What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-15 compared with 2021-08-13 · 413 added, 304 removed, 646 unchanged (53% of the section changed)

Financial Statements.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2021 and December 31, 2020

June 30, 2021 December 31, 2020

As of September 30, 2021 and December 31, 2020

September 30, 2021 December 31, 2020

Real estate investments, net $ 907,103,000 $ 921,580,000

23 unchanged sentences

900,000,000 shares authorized;

76,069,129 and 75,690,838 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

76,069,129 and 75,690,838 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

760,000 756,000

1 unchanged sentence

100,000,000 shares authorized;

5,662,132 and 5,648,499 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

5,662,132 and 5,648,499 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

57,000 57,000

2 unchanged sentences

Total stockholders’ equity 514,798,000 548,958,000

528,885,000 548,958,000

Noncontrolling interest (Note 12) 540,000 781,000

529,462,000 549,739,000

Total equity 515,338,000 549,739,000

Total liabilities, redeemable noncontrolling interests and equity $ 1,063,896,000 $ 1,092,773,000

$ 1,075,781,000 $ 1,092,773,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

As of June 30, 2021 and December 31, 2020

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

as of June 30, 2021 and December 31, 2020 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 $ 482,900,000 and $ 476,900,000 as of June 30, 2021 and December 31, 2020, respectively, which is guaranteed by Griffin-American Healthcare REIT IV, Inc.

As of September 30, 2021 and December 31, 2020

(1) Such liabilities of American Healthcare REIT, Inc., (formerly known as Griffin-American Healthcare REIT IV, Inc.), as of September 30, 2021 and December 31, 2020 represented liabilities of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries.

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

The creditors of Griffin-American Healthcare REIT IV Holdings, LP or its consolidated subsidiaries do not have recourse against American Healthcare REIT, 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 $ 488,900,000 and $ 476,900,000 as of September 30, 2021 and December 31, 2020, respectively, which is guaranteed by American Healthcare REIT, Inc.

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

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2021 and 2020

Three Months Ended June 30, Six Months Ended June 30,

For the Three and Nine Months Ended September 30, 2021 and 2020

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

2021 2020 2021 2020

Revenues and grant income:

Real estate revenue $ 22,120,000 $ 21,519,000 $ 66,054,000 $ 64,824,000

Resident fees and services 15,090,000 18,948,000 46,179,000 51,863,000

Total revenues 37,182,000 38,676,000 75,023,000 76,220,000

Grant income — 864,000 — 864,000

Total revenues and grant income 37,210,000 41,331,000 112,233,000 117,551,000

Rental expenses 6,389,000 5,905,000 18,542,000 17,723,000

10 unchanged sentences

Gain (loss) in fair value of derivative financial instruments 1,514,000 1,450,000 4,431,000 ( 2,302,000 )

Loss on disposition of real estate investments ( 199,000 ) — ( 199,000 ) —

(Loss) income from unconsolidated entity ( 193,000 ) 1,074,000 ( 1,097,000 ) 1,329,000

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

Gain (loss) on disposition of real estate investments 15,000 — ( 184,000 ) —

Income (loss) from unconsolidated entity 70,000 ( 377,000 ) ( 1,027,000 ) 952,000

33,000 8,000 49,000 278,000

1 unchanged sentence

Loss before income taxes ( 5,898,000 ) ( 5,191,000 ) ( 13,782,000 ) ( 14,240,000 )

Income tax expense — ( 39,000 ) — ( 39,000 )

Income tax benefit — 39,000 — —

Net loss ( 5,898,000 ) ( 5,152,000 ) ( 13,782,000 ) ( 14,240,000 )

5 unchanged sentences

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

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three and Six Months Ended June 30, 2021 and 2020

Three Months Ended June 30, 2021

For the Three and Nine Months Ended September 30, 2021 and 2020

Three Months Ended September 30, 2021

Stockholders’ Equity

6 unchanged sentences

Interest Total Equity

BALANCE — March 31, 2021 81,697,347 $ 817,000 $ 736,486,000 $ ( 196,835,000 ) $ 540,468,000 $ 633,000 $ 541,101,000

Offering costs — common stock — — 2,000 — 2,000 — 2,000

Issuance of common stock under the DRIP 151,142 1,000 1,392,000 — 1,393,000 — 1,393,000

BALANCE — June 30, 2021 81,731,261 $ 817,000 $ 736,827,000 $ ( 208,759,000 ) $ 528,885,000 $ 577,000 $ 529,462,000

Amortization of nonvested common stock compensation — — 21,000 — 21,000 — 21,000

Repurchase of common stock ( 117,228 ) ( 1,000 ) ( 1,159,000 ) — ( 1,160,000 ) — ( 1,160,000 )

Distributions to noncontrolling interest — — — — — ( 7,000 ) ( 7,000 )

3 unchanged sentences

Net loss — — — ( 5,777,000 ) ( 5,777,000 ) ( 30,000 ) ( 5,807,000 ) (1)

BALANCE — June 30, 2021 81,731,261 $ 817,000 $ 736,827,000 $ ( 208,759,000 ) $ 528,885,000 $ 577,000 $ 529,462,000

Three Months Ended June 30, 2020

BALANCE — September 30, 2021 81,731,261 $ 817,000 $ 736,756,000 $ ( 222,775,000 ) $ 514,798,000 $ 540,000 $ 515,338,000

Three Months Ended September 30, 2020

Stockholders’ Equity

6 unchanged sentences

Interest Total Equity

BALANCE — March 31, 2020 80,574,630 $ 805,000 $ 726,258,000 $ ( 150,398,000 ) $ 576,665,000 $ 1,166,000 $ 577,831,000

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

8 unchanged sentences

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

BALANCE — June 30, 2020 80,599,306 $ 805,000 $ 726,516,000 $ ( 159,366,000 ) $ 567,955,000 $ 1,047,000 $ 569,002,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2021 and 2020

Six Months Ended June 30, 2021

For the Three and Nine Months Ended September 30, 2021 and 2020

Nine Months Ended September 30, 2021

Stockholders’ Equity

21 unchanged sentences

Net loss — — — ( 13,293,000 ) ( 13,293,000 ) ( 179,000 ) ( 13,472,000 ) (1)

BALANCE — June 30, 2021 81,731,261 $ 817,000 $ 736,827,000 $ ( 208,759,000 ) $ 528,885,000 $ 577,000 $ 529,462,000

Six Months Ended June 30, 2020

BALANCE — September 30, 2021 81,731,261 $ 817,000 $ 736,756,000 $ ( 222,775,000 ) $ 514,798,000 $ 540,000 $ 515,338,000

Nine Months Ended September 30, 2020

Stockholders’ Equity

18 unchanged sentences

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

BALANCE — June 30, 2020 80,599,306 $ 805,000 $ 726,516,000 $ ( 159,366,000 ) $ 567,955,000 $ 1,047,000 $ 569,002,000

(1) Amount excludes $ 79,000 and $ 122,000 for the three months ended June 30, 2021 and 2020, respectively, and $ 219,000 and $ 205,000 for the six months ended June 30, 2021 and 2020, respectively, of net loss attributable to redeemable noncontrolling interests.

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

(1) Amount excludes $ 91,000 and $ 127,000 for the three months ended September 30, 2021 and 2020, respectively, and $ 310,000 and $ 332,000 for the nine months ended September 30, 2021 and 2020, respectively, of net loss attributable to redeemable noncontrolling interests.

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

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

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2021 and 2020

Six Months Ended June 30,

For the Nine Months Ended September 30, 2021 and 2020

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

9 unchanged sentences

Change in fair value of derivative financial instruments ( 4,431,000 ) 2,302,000

Impairment of real estate investments — 3,064,000

Changes in operating assets and liabilities:

12 unchanged sentences

( 4,384,000 ) ( 6,729,000 )

Net cash provided by (used in) investing activities 475,000 ( 72,548,000 )

Net cash used in investing activities ( 1,573,000 ) ( 74,761,000 )

CASH FLOWS FROM FINANCING ACTIVITIES

6 unchanged sentences

Deferred financing costs

( 382,000 ) ( 43,000 )

Payment of offering costs

15 unchanged sentences

CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period $ 17,169,000 $ 23,396,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Six Months Ended June 30, 2021 and 2020

Six Months Ended June 30,

For the Nine Months Ended September 30, 2021 and 2020

Nine Months Ended September 30,

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

33 unchanged sentences

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

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Six Months Ended June 30, 2021 and 2020

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

For the Three and Nine Months Ended September 30, 2021 and 2020

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

(formerly known as Griffin-American Healthcare REIT IV, Inc.

) and its subsidiaries, including Griffin-American Healthcare REIT IV Holdings, LP, except where otherwise noted.

Organization and Description of Business

Griffin-American Healthcare REIT IV, Inc., a Maryland corporation, invests in a diversified portfolio of healthcare real estate properties, focusing primarily on medical office buildings, skilled nursing facilities and senior housing facilities that produce current income.

American Healthcare REIT, Inc.

(formerly known as Griffin-American Healthcare REIT IV, Inc.), a Maryland corporation, invests in a diversified portfolio of healthcare real estate properties, focusing primarily on medical office buildings, skilled nursing facilities and senior housing facilities that produce current income.

We also operate healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code of 1986, as amended, or the Code, authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008).

4 unchanged sentences

On March 18, 2021, our board of directors, or our board, authorized the suspension of the DRIP, effective as of April 1, 2021.

As of June 30, 2021, a total of $ 46,970,000 in distributions were reinvested that resulted in 4,923,550 shares of our common stock being issued pursuant to the 2019 DRIP Offering.

As of September 30, 2021, a total of $ 46,970,000 in distributions were reinvested that resulted in 4,923,550 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.

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

We conduct substantially all of our operations through Griffin-American Healthcare REIT IV Holdings, LP, or our operating partnership.

We are externally advised by Griffin-American Healthcare REIT IV Advisor, LLC, or our advisor, pursuant to an advisory agreement, as amended, or the Advisory Agreement, between us, our operating partnership and our advisor.

On October 4, 2021, our board authorized the reinstatement of the DRIP.

See Note 20, Subsequent Events — Reinstatement of the DRIP, for a further discussion.

Until October 1, 2021, we conducted substantially all of our operations through Griffin-American Healthcare REIT IV Holdings, LP, or our operating partnership.

Through September 30, 2021, we were externally advised by Griffin-American Healthcare REIT IV Advisor, LLC, or our advisor, pursuant to an advisory agreement, as amended, or the Advisory Agreement, between us, our operating partnership and our advisor.

The Advisory Agreement was effective as of February 16, 2016 and had a one-year initial term, subject to successive one-year renewals upon the mutual consent of the parties.

The Advisory Agreement was last renewed pursuant to the mutual consent of the parties on February 11, 2021 and expires on February 16, 2022.

