisor owned 20,833 shares of our Class T common stock.

On February 15, 2019, we terminated our initial offering.

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See the “Distribution Reinvestment Plan” section below for a further discussion.

Through June 30, 2020 , we had issued 75,639,681 aggregate shares of our Class T and Class I common stock in connection with the primary portion of our initial offering and 6,712,191 aggregate shares of our Class T and Class I common stock pursuant to our DRIP Offerings.

We also granted an aggregate of 90,000 shares of our restricted Class T common stock to our independent directors and repurchased 1,863,399 shares of our common stock under our share repurchase plan through June 30, 2020 .

As of June 30, 2020 and December 31, 2019, we had 80,599,306 and 79,899,874 aggregate shares of our Class T and Class I common stock, respectively, issued and outstanding.

Through September 30, 2020, we had issued 75,639,681 aggregate shares of our Class T and Class I common stock in connection with the primary portion of our initial offering and 7,157,430 aggregate shares of our Class T and Class I common stock pursuant to our DRIP Offerings.

We also granted an aggregate of 105,000 shares of our restricted Class T common stock to our independent directors and repurchased 1,934,950 shares of our common stock under our share repurchase plan through September 30, 2020.

As of September 30, 2020 and December 31, 2019, we had 80,987,994 and 79,899,874 aggregate shares of our Class T and Class I common stock, respectively, issued and outstanding.

Distribution Reinvestment Plan

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The following is a summary of our historical and current estimated per share NAV of our Class T and Class I common stock:

Approval Date by our Board

Established Per

For the three months ended June 30, 2020 and 2019, $4,997,000 and $6,588,000 , respectively, in distributions were reinvested and 523,736 and 687,840 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

For the six months ended June 30, 2020 and 2019, $11,434,000 and $12,457,000 , respectively, in distributions were reinvested and 1,198,492 and 1,296,119 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

As of June 30, 2020 and December 31, 2019, a total of $64,064,000 and $52,630,000 , respectively, in distributions were reinvested that resulted in 6,712,191 and 5,513,699 shares of our common stock, respectively, being issued pursuant to our DRIP Offerings.

Approval Date by our Board Established Per

04/06/18 $ 9.65

04/04/19 $ 9.54

04/02/20 $ 9.54

For the three months ended September 30, 2020 and 2019, $ 4,247,000 and $ 6,599,000 , respectively, in distributions were reinvested and 445,239 and 691,703 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

For the nine months ended September 30, 2020 and 2019, $ 15,681,000 and $ 19,056,000 , respectively, in distributions were reinvested and 1,643,731 and 1,987,822 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

As of September 30, 2020 and December 31, 2019, a total of $ 68,311,000 and $ 52,630,000 , respectively, in distributions were cumulatively reinvested that resulted in 7,157,430 and 5,513,699 shares of our common stock, respectively, being issued pursuant to our DRIP Offerings.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Share Repurchase Plan

6 unchanged sentences

Further, all share repurchases are repurchased following a one-year holding period at a price between 92.5 % to 100 % of each stockholder’s repurchase amount depending on the period of time their shares have been held.

During our initial offering and with respect to

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shares repurchased for the quarter ending March 31, 2019, the repurchase amount for shares repurchased under our share repurchase plan was equal to the lesser of (i) the amount per share that a stockholder paid for their shares of our common stock, or (ii) the per share offering price in our initial offering.

During our initial offering and with respect to shares repurchased for the quarter ending March 31, 2019, the repurchase amount for shares repurchased under our share repurchase plan was equal to the lesser of (i) the amount per share that a stockholder paid for their shares of our common stock, or (ii) the per share offering price in our initial offering.

Commencing with shares repurchased for the quarter ending June 30, 2019, the repurchase amount for shares repurchased under our share repurchase plan is the lesser of (i) the amount per share the stockholder paid for their shares of our common stock, or (ii) the most recent estimated value of one share of the applicable class of common stock as determined by our board.

9 unchanged sentences

Our board shall determine if and when it is in the best interest of our company and stockholders to reinstate our share repurchase plan for additional stockholders.

For the three months ended June 30, 2020 and 2019, we repurchased 506,560 and 227,126 shares of our common stock, respectively, for an aggregate of $4,643,000 and $2,099,000 , respectively, at an average repurchase price of $9.17 and $9.24 per share, respectively.

For the six months ended June 30, 2020 and 2019, we repurchased 506,560 and 359,809 shares of our common stock, respectively, for an aggregate of $4,643,000 and $3,369,000 , respectively, at an average repurchase price of $9.17 and $9.36 per share, respectively.

As of June 30, 2020 and December 31, 2019, we cumulatively repurchased 1,863,399 and 1,356,839 shares of our common stock, respectively, for an aggregate of $17,299,000 and $12,656,000 , respectively, at an average repurchase price of $9.28 and $9.33 per share, respectively.

In July 2020, we repurchased 71,551 shares of our common stock, for an aggregate of $706,000 , at an average repurchase price of $9.87 per share.

For the three months ended September 30, 2020 and 2019, we repurchased 71,551 and 308,837 shares of our common stock, respectively, for an aggregate of $ 706,000 and $ 2,823,000 , respectively, at an average repurchase price of $ 9.87 and $ 9.14 per share, respectively.

For the nine months ended September 30, 2020 and 2019, we repurchased 578,111 and 668,646 shares of our common stock, respectively, for an aggregate of $ 5,349,000 and $ 6,192,000 , respectively, at an average repurchase price of $ 9.25 and $ 9.26 per share, respectively.

As of September 30, 2020 and December 31, 2019, we cumulatively repurchased 1,934,950 and 1,356,839 shares of our common stock, respectively, for an aggregate of $ 18,005,000 and $ 12,656,000 , respectively, at an average repurchase price of $ 9.31 and $ 9.33 per share, respectively.

In October 2020, we repurchased 86,821 shares of our common stock, for an aggregate of $ 865,000 , at an average repurchase price of $ 9.95 per share.

All shares were repurchased using the cumulative proceeds we received from the sale of shares of our common stock pursuant to our DRIP Offerings.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

2015 Incentive Plan

1 unchanged sentence

The maximum number of shares of our common stock that may be issued pursuant to our incentive plan is 4,000,000 shares.

For both the six months ended June 30, 2020 and 2019, we granted an aggregate of 7,500 shares of our restricted Class T common stock at a weighted average grant date fair value of $9.54 per share to our independent directors in connection with their re-election to our board.

For both the nine months ended September 30, 2020 and 2019, we granted an aggregat e of 22,500 shares of our restricted Class T common stock at a weighted average grant date fair value of $ 9.54 per share to our indepen dent directors in connection with their re-election to our board and in consideration for their past services rendered.

Such shares vested 20.0 % immediately on the grant date and 20.0 % will vest on each of the first four anniversaries of the grant date.

For the three months ended June 30, 2020 and 2019, we recognized stock compensation expense of $55,000 and $53,000 , respectively, and for the six months ended June 30, 2020 and 2019, we recognized stock compensation expense of $98,000 and $92,000 respectively, which is included in general and administrative in our accompanying condensed consolidated statements of operations.

For the three months ended September 30, 2020 and 2019, we recognized stock compensation expense of $ 73,000 and $ 72,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we recognized stock compensation expense of $ 171,000 and $ 164,000 , respectively, which is included in general and administrative in our accompanying condensed consolidated statements of operations.

Offering Costs

2 unchanged sentences

No selling commissions were payable on Class I shares or shares of our common stock sold pursuant to our DRIP Offerings.

Following the termination of our initial offering, we no longer incur additional selling commissions.

For the six months ended June 30, 2019, we incurred $2,241,000 in selling commissions to our dealer manager.

Following the termination of our initial offering on February 15, 2019, we no longer incur additional selling commissions.

For the nine months ended September 30, 2019, we incurred $ 2,241,000 in selling commissions to our dealer manager.

Such commissions were charged to stockholders’ equity as such amounts were paid to our dealer manager from the gross proceeds of our initial offering.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Dealer Manager Fee

1 unchanged sentence

With respect to shares of our Class I common stock, prior to March 1, 2017, our dealer manager generally received a dealer manager fee up to 3.0 % of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to the primary portion of our initial offering, of which 1.0 % of the gross offering proceeds was funded by us and an amount equal to 2.0 % of the gross offering proceeds was funded by our advisor.

Effective March 1, 2017 and through the termination of our initial offering on February 15, 2019, our dealer manager generally received a dealer manager fee up to an amount equal to 1.5% of the gross offering proceeds from the sale of Class I shares pursuant the primary portion of our initial offering, all of which was funded by our advisor.

Effective March 1, 2017 and through the termination of our initial offering on February 15, 2019, our dealer manager generally received a dealer manager fee up to an amount equal to 1.5 % of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to the primary portion of our initial offering, all of which was funded by our advisor.

No dealer manager fee was payable on shares of our common stock sold pursuant to our DRIP Offerings.

Following the termination of our initial offering on February 15, 2019, we no longer incur additional dealer manager fees.

For the six months ended June 30, 2019, we incurred $759,000 in dealer manager fees to our dealer manager.

For the nine months ended September 30, 2019, we incurred $ 759,000 in dealer manager fees to our dealer manager.

Such fees were charged to stockholders’ equity as such amounts were paid to our dealer manager or its affiliates from the gross proceeds of our initial offering.

7 unchanged sentences

By agreement with participating broker-dealers, such stockholder servicing fee may be reduced or limited.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Following the termination of our initial offering on February 15, 2019, we no longer incur additional stockholder servicing fees.

For the six months June 30, 2019, we incurred $2,602,000 in stockholder servicing fees to our dealer manager.

As of June 30, 2020 and December 31, 2019, we accrued $9,270,000 and $12,610,000 , respectively, in connection with the stockholder servicing fee payable, which is included in accounts payable and accrued liabilities with a corresponding offset to stockholders’ equity in our accompanying condensed consolidated balance sheets.

For the nine months ended September 30, 2019, we incurred $ 2,536,000 in stockholder servicing fees to our dealer manager.

As of September 30, 2020 and December 31, 2019, we accrued $ 7,667,000 and $ 12,610,000 , respectively, in connection with the stockholder servicing fee payable, which is included in accounts payable and accrued liabilities with a corresponding offset to stockholders’ equity in our accompanying condensed consolidated balance sheets.

Noncontrolling Interest

In connection with our acquisition of Louisiana Senior Housing Portfolio in January 2020, we consolidated and owned approximately 90.0% of our joint venture with SSMG as of June 30, 2020 .

As such, 10.0% of the net earnings of the joint venture were allocated to noncontrolling interests in our accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2020 , and the carrying amount of such noncontrolling interest is presented in total equity in our accompanying condensed consolidated balance sheets as of June 30, 2020 .

We did not have any noncontrolling interest in total equity for the six months ended June 30, 2019.

In connection with our acquisition of Louisiana Senior Housing Portfolio in January 2020, as of September 30, 2020 we owned an approximate 90.0 % interest in our consolidated joint venture with SSMG that owns such properties.

As such, 10.0 % of the net earnings of the joint venture were allocated to noncontrolling interests in our accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2020, and the carrying amount of such noncontrolling interest is presented in total equity in our accompanying condensed consolidated balance sheets as of September 30, 2020.

We did not have any noncontrolling interest in total equity for the nine months ended September 30, 2019.

Related Party Transactions

4 unchanged sentences

We entered into the Advisory Agreement, which entitles our advisor and its affiliates to specified compensation for certain services, as well as reimbursement of certain expenses.

Our board, including a majority of our independent directors, has reviewed the material transactions between our affiliates and us during the six months ended June 30, 2020 .