Our advisor uses its best efforts, subject to the oversight and review of our board, to, among other things, provide asset management, property management, acquisition, disposition and other advisory services on our behalf consistent with our investment policies and objectives.

Our advisor performs its duties and responsibilities under the Advisory Agreement as our fiduciary.

Our advisor is 75.0 % owned and managed by wholly owned subsidiaries of American Healthcare Investors, LLC, or American Healthcare Investors, and 25.0 % owned by a wholly owned subsidiary of Griffin Capital Company, LLC, or Griffin Capital, or collectively, our co-sponsors.

American Healthcare Investors is 47.1 % owned by AHI Group Holdings, LLC, or AHI Group Holdings, 45.1 % indirectly owned by Digital Bridge Group, Inc.

The Advisory Agreement was last renewed pursuant to the mutual consent of the parties on February 11, 2021.

On June 23, 2021, in anticipation of the Merger, as defined and discussed below, we entered into an amendment to the Advisory Agreement, whereby it was agreed that any acquisition fee due to our advisor is to be waived in connection with the REIT Merger, as defined and discussed below.

Except as set forth in such amendment to the Advisory Agreement, the terms of the Advisory Agreement continued in full force and effect.

Our advisor used its best efforts, subject to the oversight and review of our board, to, among other things, provide asset management, property management, acquisition, disposition and other advisory services on our behalf consistent with our investment policies and objectives.

Our advisor performed its duties and responsibilities under the Advisory Agreement as our fiduciary.

Prior to the Merger, our advisor was 75.0 % owned and managed by wholly owned subsidiaries of American Healthcare Investors, LLC, or American Healthcare Investors, and 25.0 % owned by a wholly owned subsidiary of Griffin Capital Company, LLC, or Griffin Capital, or collectively, our co-sponsors.

American Healthcare Investors was 47.1 % owned by AHI Group Holdings, LLC, or AHI Group Holdings, 45.1 % indirectly owned by Digital Bridge Group, Inc.

DBRG) (formerly known as Colony Capital, Inc.), or Digital Bridge, and 7.8 % owned by James F.

Flaherty III, a former partner of Colony Capital, Inc.

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

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

We currently operate through four reportable business segments:

We were not affiliated with Griffin Capital, Griffin Capital Securities, LLC, or our dealer manager, Digital Bridge or Mr.

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

Please see the “Merger with Griffin-American Healthcare REIT III, Inc.” and “AHI Acquisition” sections below for a further discussion of our operations effective October 1, 2021.

We operate through four reportable business segments:

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

As of June 30, 2021, we owned 87 properties, comprising 92 buildings, or approximately 4,799,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 1,080,381,000 .

As of June 30, 2021, we also owned a 6.0 % interest in a joint venture which owns a portfolio of integrated senior health campuses and ancillary businesses.

Due to the ongoing coronavirus, or COVID-19, pandemic in the United States and globally, since March 2020, our residents, tenants, operating partners and managers have been materially impacted, and the prolonged economic impact remains uncertain.

As of September 30, 2021, we owned 87 properties, comprising 92 buildings, or approximately 4,799,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 1,080,381,000 .

As of September 30, 2021, we also owned a 6.0 % interest in a joint venture which owned a portfolio of integrated senior health campuses and ancillary businesses.

AMERICAN HEALTHCARE REIT, INC.

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

As the COVID-19 pandemic is still impacting the healthcare system to a degree, it continues to present challenges for us as an owner and operator of healthcare facilities.

Since its outset, the impacts of the COVID-19 pandemic have been significant, rapidly and continuously evolving and may continue into the future, making it difficult to ascertain the long-term impact it will have on real estate markets in which we own and/or operate properties and our portfolio of investments.

We have evaluated the impacts of the COVID-19 pandemic on our business thus far and incorporated information concerning the impact of COVID-19 into our assessments of liquidity, impairment and collectability from tenants and residents as of June 30, 2021.

Since its outset, the impacts of the COVID-19 pandemic have been significant, rapidly and continuously evolving and may continue into the future, especially due to the emergence of the Delta variant which has caused COVID-19 cases and deaths to increase significantly in recent months, making it difficult to ascertain the long-term impact the COVID-19 pandemic will have on real estate markets in which we own and/or operate properties and our portfolio of investments.

We will continue to monitor such impacts and will adjust our estimates and assumptions based on the best available information.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

Proposed Merger with Griffin-American Healthcare REIT III, Inc.

In October 2020, our board established a special committee of our board, or our special committee, which consists of all of our independent directors, to investigate and analyze strategic alternatives, including but not limited to, the sale of our assets, a listing of our shares on a national securities exchange, or a merger with another entity, including a merger with another unlisted entity that we expect would enhance our value.

On June 23, 2021, we, our operating partnership, our wholly owned subsidiary, Continental Merger Sub, LLC, or merger sub, and Griffin-American Healthcare REIT III, Inc., or GAHR III, and its subsidiary Griffin-American Healthcare REIT III Holdings, LP, or GAHR III operating partnership, entered into an Agreement and Plan of Merger, or the Merger Agreement.

Subject to the terms and conditions of the Merger Agreement, (i) GAHR III will be merged with and into merger sub, with merger sub being the surviving company, or the REIT Merger, and (ii) our operating partnership will be merged with and into GAHR III operating partnership, with GAHR III operating partnership being the surviving partnership and being renamed “American Healthcare REIT Holdings, LP”, or the Partnership Merger, and, together with the REIT Merger, the Merger.

At the effective time of the REIT Merger, each issued and outstanding share of GAHR III’s common stock, $ 0.01 par value per share, will be converted into the right to receive 0.9266 of a share of our Class I common stock, $ 0.01 par value per share.

Further, at the effective time of the Partnership Merger, (i) each unit of limited partnership interest in GAHR III operating partnership outstanding as of immediately prior to the effective time of the Partnership Merger will be converted automatically into the right to receive 0.9266 of a Partnership Class I Unit, as defined in the agreement of limited partnership of the surviving partnership and (ii) each unit of limited partnership interest in our operating partnership outstanding as of immediately prior to the effective time of the Partnership Merger will be converted automatically into the right to receive one unit of limited partnership interest of the surviving partnership of like class.

Following the Merger, we (as combined with GAHR III, or the Combined Company) will be named “American Healthcare REIT, Inc.” The REIT Merger is intended to qualify as a “reorganization” under, and within the meaning of, Section 368(a) of the Internal Revenue Code of 1986, as amended.

The Merger Agreement may be terminated by either us or GAHR III under certain circumstances, including but not limited to (in each case, with the prior approval of the special committee of the respective board of directors) (i) if the REIT Merger has not been consummated on or before 11:59 p.m.

New York time on March 23, 2022;

(ii) if the approval of the Merger by our stockholders or the stockholders of GAHR III is not obtained;

or (iii) upon a material uncured breach of the respective obligations, covenants or agreements by the other party that would cause the closing conditions in the Merger Agreement not to be satisfied.

The consummation of the Merger and the AHI Acquisition (as defined below) is subject to substantial conditions to closing and is not expected to close until the fourth quarter of 2021;

therefore, our accompanying condensed consolidated financial statements do not include the Merger or the AHI Acquisition.

If the Merger Agreement is terminated in connection with GAHR III’s acceptance of a Superior Proposal, as defined in the Merger Agreement, or due to GAHR III making a GAHR III Adverse Recommendation Change, as defined in the Merger Agreement, then GAHR III must pay us a termination fee of $ 50,654,000 and reimburse up to $ 4,000,000 of documented expenses incurred by us in connection with the Merger.

If the Merger Agreement is terminated in connection with our acceptance of a Superior Proposal or due to us making a GAHR IV Adverse Recommendation Change, as defined in the Merger Agreement, then we must pay to GAHR III a termination fee of $ 23,028,000 and reimburse up to $ 4,000,000 of documented expenses incurred by GAHR III in connection with the Merger.

The parties to the Merger Agreement have agreed to certain limits on the conduct of their businesses between the signing of the Merger Agreement and the closing of the Merger.

Generally, transactions that are not in the ordinary course of business require the consent of the other party.

Also on June 23, 2021, GAHR III, GAHR III operating partnership, our co-sponsors, Platform Healthcare Investor T-II, LLC, Flaherty Trust, Jeffrey T.

Hanson, our Chief Executive Officer and Chairman of the Board of Directors, Danny Prosky, our President and Chief Operating Officer, and Mathieu B.

Streiff, our Executive Vice President, General Counsel, entered into a contribution and exchange agreement, or the Contribution Agreement, pursuant to which, among other things, GAHR III has agreed to acquire a newly formed entity, or the AHI Acquisition, that will own substantially all of the business and operations of one of our co-sponsors, American Healthcare Investors, as well as all of the equity interests in (i) Griffin-American Healthcare REIT III Advisor, LLC, a subsidiary of American Healthcare Investors that serves as the external advisor of GAHR III, and (ii) our advisor, such that GAHR III will become self-managed and (if the Merger does not occur) we will become indirectly managed by GAHR III.

The AHI Acquisition is expected to close immediately prior to the consummation of the Merger.

Following the consummation of the Merger, assuming the AHI Acquisition is consummated, the Combined Company will be an entirely self-managed company.

The Merger is not subject to the consummation of the AHI Acquisition, such that the Merger may occur even if the AHI Acquisition does not.

The parties to the Contribution Agreement also may elect to proceed with the AHI Acquisition even if the Merger is not consummated.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

In addition, on June 23, 2021, in connection with the Merger, we amended the Advisory Agreement with our advisor, such that our advisor agreed to waive any acquisition fee due in connection with the REIT Merger.

Except as set forth in such amendment to the Advisory Agreement, the terms of the Advisory Agreement shall continue in full force and effect.

Merger with Griffin-American Healthcare REIT III, Inc.

On June 23, 2021, we, our operating partnership, our wholly owned subsidiary, Continental Merger Sub, LLC, or merger sub, Griffin-American Healthcare REIT III, Inc., or GAHR III, and American Healthcare REIT Holdings, LP (formerly known as Griffin-American Healthcare REIT III Holdings, LP), or the surviving partnership, entered into an Agreement and Plan of Merger, or the Merger Agreement.

On October 1, 2021, pursuant to the Merger Agreement, (i) GAHR III merged with and into merger sub, with merger sub being the surviving company, or the REIT Merger, and (ii) our operating partnership merged with and into the surviving partnership, with the surviving partnership being the surviving entity and being renamed American Healthcare REIT Holdings, LP, or the Partnership Merger, and, together with the REIT Merger, the Merger.

As a result of and at the effective time of the Merger, the separate corporate existence of GAHR III and our operating partnership ceased.

Following the Merger, our company, combined with GAHR III, or the Combined Company, was renamed “American Healthcare REIT, Inc.” The REIT Merger is intended to qualify as a “reorganization” under, and within the meaning of, Section 368(a) of the Code.

AHI Acquisition

Also on June 23, 2021, the surviving partnership, our co-sponsors, Platform Healthcare Investor T-II, LLC, Flaherty Trust, Jeffrey T.

Hanson, our former Chief Executive Officer and Chairman of the Board of Directors, Danny Prosky, our President and former Chief Operating Officer, and Mathieu B.

Streiff, our former Executive Vice President, General Counsel, entered into a contribution and exchange agreement, or the Contribution Agreement, pursuant to which, among other things, the surviving partnership agreed to acquire a newly formed entity, or NewCo, which we refer to as the AHI Acquisition, that owned substantially all of the business and operations of one of our co-sponsors, American Healthcare Investors, as well as all of the equity interests in (i) Griffin-American Healthcare REIT III Advisor, LLC, or GAHR III Advisor, a subsidiary of American Healthcare Investors that served as the external advisor of GAHR III, and (ii) our advisor.

On October 1, 2021, the AHI Acquisition closed immediately prior to the consummation of the Merger.

Following the consummation of the Merger, the Combined Company has become a self-managed company.

The AHI Acquisition will be treated as a business combination for accounting purposes, with GAHR III as both the legal and accounting acquiror of NewCo.

While we are the legal acquiror of GAHR III in the REIT Merger, GAHR III was determined to be the accounting acquiror in the REIT Merger transaction in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations , after considering the relative share ownership and the composition of the governing body of the Combined Company.

As a result of the completion of the Merger and the AHI Acquisition, the historical information regarding our company’s structure, agreements and financial information presented within this Note 1 and throughout the rest of the Notes to Condensed Consolidated Financial Statements has materially changed;

however, such information did apply to us as of September 30, 2021.

See Note 20, Subsequent Events — Merger with Griffin-American Healthcare REIT III, Inc.

and AHI Acquisition, for a further discussion about the Merger and the AHI Acquisition.

Summary of Significant Accounting Policies

4 unchanged sentences

Our accompanying condensed consolidated financial statements include our accounts and those of our operating partnership, the wholly owned subsidiaries of our operating partnership and all non-wholly owned subsidiaries in which we have control, as well as any VIEs in which we are the primary beneficiary.

The portion of equity in any subsidiary that is not wholly-owned by us is presented in our accompanying condensed consolidated financial statements as noncontrolling interest.

The portion of equity in any subsidiary that is not

AMERICAN HEALTHCARE REIT, INC.

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

wholly-owned by us is presented in our accompanying condensed consolidated financial statements as noncontrolling interest.

We evaluate our ability to control an entity, and whether the entity is a VIE and we are the primary beneficiary, by considering substantive terms of the arrangement and identifying which enterprise has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance.

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 both June 30, 2021 and December 31, 2020, we owned greater than a 99.99 % general partnership interest therein.

Our advisor is a limited partner, and as of both June 30, 2021 and December 31, 2020, 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, 2021 and December 31, 2020, we owned greater than a 99.99 % general partnership interest therein.

Our advisor was a limited partner, and as of both September 30, 2021 and December 31, 2020, 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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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, revenues, allowance for credit losses, impairment of long-lived and intangible assets and contingencies.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

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 and intangible 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.

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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,

Three Months Ended September 30,

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

Senior housing — RIDEA $ 150,000 $ 14,940,000 $ 15,090,000 $ 174,000 $ 18,774,000 $ 18,948,000

Six Months Ended June 30,

AMERICAN HEALTHCARE REIT, INC.

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

Nine Months Ended September 30,

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

1 unchanged sentence

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,

2021 2020 2021 2020

10 unchanged sentences

$ 1,123,000 $ 358,000 $ 1,481,000

Ending balance — June 30, 2021

Ending balance — September 30, 2021

257,000 900,000 1,157,000

Decrease $ ( 422,000 ) $ ( 24,000 ) $ ( 446,000 )

(Decrease)/increase $ ( 866,000 ) $ 542,000 $ ( 324,000 )

Tenant and Resident Receivables and Allowances

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Tenant receivables, which are related to real estate revenue, 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.

As of June 30, 2021 and December 31, 2020, we had $ 2,238,000 and $ 2,086,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the six months ended June 30, 2021 and 2020, we increased allowances by $ 563,000 and $ 541,000 , respectively, and reduced allowances for collections or

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

adjustments by $ 55,000 and $ 74,000 , respectively.

For the six months ended June 30, 2021 and 2020, $ 356,000 and $ 39,000 , respectively, of our receivables were written off against the related allowances.

As of September 30, 2021 and December 31, 2020, we had $ 2,219,000 and $ 2,086,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the nine months ended September 30, 2021 and 2020, we increased allowances by $ 839,000 and $ 937,000 , respectively, and reduced allowances for collections or adjustments by $ 350,000 and $ 126,000 , respectively.

For the nine months ended September 30, 2021 and 2020, $ 356,000 and $ 60,000 , respectively, of our receivables were written off against the related allowances.

Real Estate Investments, Net

Our real estate investments, net consisted of the following as of June 30, 2021 and December 31, 2020:

Our real estate investments, net consisted of the following as of September 30, 2021 and December 31, 2020:

September 30,

2021 December 31,

5 unchanged sentences

Total $ 907,103,000 $ 921,580,000

Depreciation expense for the three months ended June 30, 2021 and 2020 was $ 7,930,000 and $ 7,893,000 , respectively, and for the six months ended June 30, 2021 and 2020 was $ 15,844,000 and $ 15,732,000 , respectively.

In addition to the property acquisition transaction discussed below, for the three and six months ended June 30, 2021, we incurred capital expenditures of $ 2,140,000 and $ 2,916,000 , respectively, for our medical office buildings and $ 743,000 and $ 1,058,000 , respectively, for our senior housing — RIDEA facilities.

We did no t incur any capital expenditures for our skilled nursing and senior housing facilities during the three and six months ended June 30, 2021.

AMERICAN HEALTHCARE REIT, INC.

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

Depreciation expense for the three months ended September 30, 2021 and 2020 was $ 8,181,000 and $ 7,966,000 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 24,025,000 and $ 23,698,000 , respectively.

For the three and nine months ended September 30, 2021, we incurred capital expenditures of $ 1,959,000 and $ 4,875,000 , respectively, for our medical office buildings, $ 827,000 and $ 1,885,000 , respectively, for our senior housing — RIDEA facilities and $ 31,000 and $ 31,000 , respectively, for our skilled nursing facilities.

We did no t incur any capital expenditures for our senior housing facilities during the three and nine months ended September 30, 2021.

On February 12, 2021, we acquired a previously unowned unit within one of our buildings at our existing Athens MOB Portfolio, originally purchased in May 2017, for a contract purchase price of $ 2,950,000 .

1 unchanged sentence

We acquired such unit using cash on hand and borrowed $ 2,000,000 under the 2018 Credit Facility, as defined in Note 7, Line of Credit and Term Loans, at the time of acquisition.

We accounted for our acquisition completed during the six months ended June 30, 2021 as an asset acquisition.

We accounted for our acquisition completed during the nine months ended September 30, 2021 as an asset acquisition.

We incurred and capitalized the base acquisition fee and direct acquisition related expenses of $ 94,000 .

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Our advisor did not receive any additional securities, shares of our stock or any other form of consideration or any repayment as a result of the waiver of such disposition fee and expense reimbursements.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

Identified Intangible Assets, Net

Identified intangible assets, net consisted of the following as of June 30, 2021 and December 31, 2020:

Identified intangible assets, net consisted of the following as of September 30, 2021 and December 31, 2020:

September 30,

2021 December 31,

Amortized intangible assets:

In-place leases, net of accumulated amortization of $ 28,793,000 and $ 32,134,000 as of June 30, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 8.9 years and 8.8 years as of June 30, 2021 and December 31, 2020, respectively)

In-place leases, net of accumulated amortization of $ 30,663,000 and $ 32,134,000 as of September 30, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 8.8 years as of both September 30, 2021 and December 31, 2020)

$ 52,112,000 $ 61,166,000

Above-market leases, net of accumulated amortization of $ 1,156,000 and $ 1,009,000 as of June 30, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 8.7 years and 9.1 years as of June 30, 2021 and December 31, 2020, respectively)

Above-market leases, net of accumulated amortization of $ 1,252,000 and $ 1,009,000 as of September 30, 2021 and December 31, 2020, respectively (with a weighted average remaining life of 8.5 years and 9.1 years as of September 30, 2021 and December 31, 2020, respectively)

2,292,000 2,587,000

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Total $ 54,752,000 $ 64,101,000

Amortization expense on identified intangible assets for the three months ended June 30, 2021 and 2020 was $ 2,654,000 and $ 4,877,000 , respectively, which included $ 98,000 and $ 110,000 , respectively, of amortization recorded as a decrease to 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, 2021 and 2020 was $ 7,137,000 and $ 9,633,000 , respectively, which included $ 199,000 and $ 220,000 , respectively, of amortization recorded as a decrease to 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 8.9 years and 8.8 years as of June 30, 2021 and December 31, 2020, respectively.

As of June 30, 2021, estimated amortization expense on the identified intangible assets for the six months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter was as follows:

Amortization expense on identified intangible assets for the three months ended September 30, 2021 and 2020 was $ 2,358,000 and $ 4,728,000 , respectively, which included $ 97,000 and $ 109,000 , respectively, of amortization recorded as a decrease to 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, 2021 and 2020 was $ 9,495,000 and $ 14,361,000 , respectively, which included $ 296,000 and $ 329,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations.

AMERICAN HEALTHCARE REIT, INC.

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

The aggregate weighted average remaining life of the identified intangible assets was 8.8 years as of both September 30, 2021 and December 31, 2020.

As of September 30, 2021, estimated amortization expense on the identified intangible assets for the three months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter was as follows:

2021 $ 2,396,000

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Total $ 54,404,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

Other Assets, Net

Other assets, net consisted of the following as of June 30, 2021 and December 31, 2020:

Other assets, net consisted of the following as of September 30, 2021 and December 31, 2020:

September 30,

2021 December 31,

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Prepaid expenses, deposits and other assets 3,939,000 9,028,000

Lease commissions, net of accumulated amortization of $ 585,000 and $ 426,000 as of June 30, 2021 and December 31, 2020, respectively

Lease commissions, net of accumulated amortization of $ 687,000 and $ 426,000 as of September 30, 2021 and December 31, 2020, respectively

3,763,000 2,399,000

Deferred financing costs, net of accumulated amortization of $ 4,338,000 and $ 3,397,000 as of June 30, 2021 and December 31, 2020, respectively(1)

Deferred financing costs, net of accumulated amortization of $ 4,808,000 and $ 3,397,000 as of September 30, 2021 and December 31, 2020, respectively(1)

313,000 1,724,000

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

Amortization expense on deferred financing costs of our line of credit and term loans for the three months ended June 30, 2021 and 2020 was $ 471,000 and $ 470,000 , respectively, and for the six months ended June 30, 2021 and 2020 was $ 941,000 and $ 939,000 , respectively, which is recorded to interest expense in our accompanying condensed consolidated statements of operations.