Our board, including a majority of our independent directors, has reviewed the material transactions between our affiliates and us during the nine months ended September 30, 2020.

Set forth below is a description of the transactions with affiliates.

We believe that we have

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

executed all of the transactions set forth below on terms that are fair and reasonable to us and on terms no less favorable to us than those available from unaffiliated third parties.

For the three months ended June 30, 2020 and 2019, we incurred $3,015,000 and $3,731,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred $7,299,000 and $8,148,000 , respectively, in fees and expenses to our affiliates as detailed below.

We believe that we have executed all of the transactions set forth below on terms that are fair and reasonable to us and on terms no less favorable to us than those available from unaffiliated third parties.

For the three months ended September 30, 2020 and 2019, we incurred $ 3,045,000 and $ 4,478,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred $ 10,344,000 and $ 12,626,000 , respectively, in fees and expenses to our affiliates as detailed below.

Offering Stage

2 unchanged sentences

Effective March 1, 2017 and through the termination of our initial offering on February 15, 2019, our dealer manager generally received a dealer manager fee up to an amount equal to 1.5% of the gross offering proceeds from the sale of Class I shares pursuant to the primary portion of our initial offering, all of which was funded by our advisor.

Effective March 1, 2017 and through the termination of our initial offering on February 15, 2019, our dealer manager generally received a dealer manager fee up to an amount equal to 1.5 % of the gross offering proceeds from the sale of Class I shares of our common stock pursuant to the primary portion of our initial offering, all of which was funded by our advisor.

Our advisor recouped the portion of the dealer manager fee it funded through the receipt from us of the Contingent Advisor Payment, as defined below, through the payment of acquisition fees as described below.

1 unchanged sentence

Following the termination of our initial offering on February 15, 2019, we no longer incur additional dealer manager fees.

For the six months ended June 30, 2019, we incurred $1,687,000 payable to our advisor as part of the Contingent Advisor Payment in connection with the dealer manager fee that our advisor had incurred.

For the nine months ended September 30, 2019, we incurred $ 1,687,000 payable to our advisor as part of the Contingent Advisor Payment in connection with the dealer manager fee that our advisor had incurred.

Such fee was charged to stockholders’ equity as incurred with a corresponding offset to accounts payable due to affiliates in our accompanying condensed consolidated balance sheets.

See Note 12, Equity — Offering Costs — Dealer Manager Fee, for a further discussion of the dealer manager fee funded by us.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Other Organizational and Offering Expenses

3 unchanged sentences

Following the termination of our initial offering on February 15, 2019, we no longer incur additional other organizational and offering expenses.

For the six months ended June 30, 2019, we incurred $112,000 payable to our advisor as part of the Contingent Advisor Payment in connection with the other organizational and offering expenses that our advisor had incurred.

For the nine months ended September 30, 2019, we incurred $ 112,000 payable to our advisor as part of the Contingent Advisor Payment in connection with the other organizational and offering expenses that our advisor had incurred.

Such expenses were charged to stockholders’ equity as incurred with a corresponding offset to accounts payable due to affiliates in our accompanying condensed consolidated balance sheets.

5 unchanged sentences

Therefore, the amount of the Contingent Advisor Payment paid upon the closing of an acquisition did not exceed the then outstanding amounts paid by our advisor for dealer manager fees and other organizational and offering expenses at the time of such closing.

For these purposes, the amounts paid by our advisor and considered as “outstanding” were reduced by the amount of the Contingent

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Advisor Payment previously paid.

For these purposes, the amounts paid by our advisor and considered as “outstanding” were reduced by the amount of the Contingent Advisor Payment previously paid.

Notwithstanding the foregoing, the initial $ 7,500,000 of amounts paid by our advisor to fund the dealer manager fee and other organizational and offering expenses, or the Contingent Advisor Payment Holdback, was retained by us until February 2019, the termination of our initial offering and the third anniversary of the commencement date of our initial offering, at which time such amount was paid to our advisor.

3 unchanged sentences

The base acquisition fee in connection with the acquisition of properties accounted for as asset acquisitions or the acquisition of real estate-related investments is capitalized as part of the associated investment in our accompanying condensed consolidated balance sheets.

For the three months ended June 30, 2020 and 2019, we incurred base acquisition fees of $34,000 and $1,343,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred base acquisition fees of $1,440,000 and $1,741,000 , respectively, to our advisor.

As of both June 30, 2020 and December 31, 2019, we have paid $20,982,000 in Contingent Advisor Payments to our advisor and do not have any amounts outstanding due to our advisor.

For the three months ended September 30, 2020 and 2019, we incurred base acquisition fees of $ 35,000 and $ 1,922,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred base acquisition fees of $ 1,475,000 and $ 3,663,000 , respectively, to our advisor.

As of both September 30, 2020 and December 31, 2019, we have paid $ 20,982,000 in Contingent Advisor Payments to our advisor and do not have any amounts outstanding due to our advisor.

For a further discussion of amounts paid in connection with the Contingent Advisor Payment, see “Dealer Manager Fee” and “Other Organizational and Offering Expenses,” above.

2 unchanged sentences

however, we will not pay a development fee to our advisor or its affiliates if our advisor or its affiliates elect to receive an acquisition fee based on the cost of such development.

For the three months ended June 30, 2020 and 2019, we incurred development fees of $2,000 and $1,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred development fees of $2,000 and $14,000 , respectively, to our advisor, which was expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

For the three months ended September 30, 2020 and 2019, we incurred development fees of $ 22,000 and $ 0 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred development fees of $ 24,000 and $ 14,000 , respectively, to our advisor, which was expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations.

Reimbursement of Acquisition Expenses

1 unchanged sentence

The reimbursement of acquisition expenses, acquisition fees, total development costs and real estate commissions paid to unaffiliated third parties will not exceed, in the aggregate, 6.0 % of the contract purchase price of the property or real estate-related investments, unless fees in excess of such limits are approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction.

For the six months ended June 30, 2020 and 2019, such fees and expenses paid did not exceed 6.0% of the contract purchase price of our property acquisitions, except with respect to our acquisitions of Pinnacle Warrenton ALF, Glendale MOB, Missouri SNF Portfolio, Flemington MOB Portfolio and West Des Moines SNF, which excess fees and expenses were approved by our directors as set forth above.

For the nine months ended September 30, 2020 and 2019, such fees and expenses paid did not exceed 6.0 % of the contract purchase price of our property acquisitions, except with respect to our acquisitions of Pinnacle Warrenton ALF, Glendale MOB, Missouri SNF Portfolio, Flemington MOB Portfolio and West Des Moines SNF, which excess fees and expenses were approved by our directors as set forth above.

Reimbursements of acquisition expenses in connection with the acquisition of real estate investments accounted for as business combinations are expensed as incurred and included in acquisition related expenses in our accompanying condensed consolidated statements of operations.

Reimbursements of acquisition expenses in connection with the acquisition of properties accounted for as asset acquisitions or the acquisition of real estate-related investments are capitalized as part of the associated investment in our accompanying condensed consolidated balance sheets.

For the three and six months ended June 30, 2020 , we incurred $0 and $1,000 , respectively, in acquisition expenses to our advisor or its affiliates.

For the three and six months ended June 30, 2019, we did not incur any acquisition expenses payable to our advisor or its affiliates.

For the three and nine months ended September 30, 2020, we incurred $ 0 and $ 1,000 , respectively, in acquisition expenses to our advisor or its affiliates.

For the three and nine months ended September 30, 2019, we did no t incur any acquisition expenses payable to our advisor or its affiliates.

Operational Stage

1 unchanged sentence

We pay our advisor or its affiliates a monthly fee for services rendered in connection with the management of our assets equal to one-twelfth of 0.80 % of average invested assets.

For such purposes, average invested assets means the average of the

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aggregate book value of our assets invested in real estate investments and real estate-related investments, before deducting depreciation, amortization, bad debt and other similar non-cash reserves, computed by taking the average of such values at the end of each month during the period of calculation.

For the three months ended June 30, 2020 and 2019, we incurred asset management fees of $2,435,000 and $2,003,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred asset management fees of $4,846,000 and $3,892,000 , respectively, to our advisor, which are included in general and administrative in our accompanying condensed consolidated statements of operations.

For such purposes, average invested assets means the average of the aggregate book value of our assets invested in real estate investments and real estate-related investments, before deducting depreciation, amortization, bad debt and other similar non-cash reserves, computed by taking the average of such values at the end of each month during the period of calculation.

For the three months ended September 30, 2020 and 2019, we incurred asset management fees of $ 2,446,000 and $ 2,120,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred asset management fees of $ 7,292,000 and $ 6,012,000 , respectively, to our advisor, which are included in general and administrative in our accompanying condensed consolidated statements of operations.

Property Management Fee

4 unchanged sentences

or (iii) a fair and reasonable property management fee that is approved by a majority of our directors, including a majority of our independent directors, that is not less favorable to us than terms available from unaffiliated third parties for any property that is not a stand-alone, single-tenant, net leased property and for which American Healthcare Investors or its designated personnel directly serve as the property manager without sub-contracting such duties to a third party.

Property management fees are included in property operating expenses and rental expenses in our accompanying condensed consolidated statements of operations.

For the three months ended June 30, 2020 and 2019, we incurred property management fees of $375,000 and $293,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred property management fees of $724,000 and $553,000 , respectively, to American Healthcare Investors.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Property management fees are included in rental expenses and general and administrative expenses in our accompanying condensed consolidated statements of operations.

For the three months ended September 30, 2020 and 2019, we incurred property management fees of $ 376,000 and $ 318,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred property management fees of $ 1,100,000 and $ 871,000 , respectively, to American Healthcare Investors.

We pay our advisor or its affiliates a separate fee for any leasing activities in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area.

1 unchanged sentence

Lease fees are capitalized as lease commissions, which are included in other assets, net in our accompanying condensed consolidated balance sheets, and amortized over the term of the lease.

For the three months ended June 30, 2020 and 2019, we incurred lease fees of $86,000 and $40,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred lease fees of $137,000 and $50,000 , respectively.

For the three months ended September 30, 2020 and 2019, we incurred lease fees of $ 117,000 and $ 21,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred lease fees of $ 254,000 and $ 71,000 , respectively.

Construction Management Fee

1 unchanged sentence

Construction management fees are capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets or are expensed and included in our accompanying condensed consolidated statements of operations, as applicable.

For the three months ended June 30, 2020 and 2019, we incurred construction management fees of $41,000 and $19,000 , respectively, and for the six months ended June 30, 2020 and 2019, we incurred construction management fees of $64,000 and $26,000 , respectively.

For the three months ended September 30, 2020 and 2019, we incurred construction management fees of $ 12,000 and $ 73,000 , respectively, and for the nine months ended September 30, 2020 and 2019, we incurred construction management fees of $ 76,000 and $ 99,000 , respectively.

Operating Expenses

2 unchanged sentences

(i) 2.0 % of our average invested assets, as defined in the Advisory Agreement;

or (ii) 25.0% of our net income, as defined in the Advisory Agreement, unless our

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independent directors determined that such excess expenses were justified based on unusual and nonrecurring factors which they deem sufficient.

or (ii) 25.0 % of our net income, as defined in the Advisory Agreement, unless our independent directors determined that such excess expenses were justified based on unusual and nonrecurring factors which they deem sufficient.