Amortization expense on deferred financing costs of our line of credit and term loans for the three months ended September 30, 2021 and 2020 was $ 470,000 and $ 471,000 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 1,411,000 and $ 1,410,000 , respectively, which is recorded to interest expense in our accompanying condensed consolidated statements of operations.

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

Investment in unconsolidated entity represents our interest in Trilogy REIT Holdings, LLC, or Trilogy, pursuant to an amended joint venture agreement with an indirect, wholly-owned subsidiary of NorthStar Healthcare Income, Inc.

and a wholly-owned subsidiary of GAHR III operating partnership.

and a wholly-owned subsidiary of the surviving partnership.

Trilogy owns a portfolio of integrated senior health campuses and ancillary businesses.

As of June 30, 2021 and December 31, 2020, we owned a 6.0 % interest in such joint venture and the unamortized basis difference of our investment in Trilogy of $ 16,562,000 and $ 16,791,000 , respectively, is primarily attributable to the difference between the amount for which we purchased our interest in such joint venture, including transaction costs, and the historical carrying value of the net assets of such joint venture.

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.

The following is summarized financial information of Trilogy:

2021 December 31,

Balance Sheet Data:

Total assets $ 1,862,179,000 $ 1,882,584,000

Total liabilities $ 1,325,497,000 $ 1,329,832,000

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Statements of Operations Data:

Revenues $ 255,815,000 $ 232,831,000 $ 489,042,000 $ 500,626,000

Grant income 898,000 29,990,000 9,127,000 29,990,000

Expenses 258,065,000 242,311,000 513,159,000 503,748,000

Net (loss) income $ ( 1,352,000 ) $ 20,510,000 $ ( 14,990,000 ) $ 26,868,000

Proportional net (loss) income $ ( 79,000 ) $ 1,188,000 $ ( 869,000 ) $ 1,557,000

Amortization of basis difference ( 114,000 ) ( 114,000 ) ( 228,000 ) ( 228,000 )

(Loss) income from unconsolidated entity $ ( 193,000 ) $ 1,074,000 $ ( 1,097,000 ) $ 1,329,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

As of September 30, 2021 and December 31, 2020, we owned a 6.0 % interest in such joint venture and the unamortized basis difference of our investment in Trilogy of $ 16,448,000 and $ 16,791,000 , respectively, was primarily attributable to the difference between the amount for which we purchased our interest in such joint venture, including transaction costs, and the historical carrying value of the net assets of such joint venture.

This difference was 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.

AMERICAN HEALTHCARE REIT, INC.

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

Mortgage Loans Payable, Net

As of June 30, 2021 and December 31, 2020, mortgage loans payable were $ 18,474,000 ($ 17,572,000 , net of discount/premium and deferred financing costs) and $ 18,766,000 ($ 17,827,000 , net of discount/premium and deferred financing costs), respectively.

As of June 30, 2021, 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 3.92 %.

As of September 30, 2021 and December 31, 2020, mortgage loans payable were $ 18,291,000 ($ 17,409,000 , net of discount/premium and deferred financing costs) and $ 18,766,000 ($ 17,827,000 , net of discount/premium and deferred financing costs), respectively.

As of September 30, 2021, 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 3.91 %.

As of December 31, 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 3.93 %.

1 unchanged sentence

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, 2021 and 2020:

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, 2021 and 2020:

Nine Months Ended September 30,

Beginning balance $ 17,827,000 $ 26,070,000

6 unchanged sentences

Ending balance $ 17,409,000 $ 17,974,000

As of June 30, 2021, the principal payments due on our mortgage loans payable for the six months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter were as follows:

As of September 30, 2021, the principal payments due on our mortgage loans payable for the three months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter were as follows:

2021 $ 132,000

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Line of Credit and Term Loans

We, through our operating partnership, as borrower, entered into a credit agreement, or the 2018 Credit Agreement, as amended, with Bank of America, N.A.;

KeyBank, National Association;

We, through our operating partnership, as borrower, entered into a credit agreement, or the 2018 Credit Agreement, as amended, with Bank of America, N.A., or Bank of America;

KeyBank, National Association, or KeyBank;

Citizens Bank, National Association;

Merrill Lynch, Pierce, Fenner & Smith Incorporated;

KeyBanc Capital Markets;

KeyBanc Capital Markets, Inc., or KeyBanc Capital Markets;

and the lenders named therein, to obtain a credit facility with an aggregate maximum principal amount of $ 530,000,000 , or the 2018 Credit Facility.

1 unchanged sentence

The maximum principal amount of the 2018 Credit Facility may be increased by up to $ 120,000,000 , for a total principal amount of $ 650,000,000 , subject to certain conditions.

The 2018 Credit Facility matures on November 19, 2021 and may be extended for one 12 -month period during the term of the related credit agreement, as amended, subject to satisfaction of certain conditions, including payment of an extension fee.

At our option, the 2018 Credit Facility bears interest at per annum rates equal to (a)(i) the Eurodollar Rate, as defined in the 2018 Credit Agreement, as amended, plus (ii) a margin ranging from 1.70 % to 2.20 % based on our Consolidated Leverage Ratio, as defined in the 2018 Credit Agreement, as amended, or (b)(i) the greater of:

(1) the prime rate publicly announced by Bank of America, N.A., (2) the Federal Funds Rate, as defined in the 2018 Credit Agreement, as amended, plus 0.50 %, (3) the one-month Eurodollar Rate plus 1.00 %, and (4) 0.00 %, plus (ii) a margin ranging from 0.70 % to 1.20 % based on our Consolidated Leverage Ratio.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

The 2018 Credit Facility matures on November 19, 2021 and we intend to extend the maturity for one 12 -month period pursuant to the terms of the 2018 Credit Agreement, as amended, subject to the satisfaction of certain conditions, including payment of an extension fee.

AMERICAN HEALTHCARE REIT, INC.

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

As of both June 30, 2021 and December 31, 2020, our aggregate borrowing capacity under the 2018 Credit Facility was $ 530,000,000 .

As of June 30, 2021 and December 31, 2020, borrowings outstanding totaled $ 482,900,000 and $ 476,900,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 2.25 % and 2.12 %, respectively, per annum.

(1) the prime rate publicly announced by Bank of America (2) the Federal Funds Rate, as defined in the 2018 Credit Agreement, as amended, plus 0.50 %, (3) the one-month Eurodollar Rate plus 1.00 %, and (4) 0.00 %, plus (ii) a margin ranging from 0.70 % to 1.20 % based on our Consolidated Leverage Ratio.

As of both September 30, 2021 and December 31, 2020, our aggregate borrowing capacity under the 2018 Credit Facility was $ 530,000,000 .

As of September 30, 2021 and December 31, 2020, borrowings outstanding totaled $ 488,900,000 and $ 476,900,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 2.05 % and 2.12 %, respectively, per annum.

On October 1, 2021, we entered into a Second Amendment to the 2018 Credit Agreement, or the Amendment.

See Note 20, Subsequent Events — Lines of Credit and Term Loans — Amendment to 2018 Credit Facility, for a further discussion.

Derivative Financial Instruments

We use derivative financial instruments to manage interest rate risk associated with our variable-rate term loans and we record such 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, 2021 and December 31, 2020, 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 June 30,

The following table lists the derivative financial instruments held by us as of September 30, 2021 and December 31, 2020, 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,

2021 December 31,

5 unchanged sentences

$ 295,000,000 $ ( 824,000 ) $ ( 5,255,000 )

As of both June 30, 2021 and December 31, 2020, none of our derivative financial instruments were designated as hedges.

For the three months ended June 30, 2021 and 2020, we recorded $ 1,462,000 and $ 853,000 , respectively, and for the six months ended June 30, 2021 and 2020, we recorded $ 2,917,000 and $( 3,752,000 ), 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.

As of both September 30, 2021 and December 31, 2020, none of our derivative financial instruments were designated as hedges.

For the three months ended September 30, 2021 and 2020, we recorded $ 1,514,000 and $ 1,450,000 , respectively, and for the nine months ended September 30, 2021 and 2020, we recorded $ 4,431,000 and $( 2,302,000 ), 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.

Identified Intangible Liabilities, Net

As of June 30, 2021 and December 31, 2020, identified intangible liabilities, net consisted of below-market leases of $ 1,174,000 and $ 1,295,000 , respectively, net of accumulated amortization of $ 730,000 and $ 608,000 , respectively.

Amortization expense on below-market leases for the three months ended June 30, 2021 and 2020 was $ 61,000 and $ 69,000 , respectively, and for the six months ended June 30, 2021 and 2020 was $ 122,000 and $ 161,000 , respectively, which was recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations.

The weighted average remaining life of below-market leases was 11.9 years and 11.6 years as of June 30, 2021 and December 31, 2020, respectively.

As of June 30, 2021, estimated amortization expense on below-market leases for the six months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter was as follows:

As of September 30, 2021 and December 31, 2020, identified intangible liabilities, net consisted of below-market leases of $ 1,115,000 and $ 1,295,000 , respectively, net of accumulated amortization of $ 730,000 and $ 608,000 , respectively.

Amortization expense on below-market leases for the three months ended September 30, 2021 and 2020 was $ 59,000 and $ 78,000 , respectively, and for the nine months ended September 30, 2021 and 2020 was $ 181,000 and $ 239,000 , respectively, which was recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations.

AMERICAN HEALTHCARE REIT, INC.

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

The weighted average remaining life of below-market leases was 12.0 years and 11.6 years as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, estimated amortization expense on below-market leases for the three months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter was as follows:

2021 $ 55,000

1 unchanged sentence

Total $ 1,115,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

Commitments and Contingencies

7 unchanged sentences

Redeemable Noncontrolling Interests

As of both June 30, 2021 and December 31, 2020, our advisor owned all of the 208 limited partnership units outstanding in our operating partnership.

As of both June 30, 2021 and December 31, 2020, 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.

The noncontrolling interest of our advisor in our operating partnership, which has redemption features outside of our control, is accounted for as a redeemable noncontrolling interest and is presented outside of permanent equity in our accompanying condensed consolidated balance sheets.

As of both September 30, 2021 and December 31, 2020, our advisor owned all of the 208 limited partnership units outstanding in our operating partnership.

As of both September 30, 2021 and December 31, 2020, 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 was entitled to special redemption rights of its limited partnership units.

The noncontrolling interest of our advisor in our operating partnership, which had redemption features outside of our control, was accounted for as a redeemable noncontrolling interest and was presented outside of permanent equity in our accompanying condensed consolidated balance sheets as of both September 30, 2021 and December 31, 2020.

In connection with the AHI Acquisition, on October 1, 2021, GAHR III redeemed all 208 limited partnership units in our operating partnership owned by our advisor for approximately $ 2,000 .

In connection with our acquisitions of Central Florida Senior Housing Portfolio, Pinnacle Beaumont ALF and Pinnacle Warrenton ALF, we own approximately 98.0 % of the joint ventures with an affiliate of Meridian Senior Living, LLC, or Meridian.

1 unchanged sentence

The noncontrolling interests held by Meridian and Avalon have redemption features outside of our control and are accounted for as redeemable noncontrolling interests in our accompanying condensed consolidated balance sheets.

AMERICAN HEALTHCARE REIT, INC.

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

We record the carrying amount of redeemable noncontrolling interests at the greater of:

1 unchanged sentence

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, 2021 and 2020:

Six Months Ended June 30,

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

Beginning balance $ 2,618,000 $ 1,462,000

4 unchanged sentences

Ending balance $ 2,592,000 $ 2,697,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

Preferred Stock

Pursuant to our Third Articles of Amendment and Restatement, as supplemented, or our charter, we are authorized to issue 200,000,000 shares of our preferred stock, par value $ 0.01 per share.

As of both June 30, 2021 and December 31, 2020, 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.

As of September 30, 2021, pursuant to our Third Articles of Amendment and Restatement, as supplemented, or our charter, we were authorized to issue 200,000,000 shares of our preferred stock, par value $ 0.01 per share.

As of both September 30, 2021 and December 31, 2020, no shares of our preferred stock were issued and outstanding.

As of September 30, 2021, our charter authorized us to issue 1,000,000,000 shares of our common stock, par value $ 0.01 per share, whereby 900,000,000 shares were classified as Class T common stock and 100,000,000 shares were classified as Class I common stock.

See Note 20, Subsequent Events — Amendments to Articles of Incorporation, for a discussion of an amendment to our charter filed on October 1, 2021.

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 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.

As of both June 30, 2021 and December 31, 2020, our advisor owned 20,833 shares of our Class T common stock.

As of both September 30, 2021 and December 31, 2020, our advisor owned 20,833 shares of our Class T common stock.

In connection with the AHI Acquisition, on October 1, 2021, GAHR III redeemed all 20,833 shares of our Class T common stock owned by our advisor for approximately $ 192,000 .

On February 15, 2019, we terminated our initial offering and we continued to offer shares of our common stock pursuant to the 2019 DRIP Offering.

On March 18, 2021, our board authorized the suspension of the DRIP effective with distributions declared for the month of April 2021;

however, on October 4, 2021, our board reinstated the DRIP.

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

Through June 30, 2021, 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 8,177,085 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 2,211,338 shares of our common stock under our share repurchase plan through June 30, 2021.

As of June 30, 2021 and December 31, 2020, we had 81,731,261 and 81,339,337 aggregate shares of our Class T and Class I common stock, respectively, issued and outstanding.

Through September 30, 2021, 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 8,177,085 aggregate shares of our Class T and Class I common stock pursuant to our DRIP Offerings.

As of September 30, 2021 and December 31, 2020, we had 81,731,261 and 81,339,337 aggregate shares of our Class T and Class I common stock, respectively, issued and outstanding.

Distribution Reinvestment Plan

3 unchanged sentences

On February 15, 2019, we terminated our initial offering and continued to offer up to $ 100,000,000 in shares of our common stock pursuant to the 2019 DRIP Offering.

In connection with our special committee’s strategic alternative review process and in order to facilitate a strategic transaction, on March 18, 2021, our board authorized the suspension of the DRIP, effective as of April 1, 2021, unless and until our board reinstates the DRIP.

As a consequence of the suspension of the DRIP, beginning with the April 2021 distributions, which were paid in May 2021, there were no further issuances of shares pursuant to the DRIP, and stockholders who are participants in the DRIP received or will receive cash distributions instead.

On October 4, 2021, our board authorized the reinstatement of the DRIP.

See Note 20, Subsequent Events — Reinstatement of the DRIP, for a further discussion.

AMERICAN HEALTHCARE REIT, INC.

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

Since April 6, 2018, our board has approved and established an estimated per share net asset value, or NAV, on at least an annual basis.

Commencing with the distribution payment to stockholders paid in the month following such board approval, shares of our common stock issued pursuant the DRIP were or will be issued at the current estimated per share NAV until such time as our board determines an updated estimated per share NAV.

For the three months ended June 30, 2021 and 2020, $ 1,393,000 and $ 4,997,000 , respectively, in distributions were reinvested, and 151,142 and 523,736 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

For the six months ended June 30, 2021 and 2020, $ 5,499,000 and $ 11,434,000 , respectively, in distributions were reinvested, and 581,491 and 1,198,492 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

As of June 30, 2021 and December 31, 2020, a total of $ 77,991,000 and $ 72,492,000 , respectively, in distributions were cumulatively reinvested that resulted in 8,177,085 and 7,595,594 shares of our common stock, respectively, being issued pursuant to our DRIP Offerings.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

For the three months ended September 30, 2021, there were no distributions reinvested or shares issued due to the suspension of the DRIP.

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

For the nine months ended September 30, 2021 and 2020, $ 5,499,000 and $ 15,681,000 , respectively, in distributions were reinvested, and 581,491 and 1,643,731 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

As of September 30, 2021 and December 31, 2020, a total of $ 77,991,000 and $ 72,492,000 , respectively, in distributions were cumulatively reinvested that resulted in 8,177,085 and 7,595,594 shares of our common stock, respectively, being issued pursuant to our DRIP Offerings.

Share Repurchase Plan

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Repurchase requests resulting from the death or qualifying disability of stockholders were not suspended, but remained subject to all terms and conditions of our share repurchase plan, including our board’s discretion to determine whether we have sufficient funds available to repurchase any shares.

In connection with our special committee’s strategic alternative review process and in order to facilitate a strategic transaction, on March 18, 2021, our board approved the suspension of our share repurchase plan with respect to all repurchase requests received by us after February 28, 2021, including repurchases resulting from the death or qualifying disability of stockholders, until such time, if any, as our board determines to reinstate our share repurchase plan.

Prior to its suspension, our share repurchase plan allowed for repurchases of shares of our common stock by us when certain criteria were met.

Share repurchases were made at the sole discretion of our board.

Subject to the availability of the funds for share repurchases, we generally limited the number of shares of our common stock repurchased during any calendar year to 5.0 % of the weighted average number of shares of our common stock outstanding during the prior calendar year;

provided, however, that shares subject to a repurchase requested upon the death of a stockholder were not subject to this cap.

Funds for the repurchase of shares of our common stock came exclusively from the cumulative proceeds we received from the sale of shares of our common stock pursuant to our DRIP Offerings.

On October 4, 2021, our board authorized the partial reinstatement of our share repurchase plan.

See Note 20, Subsequent Events — Amendments to and Partial Reinstatement of Share Repurchase Plan, for a further discussion.

Our share repurchase plan allows for repurchases of shares of our common stock by us when certain criteria are met.

Share repurchases will be made at the sole discretion of our board.

Subject to the availability of the funds for share repurchases, we will limit the number of shares of our common stock repurchased during any calendar year to 5.0 % of the weighted average number of shares of our common stock outstanding during the prior calendar year;

provided, however, that shares subject to a repurchase requested upon the death of a stockholder are not subject to this cap.

Funds for the repurchase of shares of our common stock come exclusively from the cumulative proceeds we receive from the sale of shares of our common stock pursuant to our DRIP Offerings.

During our initial offering and with respect to shares repurchased for the quarter ended 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 ended June 30, 2019, and through the suspension of the share repurchase plan as described above, the repurchase amount for shares repurchased under our share repurchase plan was 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.

Commencing with shares repurchased for the quarter ended 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.

However, if shares of our common stock were repurchased in connection with a stockholder’s death or qualifying disability, the repurchase price was no less than 100 % of the price paid to acquire the shares of our common stock from us.

For the three months ended June 30, 2021 and 2020, we repurchased 117,228 and 506,560 shares of our common stock, respectively, for an aggregate of $ 1,160,000 and $ 4,643,000 , respectively, at an average repurchase price of $ 9.89 and $ 9.17 per share, respectively.

For the six months ended June 30, 2021 and 2020, we repurchased 189,567 and 506,560 shares of our common stock, respectively, for an aggregate of $ 1,874,000 and $ 4,643,000 , respectively, at an average repurchase price of $ 9.88 and $ 9.17 per share, respectively.

As of June 30, 2021 and December 31, 2020, we cumulatively repurchased 2,211,338 and 2,021,771 shares of our common stock, respectively, for an aggregate of $ 20,744,000 and $ 18,870,000 , respectively, at an average repurchase price of $ 9.38 and $ 9.33 per share, respectively.

On October 4, 2021, we amended and restated our share repurchase plan to change the repurchase price with respect to repurchases resulting from the death or qualifying disability of stockholders.

See Note 20, Subsequent Events — Amendments to and Partial Reinstatement of Share Repurchase Plan, for a further discussion.

For the three months ended September 30, 2021, we did no t repurchase any shares of our common stock due to the suspension of our share repurchase plan.

For the three months ended September 30, 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 nine months ended September 30, 2021 and 2020, we repurchased 189,567 and 578,111 shares of our common stock, respectively, for an aggregate of $ 1,874,000 and $ 5,349,000 , respectively, at an average repurchase price of $ 9.88 and $ 9.25 per share, respectively.

As of September 30, 2021 and December 31, 2020, we cumulatively repurchased 2,211,338 and 2,021,771 shares of our common stock, respectively, for an aggregate of $ 20,744,000 and $ 18,870,000 , respectively, at an average repurchase price of $ 9.38 and $ 9.33 per share, respectively.

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

AMERICAN HEALTHCARE REIT, INC.

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

Noncontrolling Interest

In connection with our acquisition of Louisiana Senior Housing Portfolio on January 3, 2020, as of both June 30, 2021 and December 31, 2020, we owned an approximate 90.0 % interest in our consolidated joint venture 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 six months ended June 30, 2021 and for the period from January 3, 2020 through 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, 2021 and December 31, 2020.

In connection with our acquisition of Louisiana Senior Housing Portfolio on January 3, 2020, as of both September 30, 2021 and December 31, 2020, we owned an approximate 90.0 % interest in our consolidated joint venture 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, 2021 and for the period from January 3, 2020 through 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, 2021 and December 31, 2020.

Related Party Transactions

Fees and Expenses Paid to Affiliates

All of our executive officers and one of our non-independent directors are also executive officers and employees and/or holders of a direct or indirect interest in our advisor, one of our co-sponsors or other affiliated entities.

We are affiliated with our advisor, American Healthcare Investors and AHI Group Holdings;

however, we are not affiliated with Griffin Capital, our dealer manager, Digital Bridge or Mr.