The following table reflects our operating expenses as a percentage of average invested assets and as a percentage of net income for the 12 month periods then ended:

12 months ended June 30,

12 months ended September 30,

Operating expenses as a percentage of average invested assets 1.1 % 1.2 %

Operating expenses as a percentage of net income 32.7 % 42.0 %

For the 12 months ended June 30, 2020 and 2019, our operating expenses did not exceed the aforementioned limitations as 2.0% of our average invested assets was greater than 25.0% of our net income.

For the three months ended June 30, 2020 and 2019, our advisor incurred operating expenses on our behalf of $42,000 and $32,000 , respectively, and for the six months ended June 30, 2020 and 2019, our advisor incurred operating expenses on our behalf of $85,000 and $73,000 , respectively.

For the 12 months ended September 30, 2020 and 2019, our operating expenses did not exceed the aforementioned limitations as 2.0 % of our average invested assets was greater than 25.0 % of our net income.

For the three months ended September 30, 2020 and 2019, our advisor incurred operating expenses on our behalf of $ 37,000 and $ 24,000 , respectively, and for the nine months ended September 30, 2020 and 2019, our advisor incurred operating expenses on our behalf of $ 122,000 and $ 97,000 , respectively.

Operating expenses are generally included in general and administrative in our accompanying condensed consolidated statements of operations.

2 unchanged sentences

The rate of compensation for these services has to be approved by a majority of our board, including a majority of our independent directors, and cannot exceed an amount that would be paid to unaffiliated parties for similar services.

For the three and six months ended June 30, 2020 and 2019, our advisor and its affiliates were not compensated for any additional services.

For the three and nine months ended September 30, 2020 and 2019, our advisor and its affiliates were not compensated for any additional services.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Liquidity Stage

2 unchanged sentences

The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated parties, will not exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0 % of the contract sales price.

For the three and six months ended June 30, 2020 and 2019, we did not incur any disposition fees to our advisor or its affiliates.

For the three and nine months ended September 30, 2020 and 2019, we did not incur any disposition fees to our advisor or its affiliates.

Subordinated Participation Interest

5 unchanged sentences

Actual amounts to be received depend on the sale prices of properties upon liquidation.

For the three and six months ended June 30, 2020 and 2019, we did not pay any such distributions to our advisor.

For the three and nine months ended September 30, 2020 and 2019, we did not pay any such distributions to our advisor.

Subordinated Distribution Upon Listing

1 unchanged sentence

(i) the market value of our outstanding common stock at listing plus distributions paid prior to listing exceeds (ii) the sum of the total amount of capital raised from stockholders (less amounts paid to repurchase shares of our common stock pursuant to our share repurchase plan) and the amount of cash equal to an annual 6.0 % cumulative, non-compounded return on the gross proceeds from the sale of shares of our common stock through the date of listing.

Actual amounts to be received depend upon the market value of our

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outstanding stock at the time of listing, among other factors.

For the three and six months ended June 30, 2020 and 2019, we did not pay any such distributions to our advisor.

Actual amounts to be received depend upon the market value of our outstanding stock at the time of listing, among other factors.

For the three and nine months ended September 30, 2020 and 2019, we did not pay any such distributions to our advisor.

Subordinated Distribution Upon Termination

2 unchanged sentences

In addition, our advisor may elect to defer its right to receive a subordinated distribution upon termination until either a listing or other liquidity event, including a liquidation, sale of substantially all of our assets or merger in which our stockholders receive in exchange for their shares of our common stock, shares of a company that are traded on a national securities exchange.

As of June 30, 2020 and December 31, 2019, we did not have any liability related to the subordinated distribution upon termination.

As of September 30, 2020 and December 31, 2019, we did not have any liability related to the subordinated distribution upon termination.

Stock Purchase Plans

5 unchanged sentences

Peay, as well as Wendie Newman and Christopher M.

Belford, both of whom are our Vice Presidents of Asset Management, each executed similar 2018 Stock Purchase Plans whereby they each irrevocably agreed to invest a portion of their net after-tax base salary or a portion of their net after-tax base salary and cash bonus compensation, ranging from 5.0% to 15.0% , earned on or after January 1, 2018 as employees of American Healthcare Investors directly into shares of our Class I common stock.

Belford, both of whom

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were our Vice Presidents of Asset Management as of September 30, 2020, each executed similar 2018 Stock Purchase Plans whereby they each irrevocably agreed to invest a portion of their net after-tax base salary or a portion of their net after-tax base salary and cash bonus compensation, ranging from 5.0 % to 15.0 %, earned on or after January 1, 2018 as employees of American Healthcare Investors directly into shares of our Class I common stock.

The 2018 Stock Purchase Plans terminated on December 31, 2018.

2 unchanged sentences

No selling commissions, dealer manager fees (including the portion of such dealer manager fees funded by our advisor) or stockholder servicing fees were paid with respect to such sales of our Class I common stock pursuant to the 2018 Stock Purchase Plans.

For the six months ended June 30, 2019, our officers invested the following amounts and we issued the following shares of our Class I common stock pursuant to the 2018 Stock Purchase Plans:

Six Months Ended June 30, 2019

Officer’s Name

For the nine months ended September 30, 2019, our officers invested the following amounts and we issued the following shares of our Class I common stock pursuant to the 2018 Stock Purchase Plans:

Nine Months Ended September 30, 2019

Officer’s Name Title Amount Shares

Chief Executive Officer and Chairman of the Board of Directors

President and Chief Operating Officer

Danny Prosky President and Chief Operating Officer

Executive Vice President and General Counsel

5 unchanged sentences

Vice President of Asset Management

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

$ 35,000 3,448

Accounts Payable Due to Affiliates

The following amounts were outstanding to our affiliates as of June 30, 2020 and December 31, 2019:

The following amounts were outstanding to our affiliates as of September 30, 2020 and December 31, 2019:

Fee September 30,

2020 December 31,

Asset management fees $ 815,000 $ 768,000

Property management fees 128,000 145,000

Lease commissions

Construction management fees 31,000 65,000

1 unchanged sentence

Acquisition and development fees 2,000 5,000

Lease commissions — 21,000

Total $ 987,000 $ 1,016,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Fair Value Measurements