We entered into the Advisory Agreement, as amended, which entitles our

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

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, 2021.

As of September 30, 2021, all of our executive officers and one of our non-independent directors were also executive officers and employees and/or holders of a direct or indirect interest in our advisor, one of our co-sponsors or other affiliated entities.

We were affiliated with our advisor, American Healthcare Investors and AHI Group Holdings;

however, we were not affiliated with Griffin Capital, our dealer manager, Digital Bridge or Mr.

We entered into the Advisory Agreement, as amended, which entitled 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, reviewed the material transactions between our affiliates and us during the nine months ended September 30, 2021.

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.

Fees and expenses to our affiliates incurred for the three and six months ended June 30, 2021 and 2020 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Fees and expenses to our affiliates incurred for the three and nine months ended September 30, 2021 and 2020 were as follows:

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

2021 2020 2021 2020

Asset management fees(1) $ 2,454,000 $ 2,446,000 $ 7,359,000 $ 7,292,000

Lease fees(2) 380,000 86,000 421,000 137,000

Property management fees(2) 383,000 376,000 1,124,000 1,100,000

Lease fees(3) 211,000 117,000 632,000 254,000

Construction management fees(4) 36,000 12,000 98,000 76,000

3 unchanged sentences

$ 3,129,000 $ 3,045,000 $ 9,574,000 $ 10,344,000

(1) Asset management fees are included in general and administrative in our accompanying condensed consolidated statements of operations.

(2) Lease fees are capitalized as costs of entering into new leases and included in other assets, net in our accompanying condensed consolidated balance sheets, and amortized over the term of the lease.

(3) Property management fees are included in rental expenses or general and administrative expenses in our accompanying condensed consolidated statements of operations, depending on the property type from which the fee was incurred.

(4) 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.

(5) We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations.

For the 12 months ended June 30, 2021 and 2020, our operating expenses did not exceed such limitations.

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

(6) Development fees are expensed as incurred and included in business acquisition expenses in our accompanying condensed consolidated statements of operations.

(7) Such amounts 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 as incurred and included in business acquisition expenses in our accompanying condensed consolidated statements of operations, as applicable.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

(1) Asset management fees were included in general and administrative in our accompanying condensed consolidated statements of operations.

(2) Property management fees were included in rental expenses or general and administrative expenses in our accompanying condensed consolidated statements of operations, depending on the property type from which the fee was incurred.

(3) Lease fees were capitalized as costs of entering into new leases and included in other assets, net in our accompanying condensed consolidated balance sheets, and amortized over the term of the lease.

(4) Construction management fees were capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets.

(5) We reimbursed our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations.

For the 12 months ended September 30, 2021 and 2020, our operating expenses did not exceed such

AMERICAN HEALTHCARE REIT, INC.

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

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

(6) Development fees were expensed as incurred and included in business acquisition expenses in our accompanying condensed consolidated statements of operations.

(7) Such amounts were capitalized as part of the associated asset and included in real estate investments, net in our accompanying condensed consolidated balance sheets or were expensed as incurred and included in business acquisition expenses in our accompanying condensed consolidated statements of operations, as applicable.

Accounts Payable Due to Affiliates

The following amounts were outstanding to our affiliates as of June 30, 2021 and December 31, 2020:

The following amounts were outstanding to our affiliates as of September 30, 2021 and December 31, 2020:

Fee September 30,

2021 December 31,

Asset management fees $ 816,000 $ 814,000

Lease commissions $ 210,000 $ 8,000

Operating expenses 34,000 10,000

Property management fees 32,000 117,000

Construction management fees 31,000 33,000

Lease commissions 13,000 8,000

Development fees 16,000 64,000

Operating expenses 8,000 10,000

Asset management fees 1,000 814,000

Total $ 324,000 $ 1,046,000

1 unchanged sentence

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, 2021, 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, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall:

Quoted Prices in

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Derivative financial instruments $ — $ 5,255,000 $ — $ 5,255,000

There were no transfers into or out of fair value measurement levels during the six months ended June 30, 2021 and 2020.

There were no transfers into or out of fair value measurement levels during the nine months ended September 30, 2021 and 2020.

We use interest rate swaps to manage interest rate risk associated with variable-rate debt.

1 unchanged sentence

This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, as well as option volatility.

The fair values of interest rate swaps are determined by netting the discounted future fixed cash payments and the discounted expected variable cash receipts.

The fair values of interest rate swaps are determined by netting the discounted future fixed cash payments and the discounted expected variable

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

cash receipts.

The variable cash receipts are based on an expectation of future interest rates derived from observable market interest rate curves.

1 unchanged sentence

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.

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

such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparty.

However, as of June 30, 2021, 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.

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 September 30, 2021, 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.

1 unchanged sentence

Our accompanying condensed consolidated balance sheets include the following financial instruments:

cash and cash equivalents, accounts and other receivables, restricted cash, accounts payable and accrued liabilities, accounts payable due to affiliates, mortgage loans payable and borrowings under the 2018 Credit Facility.

We consider the carrying values of cash and cash equivalents, accounts and other receivables, restricted cash and accounts payable and accrued liabilities to approximate the fair values for these financial instruments based upon the short period of time between origination of the instruments and their expected realization.

cash and cash equivalents, restricted cash, accounts and other receivables, accounts payable and accrued liabilities, accounts payable due to affiliates, mortgage loans payable and borrowings under the 2018 Credit Facility.

We consider the carrying values of cash and cash equivalents, restricted cash, accounts and other receivables and accounts payable and accrued liabilities to approximate the fair values for these financial instruments based upon the short period of time between origination of the instruments and their expected realization.

The fair value of accounts payable due to affiliates is not determinable due to the related party nature of the accounts payable.

2 unchanged sentences

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, 2021 and December 31, 2020 were as follows:

June 30, 2021 December 31, 2020

The carrying amounts and estimated fair values of such financial instruments as of September 30, 2021 and December 31, 2020 were as follows:

September 30, 2021 December 31, 2020

Amount(1) Fair

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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.

The components of income tax benefit or expense for the three and six months ended June 30, 2021 and 2020 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

The components of income tax benefit or expense for the three and nine months ended September 30, 2021 and 2020 were as follows:

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

2021 2020 2021 2020

4 unchanged sentences

Valuation allowance 1,146,000 1,190,000 3,508,000 2,855,000

Total income tax expense $ — $ 39,000 $ — $ 39,000

Total income tax benefit $ — $ ( 39,000 ) $ — $ —

Current Income Tax

Federal and state income taxes are generally a function of the level of income recognized by our TRS.

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

Deferred Taxes

2 unchanged sentences

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, 2021 and December 31, 2020, 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, 2021 and December 31, 2020, 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, 2021 and December 31, 2020, our valuation allowance fully reserves the net deferred tax asset due to inherent uncertainty of future income.

As of both September 30, 2021 and December 31, 2020, 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.

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

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

For the three months ended June 30, 2021 and 2020, we recognized $ 21,988,000 and $ 21,842,000 of real estate revenue, respectively, related to operating lease payments, of which $ 4,860,000 and $ 4,814,000 , respectively, was for variable lease payments.

For the six months ended June 30, 2021 and 2020, we recognized $ 43,934,000 and $ 43,305,000 of real estate revenue, respectively, related to operating lease payments, of which $ 9,804,000 and $ 9,269,000 , respectively, was for variable lease payments.

As of June 30, 2021, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the six months ending December 31, 2021 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, 2021 and 2020, we recognized $ 22,120,000 and $ 21,519,000 of real estate revenue, respectively, related to operating lease payments, of which $ 5,013,000 and $ 4,592,000 , respectively, was for variable lease payments.

For the nine months ended September 30, 2021 and 2020, we recognized $ 66,054,000 and $ 64,824,000 of real estate revenue, respectively, related to operating lease payments, of which $ 14,817,000 and $ 13,861,000 , respectively, was for variable lease payments.

As of September 30, 2021, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the three months ending December 31, 2021 and for each of the next four years ending December 31 and thereafter for the properties that we wholly own:

2021 $ 16,361,000

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Thereafter 283,142,000

$ 533,910,000

Total $ 527,637,000

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

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

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

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

For the three months ended June 30, 2021 and 2020, operating lease costs were $ 210,000 and $ 228,000 , respectively, and for the six months ended June 30, 2021 and 2020, operating lease costs were $ 418,000 and $ 437,000 , respectively, which are included in rental expenses in our accompanying condensed consolidated statements of operations.

For the three months ended September 30, 2021 and 2020, operating lease costs were $ 226,000 and $ 206,000 , respectively, and for the nine months ended September 30, 2021 and 2020, operating lease costs were $ 644,000 and $ 643,000 , 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,

2021 December 31,

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Weighted average discount rate 5.74 % 5.74 %

5.74 % 5.74 %

As of June 30, 2021, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the six months ending December 31, 2021 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:

AMERICAN HEALTHCARE REIT, INC.

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

As of September 30, 2021, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the three months ending December 31, 2021 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:

2021 $ 213,000

4 unchanged sentences

Segment Reporting

As of June 30, 2021, 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, 2021, 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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While we believe that net income (loss), as defined by GAAP, is the most appropriate earnings measurement, we evaluate our segments’ performance based upon segment net operating income, or NOI.

We define segment NOI as total revenues, less rental expenses and property operating expenses, which excludes depreciation and amortization, general and administrative expenses, business acquisition expenses, interest expense, gain or loss on disposition of real estate investments, income or loss from unconsolidated entity, other income and income tax expense for each segment.

We define segment NOI as total revenues and grant income, less rental expenses and property operating expenses, which excludes depreciation and amortization, general and administrative expenses, business acquisition expenses, interest expense, gain or loss on disposition of real estate investments, income or loss from unconsolidated entity, other income and income tax expense for each segment.

We believe that segment NOI serves as an appropriate supplemental performance measure to net income (loss) because it allows investors and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis.

1 unchanged sentence

Non-segment assets primarily consist of corporate assets including our joint venture investment in an unconsolidated entity, cash and cash equivalents, other receivables and other assets not attributable to individual properties.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

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

Summary information for the reportable segments during the three and six months ended June 30, 2021 and 2020 was as follows:

Summary information for the reportable segments during the three and nine months ended September 30, 2021 and 2020 was as follows:

Buildings Senior

2 unchanged sentences

Housing Three Months

June 30, 2021

September 30, 2021

Real estate revenue $ 16,921,000 $ — $ 2,996,000 $ 2,203,000 $ 22,120,000

11 unchanged sentences

Gain in fair value of derivative financial instruments 1,514,000

Loss on disposition of real estate investments ( 199,000 )

Loss from unconsolidated entity ( 193,000 )

Gain on disposition of real estate investments 15,000

Income from unconsolidated entity 70,000

Other income 33,000

1 unchanged sentence

Net loss $ ( 5,898,000 )

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

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

3 unchanged sentences

Housing Three Months

June 30, 2020

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 16,575,000 16,834,000 2,993,000 2,274,000 38,676,000

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 1,074,000

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

Loss from unconsolidated entity ( 377,000 )

Other income 8,000

1 unchanged sentence

Loss before income taxes ( 5,191,000 )

Income tax expense ( 39,000 )

Income tax benefit 39,000

Net loss $ ( 5,152,000 )

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

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

2 unchanged sentences

Facilities Senior

Housing Six Months

June 30, 2021

Housing Nine Months

September 30, 2021

Real estate revenue $ 50,478,000 $ — $ 8,987,000 $ 6,589,000 $ 66,054,000

16 unchanged sentences

Net loss $ ( 13,782,000 )

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

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

2 unchanged sentences

Facilities Senior

Housing Six Months

June 30, 2020

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

32,846,000 32,915,000 6,005,000 4,454,000 76,220,000

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

10 unchanged sentences

( 2,302,000 )

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

Income from unconsolidated entity

1 unchanged sentence

Total net other expense ( 19,259,000 )

Loss before income taxes ( 9,049,000 )

Income tax expense ( 39,000 )

Net loss $ ( 14,240,000 )

Assets by reportable segment as of June 30, 2021 and December 31, 2020 were as follows:

Assets by reportable segment as of September 30, 2021 and December 31, 2020 were as follows:

September 30,

2021 December 31,

5 unchanged sentences

$ 1,063,896,000 $ 1,092,773,000

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

AMERICAN HEALTHCARE REIT, INC.

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

Concentration of Credit Risk

Financial instruments that potentially subject us to a concentration of credit risk are primarily cash and cash equivalents, accounts and other receivables and restricted cash.

Financial instruments that potentially subject us to a concentration of credit risk are primarily cash and cash equivalents, restricted cash and accounts and other receivables.

Cash and cash equivalents are generally invested in investment-grade, short-term instruments with a maturity of three months or less when purchased.

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

As of June 30, 2021 and December 31, 2020, we had cash and cash equivalents in excess of FDIC insured limits.

As of September 30, 2021 and December 31, 2020, 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, 2021, two states in the United States accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI.

Based on leases in effect as of September 30, 2021, two states in the United States accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI.

Our properties located in Missouri and Michigan accounted for approximately 12.4 % and 10.6 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

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

Based on leases in effect as of June 30, 2021, our four reportable business segments, medical office buildings, skilled nursing facilities, senior housing and senior housing — RIDEA, accounted for 67.2 %, 14.6 %, 10.4 % and 7.8 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

As of June 30, 2021, we had one tenant that accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI, as follows:

Based on leases in effect as of September 30, 2021, our four reportable business segments, medical office buildings, skilled nursing facilities, senior housing and senior housing — RIDEA, accounted for 68.9 %, 14.9 %, 10.7 % and 5.5 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

As of September 30, 2021, we had one tenant that accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI, as follows:

Tenant Annualized

3 unchanged sentences

RC Tier Properties, LLC $ 7,937,000 11.3 % Missouri SNF Portfolio Skilled Nursing 385,000 09/30/33

(1) Amount is based on contractual base rent from leases in effect as of June 30, 2021 for our non–RIDEA properties and annualized NOI for our senior housing — RIDEA facilities.

(1) Amount is based on contractual base rent from leases in effect as of September 30, 2021 for our non–RIDEA properties and annualized NOI for 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 $ 5,000 and $ 4,000 , respectively, for the three months ended June 30, 2021 and 2020 and $ 9,000 and $ 11,000 , respectively, for the six months ended June 30, 2021 and 2020.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $ 3,000 and $ 4,000 , respectively, for the three months ended September 30, 2021 and 2020 and $ 12,000 and $ 15,000 , respectively, for the nine months ended September 30, 2021 and 2020.

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, 2021 and 2020, there were 39,000 and 42,000 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 both June 30, 2021 and 2020, 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, 2021 and 2020, there were 27,000 and 45,000 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 both September 30, 2021 and 2020, 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.

AMERICAN HEALTHCARE REIT, INC.

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

Subsequent Events

Registration Statement on Form S-4

In connection with the Merger, on July 16, 2021, we filed with the SEC a registration statement on Form S-4 (File No.

333-257974), or the Form S-4, that contains a joint proxy statement/prospectus for purposes of the Securities Act of 1933, as amended, with respect to the approval of the Merger and other ancillary agreements in connection therewith by our stockholders and the GAHR III stockholders, as well as the issuance of up to 179,658,356 shares of our Class I common stock to GAHR III stockholders in exchange for shares of GAHR III common stock pursuant to the Merger Agreement.

The Form S-4 was declared effective by the SEC on July 30, 2021.

GRIFFIN-AMERICAN HEALTHCARE REIT IV, INC.

Merger with Griffin-American Healthcare REIT III, Inc.

and AHI Acquisition

As discussed in Note 1, Organization and Description of Business, on October 1, 2021, we completed the REIT Merger pursuant to the Merger Agreement with GAHR III.

At the effective time of the REIT Merger, each issued and outstanding share of GAHR III’s common stock, $ 0.01 par value per share, converted into the right to receive 0.9266 shares of our Class I common stock, $ 0.01 par value per share.

Further, at the effective time of the Partnership Merger, (i) each unit of limited partnership interest in the surviving partnership outstanding as of immediately prior to the effective time of the Partnership Merger was converted automatically into the right to receive 0.9266 of a Partnership Class I Unit, as defined in the agreement of limited partnership, as amended, of the surviving partnership and (ii) each unit of limited partnership interest in our operating partnership outstanding as of immediately prior to the effective time of the Partnership Merger was converted automatically into the right to receive one unit of limited partnership interest of the surviving partnership of like class.

Also on October 1, 2021, the AHI Acquisition closed immediately prior to the consummation of the Merger and pursuant to the Contribution Agreement, American Healthcare Investors contributed substantially all of its business and operations to the surviving partnership, including its interest in GAHR III Advisor and our advisor, and Griffin Capital contributed its current ownership interest in GAHR III Advisor and our advisor to the surviving partnership.

In exchange for these contributions, the surviving partnership issued limited partnership units, or Surviving Partnership OP Units.

Subject to working capital and other customary adjustments, the total approximate value of these Surviving Partnership OP Units at the time of consummation of the transactions contemplated by the Contribution Agreement was approximately $ 131,674,000 , with a reference value for purposes thereof of $ 8.71 per unit, such that the surviving partnership issued 15,117,529 Surviving Partnership OP Units as consideration, or the Closing Date Consideration.

The Combined Company following the Merger has become self-managed and was named “American Healthcare REIT, Inc.”

In addition to the Closing Date Consideration, we may in the future pay cash “earnout” consideration to American Healthcare Investors based on the fees that we may earn from our potential sponsorship of, and investment advisory services rendered to, American Healthcare RE Fund, L.P., a healthcare-related, real-estate-focused, private investment fund currently under consideration by American Healthcare Investors, or the Earnout Consideration.

The Earnout Consideration is uncapped in amount and, if ever payable by us to American Healthcare Investors, will be due on the seventh anniversary of the closing of the AHI Acquisition (subject to acceleration in certain events, including if we achieve certain fee-generation milestones from our sponsorship of the private investment fund).

American Healthcare Investors’ ability to receive the Earnout Consideration is also subject to vesting conditions relating to the private investment fund’s deployed equity capital and the continuous employment of at least two of its principals throughout the vesting period.

Amendments to Articles of Incorporation

On October 1, 2021, we filed the Fourth Articles of Amendment and Restatement to our charter, or the Charter Amendment, with the State Department of Assessments and Taxation of Maryland, and the Charter Amendment became effective upon filing.

The changes to the Charter Amendment include, among other things, the following:

(i) the removal of certain limitations relating to (a) suitability of stockholders and (b) collection of an internalization fee;

(ii) the removal or revision of certain limitations required by the North American Securities Administrators Association and making other conforming and ministerial changes;

(iii) revisions in order to bring our charter more in line with those of publicly-listed companies;

and (iv) the change in common stock we are authorized to issue from 900,000,000 shares classified as Class T common stock and 100,000,000 shares classified as Class I common stock to 200,000,000 shares classified as Class T common stock and 800,000,000 shares classified as Class I common stock.

Second Amended and Restated Agreement of Limited Partnership

On October 1, 2021, in connection with the Partnership Merger, merger sub entered into the Second Amended and Restated Agreement of Limited Partnership of American Healthcare REIT, Inc., which amends and supersedes the Amended and Restated Agreement of Limited Partnership of the surviving partnership, or the Operating Partnership Agreement.

The Operating Partnership Agreement reflects, among other things, the following:

(i) the change of the surviving partnership’s name to “American Healthcare REIT Holdings, LP,” (ii) the change of the general partner of the surviving partnership to merger sub, (iii) the conversion of units of partnership interest in the surviving partnership outstanding as of immediately prior to the effective time of the Partnership Merger into “Partnership Class I Units” pursuant to the Partnership Merger, (iv) the conversion of units of partnership interest in our operating partnership outstanding as of immediately prior to the effective time of the Partnership Merger into units of limited partnership interest of the surviving partnership of like class, and (v) to make other updates to reflect the effects of the mergers consummated pursuant to the Merger Agreement.

AMERICAN HEALTHCARE REIT, INC.

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

Lines of Credit and Term Loans

Amendment to 2018 Credit Facility

On October 1, 2021, we entered into the Amendment, which provide for, among other things, the following:

(i) revisions to financial covenant calculations to exclude the assets, liabilities and operating performance of Trilogy or any subsidiary thereof;

(ii) our operating partnership to pledge the equity interests in each direct and indirect subsidiary that owns an unencumbered asset;

(iii) updates regarding restrictions and limitations on certain investments during the remainder of the term of the 2018 Credit Facility;

and (iv) updates to the certain financial covenants to reflect the Combined Company subsequent to the Merger.

Assumption of Obligations Under GAHR III 2019 Corporate Line of Credit

On October 1, 2021, upon consummation of the Merger, we assumed GAHR III’s obligations, through the surviving partnership, under the credit agreement, as amended, or the 2019 Corporate Credit Agreement, with Bank of America, KeyBank, Citizens Bank, and a syndicate of other banks, as lenders, with respect to a credit facility with a maximum principal amount of $ 480,000,000 , or the 2019 Corporate Line of Credit.

The 2019 Corporate Line of Credit consists of a senior unsecured term loan facility in an amount of $ 480,000,000 .

The maximum principal amount of term loans under the 2019 Corporate Line of Credit may be increased by up to $ 370,000,000 , for a total principal amount of $ 850,000,000 , subject to certain conditions.

The 2019 Corporate Line of Credit matures on January 25, 2022 and may be extended for one 12 -month period during the term of the 2019 Corporate Credit Agreement, subject to satisfaction of certain conditions, including payment of an extension fee.