Assets and Liabilities Reported at Fair Value

The table below presents our assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 , aggregated by the level in the fair value hierarchy within which those measurements fall:

The table below presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2020, aggregated by the level in the fair value hierarchy within which those measurements fall:

Quoted Prices in

2 unchanged sentences

and Liabilities

Significant Other

(Level 1) Significant Other

Observable Inputs

(Level 2) Significant

(Level 3) Total

Derivative financial instruments $ — $ 6,687,000 $ — $ 6,687,000

4 unchanged sentences

and Liabilities

Significant Other

(Level 1) Significant Other

Observable Inputs

(Level 2) Significant

(Level 3) Total

Derivative financial instruments $ — $ 4,385,000 $ — $ 4,385,000

There were no transfers into or out of fair value measurement levels during the six months ended June 30, 2020 and 2019.

There were no transfers into or out of fair value measurement levels during the nine months ended September 30, 2020 and 2019.

Derivative Financial Instruments

6 unchanged sentences

In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Although we have determined that the majority of the inputs used to value our derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparty.

However, as of June 30, 2020 , we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

However, as of September 30, 2020, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Financial Instruments Disclosed at Fair Value

4 unchanged sentences

These financial assets and liabilities are measured at fair value on a recurring basis based on quoted prices in active markets for identical assets and liabilities, and therefore are classified as Level 1 in the fair value hierarchy.

The fair value of our mortgage loans payable and the 2018 Credit Facility is estimated using a discounted cash flow analysis using borrowing rates available to us for debt instruments with similar terms and maturities.

The fair values of our mortgage loans payable and the 2018 Credit Facility are estimated using discounted cash flow analyses using borrowing rates available to us for debt instruments with similar terms and maturities.

We have determined that our mortgage loans payable and the 2018 Credit Facility are classified in Level 2 within the fair value hierarchy as reliance is placed on inputs other than quoted prices that are observable, such as interest rates and yield curves.

The carrying amounts and estimated fair values of such financial instruments as of June 30, 2020 and December 31, 2019 were as follows:

June 30, 2020

December 31, 2019

The carrying amounts and estimated fair values of such financial instruments as of September 30, 2020 and December 31, 2019 were as follows:

September 30, 2020 December 31, 2019

Amount(1) Fair

Value Carrying

Amount(1) Fair

Financial Liabilities:

5 unchanged sentences

TRS may participate in services that would otherwise be considered impermissible for REITs and are subject to federal and state income tax at regular corporate tax rates.

On December 22, 2017, the United States government enacted comprehensive tax legislation pursuant to the Tax Cuts and Jobs Act of 2017, or the Tax Act.

The Tax Act makes broad and complex changes to the United States tax code, including, but not limited to, reducing the United States federal corporate tax rate from 35.0% to 21.0%, eliminating the corporate alternative minimum tax and changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

The Tax Act is still unclear in some respects and could be subject to potential amendments and technical corrections.

The federal income tax rules dealing with United States federal income taxation and REITs are constantly under review by persons involved in the legislative process, the IRS and the United States Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations.

As a result, the long-term impact of the Tax Act on the overall economy, government revenues, our tenants, us and the real estate industry cannot be reliably predicted at this time.

We continue to work with our tax advisors to determine the full impact that the tax legislation as a whole will have on us.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was passed into law by the federal government that contains economic stimulus provisions, including the temporary removal of limitations on the deductibility of net operating losses, or NOL, modifications to the carryback periods of NOL, modifications to the business

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

interest deduction limitations and technical corrections to the tax depreciation recovery period for qualified improvement property.

On March 27, 2020, the federal government passed the CARES Act which contains economic stimulus provisions, including the temporary removal of limitations on the deductibility of net operating losses, or NOL, modifications to the carryback periods of NOL, modifications to the business interest deduction limitations and technical corrections to the tax depreciation recovery period for qualified improvement property.

Accordingly, tax law changes within the CARES Act may impact income taxes accrued, deferred tax assets or liabilities and the associated valuation allowances included in our condensed consolidated financial statements, if any.

2 unchanged sentences

We will continue to evaluate the tax impact of the CARES Act and any guidance provided by the United States Treasury Department, the IRS and other state and local regulatory authorities to our condensed consolidated financial statements.

The components of income tax expense for the three and six months ended June 30, 2020 and 2019 were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

The components of income tax (benefit) expense for the three and nine months ended September 30, 2020 and 2019 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Federal deferred $ ( 863,000 ) $ ( 290,000 ) $ ( 2,134,000 ) $ ( 958,000 )

3 unchanged sentences

Valuation allowance 1,190,000 349,000 2,855,000 1,199,000

Total income tax expense

Total income tax (benefit) expense $ ( 39,000 ) $ 7,000 $ — $ 17,000

Current Income Tax

1 unchanged sentence

Deferred Taxes

Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating losses that may be realized in future periods depending on sufficient taxable income.

Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax NOL that may be realized in future periods depending on sufficient taxable income.

We recognize the financial statement effects of an uncertain tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities.

If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority.

As of both June 30, 2020 and December 31, 2019, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

As of both September 30, 2020 and December 31, 2019, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

A valuation allowance is established if we believe it is more likely than not that all or a portion of the deferred tax assets are not realizable.

As of both June 30, 2020 and December 31, 2019, our valuation allowance fully reserves the net deferred tax asset due to inherent uncertainty of future income.

As of both September 30, 2020 and December 31, 2019, our valuation allowance fully reserves the net deferred tax asset due to inherent uncertainty of future income.

We will continue to monitor industry and economic conditions, and our ability to generate taxable income based on our business plan and available tax planning strategies, which would allow us to utilize the tax benefits of the net deferred tax assets and thereby allow us to reverse all, or a portion of, our valuation allowance in the future.