Upon consummation of the Merger, a previously available $ 150,000,000 senior unsecured revolving credit facility was cancelled, and a ratable amendment to certain financial covenants to account for the Combined Company was made.

At our option, the 2019 Corporate Line of Credit bears interest at per annum rates equal to (a) (i) the Eurodollar Rate, as defined in the 2019 Corporate Credit Agreement, plus (ii) a margin ranging from 1.85 % to 2.80 % based on the Consolidated Leverage Ratio, as defined in the 2019 Corporate Credit Agreement, or (b) (i) the greater of:

(1) the prime rate publicly announced by Bank of America, (2) the Federal Funds Rate, as defined in the 2019 Corporate Credit Agreement, plus 0.50 %, (3) the one-month Eurodollar Rate plus 1.00 %, and (4) 0.00 %, plus (ii) a margin ranging from 0.85 % to 1.80 % based on the Consolidated Leverage Ratio.

Accrued interest on the 2019 Corporate Line of Credit is payable monthly.

The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions.

Assumption of GAHR III Obligations Under 2019 Trilogy Credit Facility

On October 1, 2021, upon consummation of the Merger, we assumed GAHR III’s obligations under the amended and restated loan agreement, or the 2019 Trilogy Credit Agreement, with KeyBank;

CIT Bank, N.A.;

Regions Bank;

KeyBanc Capital Markets;

Regions Capital Markets;

Bank of America;

The Huntington National Bank;

and a syndicate of other banks, as lenders named therein, regarding a senior secured revolving credit facility with an aggregate maximum principal amount of $ 360,000,000 , consisting of:

(i) a $ 325,000,000 secured revolver supported by real estate assets and ancillary business cash flow and (ii) a $ 35,000,000 accounts receivable revolving credit facility supported by eligible accounts receivable, or the 2019 Trilogy Credit Facility.

We may obtain up to $ 35,000,000 in the form of swing line loans and up to $ 15,000,000 in the form of standby letters of credit under the 2019 Trilogy Credit Facility.

The proceeds of the 2019 Trilogy Credit Facility may be used for acquisitions, debt repayment and general corporate purposes.

The maximum principal amount of the 2019 Trilogy Credit Facility may be increased by up to $ 140,000,000 , for a total principal amount of $ 500,000,000 , subject to certain conditions.

The 2019 Trilogy Credit Facility matures on September 5, 2023 and may be extended for one 12 -month period during the term of the 2019 Trilogy Credit Agreement, subject to the satisfaction of certain conditions, including payment of an extension fee.

At our option, the 2019 Trilogy Credit Facility bears interest at per annum rates equal to (a) the London Inter-Bank Offer Rate, or LIBOR, plus 2.75 % for LIBOR Rate Loans, as defined in the 2019 Trilogy Credit Agreement, and (b) for Base Rate Loans, as defined in the 2019 Trilogy Credit Agreement, 1.75 % plus the greater of:

(i) the fluctuating annual rate of interest announced from time to time by KeyBank as its prime rate, (ii) 0.50 % above the Federal Funds Effective Rate, as defined in the 2019 Trilogy Credit Agreement, and (iii) 1.00 % above the one-month LIBOR.

Accrued interest on the 2019 Trilogy Credit Facility is payable monthly.

The 2019 Trilogy Credit Facility may be repaid in whole or in part without prepayment fees or penalty, subject to certain conditions.

We are required to pay fees on the unused portion of the lenders’ commitments under the 2019 Trilogy Credit Facility, with respect to any day during a calendar quarter, at a per annum rate equal to (a) 0.15 % if the sum of the Aggregate Real Estate Revolving Credit Obligations, as defined in the 2019 Trilogy Credit Agreement, outstanding on such day is greater than 50.00% of the commitments or 0.20 % if the sum of the Aggregate Real Estate Revolving Credit Obligations on such day is less than or equal to 50.00% of the commitments, and (b) 0.15 % if the sum of the Aggregate A/R Revolving Credit Obligations, as defined in the 2019 Trilogy Credit Agreement, outstanding on such day is greater than 50.00% of the commitments or 0.20 % if the sum of the Aggregate A/R Revolving Credit Obligations on such day is less than or equal to 50.00% of the commitments, which fees shall be measured and payable on a quarterly basis.

AMERICAN HEALTHCARE REIT, INC.

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

Reinstatement of the DRIP

On October 4, 2021, our board reinstated the DRIP and as a result, beginning with the October 2021 distribution, which was paid in November 2021, stockholders who previously enrolled as participants in the DRIP (including former GAHR III stockholders who participated in the GAHR III distribution reinvestment plan) received or will receive distributions in shares of our common stock pursuant to the terms of the DRIP, instead of cash distributions.

Amendments to and Partial Reinstatement of Share Repurchase Plan

On October 4, 2021, our board authorized our amended and restated share repurchase plan that included the change in the repurchase price with respect to repurchases resulting from the death or qualifying disability (as such term is defined in the share repurchase plan) of stockholders from 100 % of the price paid by the stockholder to acquire shares of our Class T common stock or Class I common stock, as applicable, to the most recently published estimated NAV per share.

In addition, on October 4, 2021, our board authorized the partial reinstatement of our share repurchase plan with respect to requests to repurchase shares resulting from the death or qualifying disability of stockholders, effective with respect to qualifying repurchases for the fiscal quarter ending December 31, 2021, which will be paid on or about January 1, 2022.

All share repurchase requests other than those requests resulting from the death or qualifying disability of stockholders, shall be rejected.

Distributions Declared

Our board authorized a daily distribution to our Class T and Class I stockholders of record as of the close of business on each day of the period commencing on July 1, 2021 and ending on August 31, 2 021.

The daily distributions will be calculated based on 365 days in the calendar year and will be equal to $ 0.001095890 per share of our common stock, which is equal to an annualized distribution of $ 0.40 per share.

The distributions will be aggregated and paid in cash on a monthly basis, in August and September 20 21, only from legally available funds.

Our board authorized a daily distribution to our Class T and Class I stockholders of record as of the close of business on October 27, 2021.

This distribution for the month of October 2021 was equal to $ 0.033333333 per share of our common stock, which is equal to an annualized distribution rate of $ 0.40 per share.

The distribution was paid in cash or shares of our common stock pursuant to the DRIP.

The distribution was paid in November 2021, only from legally available funds.

Director Appointments and Resignation

On October 1, 2021, immediately following the effective time of the REIT Merger, our board was increased from five members to nine members.

Our board appointed Harold H.

Grayson Sanders and Gerald W.

Robinson to our board as independent directors.

Greene, Sanders and Robinson were independent directors on GAHR III’s board of directors immediately prior to the effective time of the REIT Merger.

Our board also appointed Mr.

Prosky and Mr.

Streiff as directors.

On October 1, 2021, Richard S.

Welch resigned from our board and no longer serves as our director.

Greene, Sanders and Robinson satisfy the independent director standards applicable to us and, as independent directors, are entitled to receive the same compensation and reimbursement of expenses that we pay to each of our independent directors;

Prosky and Streiff also serve as our executive officers and therefore will not receive compensation for services rendered as directors.

We also issued 5,000 shares of restricted Class T common stock to each of Messrs.

Greene, Sanders and Robinson in connection with their appointment to our board.

Officer Transitions and Appointments

Effective October 1, 2021, Jeffrey T.

Hanson was appointed as our Executive Chairman of the Board of Directors and thereby no longer serves as our Chief Executive Officer.

In addition, effective October 1, 2021, Danny Prosky was appointed Chief Executive Officer and thereby no longer serves as our Chief Operating Officer but continues in the role of President, and Mathieu B.

Streiff was appointed as our Chief Operating Officer and thereby no longer serves as our Executive Vice President, General Counsel.

Also effective October 1, 2021, Gabriel M.

Willhite was appointed as our Executive Vice President, General Counsel, filling the vacancy created by Mr.

Streiff’s resignation from such position.

Employment Agreements

On October 1, 2021, immediately prior to the closing of the AHI Acquisition, GAHR III (through a wholly owned subsidiary) entered into offer letters with each of Mr.

Streiff and Brian S.

Peay, GAHR III’s chief financial officer, relating to their employment with GAHR III following the closing of the AHI Acquisition and relating to their employment with us following the consummation of the REIT Merger.

Upon the closing of the REIT Merger, we indirectly assumed (by virtue of the REIT Merger and our acquisition of GAHR III’s wholly owned subsidiary that is party to the offer letters) GAHR III’s obligations under these offer letters.

Issuance of Restricted Stock Awards to Key Executives and Employees

As a result of the REIT Merger, under our incentive plan, as amended, or our 2015 Incentive Plan, certain of our key executives received initial grants of 477,901 time-based restricted stock and 159,301 performance-based restricted units representing the right to receive shares of our Class T common stock upon vesting.

The time-based restricted stock vest in three equal annual installments on October 1, 2022, October 1, 2023 and October 1, 2024 (subject to continuous employment through

AMERICAN HEALTHCARE REIT, INC.

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

each vesting date).

The performance-based restricted stock will cliff vest in the first quarter of 2025 (subject to continuous employment through that vesting date) with the amount vesting depending on meeting certain key performance criteria as further described in the 2015 Incentive Plan.

Also in connection with the Merger, on October 4, 2021, certain of our key employees were granted 319,149 of restricted Class T common stock under our 2015 Incentive Plan, which will cliff vest on October 4, 2024 (subject to continuous employment through that vesting date).

Registration Rights Agreement

On October 1, 2021, at the consummation of the AHI Acquisition, GAHR III and the surviving partnership entered into a registration rights agreement, or the Registration Rights Agreement, with Griffin-American Strategic Holdings, LLC, or HoldCo, pursuant to which, subject to certain limitations therein, as promptly as practicable following the later of the expiration of (i) the period commencing on the closing of the AHI Acquisition and ending upon the earliest to occur of (a) the second anniversary date of the issuance of the Surviving Partnership OP Units issued in connection with the AHI Acquisition, (b) a change of control of Merger Sub, and (c) the listing of shares of our common stock on a national securities exchange, or the Lock-Up Period;

and (ii) the date on which we are eligible to file a registration statement (but in any event no later than 180 days after such date), we, as the indirect parent company of the surviving partnership, are required to file a shelf registration statement with the SEC under the Securities Act of 1933, as amended, covering the resale of the shares of our Class I common stock issued or issuable in redemption of the Surviving Partnership OP Units that the surviving partnership issued as consideration in the AHI Acquisition.

The Registration Rights Agreement also grants HoldCo (or any successor holder of such shares) demand rights to request additional registration statement filings as well as “piggyback” registration rights, in each case on or after the expiration of the Lock-Up Period.

In connection with the Merger, we assumed from GAHR III the Registration Rights Agreement and GAHR III’s obligations thereunder in their entirety.

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