2 unchanged sentences

We have operating leases with tenants that expire at various dates through 2040.

For the three months ended June 30, 2020 and 2019, we recognized $21,842,000 and $18,880,000 of real estate revenue, respectively, related to operating lease payments, of which $4,814,000 and $3,683,000 , respectively, was for variable lease payments.

For the six months ended June 30, 2020 and 2019, we recognized $43,305,000 and $34,027,000 of real estate revenue, respectively, related to operating lease payments, of which $9,269,000 and $6,708,000 , respectively, was for variable lease payments.

As of June 30, 2020 , the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the six months ended December 31, 2020 and for each of the next four years ending December 31 and thereafter for the properties that we wholly own:

For the three months ended September 30, 2020 and 2019, we recognized $ 21,519,000 and $ 19,253,000 of real estate revenue, respectively, related to operating lease payments, of which $ 4,592,000 and $ 3,718,000 , respectively, was for variable lease payments.

For the nine months ended September 30, 2020 and 2019, we recognized $ 64,824,000 and $ 53,280,000 of real estate revenue, respectively, related to operating lease payments, of which $ 13,861,000 and $ 10,426,000 , respectively, was for variable lease payments.

As of September 30, 2020, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the three months ended December 31, 2020 and for each of the next four years ending December 31 and thereafter for the properties that we wholly own:

2020 $ 16,049,000

2021 64,178,000

2022 61,520,000

2023 57,017,000

2024 51,410,000

Thereafter 310,613,000

$ 560,787,000

We have ground lease obligations that generally require fixed annual rental payments and may also include escalation clauses and renewal options.

2 unchanged sentences

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For the three months ended June 30, 2020 and 2019, operating lease costs were $228,000 and $174,000 , respectively, and for the six months ended June 30, 2020 and 2019, operating lease costs were $437,000 and $301,000 , respectively, which are included in rental expenses in our accompanying condensed consolidated statements of operations.

Such costs also include short-term leases and variable lease costs, which are immaterial.

For the three months ended September 30, 2020 and 2019, operating lease costs were $ 206,000 and $ 177,000 , respectively, and for the nine months ended September 30, 2020 and 2019, operating lease costs were $ 643,000 and $ 478,000 , respectively, which are included in rental expenses in our accompanying condensed consolidated statements of operations.

Such costs also include variable lease costs, which are immaterial.

Additional information related to our operating leases for the periods presented below was as follows:

September 30,

2020 December 31,

Weighted average remaining lease term (in years) 79.7 80.4

Weighted average discount rate

Six Months Ended June 30,

5.74 % 5.74 %

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of operating lease liabilities:

Operating cash outflows related to operating leases

Right-of-use assets obtained in exchange for new operating lease liabilities

$ 306,000 $ 252,000

Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 4,489,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

As of June 30, 2020 , the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the six months ended December 31, 2020 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet:

As of September 30, 2020, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the three months ended December 31, 2020 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet:

2020 $ 212,000

Thereafter 47,103,000

Total operating lease payments 49,428,000

interest 39,453,000

Present value of operating lease liabilities $ 9,975,000

Segment Reporting

As of June 30, 2020 , we evaluated our business and made resource allocations based on four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities.

As of September 30, 2020, we evaluated our business and made resource allocations based on four reportable business segments — medical office buildings, senior housing, senior housing — RIDEA and skilled nursing facilities.

Our medical office buildings are typically leased to multiple tenants under separate leases, thus requiring active management and responsibility for many of the associated operating expenses (much of which are, or can effectively be, passed through to the tenants).

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We evaluate performance based upon segment net operating income.

We define segment net operating income as total revenues, less rental expenses and property operating expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses, interest expense, income or loss from unconsolidated entity, other income and income tax expense for each segment.

We define segment net operating income as total revenues and grant income, less rental expenses and property operating expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses, interest expense, income or loss from unconsolidated entity, other income and income tax expense for each segment.

We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measurement.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Summary information for the reportable segments during the three and six months ended June 30, 2020 and 2019 was as follows:

June 30, 2020

Summary information for the reportable segments during the three and nine months ended September 30, 2020 and 2019 was as follows:

Buildings Senior

RIDEA Skilled

Facilities Senior

Housing Three Months

September 30, 2020

Revenues and grant income:

Real estate revenue $ 16,338,000 $ — $ 2,979,000 $ 2,202,000 $ 21,519,000

Resident fees and services — 18,948,000 — — 18,948,000

Total revenues

Grant income — 864,000 — — 864,000

Total revenues and grant income 16,338,000 19,812,000 2,979,000 2,202,000 41,331,000

Rental expenses 5,607,000 — 125,000 173,000 5,905,000

8 unchanged sentences

Gain in fair value of derivative financial instruments 1,450,000

Income from unconsolidated entity

Impairment of real estate investments ( 3,064,000 )

Loss from unconsolidated entity ( 377,000 )

Other income 8,000

Loss before income taxes ( 5,191,000 )

Income tax expense

Income tax benefit 39,000

Net loss $ ( 5,152,000 )

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

June 30, 2019

Buildings Senior

RIDEA Skilled

Facilities Senior

Housing Three Months

September 30, 2019

Real estate revenue $ 14,144,000 $ — $ 2,929,000 $ 2,180,000 $ 19,253,000

1 unchanged sentence

Total revenues

14,144,000 11,865,000 2,929,000 2,180,000 31,118,000

Rental expenses 4,581,000 — 135,000 213,000 4,929,000

7 unchanged sentences

Interest expense (including amortization of deferred financing costs and debt discount/premium)

( 4,140,000 )

Loss in fair value of derivative financial instruments

Income from unconsolidated entity

Loss from unconsolidated entity ( 79,000 )

Other income 13,000

Loss before income taxes ( 1,911,000 )

Income tax expense

$ ( 1,918,000 )

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

June 30, 2020

Buildings Senior

RIDEA Skilled

Facilities Senior

Housing Nine Months

September 30, 2020

Revenues and grant income:

Real estate revenue $ 49,184,000 $ — $ 8,984,000 $ 6,656,000 $ 64,824,000

Resident fees and services — 51,863,000 — — 51,863,000

Total revenues

Grant income — 864,000 — — 864,000

Total revenues and grant income 49,184,000 52,727,000 8,984,000 6,656,000 117,551,000

Rental expenses 16,616,000 — 459,000 648,000 17,723,000

7 unchanged sentences

Interest expense (including amortization of deferred financing costs and debt discount/premium)

( 15,123,000 )

Loss in fair value of derivative financial instruments ( 2,302,000 )

Impairment of real estate investments ( 3,064,000 )

Income from unconsolidated entity 952,000

Loss before income taxes

Income tax expense

$ ( 14,240,000 )

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

June 30, 2019

Buildings Senior

RIDEA Skilled

Facilities Senior

Housing Nine Months

September 30, 2019

Real estate revenue $ 38,802,000 $ — $ 8,732,000 $ 5,746,000 $ 53,280,000

1 unchanged sentence

Total revenues

38,802,000 34,053,000 8,732,000 5,746,000 87,333,000

Rental expenses 12,814,000 — 435,000 989,000 14,238,000

7 unchanged sentences

Interest expense (including amortization of deferred financing costs and debt discount/premium)

( 11,532,000 )

Loss in fair value of derivative financial instruments

( 5,401,000 )

Income from unconsolidated entity

Other income 162,000

Loss before income taxes ( 20,151,000 )

Income tax expense

Assets by reportable segment as of June 30, 2020 and December 31, 2019 were as follows:

$ ( 20,168,000 )

Assets by reportable segment as of September 30, 2020 and December 31, 2019 were as follows:

September 30,

2020 December 31,

Medical office buildings $ 590,075,000 $ 600,048,000

2 unchanged sentences

Senior housing 101,225,000 142,982,000

1,122,994,000

Other 51,999,000 54,493,000

$ 1,111,490,000 $ 1,068,327,000

5 unchanged sentences

We have cash and cash equivalents in financial institutions that are insured by the Federal Deposit Insurance Corporation, or FDIC.

As of June 30, 2020 and December 31, 2019, we had cash and cash equivalents in excess of FDIC insured limits.

As of September 30, 2020 and December 31, 2019, we had cash and cash equivalents in excess of FDIC insured limits.

We believe this risk is not significant.

1 unchanged sentence

In general, we perform credit evaluations of prospective tenants and security deposits are obtained at the time of property acquisition and upon lease execution.

Based on leases in effect as of June 30, 2020 , one state in the United States accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income.

Based on leases in effect as of September 30, 2020, one state in the United States accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized net operating income.

Our properties located in Missouri accounted for approximately 11.4 % of our total property portfolio’s annualized base rent or annualized net operating income.

Accordingly, there is a geographic concentration of risk subject to fluctuations in such state’s economy.

Based on leases in effect as of June 30, 2020 , our four reportable business segments, medical office buildings, senior housing — RIDEA, skilled nursing facilities and senior housing accounted for 61.1% , 16.0% , 13.3% and 9.6% , respectively, of our total property portfolio’s annualized base rent or annualized net operating income.

As of June 30, 2020 , we had one tenant that accounted for 10.0% or more of our total property portfolio’s annualized base rent or annualized net operating income, as follows:

Percentage of

Lease Expiration

RC Tier Properties, LLC

Missouri SNF Portfolio

Skilled Nursing

Annualized base rent is based on contractual base rent from leases in effect as of June 30, 2020 , inclusive of our senior housing — RIDEA facilities.

Based on leases in effect as of September 30, 2020, our four reportable business segments, medical office buildings, senior housing — RIDEA, skilled nursing facilities and senior housing accounted for 62.6 %, 14.0 %, 13.7 % and 9.7 %, respectively, of our total property portfolio’s annualized base rent or annualized net operating income.

As of September 30, 2020, we had one tenant that accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized net operating income, as follows:

Tenant Annualized

Base Rent(1) Percentage of

Base Rent Acquisition Reportable

(Sq Ft) Lease Expiration

RC Tier Properties, LLC $ 7,782,000 10.4 % Missouri SNF Portfolio Skilled Nursing 385,000 09/30/33

(1) Annualized base rent is based on contractual base rent from leases in effect as of September 30, 2020, inclusive of our senior housing — RIDEA facilities.

The loss of this tenant or its inability to pay rent could have a material adverse effect on our business and results of operations.

1 unchanged sentence

Basic earnings (loss) per share for all periods presented are computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of our common stock outstanding during the period.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $4,000 and $5,000 , respectively, for the three months ended June 30, 2020 and 2019 and $11,000 for both the six months ended June 30, 2020 and 2019.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $ 4,000 and $ 7,000 , respectively, for the three months ended September 30, 2020 and 2019, and $ 15,000 and $ 18,000 , respectively, for the nine months ended September 30, 2020 and 2019.

Diluted earnings (loss) per share are computed based on the weighted average number of shares of our common stock and all potentially dilutive securities, if any.

Nonvested shares of our restricted common stock and redeemable limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock.

As of June 30, 2020 and 2019 , there were 42,000 and 37,500 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during these periods.

As of June 30, 2020 and 2019, there were 208 redeemable limited partnership units of our operating partnership outstanding, but such units were excluded from the computation of diluted earnings per share because such units were anti-dilutive during these periods.

As of September 30, 2020 and 2019, there were 45,000 and 43,500 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during these periods.

As of September 30, 2020 and 2019, there were 208 redeemable limited partnership units of our operating partnership outstanding, but such units were excluded from the computation of diluted earnings per share because such units were anti-dilutive during these periods.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements