American Healthcare REIT, Inc. 10-K

Item 9A. Controls and Procedures. (a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily are required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs. As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of December 31, 2021 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2021, were effective at the reasonable assurance level. (b) Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision, and with the participation, of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the Internal Control-Integrated Framework issued in 2013, our management concluded that our internal control over financial reporting was effective as of December 31, 2021. (c) Changes in internal control over financial reporting. There were no changes in internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. On March 24, 2022, Jeffrey T. Hanson informed our board of his intention to retire from the day-to-day operations of our company and transition from his position as Executive Chairman of our board to non-executive Chairman of our board effective June 30, 2022, assuming he is re-elected as a director at our 2022 annual meeting of stockholders. Mr. Hanson’s decision to retire from the day-to-day operations of our company and transition from his position as Executive Chairman of our board to non-executive Chairman of our board was not the result of any disagreement with our company on any matter relating to our company’s operations, policies or practices. In connection with this transition, our company, American Healthcare Opps Holdings, LLC and Mr. Hanson have entered into a Transition Letter Agreement, or the Transition Letter Agreement. Pursuant to the Transition Letter Agreement, beginning July 1, 2022, although Mr. Hanson is not an independent director, he will receive the same compensation and reimbursement of expenses that our company pays to each of its independent directors, with the portion of his 2022 72 Table of Contents compensation that is paid in cash being prorated for the period from July 1, 2022 to December 31, 2022; provided, however, that Mr. Hanson has agreed to waive the equity retainer compensation that will be paid to our independent directors in 2022. In addition, as Chairman of our board, Mr. Hanson will receive annual cash compensation of $100,000, with such compensation also being prorated for the period from July 1, 2022 to December 31, 2022. The amount of cash compensation payable to our Chairman of the board was determined by our board after engaging Ferguson Partners Consulting, L.P., formerly known as FPL Associates, L.P., as an independent compensation consultant to advise our board on executive officer and director compensation. In addition, pursuant to the Transition Letter Agreement, Mr. Hanson has agreed to forfeit the performance-based-vesting restricted stock units that were granted to him in October 2021 pursuant to his offer letter with our company to serve as Executive Chairman of our board. However, he will retain the time-based-vesting restricted shares of Class T common stock that were granted pursuant to such offer letter in October 2021, which time-based-vesting restricted shares will remain subject to the existing vesting schedule and other terms and conditions; provided, however, that the award agreement of such restricted shares granted to Mr. Hanson is amended as of the close of business on June 30, 2022 to conform to the accelerated vesting provisions of restricted stock grants to our independent directors, including acceleration of vesting upon a change of control of our company. Because Mr. Hanson is no longer an executive officer of our company, he also will no longer be a participant in our Executive Severance and Change in Control Plan as of July 1, 2022; however, our company will reimburse Mr. Hanson for the monthly premium cost of medical coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or COBRA, for a period of up to 18 months beginning on July 1, 2022. The preceding summary of the Transition Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the Transition Letter Agreement, a copy of which is filed as Exhibit 10.15 to this Annual Report on Form 10-K and is incorporated into this Item 9B of Form 10-K by reference. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 73 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2021 with respect to our 2022 annual meeting of stockholders. Item 11. Executive Compensation. The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2021 with respect to our 2022 annual meeting of stockholders. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2021 with respect to our 2022 annual meeting of stockholders. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2021 with respect to our 2022 annual meeting of stockholders. Item 14. Principal Accountant Fees and Services. The information required by this item is incorporated by reference to our definitive proxy statement to be filed within 120 days after the end of fiscal year 2021 with respect to our 2022 annual meeting of stockholders. 74 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a)(1) Financial Statements: INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID No 34 ) 76 Consolidated Balance Sheets as of December 31, 2021 and 2020 78 Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2021, 2020 and 2019 80 Consolidated Statements of Equity for the Years Ended December 31, 2021, 2020 and 2019 81 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020 and 2019 83 Notes to Consolidated Financial Statements 86 (a)(2) Financial Statement Schedule: The following financial statement schedule for the year ended December 31, 2021 is submitted herewith: Page Real Estate and Accumulated Depreciation (Schedule III) 138 All schedules other than the one listed above have been omitted as the required information is inapplicable or the information is presented in our consolidated financial statements or related notes. (a)(3) Exhibits: Page The exhibits listed in this section are included, or incorporated by reference, in this annual report. 153 (b) Exhibits: See Item 15(a)(3) above. (c) Financial Statement Schedule: See Item 15(a)(2) above. 75 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of American Healthcare REIT, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of American Healthcare REIT, Inc. and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Merger of Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT IV, Inc. — Real Estate Investments Purchase Price Allocation — Refer to Notes 1, 2 and 3 to the financial statements Critical Audit Matter Description On October 1, 2021, pursuant to the Merger Agreement (as defined in Note 1), Griffin-American Healthcare REIT III, Inc. (“GAHR III”) merged with and into a wholly owned subsidiary of the Company, and each issued and outstanding share of GAHR III’s common stock converted into the right to receive 0.9266 shares of the Company’s Class I common stock (referred to as the “REIT Merger”). The Company treated the REIT Merger as a business combination accounted for as a reverse acquisition. The accounting for the REIT Merger included determining the fair value of the assets acquired and liabilities assumed, including $ 1,126,641,000 of real estate investments. The Company’s methods for determining the respective fair value of the assets acquired and liabilities assumed varied depending on the type of asset or liability, and involved management making significant estimates related to assumptions such as expected net operating income, market sales comparisons, replacement costs, cap rates and market rent. We identified the allocation of fair value to the assets acquired and liabilities assumed in the REIT Merger as a critical audit matter because of the significant estimates management makes to determine the respective fair value of assets acquired and liabilities assumed. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. 76 Table of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the fair value of assets acquired and liabilities assumed in the REIT Merger included the following, among others: • With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) current market data, such as cap rate and market rent, (3) replacement costs for certain assets, and (4) market sales comparisons for certain assets. With the assistance of our fair value specialists, we also tested the mathematical accuracy of the Company’s valuation model. • We evaluated the reasonableness of management’s projections of net operating income by comparing the assumptions used in the projections to external market sources, in-place lease agreements, historical data, and results from other areas of the audit. Impairment of Long-Lived Assets relating to historical GAHR III real estate investments — Refer to Note 2 to the financial statements Critical Audit Matter Description The Company periodically evaluates long-lived assets, primarily consisting of investments in real estate that are carried at historical cost less accumulated depreciation, for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company considers the following indicators, among others, in its evaluation of impairment: • Significant negative industry or economic trends; • A significant underperformance relative to historical or projected future operating results; and • A significant change in the extent or manner in which the asset is used or significant physical change in the asset. If indicators of impairment of long-lived assets are present, the Company evaluates the carrying value of the related real estate investment in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, the Company considers market conditions and the Company’s current intentions with respect to holding or disposing of the asset. The Company adjusts the net book value of properties it leases to others and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than carrying value. The Company recognizes an impairment loss at the time any such determination is made. We identified the determination of impairment indicators for real estate investments, specifically the historical GAHR III real estate investments, as a critical audit matter because of the significant assumptions management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of real estate assets may not be recoverable. This required a high degree of auditor judgment when performing audit procedures to evaluate whether management appropriately identified impairment indicators. The remaining real estate investments were recently recorded at fair value in connection with the REIT Merger and are the subject of the critical audit matter described above. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the evaluation of historical GAHR III real estate investments for possible indications of impairment included the following, among others: • Obtained independent market data to determine if there were indicators of impairment not identified by management. • Determined whether there are adverse qualitative or quantitative asset-specific conditions, which may indicate that an other than temporary impairment exists . /s/ Deloitte & Touche LLP Costa Mesa, California March 25, 2022 We have served as the Company’s auditor since 2013. 77 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED BALANCE SHEETS As of December 31, 2021 and 2020 December 31, 2021 2020 ASSETS Real estate investments, net $ 3,514,686,000 $ 2,330,000,000 Debt security investment, net 79,315,000 75,851,000 Cash and cash equivalents 81,597,000 113,212,000 Restricted cash 43,889,000 38,978,000 Accounts and other receivables, net 122,778,000 124,556,000 Identified intangible assets, net 248,871,000 154,687,000 Goodwill 209,898,000 75,309,000 Operating lease right-of-use assets, net 158,157,000 203,988,000 Other assets, net 121,148,000 118,356,000 Total assets $ 4,580,339,000 $ 3,234,937,000 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY Liabilities: Mortgage loans payable, net(1) $ 1,095,594,000 $ 810,478,000 Lines of credit and term loans(1) 1,226,634,000 843,634,000 Accounts payable and accrued liabilities(1) 187,254,000 186,651,000 Accounts payable due to affiliates(1) 866,000 8,026,000 Identified intangible liabilities, net 12,715,000 367,000 Financing obligations(1) 33,653,000 28,425,000 Operating lease liabilities(1) 145,485,000 193,634,000 Security deposits, prepaid rent and other liabilities(1) 48,567,000 88,899,000 Total liabilities 2,750,768,000 2,160,114,000 Commitments and contingencies (Note 12) Redeemable noncontrolling interests (Note 13) 72,725,000 40,340,000 Equity: Stockholders’ equity: Preferred stock, $ 0.01 par value per share; 200,000,000 shares authorized; no ne issued and outstanding — — Common stock, $ 0.01 par value per share; 1,000,000,000 shares authorized; 179,658,367 shares issued and outstanding as of December 31, 2020 — 1,798,000 Class T common stock, $ 0.01 par value per share; 200,000,000 shares authorized; 77,176,406 shares issued and outstanding as of December 31, 2021 763,000 — Class I common stock, $ 0.01 par value per share; 800,000,000 shares authorized; 185,855,625 shares issued and outstanding as of December 31, 2021 1,859,000 — Additional paid-in capital 2,531,940,000 1,730,589,000 Accumulated deficit ( 951,303,000 ) ( 864,271,000 ) Accumulated other comprehensive loss ( 1,966,000 ) ( 2,008,000 ) Total stockholders’ equity 1,581,293,000 866,108,000 Noncontrolling interests (Note 14) 175,553,000 168,375,000 Total equity 1,756,846,000 1,034,483,000 Total liabilities, redeemable noncontrolling interests and equity $ 4,580,339,000 $ 3,234,937,000 78 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED BALANCE SHEETS — (Continued) As of December 31, 2021 and 2020 ___________ (1) Prior to the Merger, as defined and described in Note 1, on October 1, 2021, such liabilities of Griffin-American Healthcare REIT III, Inc., or GAHR III, represented liabilities of Griffin-American Healthcare REIT III Holdings, LP or its consolidated subsidiaries. Griffin-American Healthcare REIT III Holdings, LP was a variable interest entity, or VIE, and a consolidated subsidiary of GAHR III. The creditors of Griffin-American Healthcare REIT III Holdings, LP, or its consolidated subsidiaries did not have recourse against GAHR III, except for the 2019 Credit Facility, as defined in Note 9, held by Griffin-American Healthcare REIT III Holdings, LP in the amount of $ 556,500,000 as of December 31, 2020, which was guaranteed by GAHR III. Following the Merger, such liabilities of American Healthcare REIT, Inc., formally known as Griffin-American Healthcare REIT IV, Inc., as successor by merger with GAHR III, represented liabilities of American Healthcare REIT Holdings, LP, formally known as Griffin-American Healthcare REIT III Holdings, LP, or its consolidated subsidiaries as of December 31, 2021. American Healthcare REIT Holdings, LP is a VIE and a consolidated subsidiary of American Healthcare REIT, Inc. The creditors of American Healthcare REIT Holdings, LP or its consolidated subsidiaries do not have recourse against American Healthcare REIT, Inc., except for the 2018 Credit Facility and 2019 Credit Facility, as defined in Note 9, held by American Healthcare REIT Holdings, LP in the amount of $ 441,900,000 and $ 480,000,000 , respectively, as of December 31, 2021, which were guaranteed by American Healthcare REIT, Inc. The accompanying notes are an integral part of these consolidated financial statements. 79 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Years Ended December 31, 2021, 2020 and 2019 Years Ended December 31, 2021 2020 2019 Revenues and grant income: Resident fees and services $ 1,123,935,000 $ 1,069,073,000 $ 1,099,078,000 Real estate revenue 141,368,000 120,047,000 124,038,000 Grant income 16,951,000 55,181,000 — Total revenues and grant income 1,282,254,000 1,244,301,000 1,223,116,000 Expenses: Property operating expenses 1,030,193,000 993,727,000 967,860,000 Rental expenses 38,725,000 32,298,000 33,859,000 General and administrative 43,199,000 27,007,000 29,749,000 Business acquisition expenses 13,022,000 290,000 ( 161,000 ) Depreciation and amortization 133,191,000 98,858,000 111,412,000 Total expenses 1,258,330,000 1,152,180,000 1,142,719,000 Other income (expense): Interest expense: Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 80,937,000 ) ( 71,278,000 ) ( 78,553,000 ) Gain (loss) in fair value of derivative financial instruments 8,200,000 ( 3,906,000 ) ( 4,541,000 ) (Loss) gain on dispositions of real estate investments ( 100,000 ) 1,395,000 — Impairment of real estate investments ( 3,335,000 ) ( 11,069,000 ) — Loss from unconsolidated entities ( 1,355,000 ) ( 4,517,000 ) ( 2,097,000 ) Foreign currency (loss) gain ( 564,000 ) 1,469,000 1,730,000 Other income 1,854,000 1,570,000 3,736,000 Total net other expense ( 76,237,000 ) ( 86,336,000 ) ( 79,725,000 ) (Loss) income before income taxes ( 52,313,000 ) 5,785,000 672,000 Income tax (expense) benefit ( 956,000 ) 3,078,000 ( 1,524,000 ) Net (loss) income ( 53,269,000 ) 8,863,000 ( 852,000 ) Less: net loss (income) attributable to noncontrolling interests 5,475,000 ( 6,700,000 ) ( 4,113,000 ) Net (loss) income attributable to controlling interest $ ( 47,794,000 ) $ 2,163,000 $ ( 4,965,000 ) Net (loss) income per Class T and Class I common share attributable to controlling interest — basic and diluted $ ( 0.24 ) $ 0.01 $ ( 0.03 ) Weighted average number of Class T and Class I common shares outstanding — basic and diluted 200,324,561 179,916,841 181,931,306 Net (loss) income $ ( 53,269,000 ) $ 8,863,000 $ ( 852,000 ) Other comprehensive (loss) income: Foreign currency translation adjustments ( 65,000 ) 247,000 305,000 Total other comprehensive (loss) income ( 65,000 ) 247,000 305,000 Comprehensive (loss) income ( 53,334,000 ) 9,110,000 ( 547,000 ) Less: comprehensive loss (income) attributable to noncontrolling interests 5,582,000 ( 6,700,000 ) ( 4,113,000 ) Comprehensive (loss) income attributable to controlling interest $ ( 47,752,000 ) $ 2,410,000 $ ( 4,660,000 ) The accompanying notes are an integral part of these consolidated financial statements. 80 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED STATEMENTS OF EQUITY For the Years Ended December 31, 2021, 2020 and 2019 Stockholders’ Equity Common Stock Number of Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Noncontrolling Interests Total Equity BALANCE — December 31, 2018 183,056,666 $ 1,831,000 $ 1,765,984,000 $ ( 704,748,000 ) $ ( 2,560,000 ) $ 1,060,507,000 $ 158,128,000 $ 1,218,635,000 Offering costs — common stock — — ( 91,000 ) — — ( 91,000 ) — ( 91,000 ) Issuance of common stock under the DRIP 5,479,620 55,000 55,385,000 — — 55,440,000 — 55,440,000 Issuance of vested and nonvested restricted common stock 20,849 — 42,000 — — 42,000 — 42,000 Amortization of nonvested common stock compensation — — 173,000 — — 173,000 — 173,000 Stock based compensation — — — — — — 2,698,000 2,698,000 Repurchase of common stock ( 8,826,872 ) ( 88,000 ) ( 89,800,000 ) — — ( 89,888,000 ) — ( 89,888,000 ) Contribution from noncontrolling interest — — — — — — 3,000,000 3,000,000 Distributions to noncontrolling interests — — — — — — ( 7,272,000 ) ( 7,272,000 ) Reclassification of noncontrolling interests to mezzanine equity — — — — — — ( 780,000 ) ( 780,000 ) Adjustment to value of redeemable noncontrolling interests — — ( 3,131,000 ) — — ( 3,131,000 ) ( 1,342,000 ) ( 4,473,000 ) Distributions declared ($ 0.65 per share) — — — ( 117,837,000 ) — ( 117,837,000 ) — ( 117,837,000 ) Net (loss) income — — — ( 4,965,000 ) — ( 4,965,000 ) 3,676,000 ( 1,289,000 ) (1) Other comprehensive income — — — — 305,000 305,000 — 305,000 BALANCE — December 31, 2019 179,730,263 $ 1,798,000 $ 1,728,562,000 $ ( 827,550,000 ) $ ( 2,255,000 ) $ 900,555,000 $ 158,108,000 $ 1,058,663,000 Offering costs — common stock — — ( 8,000 ) — — ( 8,000 ) — ( 8,000 ) Issuance of common stock under the DRIP 2,155,061 22,000 21,839,000 — — 21,861,000 — 21,861,000 Issuance of vested and nonvested restricted common stock 6,950 — 14,000 — — 14,000 — 14,000 Amortization of nonvested common stock compensation — — 141,000 — — 141,000 — 141,000 Stock based compensation — — — — — — ( 1,188,000 ) ( 1,188,000 ) Repurchase of common stock ( 2,233,907 ) ( 22,000 ) ( 23,085,000 ) — — ( 23,107,000 ) — ( 23,107,000 ) Issuance of noncontrolling interest — — 515,000 — — 515,000 10,485,000 11,000,000 Distributions to noncontrolling interests — — — — — — ( 5,463,000 ) ( 5,463,000 ) Reclassification of noncontrolling interests to mezzanine equity — — — — — — ( 715,000 ) ( 715,000 ) Adjustment to value of redeemable noncontrolling interests — — 2,611,000 — — 2,611,000 1,103,000 3,714,000 Distributions declared ($ 0.22 per share) — — — ( 38,884,000 ) — ( 38,884,000 ) — ( 38,884,000 ) Net income — — — 2,163,000 — 2,163,000 6,045,000 8,208,000 (1) Other comprehensive income — — — — 247,000 247,000 — 247,000 BALANCE — December 31, 2020 179,658,367 $ 1,798,000 $ 1,730,589,000 $ ( 864,271,000 ) $ ( 2,008,000 ) $ 866,108,000 $ 168,375,000 $ 1,034,483,000 Offering costs — common stock — — ( 14,000 ) — — ( 14,000 ) — ( 14,000 ) Issuance of common stock and purchase of noncontrolling interest in connection with the Merger 81,731,261 816,000 764,332,000 — — 765,148,000 ( 43,203,000 ) 721,945,000 (2) 81 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED STATEMENTS OF EQUITY — (Continued) For the Years Ended December 31, 2021, 2020 and 2019 Stockholders’ Equity Common Stock Number of Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Noncontrolling Interests Total Equity Issuance of operating partnership units to acquire AHI — $ — $ 36,449,000 $ — $ 107,000 $ 36,556,000 $ 75,727,000 $ 112,283,000 Issuance of common stock under the DRIP 831,463 8,000 7,658,000 — — 7,666,000 — 7,666,000 Issuance of vested and nonvested restricted common stock 852,364 — 41,000 — — 41,000 — 41,000 Amortization of nonvested common stock compensation — — 816,000 — — 816,000 — 816,000 Stock based compensation — — — — — — ( 14,000 ) ( 14,000 ) Repurchase of common stock ( 41,424 ) — ( 382,000 ) — — ( 382,000 ) — ( 382,000 ) (3) Distributions to noncontrolling interests — — — — — — ( 15,247,000 ) ( 15,247,000 ) Reclassification of noncontrolling interests to mezzanine equity — — — — — — ( 5,923,000 ) ( 5,923,000 ) Adjustment to value of redeemable noncontrolling interests — — ( 7,549,000 ) — — ( 7,549,000 ) 169,000 ( 7,380,000 ) Distributions declared ($ 0.17 per share) — — — ( 39,238,000 ) — ( 39,238,000 ) — ( 39,238,000 ) Net loss — — — ( 47,794,000 ) — ( 47,794,000 ) ( 4,331,000 ) ( 52,125,000 ) (1) Other comprehensive loss — — — — ( 65,000 ) ( 65,000 ) — ( 65,000 ) BALANCE — December 31, 2021 263,032,031 $ 2,622,000 $ 2,531,940,000 $ ( 951,303,000 ) $ ( 1,966,000 ) $ 1,581,293,000 $ 175,553,000 $ 1,756,846,000 ___________ (1) For the years ended December 31, 2021, 2020 and 2019, amounts exclude $( 1,144,000 ), $ 655,000 and $ 437,000 , respectively, of net (loss) income attributable to redeemable noncontrolling interests. See Note 13, Redeemable Noncontrolling Interests, for a further discussion. (2) In connection with the Merger, on October 1, 2021, a wholly owned subsidiary of Griffin-American Healthcare REIT IV Holdings, LP sold its 6.0 % interest in Trilogy REIT Holdings, LLC to GAHR III. See Note 14, Equity — Noncontrolling Interests in Total Equity, for a further discussion. (3) Prior to the Merger, but upon the closing of the AHI Acquisition, as defined in Note 1, GAHR III redeemed all 22,222 shares of its common stock held by GAHR III’s former advisor as well as all 20,833 shares of GAHR IV Class T common stock held by GAHR IV’s former advisor. 82 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2021, 2020 and 2019 Years Ended December 31, 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ ( 53,269,000 ) $ 8,863,000 $ ( 852,000 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 133,191,000 98,858,000 111,412,000 Other amortization 24,189,000 30,789,000 29,740,000 Deferred rent ( 2,673,000 ) ( 5,606,000 ) ( 3,264,000 ) Stock based compensation 8,801,000 ( 1,342,000 ) 2,744,000 Stock based compensation — vested and nonvested restricted common stock 857,000 155,000 215,000 Change in fair value of derivative financial instruments ( 8,200,000 ) 3,906,000 4,541,000 Impairment of real estate investments 3,335,000 11,069,000 — Loss from unconsolidated entities 1,355,000 4,517,000 2,097,000 Loss (gain) on dispositions of real estate investments 100,000 ( 1,395,000 ) — Foreign currency loss (gain) 573,000 ( 1,522,000 ) ( 1,731,000 ) Loss on extinguishments of debt 2,655,000 — 2,968,000 Deferred income taxes — ( 3,329,000 ) 964,000 Change in fair value of contingent consideration — — ( 681,000 ) Other adjustments 466,000 — — Changes in operating assets and liabilities: Accounts and other receivables 3,691,000 20,318,000 ( 22,435,000 ) Other assets ( 2,775,000 ) ( 7,357,000 ) ( 6,537,000 ) Accounts payable and accrued liabilities ( 32,571,000 ) 30,290,000 18,103,000 Accounts payable due to affiliates ( 7,140,000 ) 5,162,000 121,000 Operating lease liabilities ( 16,793,000 ) ( 23,790,000 ) ( 22,114,000 ) Security deposits, prepaid rent and other liabilities ( 37,879,000 ) 49,570,000 2,163,000 Net cash provided by operating activities 17,913,000 219,156,000 117,454,000 CASH FLOWS FROM INVESTING ACTIVITIES Developments and capital expenditures ( 79,695,000 ) ( 128,302,000 ) ( 92,836,000 ) Acquisitions of real estate and other investments ( 80,109,000 ) ( 30,552,000 ) ( 37,863,000 ) Cash, cash equivalents and restricted cash acquired in connection with the Merger and the AHI Acquisition 17,852,000 — — Proceeds from dispositions of real estate and other investments 4,499,000 12,525,000 1,227,000 Investments in unconsolidated entities ( 650,000 ) ( 960,000 ) ( 1,640,000 ) Real estate and other deposits ( 549,000 ) ( 656,000 ) ( 650,000 ) Principal repayments on real estate notes receivable — — 28,650,000 Net cash used in investing activities ( 138,652,000 ) ( 147,945,000 ) ( 103,112,000 ) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under mortgage loans payable 298,515,000 92,399,000 191,246,000 Payments on mortgage loans payable ( 34,616,000 ) ( 71,990,000 ) ( 74,037,000 ) Early payoff of mortgage loans payable — ( 2,601,000 ) ( 14,022,000 ) Borrowings under the lines of credit and term loans 51,100,000 121,755,000 1,030,653,000 Payments on the lines of credit and term loans ( 157,000,000 ) ( 94,000,000 ) ( 952,822,000 ) Deferred financing costs ( 3,854,000 ) ( 4,890,000 ) ( 12,945,000 ) Debt extinguishment costs ( 127,000 ) — ( 870,000 ) Borrowing under financing obligation — 1,907,000 — Payments on financing and other obligations ( 11,685,000 ) ( 5,453,000 ) ( 7,850,000 ) Distributions paid to common stockholders ( 22,788,000 ) ( 26,997,000 ) ( 62,612,000 ) Repurchase of common stock ( 382,000 ) ( 23,107,000 ) ( 89,888,000 ) 83 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued) For the Years Ended December 31, 2021, 2020 and 2019 Years Ended December 31, 2021 2020 2019 Issuance of noncontrolling interest $ — $ 11,000,000 $ — Contributions from noncontrolling interests — — 3,000,000 Distributions to noncontrolling interests ( 14,875,000 ) ( 5,463,000 ) ( 7,272,000 ) Contributions from redeemable noncontrolling interests 152,000 — 2,000,000 Distributions to redeemable noncontrolling interests ( 1,483,000 ) ( 1,271,000 ) ( 1,430,000 ) Repurchase of redeemable noncontrolling interests and stock warrants ( 8,933,000 ) ( 150,000 ) ( 475,000 ) Security deposits and other 85,000 50,000 12,000 Net cash provided by (used in) financing activities 94,109,000 ( 8,811,000 ) 2,688,000 NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ ( 26,630,000 ) $ 62,400,000 $ 17,030,000 EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 74,000 ) ( 90,000 ) 145,000 CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period 152,190,000 89,880,000 72,705,000 CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period $ 125,486,000 $ 152,190,000 $ 89,880,000 RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH Beginning of period: Cash and cash equivalents $ 113,212,000 $ 53,149,000 $ 35,132,000 Restricted cash 38,978,000 36,731,000 37,573,000 Cash, cash equivalents and restricted cash $ 152,190,000 $ 89,880,000 $ 72,705,000 End of period: Cash and cash equivalents $ 81,597,000 $ 113,212,000 $ 53,149,000 Restricted cash 43,889,000 38,978,000 36,731,000 Cash, cash equivalents and restricted cash $ 125,486,000 $ 152,190,000 $ 89,880,000 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for: Interest $ 70,212,000 $ 65,771,000 $ 68,654,000 Income taxes $ 1,239,000 $ 753,000 $ 921,000 SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES Accrued developments and capital expenditures $ 19,546,000 $ 22,342,000 $ 25,194,000 Capital expenditures from financing obligations $ 1,409,000 $ 1,053,000 $ 11,821,000 Tenant improvement overage $ 1,598,000 $ 4,482,000 $ 1,216,000 Acquisition of real estate investment with financing obligation $ 15,504,000 $ — $ — Issuance of common stock under the DRIP $ 7,666,000 $ 21,861,000 $ 55,440,000 Distributions declared but not paid — common stockholders $ 8,768,000 $ — $ 9,974,000 Distributions declared but not paid — limited partnership units $ 467,000 $ — $ — Reclassification of noncontrolling interests to mezzanine equity $ 5,923,000 $ 715,000 $ 780,000 Issuance of redeemable noncontrolling interests $ 7,999,000 $ — $ — Investments in unconsolidated entity $ — $ — $ 5,276,000 The following represents the net (decrease) increase in certain assets and liabilities in connection with our acquisitions and dispositions of real estate investments: Accounts and other receivables $ ( 153,000 ) $ ( 11,000 ) $ — Other assets $ ( 4,036,000 ) $ ( 253,000 ) $ — Due to affiliates $ 6,000 $ — $ — Accounts payable and accrued liabilities $ ( 161,000 ) $ ( 110,000 ) $ 46,000 Security deposits, prepaid rent and other liabilities $ — $ ( 459,000 ) $ 105,000 Merger and AHI Acquisition (Note 1): Issuance of limited partnership units in the AHI Acquisition $ 131,674,000 $ — $ — 84 Table of Contents AMERICAN HEALTHCARE REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued) For the Years Ended December 31, 2021, 2020 and 2019 Years Ended December 31, 2021 2020 2019 Implied issuance of GAHR III common stock in exchange for net assets acquired and purchase of noncontrolling interests in connection with the Merger $ 722,169,000 $ — $ — Fair value of mortgage loans payable and lines of credit and term loans assumed in the Merger $ 507,503,000 $ — $ — The accompanying notes are an integral part of these consolidated financial statements. 85 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2021, 2020 and 2019 The use of the words “we,” “us” or “our” refers to Griffin-American Healthcare REIT III, Inc. and its subsidiaries, including Griffin-American Healthcare REIT III Holdings, LP, for periods prior to the Merger, as defined below, and American Healthcare REIT, Inc. (formerly known as Griffin-American Healthcare REIT IV, Inc.) and its subsidiaries, including American Healthcare REIT Holdings, LP (formerly known as Griffin-American Healthcare REIT III Holdings, LP), for periods following the Merger, except where otherwise noted. Certain historical information of Griffin-American Healthcare REIT IV, Inc. is included for background purposes. 1. Organization and Description of Business Overview and Background American Healthcare REIT, Inc., a Maryland corporation, owns a diversified portfolio of clinical healthcare real estate properties, focusing primarily on medical office buildings, skilled nursing facilities, senior housing, hospitals and other healthcare-related facilities. 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). Our healthcare facilities operated under a RIDEA structure include our senior housing operating properties, or SHOP (formerly known as senior housing — RIDEA), and our integrated senior health campuses. We have originated and acquired secured loans and may also originate and acquire other real estate-related investments on an infrequent and opportunistic basis. We generally seek investments that produce current income; however, we have selectively developed, and may continue to selectively develop, real estate properties. We qualified to be taxed as a real estate investment trust, or REIT, under the Code for federal income tax purposes, and we intend to continue to qualify to be taxed as a REIT. Merger of Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT IV, Inc. On June 23, 2021, Griffin-American Healthcare REIT III, Inc., a Maryland corporation, or GAHR III, Griffin-American Healthcare REIT III Holdings, LP, a Delaware limited partnership, or our operating partnership that subsequent to the Merger on October 1, 2021 described below is also referred to as the surviving partnership, Griffin-American Healthcare REIT IV, Inc., a Maryland corporation, or GAHR IV, its subsidiary Griffin-American Healthcare REIT IV Holdings, LP, a Delaware limited partnership, or GAHR IV Operating Partnership, and Continental Merger Sub, LLC, a Maryland limited liability company and a newly formed wholly owned subsidiary of GAHR IV, or Merger Sub, 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) GAHR IV Operating Partnership merged with and into our operating partnership, with our operating 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. Following the Merger on October 1, 2021, our company, or the Combined Company, was renamed American Healthcare REIT, Inc. The REIT Merger was intended to qualify as a reorganization under, and within the meaning of, Section 368(a) of the Code. As a result of and at the effective time of the Merger, the separate corporate existence of GAHR III and GAHR IV Operating Partnership ceased. AHI Acquisition Also on June 23, 2021, GAHR III; our operating partnership; American Healthcare Investors, LLC, or AHI; Griffin Capital Company, LLC, or Griffin Capital; Platform Healthcare Investor T-II, LLC; Flaherty Trust; and Jeffrey T. Hanson, our former Chief Executive Officer and current Executive Chairman of the Board of Directors, Danny Prosky, our former Chief Operating Officer and current Chief Executive Officer and President, and Mathieu B. Streiff, our former Executive Vice President, General Counsel and current Chief Operating Officer, or collectively, the AHI Principals, entered into a contribution and exchange agreement, or the Contribution Agreement, pursuant to which, among other things, GAHR III agreed to acquire a newly formed entity, American Healthcare Opps Holdings, LLC, or NewCo, which we refer to as the AHI Acquisition. NewCo owned substantially all of the business and operations of AHI, as well as all of the equity interests in (i) Griffin-American Healthcare REIT IV Advisor, LLC, or GAHR IV Advisor, a subsidiary of AHI that served as the external advisor of GAHR IV, and (ii) Griffin-American Healthcare REIT III Advisor, LLC, or GAHR III Advisor, also referred to as our former advisor, a subsidiary of AHI that served as the external advisor of GAHR III. See “Operating Partnership and Former Advisor” below for a further discussion. 86 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) On October 1, 2021, the AHI Acquisition closed immediately prior to the consummation of the Merger, and pursuant to the Contribution Agreement, AHI contributed substantially all of its business and operations to the surviving partnership, including its interest in GAHR III Advisor and GAHR IV Advisor, and Griffin Capital contributed its then-current ownership interest in GAHR III Advisor and GAHR IV 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. Following the consummation of the Merger and the AHI Acquisition, the Combined Company has become self-managed. As of December 31, 2021, such surviving partnership OP units are owned by AHI Group Holdings, LLC, or AHI Group Holdings, which is owned and controlled by the AHI Principals, Platform Healthcare Investor T-II, LLC, Flaherty Trust and a wholly owned subsidiary of Griffin Capital, or collectively, the NewCo Sellers. In addition to the Closing Date Consideration, pursuant to the Contribution Agreement, we may in the future pay cash “earnout” consideration to AHI 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 under consideration by AHI, or the Earnout Consideration. The Earnout Consideration is uncapped in amount and, if ever payable by us to AHI, 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). AHI’s 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 the AHI Principals throughout the vesting period. As of December 31, 2021, the fair value of such cash earnout consideration was estimated to be $ 0 . The AHI Acquisition was treated as a business combination for accounting purposes, with GAHR III as both the legal and accounting acquiror of NewCo. While GAHR IV was the legal acquiror of GAHR III in the REIT Merger, GAHR III was determined to be the accounting acquiror in the REIT Merger in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 805, Business Combinations , or ASC Topic 805, after considering the relative share ownership and the composition of the governing body of the Combined Company. Thus, the financial information set forth herein subsequent to the consummation of the Merger and the AHI Acquisition reflects results of the Combined Company, and the financial information set forth herein prior to the Merger and the AHI Acquisition reflects GAHR III’s results. For this reason, period to period comparisons may not be meaningful. Please see Note 3, Business Combinations, for a further discussion of the Merger and the AHI Acquisition. Operating Partnership and Former Advisor We conduct substantially all of our operations through our operating partnership. Through September 30, 2021, we were externally advised by our former advisor pursuant to an advisory agreement, as amended, or the Advisory Agreement, between us and our former advisor. On June 23, 2021, we also entered into a Mutual Consent Regarding Waiver of Subordination of Asset Management Fees, or the Mutual Consent, pursuant to which, for the period from the date the Mutual Consent was entered into until the earlier to occur of (i) the closing of the Merger, or (ii) the termination of the Merger Agreement, the parties waived the requirement in the Advisory Agreement that our stockholders receive distributions in an amount equal to 5.0 % per annum, cumulative, non-compounded, of their invested capital before we would be obligated to pay an asset management fee. Our former advisor used its best efforts, subject to the oversight and review of our board of directors, or 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. Following the Merger and AHI Acquisition, we became self-managed and are no longer externally advised. As a result, any fees that would have otherwise been payable to our former advisor, are no longer being paid. Prior to the Merger and the AHI Acquisition, our former advisor was 75.0 % owned and managed by wholly owned subsidiaries of AHI, and 25.0 % owned by a wholly owned subsidiary of Griffin Capital, or collectively, our former co-sponsors. Prior to the AHI Acquisition, AHI was 47.1 % owned by AHI Group Holdings, 45.1 % indirectly owned by Digital Bridge Group, Inc. (NYSE: 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. We were not affiliated with Griffin Capital, Digital Bridge or Mr. Flaherty; however, we were affiliated with our former advisor, AHI and AHI Group Holdings. Please see the “Merger of Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT IV, Inc.” and “AHI Acquisition” sections above for a further discussion of our operations effective October 1, 2021. As a result of the Merger and the AHI Acquisition on October 1, 2021, we, through our direct and indirect subsidiaries, own approximately 94.9 % of our operating partnership and the 87 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) remaining 5.1 % is owned by the NewCo Sellers. See Note 13, Redeemable Noncontrolling Interests, and Note 14, Equity – Noncontrolling Interests in Total Equity, for a further discussion. Public Offering Prior to the Merger, we raised $ 1,842,618,000 through a best efforts initial public offering that commenced on February 26, 2014, or the GAHR III initial offering, and issued 184,930,598 shares of our common stock. In addition, during the GAHR III initial offering, we issued 1,948,563 shares of our common stock pursuant to our initial distribution reinvestment plan, or the Initial DRIP, for a total of $ 18,511,000 in distributions reinvested. Following the deregistration of the GAHR III initial offering on April 22, 2015, we continued issuing shares of our common stock pursuant to the Initial DRIP through a subsequent offering, or the 2015 GAHR III DRIP Offering. Effective October 5, 2016, we amended and restated the Initial DRIP, or the Amended and Restated DRIP, to amend the price at which shares of our common stock were issued pursuant to the 2015 GAHR III DRIP Offering. A total of $ 245,396,000 in distributions were reinvested that resulted in 26,386,545 shares of common stock being issued pursuant to the 2015 GAHR III DRIP Offering. On January 30, 2019, we filed a Registration Statement on Form S-3 under the Securities Act of 1933, as amended, or the Securities Act, to register a maximum of $ 200,000,000 of additional shares of our common stock to be issued pursuant to the Amended and Restated DRIP, or the 2019 GAHR III DRIP Offering, which commenced on April 1, 2019, following the deregistration of the 2015 GAHR III DRIP Offering. On May 29, 2020, in consideration of the impact the coronavirus, or COVID-19, pandemic had on the United States, globally and on our business operations, our board authorized the suspension of the 2019 GAHR III DRIP Offering. Such suspension was effective upon the completion of all shares issued with respect to distributions payable to stockholders of record on or prior to the close of business on May 31, 2020. A total of $ 63,105,000 in distributions were reinvested that resulted in 6,724,348 shares of common stock being issued pursuant to the 2019 GAHR III DRIP Offering. As a result of the Merger, we deregistered the 2019 GAHR III DRIP Offering. Further, on October 4, 2021, our board authorized the reinstatement of our distribution reinvestment plan, as amended, or the DRIP. We continue to offer up to $ 100,000,000 of shares of our common stock to be issued pursuant to the DRIP under an existing Registration Statement on Form S-3 under the Securities Act filed by GAHR IV, or the AHR DRIP Offering. We collectively refer to the Initial DRIP portion of the GAHR III initial offering, the 2015 GAHR III DRIP Offering, the 2019 GAHR III DRIP Offering and the AHR DRIP Offering as our DRIP Offerings. See Note 14, Equity — Distribution Reinvestment Plan, for a further discussion. As of December 31, 2021, a total of $ 54,637,000 in distributions were reinvested that resulted in 5,755,013 shares of common stock being issued pursuant to the AHR DRIP Offering. Our Real Estate Investments Portfolio We currently operate through six reportable business segments: medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals. As of December 31, 2021, we owned and/or operated 182 properties, comprising 191 buildings, and 122 integrated senior health campuses including completed development projects, or approximately 19,178,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,292,371,000 , including the fair value of the properties acquired in the Merger. In addition, as of December 31, 2021, we also owned a real estate-related debt investment purchased for $ 60,429,000 . COVID-19 Due to the COVID-19 pandemic in the United States and globally, since March 2020, our residents, tenants, operating partners and managers have been materially impacted. The rise of the Delta and Omicron variants of COVID-19, and government and public health agencies’ responses to potential future resurgences in the virus, further contributes to the prolonged economic impact and uncertainties caused by the COVID-19 pandemic. There is also uncertainty regarding the acceptance of available vaccines and boosters and the public’s receptiveness to those measures. As the COVID-19 pandemic is still impacting the healthcare system, it continues to present challenges for us as an owner and operator of healthcare facilities, 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 have evaluated the impacts of the COVID-19 pandemic on our business thus far and incorporated information concerning such impacts into our assessments of liquidity, impairment and collectability from tenants and residents as of December 31, 2021. We will continue to monitor such impacts and will adjust our estimates and assumptions based on the best available information. 88 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 2. Summary of Significant Accounting Policies The summary of significant accounting policies presented below is designed to assist in understanding our accompanying consolidated financial statements. Such consolidated financial statements and the accompanying notes thereto are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing our accompanying consolidated financial statements. Basis of Presentation Our accompanying 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 consolidated financial statements as a 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 and all non-wholly owned subsidiaries of which we have control, will own substantially all of the interests in properties acquired on our behalf. We are the sole general partner of our operating partnership and as of December 31, 2021, we owned an approximately 94.9 % general partnership interest therein and the remaining 5.1 % was owned by the NewCo Sellers. Prior to the Merger on October 1, 2021 and as of December 31, 2020, we owned greater than a 99.99 % general partnership interest in our operating partnership. Our former advisor was a limited partner and owned less than a 0.01 % noncontrolling limited partnership interest in our operating partnership. On October 1, 2021, in connection with the Merger, we repurchased our former advisor’s limited partnership interest in our operating partnership. The accounts of our operating partnership are consolidated in our accompanying consolidated financial statements 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). All intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of our accompanying 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 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 including through business combinations, goodwill and its impairment, 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. Actual results could differ from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of all highly liquid investments with a maturity of three months or less when purchased. Restricted cash primarily comprises lender required accounts for property taxes, tenant improvements, capital improvements and insurance, which are restricted as to use or withdrawal. Leases Lessee : We determine if a contract is a lease upon inception of the lease and maintain a distinction between finance and operating leases. Pursuant to FASB ASC Topic 842, Leases , or ASC Topic 842, lessees are required to recognize the following for all leases with terms greater than 12 months at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The lease liability is calculated by using either the implicit rate of the 89 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) lease or the incremental borrowing rate. The accretion of lease liabilities and amortization expense on right-of-use assets for our operating leases are included in rental expenses and property operating expenses in our accompanying consolidated statements of operations and comprehensive income (loss). Operating lease liabilities are calculated using our incremental borrowing rate based on the information available as of the lease commencement date. For our finance leases, the accretion of lease liabilities are included in interest expense and the amortization expense on right-of-use assets are included in depreciation and amortization in our accompanying consolidated statements of operations and comprehensive income (loss). Further, finance lease assets are included within real estate investments, net and finance lease liabilities are included within financing obligations in our accompanying consolidated balance sheets. Lessor : Pursuant to ASC Topic 842, lessors bifurcate lease revenues into lease components and non-lease components and separately recognize and disclose non-lease components that are executory in nature. Lease components continue to be recognized on a straight-line basis over the lease term and certain non-lease components may be accounted for under the revenue recognition guidance in ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606. See the “Revenue Recognition” section below. ASC Topic 842 also provides for a practical expedient package that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. In addition, such practical expedient causes an entity to assess whether a contract is predominately lease or service based, and recognize the revenue from the entire contract under the relevant accounting guidance. We recognize revenue for our medical office buildings, senior housing, skilled nursing facilities and hospitals segments as real estate revenue. Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). Differences between real estate revenue recognized and cash amounts contractually due from tenants under the lease agreements are recorded to deferred rent receivable, which is included in other assets, net in our accompanying consolidated balance sheets. Tenant reimbursement revenue, which comprises additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are considered non-lease components and variable lease payments. We qualified for and elected the practical expedient as outlined above to combine the non-lease component with the lease component, which is the predominant component, and therefore the non-lease component is recognized as part of real estate revenue. In addition, as lessors, we exclude certain lessor costs (i.e., property taxes and insurance) paid directly by a lessee to third parties on our behalf from our measurement of variable lease revenue and associated expense (i.e., no gross up of revenue and expense for these costs); and include lessor costs that we paid and are reimbursed by the lessee in our measurement of variable lease revenue and associated expense (i.e., gross up revenue and expense for these costs). At our RIDEA facilities, we offer residents room and board (lease component), standard meals and healthcare services (non-lease component) and certain ancillary services that are not contemplated in the lease with each resident (i.e., laundry, guest meals, etc.). For our RIDEA facilities, we recognize revenue under ASC Topic 606 as resident fees and services, based on our predominance assessment from electing the practical expedient outlined above. See the “Revenue Recognition” section below. See Note 18, Leases, for a further discussion. Revenue Recognition Real Estate Revenue We recognize real estate revenue in accordance with ASC Topic 842. See the “Leases” section above. Resident Fees and Services Revenue We recognize resident fees and services revenue in accordance with ASC Topic 606. A significant portion of resident fees and services revenue represents healthcare service revenue that is reported at the amount that we expect to be entitled to in exchange for providing patient care. These amounts are due from patients, third-party payors (including health insurers and government programs), other healthcare facilities, and others and includes variable consideration for retroactive revenue adjustments due to settlement of audits, reviews, and investigations. Generally, we bill the patients, third-party payors and other healthcare facilities several days after the services are performed. Revenue is recognized as performance obligations are satisfied. Performance obligations are determined based on the nature of the services provided by us. Revenue for performance obligations satisfied over time is recognized based on actual charges incurred in relation to total expected (or actual) charges. This method provides a depiction of the transfer of services over the term of the performance obligation based on the inputs needed to satisfy the obligation. Generally, performance obligations satisfied over time relate to patients receiving long-term 90 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) healthcare services, including rehabilitation services. We measure the performance obligation from admission into the facility to the point when we are no longer required to provide services to that patient. Revenue for performance obligations satisfied at a point in time is recognized when goods or services are provided and we do not believe we are required to provide additional goods or services to the patient. Generally, performance obligations satisfied at a point in time relate to sales of our pharmaceuticals business or to sales of ancillary supplies. Because all of our performance obligations relate to contracts with a duration of less than one year, we have elected to apply the optional exemption provided in ASC Topic 606 and, therefore, are not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The performance obligations for these contracts are generally completed within months of the end of the reporting period. We determine the transaction price based on standard charges for goods and services provided, reduced, where applicable, by contractual adjustments provided to third-party payors, implicit price concessions provided to uninsured patients, and estimates of goods to be returned. We also determine the estimates of contractual adjustments based on Medicare and Medicaid pricing tables and historical experience. We determine the estimate of implicit price concessions based on the historical collection experience with each class of payor. Agreements with third-party payors typically provide for payments at amounts less than established charges. A summary of the payment arrangements with major third-party payors follows: • Medicare: Certain healthcare services are paid at prospectively determined rates based on cost-reimbursement methodologies subject to certain limits. • Medicaid: Reimbursements for Medicaid services are generally paid at prospectively determined rates. In the state of Indiana, we participate in an Upper Payment Limit program, or IGT, with various county hospital partners, which provides supplemental Medicaid payments to skilled nursing facilities that are licensed to non-state, government-owned entities such as county hospital districts. We have operational responsibility through management agreements for facilities retained by the county hospital districts including this IGT. • Other: Payment agreements with certain commercial insurance carriers, health maintenance organizations and preferred provider organizations provide for payment using prospectively determined rates per discharge, discounts from established charges and prospectively determined periodic rates. Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation. As a result of investigations by governmental agencies, various healthcare organizations have received requests for information and notices regarding alleged noncompliance with those laws and regulations, which, in some instances, have resulted in organizations entering into significant settlement agreements. Compliance with such laws and regulations may also be subject to future government review and interpretation as well as significant regulatory action, including fines, penalties and potential exclusion from the related programs. There can be no assurance that regulatory authorities will not challenge our compliance with these laws and regulations, and it is not possible to determine the impact (if any) such claims or penalties would have upon us. Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and our historical settlement activity, including an assessment to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustment is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations. Adjustments arising from a change in the transaction price were not significant for the years ended December 31, 2021, 2020 and 2019. Disaggregation of Resident Fees and Services Revenue We disaggregate revenue from contracts with customers according to lines of business and payor classes. The transfer of goods and services may occur at a point in time or over time; in other words, revenue may be recognized over the course of the underlying contract, or may occur at a single point in time based upon a single transfer of control. This distinction is discussed in further detail below. We determine that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. 91 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 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, for the years then ended: Integrated Senior Health Campuses SHOP(1) Total 2021: Over time $ 824,991,000 $ 96,000,000 $ 920,991,000 Point in time 200,708,000 2,236,000 202,944,000 Total resident fees and services $ 1,025,699,000 $ 98,236,000 $ 1,123,935,000 2020: Over time $ 787,116,000 $ 83,043,000 $ 870,159,000 Point in time 196,053,000 2,861,000 198,914,000 Total resident fees and services $ 983,169,000 $ 85,904,000 $ 1,069,073,000 2019: Over time $ 816,284,000 $ 65,200,000 $ 881,484,000 Point in time 214,650,000 2,944,000 217,594,000 Total resident fees and services $ 1,030,934,000 $ 68,144,000 $ 1,099,078,000 The following tables disaggregate our resident fees and services revenue by payor class for the years then ended: Integrated Senior Health Campuses SHOP(1) Total 2021: Private and other payors $ 462,828,000 $ 94,673,000 $ 557,501,000 Medicare 349,876,000 — 349,876,000 Medicaid 212,995,000 3,563,000 216,558,000 Total resident fees and services $ 1,025,699,000 $ 98,236,000 $ 1,123,935,000 2020: Private and other payors $ 437,133,000 $ 84,308,000 $ 521,441,000 Medicare 356,350,000 — 356,350,000 Medicaid 189,686,000 1,596,000 191,282,000 Total resident fees and services $ 983,169,000 $ 85,904,000 $ 1,069,073,000 2019: Private and other payors $ 499,693,000 $ 67,930,000 $ 567,623,000 Medicare 338,466,000 — 338,466,000 Medicaid 192,775,000 214,000 192,989,000 Total resident fees and services $ 1,030,934,000 $ 68,144,000 $ 1,099,078,000 ___________ (1) Includes fees for basic housing and assisted living care. We record revenue when services are rendered at amounts billable to individual residents. Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For patients under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered. 92 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Accounts Receivable, Net — Resident Fees and Services Revenue The beginning and ending balances of accounts receivable, net — resident fees and services are as follows: Private and Other Payors Medicare Medicaid Total Beginning balance — January 1, 2021 $ 36,125,000 $ 36,479,000 $ 14,473,000 $ 87,077,000 Ending balance — December 31, 2021 42,056,000 35,953,000 16,922,000 94,931,000 Increase/(decrease) $ 5,931,000 $ ( 526,000 ) $ 2,449,000 $ 7,854,000 Deferred Revenue — Resident Fees and Services Revenue The beginning and ending balances of deferred revenue — resident fees and services, almost all of which relates to private and other payors, are as follows: Total Beginning balance — January 1, 2021 $ 10,597,000 Ending balance — December 31, 2021 14,673,000 Increase $ 4,076,000 In addition to the deferred revenue above, during the second quarter of 2020 we received approximately $ 52,322,000 of Medicare advance payments through an expanded program of the Centers for Medicare & Medicaid Services, or CMS. These payments are required to be applied to claims beginning one year after their receipt through Medicare claims submitted over a future period. Any amounts of unutilized Medicare advance payments, which reflect funds received that are not applied to actual billings for Medicare services performed, will be repaid to CMS by the end of 2022. Our recoupment period commenced in the second quarter of 2021 and continues through 2022, and as such, for the year ended December 31, 2021, we recognized $ 38,677,000 of resident fees and services pertaining to such Medicare advance payments. The remaining balance in Medicare advance payments will be applied to future Medicare claims. Such amounts are deferred and included in security deposits, prepaid rent and other liabilities in our accompanying consolidated balance sheets. Financing Component We have elected a practical expedient allowed under ASC Topic 606 and, therefore, we do not adjust the promised amount of consideration from patients and third-party payors for the effects of a significant financing component due to our expectation that the period between the time the service is provided to a patient and the time that the patient or a third-party payor pays for that service will be one year or less. Contract Costs We have applied the practical expedient provided by FASB ASC Topic 340, Other Assets and Deferred Costs , and, therefore, all incremental customer contract acquisition costs are expensed as they are incurred since the amortization period of the asset that we otherwise would have recognized is one year or less in duration. Government Grants We have been granted stimulus funds through various federal and state government programs, such as through the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, passed by the federal government on March 27, 2020, which were established for eligible healthcare providers to preserve liquidity in response to lost revenues and/or increased healthcare expenses (as such terms are defined in the applicable regulatory guidance) associated with the COVID-19 pandemic. Such grants are not loans and, as such, are not required to be repaid, subject to certain conditions. We recognize government grants as grant income or as a reduction of property operating expenses, as applicable, in our accompanying consolidated statements of operations and comprehensive income (loss) when there is reasonable assurance that the grants will be received and all conditions to retain the funds will be met. We adjust our estimates and assumptions based on the applicable guidance provided by the government and the best available information that we have. Any stimulus or other relief funds received that are not expected to be used in accordance with such terms and conditions will be returned to the government, and any related deferred income will not be recognized. 93 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) For the years ended December 31, 2021 and 2020, we recognized government grants of $ 16,951,000 and $ 55,181,000 , respectively, as grant income and $ 134,000 and $ 519,000 , respectively, as a reduction of property operating expenses. As of December 31, 2021 and 2020, we deferred approximately $ 443,000 and $ 2,635,000 , respectively, of grant income until such time as it is earned. Such deferred amounts are included in security deposits, prepaid rent and other liabilities in our accompanying consolidated balance sheets. As of and for the year ended December 31, 2019, we did no t recognize any government grants. Tenant and Resident Receivables and Allowances On January 1, 2020, we adopted ASC Topic 326, Financial Instruments Credit Losses , or ASC Topic 326. We adopted ASC Topic 326 using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated. There was no net cumulative effect adjustment to retained earnings as of January 1, 2020. Resident receivables are carried net of an allowance for credit losses. An allowance is maintained for estimated losses resulting from the inability of residents and payors to meet the contractual obligations under their lease or service agreements. Substantially all of such allowances are recorded as direct reductions of resident fees and services revenue as contractual adjustments provided to third-party payors or implicit price concessions in our accompanying consolidated statements of operations and comprehensive income (loss). Our determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, the residents’ financial condition, security deposits, cash collection patterns by payor and by state, current economic conditions, future expectations in estimating credit losses and other relevant factors. Prior to our adoption of ASC Topic 326 on January 1, 2020, resident receivables were carried net of an allowance for uncollectible amounts. Tenant receivables and unbilled deferred rent receivables are reduced for uncollectible amounts, which are recognized as direct reductions of real estate revenue in our accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2021 and 2020, we had $ 12,378,000 and $ 9,466,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses. For the years ended December 31, 2021, 2020 and 2019, we increased allowances by $ 10,779,000 , $ 12,494,000 and $ 13,087,000 , respectively, and reduced allowances for collections or adjustments by $ 5,624,000 , $ 7,697,000 and $ 6,094,000 , respectively. For the years ended December 31, 2021, 2020 and 2019, $ 4,353,000 , $ 6,766,000 and $ 6,774,000 , respectively, of our receivables were written off against the related allowances. For the year ended December 31, 2021, the allowance also included an increase of $ 2,110,000 as a result of the Merger. Real Estate Investments Purchase Price Allocation Upon the acquisition of real estate properties or other entities owning real estate properties, we determine whether the transaction is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the assets acquired and liabilities assumed are not a business, we account for the transaction as an asset acquisition. Under both methods, we recognize the identifiable assets acquired and liabilities assumed; however, for a transaction accounted for as an asset acquisition, we capitalize transaction costs and allocate the purchase price using a relative fair value method allocating all accumulated costs, whereas for a transaction accounted for as a business combination, we immediately expense transaction costs incurred associated with the business combination and allocate the purchase price based on the estimated fair value of each separately identifiable asset and liability. For the years ended December 31, 2021, 2020 and 2019, all of our investment transactions were accounted for as asset acquisitions with the exception of the Merger and the AHI Acquisition which took place in 2021 and were accounted for as business combinations. See Note 3, Business Combinations — Merger and the AHI Acquisition, and Note 4, Real Estate Investments, Net — Acquisition of Real Estate Investments, for a further discussion. We, with assistance from independent valuation specialists, measure the fair value of tangible and identified intangible assets and liabilities, as applicable, based on their respective fair values for acquired properties. Our method for allocating the purchase price to acquired investments in real estate requires us to make subjective assessments for determining fair value of the assets acquired and liabilities assumed. This includes determining the value of the buildings, land, leasehold interests, furniture, fixtures and equipment, above- or below-market rent, in-place leases, master leases, tenant improvements, above- or below-market debt assumed, derivative financial instruments assumed, and noncontrolling interest in the acquiree, if any. These estimates require significant judgment and in some cases involve complex calculations. These allocation assessments directly impact our results of operations, as amounts allocated to certain assets and liabilities have different depreciation or amortization lives. In addition, we amortize the value assigned to above- or below-market rent as a component of revenue, unlike in-place leases and other intangibles, which we include in depreciation and amortization in our accompanying consolidated statements of operations and comprehensive income (loss). 94 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The determination of the fair value of land is based upon comparable sales data. In cases where a leasehold interest in the land is acquired, only the above/below market consideration is necessary where the value of the leasehold interest is determined by discounting the difference between the contract ground lease payments and a market ground lease payment back to a present value as of the acquisition date. The fair value of buildings is based upon our determination of the value under two methods: one, as if it were to be replaced and vacant using cost data and, two, also using a residual technique based on discounted cash flow models, as vacant. Factors considered by us include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. We also recognize the fair value of furniture, fixtures and equipment on the premises, as well as the above- or below-market rent, the value of in-place leases, master leases, above- or below-market debt and derivative financial instruments assumed. The value of the above- or below-market component of the acquired in-place leases is determined based upon the present value (using a discount rate that reflects the risks associated with the acquired leases) of the difference between: (i) the level payment equivalent of the contract rent paid pursuant to the lease; and (ii) our estimate of market rent payments taking into account the expected market rent growth. In the case of leases with options, a case-by-case analysis is performed based on all facts and circumstances of the specific lease to determine whether the option will be assumed to be exercised. The amounts related to above-market leases are included in identified intangible assets, net in our accompanying consolidated balance sheets and are amortized against real estate revenue over the remaining non-cancelable lease term of the acquired leases with each property. The amounts related to below-market leases are included in identified intangible liabilities, net in our accompanying consolidated balance sheets and are amortized to real estate revenue over the remaining non-cancelable lease term plus any below-market renewal options of the acquired leases with each property. The value of in-place lease costs are based on management’s evaluation of the specific characteristics of the tenant’s lease and our overall relationship with the tenants. Characteristics considered by us in allocating these values include the nature and extent of the credit quality and expectations of lease renewals, among other factors. The in-place lease intangible represents the value related to the economic benefit for acquiring a property with in-place leases as opposed to a vacant property, which is evaluated based on a review of comparable leases for a similar property, terms and conditions for marketing and executing new leases, and implied in the difference between the value of the whole property “as is” and “as vacant.” The net amounts related to in-place lease costs are included in identified intangible assets, net in our accompanying consolidated balance sheets and are amortized to depreciation and amortization expense over the average downtime of the acquired leases with each property. The net amounts related to the value of tenant relationships, if any, are included in identified intangible assets, net in our accompanying consolidated balance sheets and are amortized to depreciation and amortization expense over the average remaining non-cancelable lease term of the acquired leases plus the market renewal lease term. The value of a master lease, if any, in which a previous owner or a tenant is relieved of specific rental obligations as additional space is leased, is determined by discounting the expected real estate revenue associated with the master lease space over the assumed lease-up period. The value of above- or below-market debt is determined based upon the present value of the difference between the cash flow stream of the assumed mortgage and the cash flow stream of a market rate mortgage at the time of assumption. The net value of above- or below-market debt is included in mortgage loans payable, net in our accompanying consolidated balance sheets and is amortized to interest expense over the remaining term of the assumed mortgage. The value of derivative financial instruments, if any, is determined in accordance with ASC Topic 820, Fair Value Measurements and Disclosures , and is included in other assets or other liabilities in our accompanying consolidated balance sheets. The values of contingent consideration assets and liabilities are analyzed at the time of acquisition. For contingent purchase options, the fair market value of the acquired asset is compared to the specified option price at the exercise date. If the option price is below market, it is assumed to be exercised and the difference between the fair market value and the option price is discounted to the present value at the time of acquisition. The values of the redeemable and nonredeemable noncontrolling interests are estimated by applying the income approach based on a discounted cash flow analysis. The fair value measurement may apply significant inputs that are not observable in the market. See Note 3, Business Combinations — Merger and the AHI Acquisition — Fair Value of Noncontrolling Interests, for a further discussion of our fair value measurement approach and the significant inputs used in the values of redeemable and nonredeemable noncontrolling interests in GAHR IV. 95 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Real Estate Investments, Net We carry our operating properties at our historical cost less accumulated depreciation. The cost of operating properties includes the cost of land and completed buildings and related improvements, including those related to financing obligations. Expenditures that increase the service life of properties are capitalized and the cost of maintenance and repairs is charged to expense as incurred. The cost of buildings and capital improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and capital improvements, up to 39 years, and the cost for tenant improvements is depreciated over the shorter of the lease term or useful life, up to 34 years. The cost of furniture, fixtures and equipment is depreciated over the estimated useful life, up to 28 years. When depreciable property is retired, replaced or disposed of, the related cost and accumulated depreciation is removed from the accounts and any gain or loss is reflected in earnings. As part of the leasing process, we may provide the lessee with an allowance for the construction of leasehold improvements. These leasehold improvements are capitalized and recorded as tenant improvements and depreciated over the shorter of the useful life of the improvements or the lease term. If the allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the improvements, the allowance is considered to be a lease inducement and is included in other assets, net in our accompanying consolidated balance sheets. Lease inducement is recognized over the lease term as a reduction of real estate revenue on a straight-line basis. Factors considered during this evaluation include, among other things, who holds legal title to the improvements as well as other controlling rights provided by the lease agreement and provisions for substantiation of such costs (e.g ., unilateral control of the tenant space during the build-out process). Determination of the appropriate accounting for the payment of a tenant allowance is made on a lease-by-lease basis, considering the facts and circumstances of the individual tenant lease. Recognition of lease revenue commences when the lessee is given possession of the leased space upon completion of tenant improvements when we are the owner of the leasehold improvements. However, when the leasehold improvements are owned by the tenant, the lease inception date (and the date on which recognition of lease revenue commences) is the date the tenant obtains possession of the leased space for purposes of constructing its leasehold improvements. Goodwill Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of a business acquired in a business combination. Our goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We compare the fair value of a reporting segment with its carrying amount. We recognize an impairment loss to the extent the carrying value of goodwill exceeds the implied value in the current period. We take a qualitative approach to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting segment in step one of the impairment test. We perform our annual assessment of goodwill on October 1. Please see Note 3, Business Combinations, for a further discussion of goodwill recognized on October 1, 2021 in connection with the AHI acquisition, and Note 19, Segment Reporting, for a further discussion of goodwill as of December 31, 2021. For the years ended December 31, 2021, 2020 and 2019, we did not incur any impairment losses with respect to goodwill. Impairment of Long-Lived Assets and Intangible Assets We periodically evaluate our long-lived assets, primarily consisting of investments in real estate that we carry at our historical cost less accumulated depreciation, for impairment when events or changes in circumstances indicate that its carrying value may not be recoverable. We consider the following indicators, among others, in our evaluation of impairment: • significant negative industry or economic trends; • a significant underperformance relative to historical or projected future operating results; and • a significant change in the extent or manner in which the asset is used or significant physical change in the asset. If indicators of impairment of our long-lived assets are present, we evaluate the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying operations. In performing this evaluation, we consider market conditions and our current intentions with respect to holding or disposing of the asset. We adjust the net book value of properties we lease to others and other long-lived assets to fair value if the sum of the expected future undiscounted cash flows, including sales proceeds, is less than carrying value. We recognize an impairment loss at the time we make any such determination. 96 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) We test indefinite-lived intangible assets, other than goodwill, for impairment at least annually, and more frequently if indicators arise. We first assess qualitative factors to determine the likelihood that the fair value of the reporting group is less than its carrying value. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. Fair values of other indefinite-lived intangible assets are usually determined based on discounted cash flows or appraised values, as appropriate. If impairment indicators arise with respect to intangible assets with finite useful lives, we evaluate impairment by comparing the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If the estimated future undiscounted net cash flows are less than the carrying amount of the asset, then we estimate the fair value of the asset and compare the estimated fair value to the intangible asset’s carrying value. For all of our reporting units, we recognize any shortfall from carrying value as an impairment loss in the current period. See Note 4, Real Estate Investments, Net, for a further discussion of impairment of long-lived assets. For the years ended December 31, 2021, 2020 and 2019, we did no t incur any impairment losses with respect to intangible assets. Properties Held for Sale A property or a group of properties is reported in discontinued operations in our consolidated statements of operations and comprehensive income (loss) for current and prior periods if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when either: (i) the component has been disposed of or (ii) is classified as held for sale. At such time as a property is held for sale, such property is carried at the lower of: (i) its carrying amount or (ii) fair value less costs to sell. In addition, a property being held for sale ceases to be depreciated. We classify operating properties as property held for sale in the period in which all of the following criteria are met: • management, having the authority to approve the action, commits to a plan to sell the asset; • the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; • an active program to locate a buyer or buyers and other actions required to complete the plan to sell the asset has been initiated; • the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year; • the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and • given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be withdrawn. Our properties held for sale are included in other assets, net in our accompanying consolidated balance sheets. We did no t recognize impairment charges on properties held for sale for the years ended December 31, 2021 and 2019. For the year ended December 31, 2020, we determined that the fair values of two integrated senior health campuses that were held for sale were lower than their carrying amounts, and as such, we recognized an aggregate impairment charge of $ 2,719,000 , which reduced the total aggregate carrying value of such assets to $ 807,000 . The fair values of such properties were determined by the sales prices from executed purchase and sales agreements with third-party buyers, and adjusted for anticipated selling costs, which were considered Level 2 measurements within the fair value hierarchy. For the year ended December 31, 2021, we disposed of two integrated senior health campuses included in properties held for sale for an aggregate contract sales price of $ 500,000 and recognized an aggregate net loss on sale of $ 114,000 . For the year ended December 31, 2020, we disposed of two integrated senior health campuses included in properties held for sale for an aggregate contract sales price of $ 10,457,000 and recognized an aggregate net gain on sale of $ 1,380,000 . For the year ended December 31, 2019, we did not dispose of any held for sale properties. Debt Security Investment, Net We classify our marketable debt security investment as held-to-maturity because we have the positive intent and ability to hold the security to maturity, and we have not recorded any unrealized holding gains or losses on such investment. Our held-to-maturity security is recorded at amortized cost and adjusted for the amortization of premiums or discounts through maturity. Prior to the adoption of ASC Topic 326 on January 1, 2020, a loss was recognized in earnings when we determined declines in the fair value of marketable securities were other-than-temporary. For the year ended December 31, 2019, we did not incur any 97 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) such loss. Effective January 1, 2020, we evaluated our debt security investment for expected future credit loss in accordance with ASC Topic 326. There was no net cumulative effect adjustment to retained earnings as of January 1, 2020. See Note 5, Debt Security Investment, Net, for a further discussion. Derivative Financial Instruments We are exposed to the effect of interest rate changes in the normal course of business. We seek to mitigate these risks by following established risk management policies and procedures, which include the occasional use of derivatives. Our primary strategy in entering into derivative contracts, such as fixed rate interest rate swaps and interest rate caps, is to add stability to interest expense and to manage our exposure to interest rate movements by effectively converting a portion of our variable-rate debt to fixed-rate debt. We do not enter into derivative instruments for speculative purposes. Derivatives are recognized as either other assets or other liabilities in our accompanying consolidated balance sheets and are measured at fair value. We do not designate our derivative instruments as hedge instruments as defined by guidance under ASC Topic 815, Derivatives and Hedges , or ASC Topic 815, which allows for gains and losses on derivatives designated as hedges to be offset by the change in value of the hedged items or to be deferred in other comprehensive income (loss). Changes in the fair value of our derivative financial instruments are recorded as a component of interest expense in gain or loss in fair value of derivative financial instruments in our accompanying consolidated statements of operations and comprehensive income (loss). See Note 10, Derivative Financial Instruments, and Note 16, Fair Value Measurements, for a further discussion of our derivative financial instruments. Fair Value Measurements The fair value of certain assets and liabilities is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we follow a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of our reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and our reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. See Note 16, Fair Value Measurements, for a further discussion. Other Assets, Net Other assets, net primarily consists of inventory, prepaid expenses and deposits, deferred financing costs related to our lines of credit and term loans, deferred rent receivables, deferred tax assets, investments in unconsolidated entities, lease inducements and lease commissions. Inventory consists primarily of pharmaceutical and medical supplies and is stated at the lower of cost (first-in, first-out) or market. Deferred financing costs related to our lines of credit and term loans include amounts paid to lenders and others to obtain such financing. Such costs are amortized using the straight-line method over the term of the related loan, which approximates the effective interest rate method. Amortization of deferred financing costs related to our lines of credit and term loans is included in interest expense in our accompanying consolidated statements of operations and 98 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) comprehensive income (loss). Lease commissions are amortized using the straight-line method over the term of the related lease. Prepaid expenses are amortized over the related contract periods. We report investments in unconsolidated entities using the equity method of accounting when we have the ability to exercise significant influence over the operating and financial policies. Under the equity method, our share of the investee’s earnings or losses is included in our accompanying consolidated statements of operations and comprehensive income (loss). We generally do not recognize equity method losses when such losses exceed our net equity method investment balance unless we have committed to provide such investee additional financial support or guaranteed its obligations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We have elected to follow the cumulative earnings approach when classifying distributions received from equity method investments in our consolidated statements of cash flows, whereby any distributions received up to the amount of cumulative equity earnings will be considered a return on investment and classified in operating activities and any excess distributions would be considered a return of investment and classified in investing activities. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded. For the years ended December 31, 2021, 2020 and 2019, we did no t incur any impairment losses from unconsolidated entities. See Note 7, Other Assets, Net, for a further discussion. Accounts Payable and Accrued Liabilities As of December 31, 2021 and 2020, accounts payable and accrued liabilities primarily include reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 31,101,000 and $ 46,540,000 , respectively, insurance reserves of $ 36,440,000 and $ 36,251,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 22,852,000 and $ 21,508,000 , respectively, accrued property taxes of $ 22,102,000 and $ 14,521,000 , respectively, and accrued investor distributions of $ 8,768,000 and $ 0 , respectively. Stock Based Compensation We follow ASC Topic 718, Compensation — Stock Compensation , or ASC Topic 718, to account for our stock compensation pursuant to the 2015 Incentive Plan, or our incentive plan, using the fair value method, which requires an estimate of fair value of the award at the time of grant and recognition of compensation expense on a straight-line basis over the requisite service period of the awards. The compensation expense is adjusted for actual forfeitures upon occurrence. Awards granted under our incentive plan consist of restricted stock or units issued to our executive officers and key employees, in addition to restricted stock issued to our independent directors. See Note 14, Equity — 2015 Incentive Plan, for a further discussion of awards granted under our incentive plan. On January 1, 2019, we adopted Accounting Standards Update, or ASU, 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. It expands the scope of ASC Topic 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in the entity’s own operations and supersedes the guidance of ASC Topic 505-50, Equity-Based Payments to Nonemployees. We applied this guidance using a modified retrospective approach for all equity-classified nonemployee awards for which a measurement date has not been established as of the adoption date. See Note 14, Equity — Noncontrolling Interests in Total Equity, for a further discussion of grants to nonemployees. 99 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Foreign Currency We have real estate investments in the United Kingdom, or UK, and Isle of Man for which the functional currency is the UK Pound Sterling, or GBP. We translate the results of operations of our foreign real estate investments into United States Dollars, or USD, using the average currency rates of exchange in effect during the period, and we translate assets and liabilities using the currency exchange rate in effect at the end of the period. The resulting foreign currency translation adjustments are included in accumulated other comprehensive loss, a component of stockholders’ equity, in our accompanying consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical currency exchange rates. We also have intercompany notes and payables denominated in GBP with our UK subsidiaries. Gains or losses resulting from remeasuring such intercompany notes and payables into USD at the end of each reporting period are reflected in our accompanying consolidated statements of operations and comprehensive income (loss). When such intercompany notes and payables are deemed to be of a long-term investment nature, they will be reflected in accumulated other comprehensive loss in our accompanying consolidated balance sheets. Gains or losses resulting from foreign currency transactions are remeasured into USD at the rates of exchange prevailing on the date of the transactions. The effects of transaction gains or losses are included in our accompanying consolidated statements of operations and comprehensive income (loss). Income Taxes We qualified, and elected to be taxed, as a REIT under the Code, and we intend to continue to qualify to be taxed as a REIT. To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute to our stockholders a minimum of 90.0 % of our annual taxable income, excluding net capital gains. We generally will not be subject to federal income taxes if we distribute 100% of our taxable income each year to our stockholders. If we fail to maintain our qualification as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could have a material adverse effect on our net income and net cash available for distribution to our stockholders. We may be subject to certain state and local income taxes on our income, property or net worth in some jurisdictions, and in certain circumstances we may also be subject to federal excise taxes on undistributed income. In addition, certain activities that we undertake are conducted by subsidiaries, which we elected to be treated as taxable REIT subsidiaries, or TRS, to allow us to provide services that would otherwise be considered impermissible for REITs. Also, we have real estate investments in the UK and Isle of Man, which do not accord REIT status to United States REITs under their tax laws. Accordingly, we recognize an income tax benefit or expense for the federal, state and local income taxes incurred by our TRS and foreign income taxes on our real estate investments in the UK and Isle of Man. We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets reflect the impact of the future deductibility of operating loss carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes us to change our judgment about the realizability of the related deferred tax asset, is included in income tax benefit or expense in our accompanying consolidated statements of operations and comprehensive income (loss) when such changes occur. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes us to change our judgment about expected future tax consequences of events, is recorded in income tax benefit or expense in our accompanying consolidated statements of operations and comprehensive income (loss). Net deferred tax assets are included in other assets, or net deferred tax liabilities are included in security deposits, prepaid rent and other liabilities, in our accompanying consolidated balance sheets. See Note 17, Income Taxes, for a further discussion. 100 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Segment Disclosure We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions. Accordingly, when we acquired our first medical office building in June 2014; senior housing facility in September 2014; hospital in December 2014; SHOP in May 2015; skilled nursing facility in October 2015; and integrated senior health campus in December 2015, we established a new reportable segment at such time. As of December 31, 2021, we operated through six reportable business segments, with activities related to investing in medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals. See Note 19, Segment Reporting, for a further discussion. GLA and Other Measures GLA and other measures used to describe real estate investments included in our accompanying consolidated financial statements are presented on an unaudited basis. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform of Financial Reporting , or ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria. ASU 2020-04 applies to the aforementioned transactions that reference the London Inter-bank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of the reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), or ASU 2021-01, which clarifies that certain optional expedients and exceptions for contract modification and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of the discontinuation of the use of LIBOR as a benchmark interest rate due to reference rate reform. ASU 2020-04 and ASU 2021-01 are effective for fiscal years and interim periods beginning after March 12, 2020 and through December 31, 2022. We are currently evaluating the impact this guidance has on our variable rate debt, derivatives and lease contracts to determine the impact on our disclosures. In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842): Lessors — Certain Leases with Variable Lease Payments, or ASU 2021-05, which amends the lease classification requirements for lessors to align them with practice under the previous lease accounting standard, ASC Topic 840, Leases . Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease, if both of the following criteria are met: (1) the lease would have been classified as a sales-type lease or a direct financing lease; and (2) the lessor would have otherwise recognized a day-one loss. ASU 2021-05 is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted. We are currently evaluating this guidance to determine the impact to our consolidated financial statements and disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , or ASU 2021-08, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquiror on the acquisition date in accordance with ASC Topic 606 as if it had originated the contracts. Under the current business combination guidance, such assets and liabilities were recognized by the acquiror as fair value on the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating this guidance to determine the impact to our consolidated financial statements and disclosures. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), or ASU 2021-10, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. ASU 2021-10 is effective for annual periods beginning after December 15, 2021. We adopted such accounting pronouncements on January 1, 2022, which did not have a material impact to our financial statement disclosures. 101 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 3. Business Combinations Merger and the AHI Acquisition As discussed in Note 1, Organization and Description of Business, on October 1, 2021, pursuant to the Merger Agreement, we completed the REIT Merger and Partnership 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, converted into the right to receive 0.9266 shares of GAHR IV’s Class I common stock, $ 0.01 par value per share. At the effective time of the Partnership Merger, (i) 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 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 GAHR IV 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. Additionally, on October 1, 2021, the AHI Acquisition closed immediately prior to the consummation of the Merger, and pursuant to the Contribution Agreement, AHI contributed substantially all of its business and operations to the surviving partnership, including its interest in GAHR III Advisor and GAHR IV Advisor, and Griffin Capital contributed its ownership interest in GAHR III Advisor and GAHR IV Advisor to the surviving partnership. In exchange for their contributions, the surviving partnership issued surviving partnership OP units to the NewCo Sellers. Purchase Consideration REIT Merger The fair value of the purchase consideration transferred was calculated as follows: Deemed equity consideration (1) $ 768,075,000 Consideration for acquisition of noncontrolling interest (2) ( 53,300,000 ) Repurchase of GAHR IV Class T common stock 192,000 Total purchase consideration $ 714,967,000 ________________ (1) Represents the fair value of GAHR III common stock that is deemed to be issued for accounting purposes only. The fair value of the purchase consideration is calculated based on 88,183,065 shares of common stock deemed to be issued by GAHR III at the fair value per share of $ 8.71 . (2) Represents the fair value of additional interest acquired in GAHR III’s subsidiary, Trilogy REIT Holdings, LLC, or Trilogy. The acquisition of additional interest in Trilogy is accounted for separately from the REIT Merger in accordance with ASC Topic 810, Consolidation , or ASC Topic 810. See Note 14, Equity — Noncontrolling Interests in Total Equity, for a discussion of the Trilogy Transaction. AHI Acquisition The fair value of the purchase consideration transferred was calculated as follows: Equity consideration (1) $ 131,674,000 Post-closing cash payment to NewCo Sellers related to net working capital adjustments 73,000 Contingent consideration (2) — Total purchase consideration $ 131,747,000 ________________ (1) Represents the estimated fair value of the 15,117,529 surviving partnership OP units issued as consideration, with a reference value for purposes thereof of $ 8.71 per unit. The issuance of surviving partnership OP units was accounted for separately from the AHI Acquisition. (2) Represents the estimated fair value of contingent consideration based on the performance of a possible private investment fund under consideration by AHI. As of the acquisition date, we have no definitive plans to establish the investment fund and therefore the fair value of contingent consideration was estimated to be $ 0 . 102 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Purchase Price Allocation REIT Merger The following table sets forth the allocation of the purchase consideration to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed recognized at the acquisition date of GAHR IV, as well as the fair value at the acquisition date of the noncontrolling interests in GAHR IV: Real estate investments $ 1,126,641,000 Cash and cash equivalents 16,163,000 Accounts and other receivables, net 2,086,000 Restricted cash 986,000 Identified intangible assets 115,824,000 Operating lease right-of-use assets 11,939,000 Other assets 3,938,000 Total assets 1,277,577,000 Mortgage loans payable, net ( 18,602,000 ) Lines of credit and term loans ( 488,900,000 ) Accounts payable and accrued liabilities ( 21,882,000 ) Accounts payable due to affiliates ( 324,000 ) Identified intangible liabilities ( 12,927,000 ) Operating lease liabilities ( 7,568,000 ) Security deposits, prepaid rent and other liabilities ( 8,354,000 ) Total liabilities ( 558,557,000 ) Total net identifiable assets acquired 719,020,000 Redeemable noncontrolling interests ( 2,525,000 ) Noncontrolling interest in total equity ( 1,528,000 ) Total purchase consideration $ 714,967,000 AHI Acquisition The following table sets forth the allocation of the purchase consideration to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed recognized at the acquisition date: Cash and cash equivalents $ 706,000 Operating lease right-of-use assets 3,526,000 Other assets 362,000 Total assets 4,594,000 Accounts payable and accrued liabilities ( 3,910,000 ) Operating lease liabilities ( 3,526,000 ) Total liabilities ( 7,436,000 ) Net identifiable liabilities assumed ( 2,842,000 ) Goodwill 134,589,000 Total purchase consideration $ 131,747,000 103 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Acquisition-related Costs The Merger and the AHI Acquisition were accounted for as business combinations and as a result, acquisition-related costs incurred in connection with these transactions of $ 12,873,000 were expensed and included in business acquisition expenses in our accompanying consolidated statement of operations and comprehensive income (loss). Acquisition-related costs of $ 6,753,000 were incurred by GAHR IV in the period before the consummation of the Merger on October 1, 2021 and are therefore not reflected in our accompanying consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2021 as GAHR III was the accounting acquiror in the Merger under ASC Topic 805, as further explained above. Fair Value of Noncontrolling Interests The fair value of the redeemable and nonredeemable noncontrolling interest in GAHR IV was estimated by applying the income approach based on a discounted cash flow analysis. This fair value measurement is based on significant inputs not observable in the market. The key assumptions applied in the income approach include the estimates of stabilized occupancy, market rents, capitalization rates, and discount rates. AHI Acquisition — Goodwill In connection with the AHI Acquisition, we recorded goodwill of $ 134,589,000 as a result of the consideration exceeding the fair value of the net assets acquired and liabilities assumed. Goodwill represents the estimated future benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill recognized in this transaction is not deductible for tax purposes. There has been no change to the carrying values of goodwill since the acquisition date through December 31, 2021. The table below represents the allocation of goodwill in connection with the AHI Acquisition to our reporting segments: Medical office buildings $ 47,812,000 Integrated senior health campuses 44,547,000 SHOP 23,277,000 Skilled nursing facilities 8,640,000 Senior housing 5,924,000 Hospitals 4,389,000 Total $ 134,589,000 REIT Merger — Real Estate Investments, Intangible Assets and Intangible Liabilities Real estate investments consist of land, building improvements, site improvements, unamortized tenant improvement allowances and unamortized capital improvements. Intangibles assets consist of in-place leases, above-market leases and certificates of need. We amortize purchased real estate investments and intangible assets on a straight-line basis over their respective useful lives. The following tables present the approximate fair value and the weighted-average depreciation and amortization periods of each major type of asset and liability. Real Estate Investments Approximate Fair Value Estimated Useful Lives (in years) Land $ 114,525,000 N/A Building improvements 930,700,000 39 Site improvements 33,644,000 7 Unamortized tenant improvement allowances 42,407,000 6 Unamortized capital improvements 5,365,000 11 Total real estate investments $ 1,126,641,000 104 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Intangible Assets Approximate Fair Value Estimated Useful Lives (in years) In-place leases $ 79,887,000 6 Above-market leases 35,606,000 10 Certificates of need 331,000 N/A Total identified intangible assets $ 115,824,000 Intangible Liabilities Approximate Fair Value Estimated Useful Life (in years) Below-market leases $ 12,927,000 10 The fair values of the assets acquired and liabilities assumed, as well as the fair value of the noncontrolling interests, on October 1, 2021 were preliminary estimates determined using the cost approach and direct capitalization method under the income approach, and in limited circumstances, the market approach. Any necessary adjustments will be finalized within one year from the date of acquisition. Pro Forma Financial Information (Unaudited) The following unaudited pro forma operating information is presented as if the Merger and the AHI Acquisition occurred on January 1, 2020. Such unaudited pro forma information includes a nonrecurring adjustment to present acquisition related expenses incurred in the year ended December 31, 2021 in the 2020 pro forma results. The pro forma results are not necessarily indicative of the operating results that would have been obtained had the Merger and the AHI Acquisition occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results. Unaudited pro forma revenue, net loss and net loss attributable to controlling interest would have been as follows: Years Ended December 31, 2021 2020 Revenue $ 1,392,884,000 $ 1,397,261,000 Net loss $ ( 45,253,000 ) $ ( 17,116,000 ) Net loss attributable to controlling interest $ ( 35,140,000 ) $ ( 20,642,000 ) 4. Real Estate Investments, Net Our real estate investments, net consisted of the following as of December 31, 2021 and 2020: December 31, 2021 2020 Building, improvements and construction in process $ 3,505,786,000 $ 2,379,337,000 Land and improvements 334,562,000 200,319,000 Furniture, fixtures and equipment 198,224,000 174,994,000 4,038,572,000 2,754,650,000 Less: accumulated depreciation ( 523,886,000 ) ( 424,650,000 ) $ 3,514,686,000 $ 2,330,000,000 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $ 109,036,000 , $ 90,997,000 and $ 90,914,000 , respectively. In addition to the acquisitions and dispositions discussed below, for the years ended December 31, 2021, 2020 and 2019, we incurred capital expenditures of $ 62,596,000 , $ 111,286,000 and $ 93,485,000 , respectively, for our integrated senior health campuses, $ 21,605,000 , $ 17,854,000 and $ 16,571,000 , respectively, for our medical office buildings, $ 3,539,000 , $ 1,232,000 and $ 2,015,000 , respectively, for our SHOP, $ 31,000 , $ 0 and $ 1,954,000 , respectively, for our skilled nursing facilities and $ 0 , $ 47,000 and $ 53,000 , respectively, for our hospitals. We did no t incur any capital expenditures for our senior housing facilities for the years ended December 31, 2021, 2020 and 2019. Included in the capital expenditure amounts above are costs for the development and expansion of our integrated senior health campuses. For the year ended December 31, 2021, we completed the development of three properties for $ 50,435,000 and incurred $ 22,720,000 to expand two of our existing integrated senior health campuses. We also exercised our right to 105 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) purchase a leased property that cost $ 11,004,000 . For the year ended December 31, 2020, we completed the development of six integrated senior health campuses for $ 64,409,000 and incurred $ 2,573,000 to expand two of our existing integrated senior health campuses. For the year ended December 31, 2019, we completed the development of two integrated senior health campuses for $ 25,087,000 . For the year ended December 31, 2021, we determined that one medical office building was impaired and recognized an impairment charge of $ 3,335,000 , which reduced the carrying value of such asset to $ 2,880,000 . The fair value of such property was determined by the sales price from an executed purchase and sale agreement with third-party buyer, and adjusted for anticipated selling costs, which was considered a Level 2 measurement within the fair value hierarchy. We disposed of such impaired medical office building in July 2021 for a contract sales price of $ 3,000,000 and recognized a net gain on sale of $ 346,000 . For the year ended December 31, 2020, we determined that one skilled nursing facility and one medical office building were impaired and recognized an aggregate impairment charge of $ 8,350,000 , which reduced the total carrying value of such assets to $ 4,256,000 . The fair values of such properties were determined by the sales price from executed purchase and sales agreements with third-party buyers, and adjusted for anticipated selling costs, which were considered Level 2 measurements within the fair value hierarchy. We disposed of such impaired medical office building in July 2020 for a contract sales price of $ 3,500,000 and recognized a net gain on sale of $ 15,000 . As of December 31, 2020, the remaining $ 1,056,000 carrying value of such skilled nursing facility was classified in properties held for sale, and we subsequently disposed of such property in February 2021 for a contract sales price of $ 1,300,000 and recognized a net loss on sale of $ 332,000 . No impairment charges were recognized on our properties for the year ended December 31, 2019. For the year ended December 31, 2019, we did no t dispose of any long-lived assets. Acquisitions of Real Estate Investments For the years ended December 31, 2021, 2020 and 2019, with the exception of the Merger and the AHI Acquisition, all of our acquisitions of real estate investments were determined to be asset acquisitions. Below is a summary of such property acquisitions by year, including our acquisition of previously leased real estate investments. On October 1, 2021, we completed the Merger and the AHI Acquisition and accounted for such transactions as business combinations under ASC Topic 805. See Note 3, Business Combinations — Merger and the AHI Acquisition, for a further discussion. 2021 Acquisitions of Real Estate Investments For the year ended December 31, 2021, we, through a majority-owned subsidiary of Trilogy, of which we owned 67.6 % at the time of acquisition, acquired a portfolio of six previously leased real estate investments located in Indiana and Ohio. The following is a summary of such property acquisitions, which are included in our integrated senior health campuses segment: Location Date Acquired Contract Purchase Price Mortgage Loan Payable(1) Acquisition Fee(2) Kendallville, IN; and Delphos, Lima, Springfield, Sylvania and Union Township, OH 01/19/21 $ 76,549,000 $ 78,587,000 $ 1,164,000 ___________ (1) Represents the principal balance of the mortgage loan payable placed on the properties at the time of acquisition. (2) Our former advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, an acquisition fee of 2.25 % of the portion of the contract purchase price of the properties attributed to our ownership interest in the Trilogy subsidiary that acquired the properties. Prior to the Merger on October 1, 2021, we, through a majority-owned subsidiary of Trilogy, acquired land in Indiana and Ohio for an aggregate contract purchase price of $ 1,459,000 plus closing costs and paid to our former advisor an acquisition fee of 2.25 % of the portion of the contract purchase price of each land parcel attributed to our ownership interest. On October 15, 2021, we, through a majority-owned subsidiary of Trilogy, acquired a land parcel in Ohio for a contract purchase price of $ 249,000 plus closing costs. 106 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) For the year ended December 31, 2021, we incurred and capitalized acquisition fees and direct acquisition related expenses of $ 1,855,000 for the property acquisitions described above. The following table summarizes the purchase price of such assets acquired at the time of acquisition, adjusted for $ 57,647,000 operating lease right-of-use assets and $ 54,564,000 operating lease liabilities, and based on their relative fair values: 2021 Acquisitions Building and improvements $ 66,167,000 Land 17,612,000 Total assets acquired $ 83,779,000 In July 2021, we, through a majority-owned subsidiary of Trilogy, sold an integrated senior health campus, or the Sold Property, to an unaffiliated third party, or the Buyer, and leased it back, while retaining control of the Sold Property. This transaction did not meet the criteria for a sale and leaseback under GAAP. The lease agreement includes a finance obligation with a present value of $ 15,504,000 representing our obligation to purchase the Sold Property between 2028 and 2029. Simultaneously, we, through a majority-owned subsidiary of Trilogy, purchased a previously leased integrated senior health campus, or the Purchased Property, from the Buyer which was in exchange for the Sold Property. No cash consideration was exchanged as part of the transactions explained above. As of December 31, 2021, the carrying value of the Purchased Property of $ 14,807,000 was recorded to real estate investments, net, in our accompanying consolidated balance sheet and the carrying value of the finance obligation of $ 15,504,000 was recorded to financing obligations in our accompanying consolidated balance sheet. 2020 Acquisitions of Real Estate Investments For the year ended December 31, 2020, we, through a majority-owned subsidiary of Trilogy, of which we owned 67.6 % at the time of property acquisition, acquired two previously leased real estate investments located in Indiana and Kentucky. The following is a summary of such property acquisitions, which are included in our integrated senior health campuses segment: Location Date Acquired Contract Purchase Price Line of Credit(1) Acquisition Fee(2) Monticello, IN 07/30/20 $ 10,600,000 $ 13,200,000 $ 161,000 Louisville, KY 07/30/20 16,719,000 15,055,000 254,000 Total $ 27,319,000 $ 28,255,000 $ 415,000 ___________ (1) Represents borrowings under the 2019 Trilogy Credit Facility, as defined in Note 9, Lines of Credit and Term Loans, at the time of acquisition. (2) Our former advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our properties, an acquisition fee of 2.25 % of the portion of the contract purchase price of the properties attributed to our ownership interest at the time of acquisition in the Trilogy subsidiary that acquired the properties. In addition to the property acquisitions discussed above, for the year ended December 31, 2020, we, through a majority-owned subsidiary of Trilogy, acquired land in Ohio for an aggregate contract purchase price of $ 2,833,000 plus closing costs and paid to our former advisor an acquisition fee of 2.25 % of the portion of the contract purchase price of such land parcel attributed to our ownership interest. For the year ended December 31, 2020, we incurred and capitalized closing costs and direct acquisition related expenses of $ 709,000 for the property acquisitions described above. The following table summarizes the purchase price of the assets acquired at the time of acquisition, adjusted for $ 14,281,000 of operating lease right-of-use assets and $ 15,530,000 of operating lease liabilities, and based on their relative fair values: 2020 Acquisitions Building and improvements $ 26,311,000 Land 4,563,000 Total assets acquired $ 30,874,000 107 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 2019 Acquisitions of Real Estate Investments For the year ended December 31, 2019, using cash on hand and debt financing, we completed the acquisition of two buildings from unaffiliated third parties. The following is a summary of such property acquisitions: Acquisition Location Type Date Acquired Contract Purchase Price Line of Credit Acquisition Fee North Carolina ALF Portfolio(1) Garner, NC SHOP 03/27/19 $ 15,000,000 $ 15,000,000 $ 338,000 The Cloister at Silvercrest(2) New Albany, IN Integrated Senior Health Campus 10/01/19 750,000 — 11,000 $ 15,750,000 $ 15,000,000 $ 349,000 ___________ (1) We own 100 % of our property acquired, which we added to our existing North Carolina ALF Portfolio. The other six buildings in North Carolina ALF Portfolio were acquired between January 2015 and August 2018. We borrowed under the 2019 Credit Facility, as defined in Note 9, Lines of Credit and Term Loans, at the time of acquisition. Our former advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, and acquisition fee of 2.25 % of the contract purchase price of such property. (2) We, through a majority-owned subsidiary of Trilogy, of which we owned 67.7 % at the time of such property acquisition, acquired such property using using cash on hand. Our former advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, an acquisition fee of 2.25 % of the portion of the contract purchase price of the property attributed to our ownership interest in the Trilogy subsidiary that acquired the property. In addition to the property acquisitions discussed above, for the year ended December 31, 2019, we, through a majority-owned subsidiary of Trilogy, acquired land in Ohio and Michigan for an aggregate contract purchase price of $ 4,806,000 plus closing costs and paid to our former advisor an acquisition fee of 2.25 % of the portion of the contract purchase price of each land parcel attributed to our ownership interest at the time of acquisition. 2019 Acquisition of Previously Leased Real Estate Investments For the year ended December 31, 2019, we, through a majority-owned subsidiary of Trilogy, of which we owned 67.6 % at the time of property acquisition, acquired one previously leased real estate investment located in Indiana. The following is a summary of such property acquisition, which is included in our integrated senior health campuses segment: Locations Date Acquired Contract Purchase Price Line of Credit(1) Acquisition Fee(2) Corydon, IN 09/05/19 $ 14,082,000 $ 14,114,000 $ 215,000 ___________ (1) Represents a borrowing under the 2019 Trilogy Credit Facility, at the time of acquisition. (2) Our former advisor was paid, as compensation for services rendered in connection with the investigation, selection and acquisition of our property, an acquisition fee of 2.25 % of the portion of the contract purchase price of the property attributed to our ownership interest at the time of acquisition in the Trilogy subsidiary that acquired the property. For the year ended December 31, 2019, we incurred and capitalized closing costs and direct acquisition related expenses of $ 836,000 for the property acquisition described above. The following table summarizes the purchase price of the assets acquired at the time of acquisition, adjusted for $ 13,052,000 of operating lease right-of-use assets and $ 12,599,000 of operating lease liabilities, and based on their relative fair values: 2019 Acquisitions Building and improvements $ 23,834,000 Land 8,496,000 In-place leases 3,596,000 Total assets acquired $ 35,926,000 108 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 5. Debt Security Investment, Net On October 15, 2015, we acquired a commercial mortgage-backed debt security, or debt security, from an unaffiliated third party. The debt security bears an interest rate on the stated principal amount thereof equal to 4.24 % per annum, the terms of which security provide for monthly interest-only payments. The debt security matures on August 25, 2025 at a stated amount of $ 93,433,000 , resulting in an anticipated yield-to-maturity of 10.0 % per annum. The debt security was issued by an unaffiliated mortgage trust and represents a 10.0 % beneficial ownership interest in such mortgage trust. The debt security is subordinate to all other interests in the mortgage trust and is not guaranteed by a government-sponsored entity. As of December 31, 2021 and 2020, the carrying amount of the debt security investment was $ 79,315,000 and $ 75,851,000 , respectively, net of unamortized closing costs of $ 1,004,000 and $ 1,205,000 , respectively. Accretion on the debt security for the years ended December 31, 2021, 2020 and 2019 was $ 3,665,000 , $ 3,304,000 and $ 2,987,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying consolidated statements of operations and comprehensive income (loss). Amortization expense of closing costs for the years ended December 31, 2021, 2020 and 2019 was $ 201,000 , $ 170,000 and $ 143,000 , respectively, which is recorded as a decrease to real estate revenue in our accompanying consolidated statements of operations and comprehensive income (loss). We evaluated credit quality indicators such as the agency ratings and the underlying collateral of such investment in order to determine expected future credit loss. No credit loss was recorded for the years ended December 31, 2021 and 2020. 6. Identified Intangible Assets, Net Identified intangible assets, net consisted of the following as of December 31, 2021 and 2020: December 31, 2021 2020 Amortized intangible assets: In-place leases, net of accumulated amortization of $ 28,120,000 and $ 22,019,000 as of December 31, 2021 and 2020, respectively (with a weighted average remaining life of 8.2 years and 9.4 years as of December 31, 2021 and 2020, respectively) $ 81,538,000 $ 23,760,000 Above-market leases, net of accumulated amortization of $ 2,082,000 and $ 1,975,000 as of December 31, 2021 and 2020, respectively (with a weighted average remaining life of 9.7 years and 4.6 years as of December 31, 2021 and 2020, respectively) 35,106,000 1,032,000 Customer relationships, net of accumulated amortization of $ 635,000 and $ 486,000 as of December 31, 2021 and 2020, respectively (with a weighted average remaining life of 14.7 years and 15.7 years as of December 31, 2021 and 2020, respectively) 2,205,000 2,354,000 Internally developed technology and software, net of accumulated amortization of $ 399,000 and $ 305,000 as of December 31, 2021 and 2020, respectively (with a weighted average remaining life of 0.7 years and 1.7 years as of December 31, 2021 and 2020, respectively) 70,000 165,000 Unamortized intangible assets: Certificates of need 99,165,000 96,589,000 Trade names 30,787,000 30,787,000 $ 248,871,000 $ 154,687,000 Amortization expense for the years ended December 31, 2021, 2020 and 2019 was $ 22,460,000 , $ 6,678,000 and $ 19,973,000 , respectively, which included $ 1,349,000 , $ 420,000 and $ 607,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying consolidated statements of operations and comprehensive income (loss). 109 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The aggregate weighted average remaining life of the identified intangible assets was 8.8 years and 9.7 years as of December 31, 2021 and 2020, respectively. As of December 31, 2021, estimated amortization expense on the identified intangible assets for each of the next five years ending December 31 and thereafter was as follows: Year Amount 2022 $ 22,460,000 2023 16,662,000 2024 13,724,000 2025 11,085,000 2026 9,886,000 Thereafter 45,102,000 $ 118,919,000 7. Other Assets, Net Other assets, net consisted of the following as of December 31, 2021 and 2020: December 31, 2021 2020 Deferred rent receivables $ 41,061,000 $ 38,918,000 Prepaid expenses, deposits, other assets and deferred tax assets, net 22,484,000 16,618,000 Inventory 18,929,000 24,669,000 Lease commissions, net of accumulated amortization of $ 4,911,000 and $ 3,413,000 as of December 31, 2021 and 2020, respectively 16,120,000 11,309,000 Investments in unconsolidated entities 15,615,000 16,469,000 Deferred financing costs, net of accumulated amortization of $ 8,469,000 and $ 5,700,000 as of December 31, 2021 and 2020, respectively(1) 3,781,000 6,864,000 Lease inducement, net of accumulated amortization of $ 1,842,000 and $ 1,491,000 as of December 31, 2021 and 2020, respectively (with a weighted average remaining life of 8.9 years and 9.9 years as of December 31, 2021 and 2020, respectively) 3,158,000 3,509,000 $ 121,148,000 $ 118,356,000 ___________ (1) Deferred financing costs only include costs related to our lines of credit and term loans. See Note 9, Lines of Credit and Term Loans. Amortization expense on deferred financing costs of our lines of credit and term loans for the years ended December 31, 2021, 2020 and 2019 was $ 4,261,000 , $ 3,559,000 and $ 3,664,000 , respectively, and is recorded to interest expense in our accompanying consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2021, such amount included the $ 230,000 write-off of unamortized deferred financing fees in connection with the termination of the 2019 Credit Facility term loan as discussed in Note 9, Lines of Credit and Term Loans. Amortization expense on lease inducement for the years ended December 31, 2021, 2020 and 2019 was $ 351,000 , $ 351,000 and $ 351,000 , respectively, and is recorded against real estate revenue in our accompanying consolidated statements of operations and comprehensive income (loss). 110 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 8. Mortgage Loans Payable, Net As of December 31, 2021 and 2020, mortgage loans payable were $ 1,116,216,000 ($ 1,095,594,000 , net of discount/premium and deferred financing costs) and $ 834,026,000 ($ 810,478,000 , net of discount/premium and deferred financing costs), respectively. As of December 31, 2021, we had 66 fixed-rate mortgage loans payable and 12 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 5.25 % per annum based on interest rates in effect as of December 31, 2021 and a weighted average effective interest rate of 3.21 %. As of December 31, 2020, we had 62 fixed-rate mortgage loans payable and 10 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 5.23 % per annum based on interest rates in effect as of December 31, 2020 and a weighted average effective interest rate of 3.58 %. We are required by the terms of certain loan documents to meet certain reporting requirements and covenants, such as net worth ratios, fixed charge coverage ratios and leverage ratios. Mortgage loans payable, net consisted of the following as of December 31, 2021 and 2020: December 31, 2021 2020 Total fixed-rate debt $ 845,504,000 $ 742,686,000 Total variable-rate debt 270,712,000 91,340,000 Total fixed- and variable-rate debt 1,116,216,000 834,026,000 Less: deferred financing costs, net ( 8,680,000 ) ( 10,389,000 ) Add: premium 397,000 204,000 Less: discount ( 12,339,000 ) ( 13,363,000 ) Mortgage loans payable, net $ 1,095,594,000 $ 810,478,000 The following table reflects the changes in the carrying amount of mortgage loans payable, net for the years ended December 31, 2021 and 2020: Years Ended December 31, 2021 2020 Beginning balance $ 810,478,000 $ 792,870,000 Additions: Assumed mortgage loans in the Merger(1) 18,602,000 — Borrowings under mortgage loans payable 407,939,000 92,399,000 Amortization of deferred financing costs 4,077,000 796,000 Amortization of discount/premium on mortgage loans payable 773,000 826,000 Deductions: Scheduled principal payments on mortgage loans payable ( 34,616,000 ) ( 71,990,000 ) Early payoff of mortgage loans payable ( 109,424,000 ) ( 2,601,000 ) Deferred financing costs ( 2,235,000 ) ( 1,822,000 ) Ending balance $ 1,095,594,000 $ 810,478,000 ___________ (1) On October 1, 2021, as a result of the Merger, we recognized the aggregate fair value of three fixed-rate mortgage loans of $ 18,602,000 , which consisted of the assumed aggregate principal balance of $ 18,291,000 and a total premium of $ 311,000 . The assumed mortgage loans carry 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 %. 111 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) For the year ended December 31, 2021, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 2,425,000 , which is recorded to interest expense in our accompanying consolidated statements of operations and comprehensive income (loss). Such loss was primarily related to the write-off of unamortized deferred financing costs of 10 mortgage loans payable that we refinanced on January 29, 2021 and one mortgage loan payable that we refinanced on December 1, 2021 that were due to mature in 2053 and 2049, respectively. For the year ended December 31, 2020, we did not incur any gain or loss on the extinguishment of mortgage loans payable. For the year ended December 31, 2019, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 2,182,000 , which is recorded to interest expense in our accompanying consolidated statements of operations and comprehensive income (loss). Such losses were primarily related to the write-off of unamortized debt discounts and prepayment penalties on two mortgage loans payable that were due to mature in November 2047 and April 2049. As of December 31, 2021, the principal payments due on our mortgage loans payable for each of the next five years ending December 31 and thereafter were as follows: Year Amount 2022 $ 125,686,000 2023 119,356,000 2024 164,542,000 2025 40,553,000 2026 154,600,000 Thereafter 511,479,000 $ 1,116,216,000 Some of our mortgage loan agreements include a standard loan term requiring lender approval for a change of control event, which was triggered upon the closing of the Merger. All of our mortgage lenders and loan servicers approved such event, except for the servicers of two of our mortgage loans with an aggregate principal balance of $ 14,229,000 . We have been closely working with such servicers to address their requirements to receive final approval; however, we have not received notice from such servicers to accelerate our debt obligations. 9. Lines of Credit and Term Loans 2018 Credit Facility In order to accommodate the Merger, we amended GAHR IV and its operating partnership's credit agreement, as amended, or the 2018 Credit Agreement, with Bank of America, N.A., or Bank of America; KeyBank, National Association, or KeyBank; Citizens Bank, National Association, or Citizens Bank; Merrill Lynch, Pierce, Fenner & Smith Incorporated; KeyBanc Capital Markets, Inc., or KeyBanc Capital Markets; and the lenders named therein, for a credit facility with an aggregate maximum principal amount of $ 530,000,000 , or the 2018 Credit Facility. The 2018 Credit Facility consisted of a senior unsecured revolving credit facility in the amount of $ 235,000,000 and senior unsecured term loan facilities in the aggregate amount of $ 295,000,000 . The maximum principal amount of the 2018 Credit Facility may have been increased by up to $ 120,000,000 , for a total principal amount of $ 650,000,000 , subject to certain conditions. At our option, the 2018 Credit Facility bore interest at per annum rates equal to (a)(i) the Eurodollar Rate, as defined in the 2018 Credit Agreement, plus (ii) a margin ranging from 1.70 % to 2.20 % based on our Consolidated Leverage Ratio, as defined in the 2018 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 2018 Credit Agreement, plus 0.50 %, (3) the one-month Eurodollar Rate plus 1.00 %, and (4) 0.00 %, plus (ii) a margin ranging from 0.70 % to 1.20 % based on our Consolidated Leverage Ratio. On October 1, 2021, we also entered into a Second Amendment to the 2018 Credit Agreement, or the Amendment, which provided 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 pledging 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 certain financial covenants to reflect the Combined Company subsequent to the Merger. There were no changes to the contractual interest rates as a result of the Amendment. The 2018 Credit Facility was due to mature on November 19, 2021; however, pursuant to the terms of the 2018 Credit Agreement, at such time we extended the maturity date for an additional 12 months and 112 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) paid an extension fee of $ 795,000 . As of December 31, 2021, our aggregate borrowing capacity under the 2018 Credit Facility was $ 530,000,000 . As of December 31, 2021, borrowings outstanding totaled $ 441,900,000 and the weighted average interest rate on such borrowings outstanding was 2.27 % per annum. On January 19, 2022, we terminated the 2018 Credit Agreement and entered into the 2022 Credit Agreement, as defined and discussed in Note 22, Subsequent Events — 2022 Credit Facility. 2019 Credit Facility On October 1, 2021, upon consummation of the Merger, we, through the surviving partnership, are subject to GAHR III’s 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, for a credit facility with an aggregate maximum principal amount of $ 630,000,000 , or the 2019 Credit Facility. The 2019 Credit Facility consisted of a senior unsecured revolving credit facility in an aggregate amount of $ 150,000,000 and a senior unsecured term loan facility in an aggregate amount of $ 480,000,000 . The maximum principal amount of the 2019 Credit Facility may have been increased by up to $ 370,000,000 , for a total principal amount of $ 1,000,000,000 , subject to certain conditions. On October 1, 2021, upon consummation of the Merger, the previously available $ 150,000,000 senior unsecured revolving credit facility was cancelled and a ratable amendment to certain financial covenants was made to account for the Combined Company. As a result, the maximum total principal amount of the 2019 Credit Facility available for increase was reduced to $ 850,000,000 , subject to certain conditions. At our option, the 2019 Credit Facility bore 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 our 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 our Consolidated Leverage Ratio. Accrued interest on the 2019 Credit Facility was payable monthly. The loans may have been repaid in whole or in part without prepayment premium or penalty, subject to certain conditions. As of December 31, 2021 and 2020, our aggregate borrowing capacity under the 2019 Credit Facility was $ 480,000,000 and $ 630,000,000 , respectively. As of December 31, 2021 and 2020, borrowings outstanding under the 2019 Credit Facility totaled $ 480,000,000 and $ 556,500,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 2.60 % and 2.70 % per annum, respectively. The 2019 Corporate Credit Agreement was due to mature on January 25, 2022. On January 19, 2022, we, through our operating partnership, entered into an agreement that amends and restates the 2019 Corporate Credit Agreement in its entirety, or the 2022 Credit Agreement. See Note 22, Subsequent Events — 2022 Credit Facility, for a further discussion. Trilogy PropCo and OpCo Line of Credit In connection with our acquisition of Trilogy on December 1, 2015, we, through Trilogy PropCo Finance, LLC, a Delaware limited liability company and an indirect subsidiary of Trilogy, or Trilogy PropCo Parent, and certain of its subsidiaries, or the Trilogy PropCo Co-Borrowers, entered into a loan agreement, or the Trilogy PropCo Credit Agreement, with KeyBank, as administrative agent; Regions Bank, as syndication agent; and a syndicate of other banks, as lenders, to obtain a line of credit with an aggregate maximum principal amount of $ 300,000,000 , or the Trilogy PropCo Line of Credit. On October 27, 2017, we amended the Trilogy PropCo Credit Agreement, which included a reduction of the total commitment under the Trilogy PropCo Line of Credit from $ 300,000,000 to $ 250,000,000 . On March 21, 2016, we, through Trilogy Healthcare Holdings, Inc., a direct subsidiary of Trilogy, and certain of its subsidiaries, or the Trilogy OpCo Borrowers, entered into a credit agreement, or the Trilogy OpCo Credit Agreement, with Wells Fargo Bank, National Association, as administrative agent and lender; and a syndicate of other banks, as lenders, to obtain a $ 42,000,000 secured revolving credit facility, or the Trilogy OpCo Line of Credit, as amended on April 2016. In April 2018, we further amended the Trilogy OpCo Credit Agreement to reduce the aggregate maximum principal amount to $ 25,000,000 . On September 5, 2019, we paid off and terminated the Trilogy OpCo Line of Credit and further amended and restated the Trilogy PropCo Credit Agreement to replace both agreements with the 2019 Trilogy Credit Facility, as described below. As a result of the termination of the Trilogy OpCo Credit Agreement, we incurred a loss on extinguishment of $ 786,000 for the year 113 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) ended December 31, 2019, which is recorded to interest expense in our accompanying consolidated statements of operations and comprehensive income (loss) and was primarily related to the write-off of unamortized deferred financing fees. The source of funds for the payoff was from the 2019 Trilogy Credit Facility. We currently do not have any obligations under the Trilogy OpCo Credit Agreement, as amended. 2019 Trilogy Credit Facility On October 1, 2021, upon consummation of the Merger, through Trilogy RER, LLC, we are subject to an amended and restated loan agreement, or the 2019 Trilogy Credit Agreement, among certain subsidiaries of Trilogy OpCo, LLC, Trilogy RER, LLC, and Trilogy Pro Services, LLC; KeyBank; CIT Bank, N.A.; Regions Bank; KeyBanc Capital Markets, Inc.; Regions Capital Markets; Bank of America; The Huntington National Bank; and a syndicate of other banks, as lenders named therein, with respect to 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. 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) 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. As of both December 31, 2021 and 2020, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 360,000,000 . As of December 31, 2021 and 2020, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 304,734,000 and $ 287,134,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 2.85 % and 2.94 % per annum, respectively. 10. Derivative Financial Instruments We use derivative financial instruments to manage interest rate risk associated with variable-rate debt. We record such derivative financial instruments in our accompanying 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 December 31, 2021 and 2020, which are included in security deposits, prepaid rent and other liabilities in our accompanying consolidated balance sheets: Fair Value December 31, Instrument Notional Amount Index Interest Rate Maturity Date 2021 2020 Cap $ 20,000,000 one month LIBOR 3.00 % 09/23/21 $ — $ — Swap $ 250,000,000 one month LIBOR 2.10 % 01/25/22 ( 332,000 ) ( 5,245,000 ) Swap $ 130,000,000 one month LIBOR 1.98 % 01/25/22 ( 162,000 ) ( 2,561,000 ) Swap $ 100,000,000 one month LIBOR 0.20 % 01/25/22 ( 6,000 ) ( 71,000 ) $ ( 500,000 ) $ ( 7,877,000 ) As of December 31, 2021 and 2020, no ne of our derivative financial instruments were designated as hedges as defined by guidance under ASC Topic 815. Derivative financial instruments not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements. For the years ended December 31, 2021, 2020 and 2019, we recorded a gain (loss) in the fair value of derivative financial instruments of $ 8,200,000 , $( 3,906,000 ) and $( 4,541,000 ), respectively, which is included as a decrease/(increase) to interest expense in our accompanying consolidated statements of operations and comprehensive income (loss). Included in the gain in the fair value of derivative instruments recognized for the year ended December 31, 2021 is $ 823,000 related to the fair value of an interest rate swap entered into by GAHR IV, which matured on November 19, 2021. See Note 16, Fair Value Measurements, for a further discussion of the fair value of our derivative financial instruments. 114 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 11. Identified Intangible Liabilities, Net As of December 31, 2021 and 2020, identified intangible liabilities, net consisted of below-market leases of $ 12,715,000 and $ 367,000 , respectively, net of accumulated amortization of $ 1,047,000 and $ 834,000 , respectively. Amortization expense on below-market leases for the years ended December 31, 2021, 2020 and 2019 was $ 396,000 , $ 296,000 and $ 388,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying consolidated statements of operations and comprehensive income (loss). The weighted average remaining life of below-market leases was 9.1 years and 2.6 years as of December 31, 2021 and 2020, respectively. As of December 31, 2021, estimated amortization expense on below-market leases for each of the next five years ending December 31 and thereafter was as follows: Year Amount 2022 $ 1,685,000 2023 1,623,000 2024 1,502,000 2025 1,374,000 2026 1,225,000 Thereafter 5,306,000 $ 12,715,000 12. Commitments and Contingencies Litigation We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows. Environmental Matters We follow a policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency. Other Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business, which include calls/puts to sell/acquire properties. In our view, these matters are not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. 13. Redeemable Noncontrolling Interests Prior to the Merger on October 1, 2021 and as of December 31, 2020 , our former advisor owned all 222 limited partnership units outstanding in our operating partnership. As of December 31, 2020 , we owned greater than a 99.99 % general partnership interest in our operating partnership, and our former advisor owned less than a 0.01 % limited partnership interest in our operating partnership. Our former advisor was entitled to special redemption rights of its limited partnership units. The noncontrolling interest of our former advisor in our operating partnership that 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 consolidated balance sheets. In connection with the AHI Acquisition, on October 1, 2021, we redeemed all 222 limited partnership units in our operating partnership owned by our former advisor for approximately $ 2,000 . As discussed in Note 1, Organization and Description of Business, as a result of the Merger and the AHI Acquisition on October 1, 2021 and as of December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 94.9 % general partnership interest in our operating partnership and the remaining approximate 5.1 % limited partnership interest in our 115 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) operating partnership is owned by the NewCo Sellers. Some of the limited partnership units outstanding, which account for approximately 1.0 % of our total operating partnership units outstanding, have redemption features outside of our control and are accounted for as redeemable noncontrolling interests presented outside of permanent equity in our accompanying consolidated balance sheets. The issuance of our surviving operating partnership units was accounted for separately from the business combination as an equity transaction under ASC Topic 810. The transaction resulted in an increase in redeemable noncontrolling interests of $ 19,392,000 offset to additional paid-in capital. The adjustment to accumulated other comprehensive income was nominal. As of December 31, 2021 and 2020, we, through Trilogy REIT Holdings, in which we indirectly hold a 76.0 % and 70.0 %, respectively, ownership interest, owned 95.9 % and 96.6 %, respectively, of the outstanding equity interests of Trilogy. As of December 31, 2021 and 2020, certain members of Trilogy’s management and certain members of an advisory committee to Trilogy’s board of directors owned approximately 4.1 % and 3.4 %, respectively, of the outstanding equity interests of Trilogy. The noncontrolling interests held by such members have redemption features outside of our control and are accounted for as redeemable noncontrolling interests in our accompanying consolidated balance sheets. On October 1, 2021, upon consummation of the Merger and through our operating partnership, we acquired approximately 98.0 % of the joint ventures with an affiliate of Meridian Senior Living, LLC, or Meridian, that own Central Florida Senior Housing Portfolio, Pinnacle Beaumont ALF and Pinnacle Warrenton ALF. Also on October 1, 2021, in connection with the Merger, we acquired approximately 90.0 % of the joint venture with Avalon Health Care, Inc., or Avalon, that owns Catalina West Haven ALF and Catalina Madera ALF. 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 consolidated balance sheets. We record the carrying amount of redeemable noncontrolling interests at the greater of: (i) the initial carrying amount, increased or decreased for the noncontrolling interests’ share of net income or loss and distributions or (ii) the redemption value. The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the years ended December 31, 2021 and 2020: December 31, 2021 2020 Beginning balance $ 40,340,000 $ 44,105,000 Additional redeemable noncontrolling interests 30,236,000 — Reclassification from equity 5,923,000 715,000 Distributions ( 1,579,000 ) ( 1,271,000 ) Repurchase of redeemable noncontrolling interests ( 8,431,000 ) ( 150,000 ) Adjustment to redemption value 7,380,000 ( 3,714,000 ) Net (loss) income attributable to redeemable noncontrolling interests ( 1,144,000 ) 655,000 Ending balance $ 72,725,000 $ 40,340,000 14. Equity Any stock transactions described below that occurred prior to the Merger are presented at their historical amounts. Subsequent to the Merger, such stock transactions would be converted using the conversion ratio of 0.9266 shares of GAHR IV Class I common stock for each share of GAHR III common stock, as determined in the Merger. Preferred Stock Pursuant to our charter, we are authorized to issue 200,000,000 shares of our preferred stock, par value $ 0.01 per share. As of both December 31, 2021 and 2020, no shares of preferred stock were issued and outstanding. Common Stock Prior to the Merger on October 1, 2021 and as of December 31, 2020, our charter authorized us to issue 1,000,000,000 shares of our common stock, par value $ 0.01 per share and our former advisor owned 22,222 shares of our common stock. In connection with the AHI Acquisition, on October 1, 2021, all 22,222 shares of our common stock owned by our former advisor were redeemed by our operating partnership fo r $ 190,000 . I n addition and in connection with the AHI Acquisition, on October 1, 2021, our operating partnership also redeemed all 20,833 shares of our Class T common stock owned by GAHR IV Advisor in GAHR IV for approximately $ 192,000 . 116 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) At the effective time of the REIT Merger, on October 1, 2021, each issued and outstanding share of GAHR III’s common stock, $ 0.01 par value per share, was converted into the right to receive 0.9266 shares of GAHR IV’s Class I common stock, $ 0.01 par value per share, resulting in the issuance of 179,637,776 shares of Class I common stock to GAHR III’s stockholders. Also, on October 1, 2021, we filed the Fourth Articles of Amendment and Restatement to our charter, or the Charter Amendment, which among other things, amended the common stock we are authorized to issue. As of December 31, 2021, the Charter Amendment authorized us to issue 1,000,000,000 shares of our common stock, par value $ 0.01 per share, whereby 200,000,000 shares were classified as Class T common stock and 800,000,000 shares were classified as Class I common stock. On March 12, 2015, we terminated the primary portion of our initial public offering. We continued to offer shares of our common stock in the GAHR III initial offering pursuant to the Initial DRIP, until the termination of the DRIP portion of the GAHR III initial offering and deregistration of the GAHR III initial offering on April 22, 2015. On March 25, 2015, we filed a Registration Statement on Form S-3 under the Securities Act to register a maximum of $ 250,000,000 of additional shares of our common stock pursuant to the 2015 GAHR III DRIP Offering and we commenced offering shares following the deregistration of the GAHR III initial offering until its termination and deregistration of the 2015 GAHR III DRIP Offering on March 29, 2019. On January 30, 2019, we filed a Registration Statement on Form S-3 under the Securities Act to register a maximum of $ 200,000,000 of additional shares of our common stock to be issued pursuant to the 2019 GAHR III DRIP Offering, which we commenced offering on April 1, 2019, following the deregistration of the 2015 GAHR III DRIP Offering. On May 29, 2020, our board authorized the suspension of the 2019 GAHR III DRIP Offering, and consequently, ceased issuing shares pursuant to such offering following the distributions paid in June 2020 to stockholders of record on or prior to the close of business on May 31, 2020. As a result of the Merger, we deregistered the 2019 GAHR III DRIP Offering on October 4, 2021. Further, on October 4, 2021, our board authorized the reinstatement of the AHR DRIP Offering. We continue to offer up to $ 100,000,000 of shares of our common stock to be issued pursuant to the DRIP under the AHR DRIP Offering. See Note 1, Organization and Description of Business — Public Offering and “Distribution Reinvestment Plan” section below for a further discussion. Through September 30, 2021, GAHR III had issued 184,930,598 shares of its common stock in connection with the primary portion of its initial public offering and 35,059,456 shares of its common stock pursuant to our DRIP Offerings. GAHR III also repurchased 26,257,404 shares of its common stock under its share repurchase plan and granted an aggregate of 135,000 shares of its restricted common stock to our independent directors through September 30, 2021. Upon consummation of the Merger on October 1, 2021, we, as a Combined Company, issued 179,637,776 shares of Class I common stock to GAHR III’s stockholders, pursuant to the terms of the REIT Merger. Noncontrolling Interests in Total Equity As of December 31, 2021 and 2020, Trilogy REIT Holdings owned approximately 95.9 % and 96.6 %, respectively, of Trilogy. Prior to October 1, 2021, we were the indirect owner of a 70.0 % interest in Trilogy REIT Holdings pursuant to an amended joint venture agreement with an indirect, wholly owned subsidiary of NorthStar Healthcare Income, Inc., or NHI, and a wholly owned subsidiary of GAHR IV Operating Partnership. Both we and GAHR IV were co-sponsored by AHI and Griffin Capital. We serve as the managing member of Trilogy REIT Holdings. As part of the Merger on October 1, 2021, the wholly owned subsidiary of GAHR IV Operating Partnership sold its 6.0 % interest in Trilogy REIT Holdings to GAHR III, thereby increasing our indirect ownership in Trilogy REIT Holdings to 76.0 %. As of December 31, 2021, NHI indirectly owned a 24.0 % membership interest in Trilogy REIT Holdings. As of December 31, 2020, NHI and GAHR IV indirectly owned a 24.0 % and 6.0 % membership interest in Trilogy REIT Holdings, respectively. Through September 30, 2021, 30.0 % of the net earnings of Trilogy REIT Holdings were allocated to noncontrolling interests, and for the period October 1, 2021 through December 31, 2021, 24.0 % of the net earnings of Trilogy REIT Holdings were allocated to a noncontrolling interest. The acquisition of additional interest in Trilogy REIT Holdings as a result of the REIT Merger was accounted for separately from the business combination as an equity transaction under ASC Topic 810. The transaction resulted in a decrease to noncontrolling interest of $ 44,730,000 with an offset to additional paid-in capital. In connection with our acquisition and operation of Trilogy, profit interest units in Trilogy, or the Profit Interests, were issued to Trilogy Management Services, LLC and an independent director of Trilogy, both unaffiliated third parties that manage or direct the day-to-day operations of Trilogy. The Profit Interests consist of time-based or performance-based commitments. The time-based Profit Interests were measured at their grant date fair value and vest in increments of 20.0 % on each anniversary of the respective grant date over a five year period. We amortized the time-based Profit Interests on a straight-line basis over the vesting periods, which are recorded to general and administrative in our accompanying consolidated statements of operations and comprehensive income (loss). The performance-based Profit Interests are subject to a performance commitment and vest upon liquidity events as defined in the Profit Interests agreements. The performance-based Profit Interests were measured at 117 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) their fair value on the adoption date of ASU 2018-07 using a modified retrospective approach. The nonvested awards are presented as noncontrolling interests in total equity in our accompanying consolidated balance sheets, and are re-classified to redeemable noncontrolling interests upon vesting as they have redemption features outside of our control similar to the common stock units held by Trilogy’s management. See Note 13, Redeemable Noncontrolling Interests, for a further discussion. In December 2021, we redeemed a part of the time-based Profit Interests, and all of the performance-based Profit Interests that were included in noncontrolling interests in total equity. We redeemed such Profit Interests for $ 16,517,000 , which was paid $ 8,650,000 in cash and $ 7,867,000 through the issuance of additional equity interests in Trilogy that are classified as redeemable noncontrolling interests in our consolidated balance sheets. There were no canceled, expired or exercised Profit Interests during the years ended December 31, 2020 and 2019. For the years ended December 31, 2021, 2020 and 2019, we recognized stock compensation expense related to the Profit Interests of $ 8,801,000 , $( 1,342,000 ) and $ 2,744,000 , respectively. One of our consolidated subsidiaries issued non-voting preferred shares of beneficial interests to qualified investors for total proceeds of $ 125,000 . These preferred shares of beneficial interests are entitled to receive cumulative preferential cash dividends at the rate of 12.5 % per annum. We classify the value of the subsidiary’s preferred shares of beneficial interests as noncontrolling interests in our accompanying consolidated balance sheets and the dividends of the preferred shares of beneficial interests in net income or loss attributable to noncontrolling interests in our accompanying consolidated statements of operations and comprehensive income (loss). As of both December 31, 2021 and 2020, we owned an 86.0 % interest in a consolidated limited liability company that owns Lakeview IN Medical Plaza, which we acquired on January 21, 2016. As such, 14.0 % of the net earnings of Lakeview IN Medical Plaza were allocated to noncontrolling interests for the years ended December 31, 2021, 2020 and 2019. On April 7, 2020, we sold a 9.4 % membership interest in a consolidated limited liability company that owns Southlake TX Hospital to an unaffiliated third party for a contract purchase price of $ 11,000,000 and therefore as of both December 31, 2021 and 2020, we owned a 90.6 % membership interest in such consolidated limited liability company. For the year ended December 31, 2020, our former advisor agreed to waive the $ 220,000 disposition fee that may have otherwise been due to our former advisor pursuant to the Advisory Agreement. For the year ended December 31, 2021 and for the period from April 7, 2020 through December 31, 2020, 9.4 % of the net earnings of Southlake TX Hospital were allocated to noncontrolling interests in our accompanying consolidated statements of operations and comprehensive income (loss). On October 1, 2021, upon consummation of the Merger, through our operating partnership, we acquired an approximate 90.0 % interest in a joint venture that owns the Louisiana Senior Housing Portfolio. As such, 10.0 % of the net earnings of the joint venture were allocated to noncontrolling interests in our accompanying consolidated statements of operations from October 1, 2021 through December 31, 2021. As discussed in Note 1, Organization and Description of Business, as a result of the Merger and the AHI Acquisition on October 1, 2021 and as of December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 94.9 % general partnership interest in our operating partnership and the remaining approximate 5.1 % limited partnership interest in our operating partnership is owned by the NewCo Sellers. Approximately 4.1 % of our total operating partnership units outstanding is presented in total equity in our accompanying consolidated balance sheet as of December 31, 2021. The issuance of our surviving operating partnership units was accounted for separately from the business combination as an equity transaction under ASC Topic 810. The transaction resulted in an increase to noncontrolling interest of $ 75,727,000 with an offset to additional paid-in capital. See Note 13, Redeemable Noncontrolling Interests, for a further discussion. Distribution Reinvestment Plan We had registered and reserved $ 35,000,000 in shares of our common stock for sale pursuant to the Initial DRIP in the GAHR III initial offering, which we deregistered on April 22, 2015. We continued to offer shares of our common stock pursuant to the 2015 GAHR III DRIP Offering, which commenced following the deregistration of the GAHR III initial offering, until the deregistration of the 2015 GAHR III DRIP Offering on March 29, 2019. We continued to offer up to $ 200,000,000 of additional shares of our common stock pursuant to the 2019 GAHR III DRIP Offering, which commenced on April 1, 2019, following the deregistration of the 2015 GAHR III DRIP Offering. Effective October 5, 2016, we amended and restated the Initial DRIP to amend the price at which shares of our common stock were issued pursuant to such distribution reinvestment plan. Pursuant to the Amended and Restated DRIP, shares are issued at a price equal to the most recently estimated net asset value, or NAV, of one share of our common stock, as approved and established by our board. The Amended and Restated DRIP became effective with the distribution payments to 118 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) stockholders paid in the month of November 2016. In all other material respects, the terms of the 2015 GAHR III DRIP Offering remained unchanged by the Amended and Restated DRIP. On May 29, 2020, in consideration of the impact the COVID-19 pandemic had on the United States, globally and on our business operations, our board authorized the temporary suspension of all stockholder distributions upon the completion of the payment of distributions payable to stockholders of record on or prior to the close of business on May 31, 2020. As a result, our board also approved the suspension of the 2019 GAHR III DRIP Offering. Such suspension was effective upon the completion of all shares issued with respect to distributions payable to stockholders of record on or prior to the close of business on May 31, 2020. As a result of the Merger, we deregistered the 2019 GAHR III DRIP Offering on October 4, 2021. Further, on October 4, 2021, our board reinstated distributions and authorized the reinstatement of the AHR DRIP Offering. We continue to offer up to $ 100,000,000 of shares of our common stock to be issued pursuant to the DRIP under the AHR DRIP Offering. As a result, beginning with the October 2021 distribution, which was paid in November 2021, stockholders who previously enrolled as participants in the DRIP received or will receive distributions in shares of our common stock pursuant to the terms of the DRIP, instead of cash distributions. Since October 5, 2016, our board had approved and established an estimated per share NAV annually. Commencing with the distribution payment to stockholders paid in the month following such board approval, shares of our common stock issued pursuant to our distribution reinvestment plan are issued at the current estimated per share NAV until such time as our board determined an updated estimated per share NAV. The following is a summary of the historical estimated per share NAV for GAHR III and the Combined Company, as applicable: Approval Date by our Board Estimated Per Share NAV (Unaudited) 10/03/18 $ 9.37 10/03/19 $ 9.40 03/18/21 $ 8.55 03/24/22 $ 9.29 For the years ended December 31, 2021, 2020 and 2019, $ 7,666,000 , $ 21,861,000 and $ 55,440,000 , respectively, in distributions were reinvested and 831,463 , 2,325,762 and 5,913,684 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings. Share Repurchase Plan In response to the effects of the COVID-19 pandemic and to protect our capital and maximize our liquidity in an effort to strengthen our long-term financial prospects, on March 31, 2020, our board partially suspended our share repurchase plan with respect to all repurchase requests other than repurchases resulting from the death or qualifying disability of stockholders, beginning with share repurchase requests submitted for repurchase during the second quarter of 2020. Repurchase requests that resulted 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 had sufficient funds available to repurchase any shares. Subsequently, on May 29, 2020, our board suspended our share repurchase plan with respect to all share repurchase requests received after May 31, 2020, including repurchases resulting from the death or qualifying disability of stockholders. On July 1, 2020, we repurchased the shares submitted pursuant to the final share repurchase requests honored prior to the suspension of our share repurchase plan. Our share repurchase plan allows for repurchases of shares of our common stock by us when certain criteria are met. Share repurchases are made at the sole discretion of our board. Subject to the availability of the funds for share repurchases and other certain conditions, we generally 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 or “qualifying disability,” as defined in our share repurchase plan, of a stockholder are not subject to this cap. Funds for the repurchase of shares of our common stock come from the cumulative proceeds we receive from the sale of shares of our common stock pursuant to our DRIP Offerings. Furthermore, our share repurchase plan provides that if there are insufficient funds to honor all repurchase requests, pending requests may be honored among all requests for repurchase in any given repurchase period as follows: first, repurchases in full as to repurchases that would result in a stockholder owning less than $ 2,500 of shares; and, next, pro rata as to other repurchase requests. Pursuant to our share repurchase plan, the repurchase price is equal to the lesser of (i) the amount per share that a stockholder paid for their shares of our common stock, or (ii) the most recent estimated value of one share of our common 119 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) stock, as determined by our board. Prior to October 4, 2021, for requests submitted pursuant to a death or a qualifying disability of a stockholder, the repurchase price was 100 % of the amount per share the stockholder paid for their shares of common stock. However, 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 per share NAV. 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. All share repurchase requests other than those requests resulting from the death or qualifying disability of stockholders were and shall be rejected. For the year ended December 31, 2021, we repurchased shares of our common stock owned by our former advisor and GAHR IV Advisor as discussed above in the “Common Stock” section. For the years ended December 31, 2020 and 2019, we repurchased 2,410,864 and 9,526,087 shares of our common stock, respectively, for an aggregate of $ 23,107,000 and $ 89,888,000 , respectively, at an average repurchase price of $ 9.58 and $ 9.44 per share, respectively. In January 2022, we repurchased 448,375 shares of our common stock, for an aggregate of $ 4,134,000 , at an average repurchase price of $ 9.22 per share. All shares were repurchased using the cumulative proceeds we received from the sale of shares of our common stock pursuant to our DRIP Offerings. 2015 Incentive Plan Prior to the REIT Merger, GAHR III adopted the 2013 Incentive Plan pursuant to which its board, or a committee of its independent directors, could grant options, shares of our common stock, stock purchase rights, stock appreciation rights or other awards to its independent directors, employees and consultants, or the 2013 Incentive Plan. The maximum number of shares of common stock that could have been issued pursuant to the 2013 Incentive Plan was 2,000,000 shares. Upon consummation of the Merger, we adopted the 2015 Incentive Plan, as amended and restated, or our incentive plan, pursuant to which our board (with respect to options and restricted shares of common stock granted to independent directors), or our compensation committee (with respect to any other award), may make grants of options, restricted shares of common stock, stock purchase rights, stock appreciation rights or other awards to our independent directors, officers, employees and consultants. The maximum number of shares of our common stock that may be issued pursuant to our incentive plan is 4,000,000 shares. As a result of the REIT Merger, under our incentive plan, certain executive officers and key employees received initial grants of 477,901 time-based shares of our restricted Class T common 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 vests in three equal annual installments on October 1, 2022, October 1, 2023 and October 1, 2024 (subject to continuous service through each vesting date). The performance-based restricted units will cliff vest in the first quarter of 2025 (subject to continuous service through that vesting date) with the amount vesting depending on meeting certain key performance criteria as further described in our incentive plan. Also in connection with the Merger, on October 4, 2021, certain of our key employees were granted 319,149 shares of our restricted Class T common stock under our incentive plan, which will cliff vest on October 4, 2024 (subject to continuous service through that vesting date). As of December 31, 2021, we granted an aggregate of 1,082,455 of shares of our restricted common stock under our incentive plan. Such amount includes: (i) 160,314 shares of our restricted Class T common stock, at a weighted average grant date fair value of $ 9.61 per share, to our independent directors; (ii) 477,901 time-based shares of our restricted Class T common stock, at a grant date fair value of $ 9.22 per share, to certain executive officers and key employees; and (iii) 319,149 shares of our restricted Class T common stock, at a grant date fair value of $ 9.22 per share, to certain of our key employees. In addition, as of December 31, 2021, under the 2013 Incentive Plan, GAHR III granted an aggregate of 135,000 shares of its restricted common stock, which is equal to 125,091 shares of restricted Class I common stock, using the conversion ratio of 0.9266 shares of GAHR IV Class I common stock for each share of GAHR III restricted common stock, as determined in the Merger. For the year ended December 31, 2021, we recognized stock compensation expense related to the restricted stock grants to our independent directors, executive officers and key employees of $ 857,000 . Such stock compensation expense is included in general and administrative in our accompanying consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2020 and 2019, under the 2013 Incentive Plan, GAHR III granted an aggregate of 7,500 and 22,500 shares of its restricted common stock, respectively, at a weighted average grant date fair value of $ 9.40 and $ 9.37 per share, respectively, to its independent directors in connection with their re-election to its board or in consideration for 120 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) their past services rendered. Such shares vested as to 20.0 % of the shares on the date of grant and on each of the first four anniversaries of the grant date. For the years ended December 31, 2020 and 2019, GAHR III recognized stock compensation expense related to the independent director grants of $ 155,000 and $ 215,000 , respectively. Such stock compensation expense is included in general and administrative in the Combined Company’s accompanying consolidated statements of operations and comprehensive income (loss). Stockholder Servicing Fee On October 1, 2021, in connection with the Merger, we assumed GAHR IV's obligations related to stockholder servicing fees. Such fees are paid quarterly with respect to our Class T shares sold in GAHR IV's initial public offering as additional compensation to participating broker-dealers. No stockholder servicing fee is paid with respect to Class I shares or shares of our common stock sold pursuant to our DRIP Offerings. The stockholder servicing fee accrued daily in an amount equal to 1/365th of 1.0 % of the purchase price per share of our Class T shares sold in the primary portion of GAHR IV's public offering. We will cease paying the stockholder servicing fee upon the occurrence of certain defined events, such as our redemption of such Class T shares. By agreement with participating broker-dealers, such stockholder servicing fee may have been reduced or limited. Following the termination of GAHR IV’s public offering on February 15, 2019, we no longer incur additional stockholder servicing fees. As of December 31, 2021, we accrued $ 1,583,000 in connection with the stockholder servicing fee payable, which is included in accounts payable and accrued liabilities in our accompanying consolidated balance sheet. 15. Related Party Transactions Fees and Expenses Paid to Affiliates Prior to the closing of the AHI Acquisition on October 1, 2021, our former 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 former advisor performed its duties and responsibilities under the Advisory Agreement as our fiduciary. Until September 30, 2021, all of our executive officers were officers of our former advisor and officers, limited partners and/or members of one of our former co-sponsors and other affiliates of our former advisor. Set forth below is a description of the transactions with our former advisor or its affiliates that occurred prior to the closing of the Merger and the AHI Acquisition. On December 20, 2021, the Advisory Agreement was assigned to NewCo and as a result, any fees that would have otherwise been payable to our former advisor are now eliminated in consolidation. Following the consummation of the Merger, we became self-managed and as a result, we no longer incur to our former advisor and its affiliates any fees or expense reimbursements arising from the Advisory Agreement. In the aggregate, for the years ended December 31, 2021, 2020 and 2019, we incurred $ 21,113,000 , $ 25,875,000 and $ 25,064,000 , respectively, in fees and expenses to our former advisor or its affiliates as detailed below. Acquisition and Development Stage Acquisition Fee We paid our former advisor or its affiliates an acquisition fee of up to 2.25 % of the contract purchase price, including any contingent or earn-out payments that were paid, for each property we acquired or 2.00 % of the origination or acquisition price, including any contingent or earn-out payments that were paid, for any real estate-related investment we originated or acquired. Our former advisor or its affiliates were entitled to receive these acquisition fees for properties and real estate-related investments we acquired with funds raised in the GAHR III initial offering, or funded with net proceeds from the sale of a property or real estate-related investment, subject to certain conditions. On June 23, 2021, in anticipation of the Merger, we entered into an amendment to the Advisory Agreement, whereby it was agreed that any acquisition fee due to our former advisor would be waived in connection with the REIT Merger. For the years ended December 31, 2021, 2020 and 2019, we incurred $ 1,363,000 , $ 480,000 and $ 1,124,000 , respectively, in acquisition fees to our former advisor. Acquisition fees in connection with the acquisition of properties accounted for as asset acquisitions or the acquisition of real estate-related investments were capitalized as part of the associated investments in our accompanying consolidated balance sheets. 121 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Development Fee In the event our former advisor or its affiliates provided development-related services, our former advisor or its affiliates received a development fee in an amount that was usual and customary for comparable services rendered for similar projects in the geographic market where the services were provided; however, we did not pay a development fee to our former advisor or its affiliates if our former advisor or its affiliates elected to receive an acquisition fee based on the cost of such development. For the years ended December 31, 2021, 2020 and 2019, we incurred $ 856,000 , $ 1,073,000 and $ 346,000 , respectively, in development fees to our former advisor or its affiliates, which were capitalized as part of the associated investments in our accompanying consolidated balance sheets. Operational Stage Asset Management Fee We paid our former advisor or its affiliates a monthly fee for services rendered in connection with the management of our assets equal to one-twelfth of 0.75 % of average invested assets, subject to our stockholders receiving distributions in an amount equal to 5.0 % per annum, cumulative, non-compounded, of invested capital. For such purposes, average invested assets means the average of the aggregate book value of our assets invested in real estate and real estate-related investments, before deducting depreciation, amortization, bad debt and other similar non-cash reserves, computed by taking the average of such values at the end of each month during the period of calculation; and invested capital means, for a specified period, the aggregate issue price of shares of our common stock purchased by our stockholders, reduced by distributions of net sales proceeds by us to our stockholders and by any amounts paid by us to repurchase shares of our common stock pursuant to our share repurchase plan. In an effort to increase our liquidity during the ongoing uncertainty surrounding the COVID-19 pandemic, on May 29, 2020, our former advisor deferred 50.0 % of the asset management fees that it would otherwise have been entitled to receive pursuant to the Advisory Agreement for services performed by our former advisor or its affiliates during the period from June 1, 2020 to November 30, 2020. Such deferred asset management fees of $ 5,207,000 as of December 31, 2020 were included in accounts payable due to affiliates in our accompanying consolidated balance sheets, and were paid in full on January 4, 2021. In addition, on June 23, 2021, in anticipation of the Merger, we entered into a Mutual Consent, pursuant to which, for the period from the date of the Mutual Consent until the earlier to occur of (i) the closing of the Merger, or (ii) the termination of the Merger Agreement, the parties waived the requirement that the asset management fee accrues until our stockholders have received distributions in an amount equal to 5.0 % per annum, cumulative, non-compounded, of their invested capital. For the years ended December 31, 2021, 2020 and 2019, we incurred $ 16,187,000 , $ 20,693,000 and $ 20,073,000 , respectively, in asset management fees to our former advisor or its affiliates. Asset management fees were included in general and administrative in our accompanying consolidated statements of operations and comprehensive income (loss). Property Management Fee Our former advisor or its affiliates directly served as property manager to certain of our properties or sub-contracted their property management duties to any third party and provided oversight of such third-party property manager. We paid our former advisor or its affiliates a monthly management fee equal to a percentage of the gross monthly cash receipts of such property as follows: (i) a property management oversight fee of 1.0 % of the gross monthly cash receipts of any stand-alone, single-tenant, net leased property; (ii) a property management oversight fee of 1.5 % of the gross monthly cash receipts of any property that was not a stand-alone, single-tenant, net leased property and for which our former advisor or its affiliates provided oversight of a third party that performed the duties of a property manager with respect to such property; or (iii) a fair and reasonable property management fee that was approved by a majority of our directors, including a majority of our independent directors, that was not less favorable to us than terms available from unaffiliated third parties for any property that was not a stand-alone, single-tenant, net leased property and for which our former advisor or its affiliates directly served as the property manager without sub-contracting such duties to a third party. For the years ended December 31, 2021, 2020 and 2019, we incurred $ 1,993,000 , $ 2,632,000 and $ 2,611,000 , respectively, in property management fees to our former advisor or its affiliates. Property management fees were included in rental expenses or general and administrative expenses in our accompanying consolidated statements of operations and comprehensive income (loss), as applicable. 122 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Lease Fees We paid our former advisor or its affiliates a separate fee for any leasing activities in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. Such fee generally ranged from 3.0 % to 6.0 % of the gross revenues generated during the initial term of the lease. For the years ended December 31, 2021, 2020 and 2019, we incurred $ 410,000 , $ 579,000 and $ 379,000 , respectively, in lease fees to our former advisor or its affiliates. Lease fees were capitalized as lease commissions and included in other assets, net in our accompanying consolidated balance sheets. Construction Management Fee In the event that our former advisor or its affiliates assisted with planning and coordinating the construction of any capital or tenant improvements, our former advisor or its affiliates were paid a construction management fee of up to 5.0 % of the cost of such improvements. For the years ended December 31, 2021, 2020 and 2019, we incurred $ 144,000 , $ 183,000 and $ 320,000 , respectively, in construction management fees to our former advisor or its affiliates. Construction management fees were capitalized as part of the associated asset and included in real estate investments, net in our accompanying consolidated balance sheets. Operating Expenses We reimbursed our former advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. However, we did not reimburse our former advisor or its affiliates at the end of any fiscal quarter for total operating expenses that, in the four consecutive fiscal quarters then ended, exceeded the greater of: (i) 2.0 % of our average invested assets, as defined in the Advisory Agreement; or (ii) 25.0 % of our net income, as defined in the Advisory Agreement, unless our independent directors determined that such excess expenses were justified based on unusual and nonrecurring factors which they deem sufficient. For the 12 months ended December 31, 2021, 2020 and 2019, our operating expenses did not exceed the aforementioned limitations. For the years ended December 31, 2021, 2020 and 2019, our former advisor or its affiliates incurred operating expenses on our behalf of $ 160,000 , $ 235,000 and $ 211,000 , respectively. Following the Merger and the AHI Acquisition, we no longer reimburse our former advisor for operating expenses incurred. Operating expenses were generally included in general and administrative in our accompanying consolidated statements of operations and comprehensive income (loss). Liquidity Stage Disposition Fees For services relating to the sale of one or more properties, we paid our former advisor or its affiliates a disposition fee of up to the lesser of 2.0 % of the contract sales price or 50.0 % of a customary competitive real estate commission given the circumstances surrounding the sale, in each case as determined by our board, including a majority of our independent directors, upon the provision of a substantial amount of the services in the sales effort. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated third parties, did not exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0 % of the contract sales price. For the years ended December 31, 2021 and 2020, our former advisor agreed to waive $ 93,000 and $ 431,000 , respectively, of disposition fees that may otherwise have been due to our former advisor pursuant to the Advisory Agreement. See Note 2, Summary of Significant Accounting Policies — Properties Held for Sale, and Note 4, Real Estate Investments, Net, for discussions of our property dispositions, as well as Note 14, Equity — Noncontrolling Interests in Total Equity, for a discussion of the disposition of membership interests in a consolidated limited liability company. Our former advisor did not receive any additional securities, shares of stock or any other form of consideration or any repayment as a result of the waiver of such disposition fees. For the year ended December 31, 2019, we did no t incur any disposition fees to our former advisor or its affiliates. 123 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 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 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. Accounts Payable Due to Affiliates The following amounts were outstanding to our affiliates as of December 31, 2021 and 2020: December 31, Fee 2021 2020 Lease commissions $ 245,000 $ 27,000 Development fees 229,000 743,000 Construction management fees 152,000 91,000 Operating expenses 100,000 10,000 Asset and property management fees 83,000 7,155,000 Acquisition fees 57,000 — $ 866,000 $ 8,026,000 16. Fair Value Measurements Assets and Liabilities Reported at Fair Value The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall: Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Liabilities: Derivative financial instruments $ — $ 500,000 $ — $ 500,000 Warrants — — 786,000 786,000 Total liabilities at fair value $ — $ 500,000 $ 786,000 $ 1,286,000 124 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2020, aggregated by the level in the fair value hierarchy within which those measurements fall: Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Derivative financial instrument $ — $ — $ — $ — Total assets at fair value $ — $ — $ — $ — Liabilities: Derivative financial instruments $ — $ 7,877,000 $ — $ 7,877,000 Warrants — — 1,025,000 1,025,000 Total liabilities at fair value $ — $ 7,877,000 $ 1,025,000 $ 8,902,000 There were no transfers into and out of fair value measurement levels during the years ended December 31, 2021 and 2020. Derivative Financial Instruments We use interest rate swaps or interest rate caps to manage interest rate risk associated with variable-rate debt. The valuation of these instruments is determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows of each derivative. 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 variable cash receipts are based on an expectation of future interest rates derived from observable market interest rate curves. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. 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. 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 December 31, 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. Warrants As of December 31, 2021 and 2020, we have recorded $ 786,000 and $ 1,025,000 , respectively, related to warrants in Trilogy common units held by certain members of Trilogy’s management, which is included in security deposits, prepaid rent and other liabilities in our accompanying consolidated balance sheets. Once exercised, these warrants have redemption features similar to the common units held by members of Trilogy’s management. See Note 13, Redeemable Noncontrolling Interests, for a further discussion. As of December 31, 2021 and 2020, the carrying value is a reasonable estimate of fair value. Financial Instruments Disclosed at Fair Value Our accompanying consolidated balance sheets include the following financial instruments: debt security investment, 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 our lines of credit and term loans. 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 value for these financial instruments based upon an evaluation of the underlying characteristics, market data and because of the short period of time between origination of the instruments and 125 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 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. The fair values of the other financial instruments are classified in Level 2 of the fair value hierarchy. The fair value of our debt security investment is estimated using a discounted cash flow analysis using interest rates available to us for investments with similar terms and maturities. The fair values of our mortgage loans payable and our lines of credit and term loans are estimated using discounted cash flow analyses using borrowing rates available to us for debt instruments with similar terms and maturities. We have determined that the valuations of our debt security investment, mortgage loans payable and lines of credit and term loans are classified in Level 2 within the fair value hierarchy. The carrying amounts and estimated fair values of such financial instruments as of December 31, 2021 and 2020 were as follows: December 31, 2021 2020 Carrying Amount(1) Fair Value Carrying Amount(1) Fair Value Financial Assets: Debt security investment $ 79,315,000 $ 93,920,000 $ 75,851,000 $ 94,033,000 Financial Liabilities: Mortgage loans payable $ 1,095,594,000 $ 1,075,729,000 $ 810,478,000 $ 830,049,000 Lines of credit and term loans $ 1,222,853,000 $ 1,226,636,000 $ 836,770,000 $ 847,048,000 ___________ (1) Carrying amount is net of any discount/premium and unamortized costs. 17. Income Taxes As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. We have elected to treat certain of our consolidated subsidiaries as TRS pursuant to the Code. 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 or loss before taxes for the years ended December 31, 2021, 2020 and 2019, were as follows: December 31, 2021 2020 2019 Domestic $ ( 52,001,000 ) $ 6,171,000 $ 1,193,000 Foreign ( 312,000 ) ( 386,000 ) ( 521,000 ) (Loss) income before income taxes $ ( 52,313,000 ) $ 5,785,000 $ 672,000 The components of income tax benefit or expense for the years ended December 31, 2021, 2020 and 2019 were as follows: December 31, 2021 2020 2019 Federal deferred $ ( 12,033,000 ) $ ( 4,818,000 ) $ ( 3,672,000 ) State deferred ( 2,908,000 ) ( 932,000 ) ( 737,000 ) Federal current — ( 361,000 ) ( 29,000 ) State current 329,000 — ( 16,000 ) Foreign current 627,000 612,000 605,000 Valuation allowances 14,941,000 2,421,000 5,373,000 Total income tax expense (benefit) $ 956,000 $ ( 3,078,000 ) $ 1,524,000 Current Income Tax Federal and state income taxes are generally a function of the level of income recognized by our TRS. Foreign income taxes are generally a function of our income on our real estate located in the UK and Isle of Man. 126 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Deferred Taxes Deferred income tax is generally a function of the period’s temporary differences (primarily basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax NOL that may be realized in future periods depending on sufficient taxable income. We recognize the financial statement effects of an uncertain tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. As of both December 31, 2021 and 2020, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying 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 December 31, 2021 and 2020, our valuation allowance fully reserves and substantially reserves, respectively, the net deferred tax assets due to historical losses and 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. Any increases or decreases to the deferred income tax assets or liabilities are reflected in income tax (expense) benefit in our accompanying consolidated statements of operations and comprehensive income (loss). The components of deferred tax assets and liabilities as of December 31, 2021 and 2020 were as follows: December 31, 2021 2020 Deferred income tax assets: Fixed assets and intangibles $ 9,870,000 $ 5,619,000 Expense accruals and other 17,804,000 13,968,000 Net operating loss and other carry forwards 41,164,000 21,168,000 Reserves and accruals 7,375,000 6,541,000 Allowances for accounts receivable 1,951,000 1,932,000 Investments in unconsolidated entities 2,611,000 2,357,000 Total deferred income tax assets $ 80,775,000 $ 51,585,000 Deferred income tax liabilities: Fixed assets and intangibles $ ( 18,689,000 ) $ ( 16,840,000 ) Other — temporary differences ( 2,467,000 ) ( 2,868,000 ) Total deferred income tax liabilities $ ( 21,156,000 ) $ ( 19,708,000 ) Net deferred income tax assets before valuation allowance $ 59,619,000 $ 31,877,000 Valuation allowances ( 59,619,000 ) ( 31,877,000 ) Net deferred income tax assets (liabilities) $ — $ — At December 31, 2021 and 2020, we had a NOL carryforward of $ 165,321,000 and $ 87,347,000 , respectively, related to our TRS. These amounts can be used to offset future taxable income, if any. The NOL carryforwards incurred before January 1, 2018 will begin to expire starting 2035, and NOL carryforwards incurred after December 31, 2017 will be carried forward indefinitely. 127 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Tax Treatment of Distributions (Unaudited) For federal income tax purposes, distributions to stockholders are characterized as ordinary income, capital gain distributions or nontaxable distributions. Nontaxable distributions will reduce United States stockholders’ basis (but not below zero) in their shares. The income tax treatment for distributions reportable for the years ended December 31, 2021, 2020 and 2019 was as follows: Years Ended December 31, 2021 2020 2019 Ordinary income $ 7,989,000 26.3 % $ — — % $ 35,294,000 29.9 % Capital gain — — — — — — Return of capital 22,406,000 73.7 48,842,000 100 82,731,000 70.1 $ 30,395,000 100 % $ 48,842,000 100 % $ 118,025,000 100 % Amounts listed above do not include distributions paid on nonvested shares of our restricted common stock which have been separately reported. 18. Leases Lessor We have operating leases with tenants that expire at various dates through 2050. For the years ended December 31, 2021 and 2020, we recognized $ 136,294,000 and $ 114,770,000 , respectively, of revenues related to operating lease payments, of which $ 23,340,000 and $ 18,452,000 , respectively, was for variable lease payments. As of December 31, 2021, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for each of the next five years ending December 31 and thereafter for properties that we wholly own: Year Amount 2022 $ 151,659,000 2023 143,130,000 2024 132,101,000 2025 118,323,000 2026 107,322,000 Thereafter 611,713,000 Total $ 1,264,248,000 Lessee We lease certain land, buildings, furniture, fixtures, campus equipment, office equipment and automobiles. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Most leases include one or more options to renew, with renewal terms that generally can extend at various dates through 2107, excluding extension options. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. As of December 31, 2021, we had future lease payments of $ 27,229,000 for an operating lease that had not yet commenced. Such operating lease will commence in fiscal year 2022 with a lease term of 15 years. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments that are adjusted periodically based on the United States Bureau of Labor Statistics’ Consumer Price Index, and may also include other variable lease costs (i.e., common area maintenance, property taxes and insurance). Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. 128 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The components of lease costs were as follows: Years Ended December 31, Lease Cost Classification 2021 2020 2019 Operating lease cost(1) Property operating expenses, rental expenses or general and administrative expenses $ 23,774,000 $ 32,441,000 $ 29,974,000 Finance lease cost Amortization of leased assets Depreciation and amortization 1,447,000 1,891,000 2,001,000 Interest on lease liabilities Interest expense 384,000 609,000 391,000 Sublease income Resident fees and services revenue or other income ( 210,000 ) — — Total lease cost $ 25,395,000 $ 34,941,000 $ 32,366,000 ___________ (1) Includes short-term leases and variable lease costs, which are immaterial. Additional information related to our leases for the periods presented below was as follows: December 31, Lease Term and Discount Rate 2021 2020 2019 Weighted average remaining lease term (in years) Operating leases 16.9 13.3 13.5 Finance leases 3.6 1.3 1.3 Weighted average discount rate Operating leases 5.52 % 5.77 % 5.94 % Finance leases 7.68 % 5.62 % 7.33 % Years Ended December 31, Supplemental Disclosure of Cash Flows Information 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows related to operating leases $ 16,793,000 $ 23,790,000 $ 22,114,000 Operating cash outflows related to finance leases $ 384,000 $ 609,000 $ 390,000 Financing cash outflows related to finance leases $ 170,000 $ 1,235,000 $ 3,076,000 Leased assets obtained in exchange for finance lease liabilities $ 1,409,000 $ 66,000 $ — Right-of-use assets obtained in exchange for operating lease liabilities $ 29,523,000 $ 14,302,000 $ 31,958,000 129 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Operating Leases As of December 31, 2021, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for each of the next five years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying consolidated balance sheet: Year Amount 2022 $ 19,188,000 2023 19,203,000 2024 18,257,000 2025 17,292,000 2026 16,956,000 Thereafter 163,816,000 Total operating lease payments 254,712,000 Less: interest 109,227,000 Present value of operating lease liabilities $ 145,485,000 Finance Leases As of December 31, 2021, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for each of the next five years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities: Year Amount 2022 $ 55,000 2023 49,000 2024 34,000 2025 31,000 2026 — Thereafter — Total finance lease payments 169,000 Less: interest 21,000 Present value of finance lease liabilities $ 148,000 19. Segment Reporting As of December 31, 2021, we evaluated our business and made resource allocations based on six reportable business segments: medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals. 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). In addition, our medical office buildings segment included our real estate notes receivable that were settled in full in June 2019. Our hospital investments are primarily single-tenant properties for which we lease the facilities to unaffiliated tenants under triple-net and generally master leases that transfer the obligation for all facility operating costs (including maintenance, repairs, taxes, insurance and capital expenditures) to the tenant. Our skilled nursing and senior housing facilities are similarly structured to our hospital investments. In addition, our senior housing segment includes our debt security investment. Our SHOP include senior housing facilities that are owned and operated utilizing a RIDEA structure. Our integrated senior health campuses include a range of assisted living, memory care, independent living, skilled nursing services and certain ancillary businesses that are owned and operated utilizing a RIDEA structure. 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 and grant income, less property operating expenses and rental expenses, which excludes depreciation and amortization, general and administrative expenses, business acquisition expenses, interest expense, gain or loss on dispositions 130 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) of real estate investments, impairment of real estate investments, income or loss from unconsolidated entities, foreign currency gain or loss, other income and income tax benefit or 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. Interest expense, depreciation and amortization and other expenses not attributable to individual properties are not allocated to individual segments for purposes of assessing segment performance. Non-segment assets primarily consist of corporate assets including cash and cash equivalents, other receivables, deferred financing costs and other assets not attributable to individual properties. On October 1, 2021, as part of the Merger, we acquired 87 properties, comprising 92 buildings, or approximately 4,799,000 square feet of GLA, which expanded our portfolio of real estate properties and SHOP within the segments as outlined above. 131 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Summary information for the reportable segments during the years ended December 31, 2021, 2020 and 2019 was as follows: Integrated Senior Health Campuses SHOP Medical Office Buildings Senior Housing Skilled Nursing Facilities Hospitals Year Ended December 31, 2021 Revenues and grant income: Resident fees and services $ 1,025,699,000 $ 98,236,000 $ — $ — $ — $ — $ 1,123,935,000 Real estate revenue — — 97,297,000 16,530,000 17,309,000 10,232,000 141,368,000 Grant income 13,911,000 3,040,000 — — — — 16,951,000 Total revenues and grant income 1,039,610,000 101,276,000 97,297,000 16,530,000 17,309,000 10,232,000 1,282,254,000 Expenses: Property operating expenses 943,743,000 86,450,000 — — — — 1,030,193,000 Rental expenses — — 36,375,000 366,000 1,507,000 477,000 38,725,000 Segment net operating income $ 95,867,000 $ 14,826,000 $ 60,922,000 $ 16,164,000 $ 15,802,000 $ 9,755,000 $ 213,336,000 Expenses: General and administrative $ 43,199,000 Business acquisition expenses 13,022,000 Depreciation and amortization 133,191,000 Other income (expense): Interest expense: Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 80,937,000 ) Gain in fair value of derivative financial instruments 8,200,000 Loss on dispositions of real estate investments ( 100,000 ) Impairment of real estate investments ( 3,335,000 ) Loss from unconsolidated entities ( 1,355,000 ) Foreign currency loss ( 564,000 ) Other income 1,854,000 Total net other expense ( 76,237,000 ) Loss before income taxes ( 52,313,000 ) Income tax expense ( 956,000 ) Net loss $ ( 53,269,000 ) 132 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Integrated Senior Health Campuses SHOP Medical Office Buildings Senior Housing Skilled Nursing Facilities Hospitals Year Ended December 31, 2020 Revenues and grant income: Resident fees and services $ 983,169,000 $ 85,904,000 $ — $ — $ — $ — $ 1,069,073,000 Real estate revenue — — 78,424,000 14,524,000 16,107,000 10,992,000 120,047,000 Grant income 53,855,000 1,326,000 — — — — 55,181,000 Total revenues and grant income 1,037,024,000 87,230,000 78,424,000 14,524,000 16,107,000 10,992,000 1,244,301,000 Expenses: Property operating expenses 929,897,000 63,830,000 — — — — 993,727,000 Rental expenses — — 30,216,000 64,000 1,572,000 446,000 32,298,000 Segment net operating income $ 107,127,000 $ 23,400,000 $ 48,208,000 $ 14,460,000 $ 14,535,000 $ 10,546,000 $ 218,276,000 Expenses: General and administrative $ 27,007,000 Business acquisition expenses 290,000 Depreciation and amortization 98,858,000 Other income (expense): Interest expense: Interest expense (including amortization of deferred financing costs and debt discount/premium) ( 71,278,000 ) Loss in fair value of derivative financial instruments ( 3,906,000 ) Gain on dispositions of real estate investments 1,395,000 Impairment of real estate investment ( 11,069,000 ) Loss from unconsolidated entities ( 4,517,000 ) Foreign currency gain 1,469,000 Other income 1,570,000 Total net other expense ( 86,336,000 ) Income before income taxes 5,785,000 Income tax benefit 3,078,000 Net income $ 8,863,000 133 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Integrated Senior Health Campuses SHOP Medical Office Buildings Senior Housing Skilled Nursing Facilities Hospitals Year Ended December 31, 2019 Revenues: Resident fees and services $ 1,030,934,000 $ 68,144,000 $ — $ — $ — $ — $ 1,099,078,000 Real estate revenue — — 80,805,000 18,407,000 13,345,000 11,481,000 124,038,000 Total revenues 1,030,934,000 68,144,000 80,805,000 18,407,000 13,345,000 11,481,000 1,223,116,000 Expenses: Property operating expenses 919,793,000 48,067,000 — — — — 967,860,000 Rental expenses — — 30,870,000 1,001,000 1,456,000 532,000 33,859,000 Segment net operating income $ 111,141,000 $ 20,077,000 $ 49,935,000 $ 17,406,000 $ 11,889,000 $ 10,949,000 $ 221,397,000 Expenses: General and administrative $ 29,749,000 Business acquisition expenses ( 161,000 ) Depreciation and amortization 111,412,000 Other income (expense): Interest expense: Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishment) ( 78,553,000 ) Loss in fair value of derivative financial instruments ( 4,541,000 ) Loss from unconsolidated entities ( 2,097,000 ) Foreign currency gain 1,730,000 Other income 3,736,000 Total net other expense ( 79,725,000 ) Income before income taxes 672,000 Income tax expense ( 1,524,000 ) Net loss $ ( 852,000 ) Total assets by reportable segment as of December 31, 2021 and 2020 were as follows: December 31, 2021 2020 Integrated senior health campuses $ 1,896,608,000 $ 1,886,878,000 Medical office buildings 1,412,247,000 610,653,000 SHOP 625,164,000 348,987,000 Senior housing 255,555,000 152,406,000 Skilled nursing facilities 252,869,000 115,941,000 Hospitals 109,834,000 109,663,000 Other 28,062,000 10,409,000 Total assets $ 4,580,339,000 $ 3,234,937,000 As discussed in Note 3, Business Combinations, in connection with the AHI Acquisition, we recorded goodwill of $ 134,589,000 , which was allocated across our reporting segments. As of December 31, 2021, goodwill of $ 47,812,000 , $ 8,640,000 , $ 4,389,000 , $ 23,277,000 , $ 5,924,000 and $ 119,856,000 was allocated to our medical office buildings, skilled nursing facilities, hospitals, SHOP, senior housing facilities and integrated senior health campuses, respectively. As of December 31, 2020, goodwill of $ 75,309,000 was allocated to integrated senior health campuses, and no other segments had goodwill. 134 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Our portfolio of properties and other investments are located in the United States, the UK and Isle of Man. Revenues and grant income and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for our operations for the periods presented: Years Ended December 31, 2021 2020 2019 Revenues and grant income: United States $ 1,277,095,000 $ 1,239,509,000 $ 1,218,337,000 International 5,159,000 4,792,000 4,779,000 $ 1,282,254,000 $ 1,244,301,000 $ 1,223,116,000 The following is a summary of real estate investments, net by geographic regions as of December 31, 2021 and 2020: December 31, 2021 2020 Real estate investments, net: United States $ 3,466,019,000 $ 2,279,257,000 International 48,667,000 50,743,000 $ 3,514,686,000 $ 2,330,000,000 20. Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are primarily our debt security investment, cash and cash equivalents, restricted cash and accounts and other receivables. We are exposed to credit risk with respect to our debt security investment, but we believe collection of the outstanding amount is probable. 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 December 31, 2021 and 2020, we had cash and cash equivalents in excess of FDIC insured limits. We believe this risk is not significant. Concentration of credit risk with respect to accounts receivable from tenants is limited. 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 December 31, 2021, properties in one state in the United States accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI. Properties located in Indiana accounted for 31.0 % of our total property portfolio’s annualized base rent or annualized NOI. Accordingly, there is a geographic concentration of risk subject to fluctuations in such state’s economy. Based on leases in effect as of December 31, 2021, our six reportable business segments, medical office buildings, integrated senior health campuses, skilled nursing facilities, SHOP, senior housing and hospitals accounted for 41.1 %, 36.5 %, 8.8 %, 5.7 %, 4.6 % and 3.3 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI. As of December 31, 2021, no ne of our tenants at our properties accounted for 10.0 % or more of our total property portfolio’s annualized base rent or annualized NOI, which is based on contractual base rent from leases in effect for our non-RIDEA properties and annualized NOI for our SHOP and integrated senior health campuses operations as of December 31, 2021. 21. Per Share Data 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 $ 1,440,000 , $ 9,000 and $ 28,000 , respectively, for the years ended December 31, 2021, 2020 and 2019. Diluted earnings (loss) per share are computed based on the weighted average number of shares of our common stock and all potentially dilutive securities, if any. Nonvested shares of our restricted common stock and limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock. As of December 31, 2021 and 2020, there were 891,543 and 33,000 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 December 31, 2021 and 2020, there were 14,007,903 and 222 limited 135 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) partnership units, respectively, of our operating partnership outstanding, but such units were also excluded from the computation of diluted earnings per share because such units were anti-dilutive during these periods. 22. Subsequent Events Distributions Declared On January 20, 2022, our board authorized a distribution to our Class T and Class I stockholders of record as of the close of business on each of January 28, 2022, February 25, 2022 and March 29, 2022. The distribution for the months of January 2022, February 2022 and March 2022, is equal to $ 0.033333333 per share of our common stock, which is equal to an annualized distribution rate of $ 0.40 per share. The distributions will be paid in cash or shares of our common stock pursuant to our DRIP. The distribution for the months of January 2022 and February 2022 were paid on or about February 1, 2022 and March 1, 2022, respectively. The distribution for the month of March 2022 will be paid on or about April 1, 2022, only from legally available funds. 2022 Credit Facility On January 19, 2022 , we, through our operating partnership, as borrower, and certain of our subsidiaries, or the subsidiary guarantors, collectively as guarantors, entered into the 2022 Credit Agreement that amends, restates, supersedes and replaces the 2019 Corporate Credit Agreement with Bank of America; KeyBank; Citizens Bank; and a syndicate of other banks, as lenders, to obtain a credit facility with an aggregate maximum principal amount up to $ 1,050,000,000 , or the 2022 Credit Facility. The 2022 Credit Facility consists of a senior unsecured revolving credit facility in the initial aggregate amount of $ 500,000,000 and a senior unsecured term loan facility in the initial aggregate amount of $ 550,000,000 . The proceeds of loans made under the 2022 Credit Facility may be used for refinancing existing indebtedness and for general corporate purposes including for working capital, capital expenditures and other corporate purposes not inconsistent with obligations under the 2022 Credit Agreement. We may also obtain up to $ 25,000,000 in the form of standby letters of credit pursuant to the 2022 Credit Facility. Under the terms of the 2022 Credit Agreement, the revolving loans mature on January 19, 2026, and may be extended for one 12 -month period, subject to the satisfaction of certain conditions, including payment of an extension fee. The term loan matures on January 19, 2027, and may not be extended. The maximum principal amount of the 2022 Credit Facility may be increased by an aggregate incremental amount of $ 700,000,000 , subject to: (i) the terms of the 2022 Credit Agreement; and (ii) at least five business days’ prior written notice to Bank of America. Unless otherwise defined herein, all capitalized terms in this Note 22, Subsequent Events — 2022 Credit Facility, are as defined and set forth in the 2022 Credit Agreement. The 2022 Credit Facility bears interest at varying rates based upon, at our option, (i) the Daily Simple Secured Overnight Financing Rate, or Daily SOFR, plus the Applicable Rate for Daily SOFR Rate Loans or (ii) the Term Secured Overnight Financing Rate, or the Term SOFR, plus the Applicable Rate for Term SOFR Rate Loans. If, under the terms of the 2022 Credit Agreement, there is an inability to determine the Daily SOFR or the Term SOFR then the 2022 Credit Facility will bear interest at a rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate Loans. The loans may be repaid in whole or in part without prepayment premium or penalty, subject to certain conditions. We are required to pay a fee on the unused portion of the lenders’ commitments under the 2022 Credit Agreement computed at (a) 0.25 % per annum if the actual daily Commitment Utilization Percentage for such quarter is less than or equal to 50% and (b) 0.20 % per annum if the actual daily Commitment Utilization Percentage for such quarter is greater than 50%, which fee shall be computed on the actual daily amount of the Available Commitments during the period for which payment is made and payable in arrears on a quarterly basis. At any time that the Applicable Rate is determined based on the Debt Ratings Based Pricing Grid, we are required to pay a facility fee as determined in the Debt Ratings Based Pricing Grid multiplied by the actual daily amount of the Aggregate Revolving Commitments , or, if the Aggregate Revolving Commitments have terminated, the Outstanding Amount of all Revolving Loans and L/C Obligations, regardless of usage. The 2022 Credit Agreement contains various affirmative and negative covenants that are customary for credit facilities and transactions of this type, including limitations on the incurrence of debt by our operating partnership and its subsidiaries and limitations on secured recourse indebtedness. The 2022 Credit Agreement also imposes certain financial covenants based on certain criteria described in the 2022 Credit Agreement. 136 Table of Contents AMERICAN HEALTHCARE REIT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The 2022 Credit Agreement requires us to add additional subsidiaries as guarantors in the event the value of the assets owned by the subsidiary guarantors falls below a certain threshold as set forth in the 2022 Credit Agreement. In the event of default, Bank of America has the right to terminate the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions under the 2022 Credit Agreement, and to accelerate the payment on any unpaid principal amount of all outstanding loans and interest thereon. The 2022 Credit Facility replaces the 2018 Credit Facility and the 2019 Credit Facility. 137 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired DeKalb Professional Center (Medical Office) Lithonia, GA $ — $ 479,000 $ 2,871,000 $ 199,000 $ 479,000 $ 3,070,000 $ 3,549,000 $ ( 792,000 ) 2008 06/06/14 Country Club MOB (Medical Office) Stockbridge, GA — 240,000 2,306,000 382,000 240,000 2,688,000 2,928,000 ( 703,000 ) 2002 06/26/14 Acworth Medical Complex (Medical Office) Acworth, GA — 216,000 3,135,000 241,000 216,000 3,376,000 3,592,000 ( 775,000 ) 1976/2009 07/02/14 Acworth, GA — 250,000 2,214,000 326,000 250,000 2,540,000 2,790,000 ( 607,000 ) 1976/2009 07/02/14 Acworth, GA — 104,000 774,000 10,000 104,000 784,000 888,000 ( 223,000 ) 1976/2009 07/02/14 Wichita KS MOB (Medical Office) Wichita, KS — 943,000 6,288,000 753,000 943,000 7,041,000 7,984,000 ( 1,867,000 ) 1980/1996 09/04/14 Delta Valley ALF Portfolio (SHOP) Batesville, MS — 331,000 5,103,000 ( 573,000 ) 331,000 4,530,000 4,861,000 ( 990,000 ) 1999/2005 09/11/14 Cleveland, MS — 348,000 6,369,000 ( 1,017,000 ) 348,000 5,352,000 5,700,000 ( 1,179,000 ) 2004 09/11/14 Springdale, AR — 891,000 6,538,000 ( 1,067,000 ) 891,000 5,471,000 6,362,000 ( 1,187,000 ) 1998/2005 01/08/15 Lee’s Summit MO MOB (Medical Office) Lee’s Summit, MO — 1,045,000 5,068,000 646,000 1,045,000 5,714,000 6,759,000 ( 1,835,000 ) 2006 09/18/14 Carolina Commons MOB (Medical Office) Indian Land, SC 6,022,000 1,028,000 9,430,000 4,252,000 1,028,000 13,682,000 14,710,000 ( 2,813,000 ) 2009 10/15/14 Mount Olympia MOB Portfolio (Medical Office) Mount Dora, FL — 393,000 5,633,000 — 393,000 5,633,000 6,026,000 ( 1,229,000 ) 2009 12/04/14 Olympia Fields, IL — 298,000 2,726,000 33,000 298,000 2,759,000 3,057,000 ( 693,000 ) 2005 12/04/14 Southlake TX Hospital (Hospital) Southlake, TX 95,000,000 5,089,000 108,517,000 — 5,089,000 108,517,000 113,606,000 ( 20,606,000 ) 2013 12/04/14 East Texas MOB Portfolio (Medical Office) Longview, TX — — 19,942,000 111,000 — 20,053,000 20,053,000 ( 4,727,000 ) 2008 12/12/14 Longview, TX — 228,000 965,000 — 228,000 965,000 1,193,000 ( 362,000 ) 1979/1997 12/12/14 Longview, TX — 759,000 1,696,000 — 759,000 1,696,000 2,455,000 ( 706,000 ) 1998 12/12/14 Longview, TX — — 8,027,000 — — 8,027,000 8,027,000 ( 1,941,000 ) 2004 12/12/14 Longview, TX — — 696,000 29,000 — 725,000 725,000 ( 270,000 ) 1956 12/12/14 Longview, TX — — 27,601,000 4,243,000 — 31,844,000 31,844,000 ( 7,853,000 ) 1985/1993/ 2004 12/12/14 Marshall, TX — 368,000 1,711,000 99,000 368,000 1,810,000 2,178,000 ( 703,000 ) 1970 12/12/14 138 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Premier MOB (Medical Office) Novi, MI $ — $ 644,000 $ 10,420,000 $ 1,367,000 $ 644,000 $ 11,787,000 $ 12,431,000 $ ( 2,833,000 ) 2006 12/19/14 Independence MOB Portfolio (Medical Office) Southgate, KY — 411,000 11,005,000 2,301,000 411,000 13,306,000 13,717,000 ( 3,024,000 ) 1988 01/13/15 Somerville, MA 29,735,000 1,509,000 46,775,000 5,471,000 1,509,000 52,246,000 53,755,000 ( 9,436,000 ) 1985 01/13/15 Morristown, NJ 27,797,000 3,763,000 26,957,000 4,574,000 3,764,000 31,530,000 35,294,000 ( 7,870,000 ) 1980 01/13/15 Verona, NJ — 1,683,000 9,405,000 1,386,000 1,683,000 10,791,000 12,474,000 ( 2,410,000 ) 1970 01/13/15 Bronx, NY — — 19,593,000 3,078,000 — 22,671,000 22,671,000 ( 4,544,000 ) 1987/1988 01/26/15 King of Prussia PA MOB (Medical Office) King of Prussia, PA 8,567,000 3,427,000 13,849,000 5,976,000 3,427,000 19,825,000 23,252,000 ( 5,172,000 ) 1946/2000 01/21/15 North Carolina ALF Portfolio (SHOP) Clemmons, NC — 596,000 13,237,000 ( 691,000 ) 596,000 12,546,000 13,142,000 ( 2,477,000 ) 2014 06/29/15 Garner, NC — 1,723,000 11,517,000 51,000 1,723,000 11,568,000 13,291,000 ( 1,138,000 ) 2014 03/27/19 Huntersville, NC — 2,033,000 11,494,000 ( 102,000 ) 2,033,000 11,392,000 13,425,000 ( 1,794,000 ) 2015 01/18/17 Matthews, NC — 949,000 12,537,000 ( 144,000 ) 949,000 12,393,000 13,342,000 ( 1,390,000 ) 2017 08/30/18 Mooresville, NC — 835,000 15,894,000 ( 716,000 ) 835,000 15,178,000 16,013,000 ( 3,019,000 ) 2012 01/28/15 Raleigh, NC — 1,069,000 21,235,000 ( 720,000 ) 1,069,000 20,515,000 21,584,000 ( 3,861,000 ) 2013 01/28/15 Wake Forest, NC — 772,000 13,596,000 ( 828,000 ) 772,000 12,768,000 13,540,000 ( 2,373,000 ) 2014 06/29/15 Orange Star Medical Portfolio (Medical Office and Hospital) Durango, CO — 623,000 14,166,000 295,000 623,000 14,461,000 15,084,000 ( 2,824,000 ) 2004 02/26/15 Durango, CO — 788,000 10,467,000 666,000 788,000 11,133,000 11,921,000 ( 2,252,000 ) 2004 02/26/15 Friendswood, TX — 500,000 7,664,000 522,000 500,000 8,186,000 8,686,000 ( 1,747,000 ) 2008 02/26/15 Keller, TX — 1,604,000 7,912,000 521,000 1,604,000 8,433,000 10,037,000 ( 1,881,000 ) 2011 02/26/15 Wharton, TX — 259,000 10,590,000 325,000 259,000 10,915,000 11,174,000 ( 2,317,000 ) 1987 02/26/15 Kingwood MOB Portfolio (Medical Office) Kingwood, TX — 820,000 8,589,000 290,000 820,000 8,879,000 9,699,000 ( 1,913,000 ) 2005 03/11/15 Kingwood, TX — 781,000 3,943,000 95,000 781,000 4,038,000 4,819,000 ( 916,000 ) 2008 03/11/15 Mt Juliet TN MOB (Medical Office) Mount Juliet, TN — 1,188,000 10,720,000 187,000 1,188,000 10,907,000 12,095,000 ( 2,353,000 ) 2012 03/17/15 Homewood AL MOB (Medical Office) Homewood, AL — 405,000 6,590,000 ( 60,000 ) 405,000 6,530,000 6,935,000 ( 1,488,000 ) 2010 03/27/15 139 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Paoli PA Medical Plaza (Medical Office) Paoli, PA $ 12,077,000 $ 2,313,000 $ 12,447,000 $ 8,068,000 $ 2,313,000 $ 20,515,000 $ 22,828,000 $ ( 3,944,000 ) 1951 04/10/15 Paoli, PA — 1,668,000 7,357,000 1,332,000 1,668,000 8,689,000 10,357,000 ( 2,324,000 ) 1975 04/10/15 Glen Burnie MD MOB (Medical Office) Glen Burnie, MD — 2,692,000 14,095,000 3,072,000 2,692,000 17,167,000 19,859,000 ( 4,269,000 ) 1981 05/06/15 Marietta GA MOB (Medical Office) Marietta, GA — 1,347,000 10,947,000 468,000 1,347,000 11,415,000 12,762,000 ( 2,281,000 ) 2002 05/07/15 Mountain Crest Senior Housing Portfolio (SHOP) Elkhart, IN — 793,000 6,009,000 427,000 793,000 6,436,000 7,229,000 ( 1,559,000 ) 1997 05/14/15 Elkhart, IN — 782,000 6,760,000 607,000 782,000 7,367,000 8,149,000 ( 1,890,000 ) 2000 05/14/15 Hobart, IN — 604,000 11,529,000 158,000 604,000 11,687,000 12,291,000 ( 2,446,000 ) 2008 05/14/15 LaPorte, IN — 392,000 14,894,000 413,000 392,000 15,307,000 15,699,000 ( 3,141,000 ) 2008 05/14/15 Mishawaka, IN 8,872,000 3,670,000 14,416,000 834,000 3,670,000 15,250,000 18,920,000 ( 3,423,000 ) 1978 07/14/15 Niles, MI — 404,000 5,050,000 421,000 404,000 5,471,000 5,875,000 ( 1,356,000 ) 2000 06/11/15 and 11/20/15 Nebraska Senior Housing Portfolio (SHOP) Bennington, NE — 981,000 20,427,000 749,000 981,000 21,176,000 22,157,000 ( 4,150,000 ) 2009 05/29/15 Omaha, NE — 1,274,000 38,619,000 972,000 1,274,000 39,591,000 40,865,000 ( 7,303,000 ) 2000 05/29/15 Pennsylvania Senior Housing Portfolio (SHOP) Bethlehem, PA — 1,542,000 22,249,000 679,000 1,542,000 22,928,000 24,470,000 ( 4,924,000 ) 2005 06/30/15 Boyertown, PA 22,932,000 480,000 25,544,000 521,000 480,000 26,065,000 26,545,000 ( 5,026,000 ) 2000 06/30/15 York, PA 12,432,000 972,000 29,860,000 438,000 972,000 30,298,000 31,270,000 ( 5,765,000 ) 1986 06/30/15 Southern Illinois MOB Portfolio (Medical Office) Waterloo, IL — 94,000 1,977,000 — 94,000 1,977,000 2,071,000 ( 455,000 ) 2015 07/01/15 Waterloo, IL — 738,000 6,332,000 509,000 738,000 6,841,000 7,579,000 ( 1,559,000 ) 1995 07/01/15, 12/19/17 and 04/17/18 Waterloo, IL — 200,000 2,648,000 76,000 200,000 2,724,000 2,924,000 ( 670,000 ) 2011 07/01/15 Napa Medical Center (Medical Office) Napa, CA — 1,176,000 13,328,000 1,732,000 1,176,000 15,060,000 16,236,000 ( 3,584,000 ) 1980 07/02/15 Chesterfield Corporate Plaza (Medical Office) Chesterfield, MO — 8,030,000 24,533,000 3,120,000 8,030,000 27,653,000 35,683,000 ( 6,941,000 ) 1989 08/14/15 140 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Richmond VA ALF (SHOP) North Chesterfield, VA $ 32,476,000 $ 2,146,000 $ 56,671,000 $ 563,000 $ 2,146,000 $ 57,234,000 $ 59,380,000 $ ( 9,757,000 ) 2009 09/11/15 Crown Senior Care Portfolio (Senior Housing) Peel, Isle of Man — 1,236,000 7,378,000 — 1,236,000 7,378,000 8,614,000 ( 1,397,000 ) 2015 09/15/15 St. Albans, UK — 1,246,000 13,100,000 723,000 1,246,000 13,823,000 15,069,000 ( 2,544,000 ) 2015 10/08/15 Salisbury, UK — 1,324,000 12,720,000 42,000 1,324,000 12,762,000 14,086,000 ( 2,360,000 ) 2015 12/08/15 Aberdeen, UK — 2,149,000 6,407,000 — 2,149,000 6,407,000 8,556,000 ( 949,000 ) 1986 11/15/16 Felixstowe, UK — 747,000 6,155,000 546,000 747,000 6,701,000 7,448,000 ( 983,000 ) 2010/2011 11/15/16 Felixstowe, UK — 564,000 2,698,000 363,000 564,000 3,061,000 3,625,000 ( 499,000 ) 2010/2011 11/15/16 Washington DC SNF (Skilled Nursing) Washington, DC 60,100,000 1,194,000 34,200,000 — 1,194,000 34,200,000 35,394,000 ( 6,995,000 ) 1983 10/29/15 Stockbridge GA MOB II (Medical Office) Stockbridge, GA — 499,000 8,353,000 1,049,000 499,000 9,402,000 9,901,000 ( 1,745,000 ) 2006 12/03/15 Marietta GA MOB II (Medical Office) Marietta, GA — 661,000 4,783,000 313,000 661,000 5,096,000 5,757,000 ( 1,067,000 ) 2007 12/09/15 Naperville MOB (Medical Office) Naperville, IL — 392,000 3,765,000 206,000 392,000 3,971,000 4,363,000 ( 894,000 ) 1999 01/12/16 Naperville, IL — 548,000 11,815,000 887,000 548,000 12,702,000 13,250,000 ( 2,554,000 ) 1989 01/12/16 Lakeview IN Medical Plaza (Medical Office) Indianapolis, IN 20,155,000 2,375,000 15,911,000 8,001,000 2,375,000 23,912,000 26,287,000 ( 5,393,000 ) 1987 01/21/16 Pennsylvania Senior Housing Portfolio II (SHOP) Palmyra, PA 19,114,000 835,000 24,424,000 355,000 835,000 24,779,000 25,614,000 ( 5,172,000 ) 2007 02/01/16 Snellville GA MOB (Medical Office) Snellville, GA — 332,000 7,781,000 1,112,000 332,000 8,893,000 9,225,000 ( 1,574,000 ) 2005 02/05/16 Lakebrook Medical Center (Medical Office) Westbrook, CT — 653,000 4,855,000 817,000 653,000 5,672,000 6,325,000 ( 1,118,000 ) 2007 02/19/16 Stockbridge GA MOB III (Medical Office) Stockbridge, GA — 606,000 7,924,000 1,440,000 606,000 9,364,000 9,970,000 ( 1,622,000 ) 2007 03/29/16 Joplin MO MOB (Medical Office) Joplin, MO — 1,245,000 9,860,000 70,000 1,245,000 9,930,000 11,175,000 ( 2,590,000 ) 2000 05/10/16 Austell GA MOB (Medical Office) Austell, GA — 663,000 10,547,000 125,000 663,000 10,672,000 11,335,000 ( 1,800,000 ) 2008 05/25/16 Middletown OH MOB (Medical Office) Middletown, OH — — 17,389,000 853,000 — 18,242,000 18,242,000 ( 3,044,000 ) 2007 06/16/16 141 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Fox Grape SNF Portfolio (Skilled Nursing) Braintree, MA $ — $ 1,844,000 $ 10,847,000 $ 31,000 $ 1,844,000 $ 10,878,000 $ 12,722,000 $ ( 1,706,000 ) 2015 07/01/16 Brighton, MA — 779,000 2,661,000 334,000 779,000 2,995,000 3,774,000 ( 522,000 ) 1982 07/01/16 Duxbury, MA — 2,921,000 11,244,000 1,933,000 2,921,000 13,177,000 16,098,000 ( 2,194,000 ) 1983 07/01/16 Hingham, MA — 2,316,000 17,390,000 ( 166,000 ) 2,316,000 17,224,000 19,540,000 ( 2,692,000 ) 1990 07/01/16 Quincy, MA 14,141,000 3,537,000 13,697,000 333,000 3,537,000 14,030,000 17,567,000 ( 2,093,000 ) 1995 11/01/16 Voorhees NJ MOB (Medical Office) Voorhees, NJ — 1,727,000 8,451,000 1,327,000 1,727,000 9,778,000 11,505,000 ( 1,974,000 ) 2008 07/08/16 Norwich CT MOB Portfolio (Medical Office) Norwich, CT — 403,000 1,601,000 1,228,000 403,000 2,829,000 3,232,000 ( 627,000 ) 2014 12/16/16 Norwich, CT — 804,000 12,094,000 566,000 804,000 12,660,000 13,464,000 ( 1,980,000 ) 1999 12/16/16 New London CT MOB (Medical Office) New London, CT — 669,000 3,479,000 600,000 670,000 4,078,000 4,748,000 ( 874,000 ) 1987 05/03/17 Middletown OH MOB II (Medical Office) Middletown, OH — — 3,949,000 549,000 — 4,498,000 4,498,000 ( 584,000 ) 2007 12/20/17 Owen Valley Health Campus Spencer, IN 8,760,000 307,000 9,111,000 245,000 307,000 9,356,000 9,663,000 ( 1,520,000 ) 1999 12/01/15 Homewood Health Campus Lebanon, IN 8,792,000 973,000 9,702,000 640,000 1,040,000 10,275,000 11,315,000 ( 1,696,000 ) 2000 12/01/15 Ashford Place Health Campus Shelbyville, IN 6,003,000 664,000 12,662,000 1,019,000 849,000 13,496,000 14,345,000 ( 2,226,000 ) 2004 12/01/15 Mill Pond Health Campus Greencastle, IN 7,104,000 1,576,000 8,124,000 535,000 1,629,000 8,606,000 10,235,000 ( 1,395,000 ) 2005 12/01/15 St. Andrews Health Campus Batesville, IN 4,482,000 552,000 8,213,000 508,000 625,000 8,648,000 9,273,000 ( 1,416,000 ) 2005 12/01/15 Hampton Oaks Health Campus Scottsburg, IN 6,310,000 720,000 8,145,000 671,000 845,000 8,691,000 9,536,000 ( 1,478,000 ) 2006 12/01/15 Forest Park Health Campus Richmond, IN 6,890,000 535,000 9,399,000 472,000 639,000 9,767,000 10,406,000 ( 1,670,000 ) 2007 12/01/15 The Maples at Waterford Crossing Goshen, IN 5,823,000 344,000 8,027,000 52,000 351,000 8,072,000 8,423,000 ( 1,304,000 ) 2006 12/01/15 Morrison Woods Health Campus Muncie, IN (c) 1,903,000 21,806,000 359,000 1,903,000 22,165,000 24,068,000 ( 2,661,000 ) 2008 12/01/15, 09/14/16 and 03/03/21 Woodbridge Health Campus Logansport, IN 8,326,000 228,000 11,812,000 322,000 257,000 12,105,000 12,362,000 ( 1,990,000 ) 2003 12/01/15 142 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Bridgepointe Health Campus Vincennes, IN $ 7,128,000 $ 747,000 $ 7,469,000 $ 1,312,000 $ 854,000 $ 8,674,000 $ 9,528,000 $ ( 1,325,000 ) 2002 12/01/15 Greenleaf Living Center Elkhart, IN 11,406,000 492,000 12,157,000 801,000 517,000 12,933,000 13,450,000 ( 2,041,000 ) 2000 12/01/15 Forest Glen Health Campus Springfield, OH 9,992,000 846,000 12,754,000 519,000 881,000 13,238,000 14,119,000 ( 2,204,000 ) 2007 12/01/15 The Meadows of Kalida Health Campus Kalida, OH 7,883,000 298,000 7,628,000 183,000 303,000 7,806,000 8,109,000 ( 1,270,000 ) 2007 12/01/15 The Heritage Findlay, OH 13,077,000 1,312,000 13,475,000 433,000 1,402,000 13,818,000 15,220,000 ( 2,298,000 ) 1975 12/01/15 Genoa Retirement Village Genoa, OH 8,269,000 881,000 8,113,000 667,000 909,000 8,752,000 9,661,000 ( 1,468,000 ) 1985 12/01/15 Waterford Crossing Goshen, IN 8,116,000 344,000 4,381,000 898,000 349,000 5,274,000 5,623,000 ( 881,000 ) 2004 12/01/15 St. Elizabeth Healthcare Delphi, IN 8,926,000 522,000 5,463,000 5,382,000 634,000 10,733,000 11,367,000 ( 1,554,000 ) 1986 12/01/15 Cumberland Pointe West Lafayette, IN 9,465,000 1,645,000 13,696,000 652,000 1,901,000 14,092,000 15,993,000 ( 2,552,000 ) 1980 12/01/15 Franciscan Healthcare Center Louisville, KY 10,614,000 808,000 8,439,000 1,750,000 910,000 10,087,000 10,997,000 ( 1,738,000 ) 1975 12/01/15 Blair Ridge Health Campus Peru, IN 7,691,000 734,000 11,648,000 591,000 773,000 12,200,000 12,973,000 ( 2,294,000 ) 2001 12/01/15 Glen Oaks Health Campus New Castle, IN 5,146,000 384,000 8,189,000 199,000 413,000 8,359,000 8,772,000 ( 1,316,000 ) 2011 12/01/15 Covered Bridge Health Campus Seymour, IN (c) 386,000 9,699,000 552,000 28,000 10,609,000 10,637,000 ( 1,722,000 ) 2002 12/01/15 Stonebridge Health Campus Bedford, IN 9,815,000 1,087,000 7,965,000 421,000 1,144,000 8,329,000 9,473,000 ( 1,426,000 ) 2004 12/01/15 RiverOaks Health Campus Princeton, IN 14,632,000 440,000 8,953,000 509,000 472,000 9,430,000 9,902,000 ( 1,559,000 ) 2004 12/01/15 Park Terrace Health Campus Louisville, KY (c) 2,177,000 7,626,000 1,228,000 2,177,000 8,854,000 11,031,000 ( 1,564,000 ) 1977 12/01/15 Cobblestone Crossing Terre Haute, IN (c) 1,462,000 13,860,000 5,702,000 1,505,000 19,519,000 21,024,000 ( 3,079,000 ) 2008 12/01/15 Creasy Springs Health Campus Lafayette, IN 16,200,000 2,111,000 14,337,000 5,914,000 2,393,000 19,969,000 22,362,000 ( 3,167,000 ) 2010 12/01/15 Avalon Springs Health Campus Valparaiso, IN 17,622,000 1,542,000 14,107,000 156,000 1,575,000 14,230,000 15,805,000 ( 2,308,000 ) 2012 12/01/15 Prairie Lakes Health Campus Noblesville, IN 8,901,000 2,204,000 13,227,000 737,000 2,342,000 13,826,000 16,168,000 ( 2,223,000 ) 2010 12/01/15 RidgeWood Health Campus Lawrenceburg, IN 13,804,000 1,240,000 16,118,000 200,000 1,261,000 16,297,000 17,558,000 ( 2,581,000 ) 2009 12/01/15 143 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Westport Place Health Campus Louisville, KY (c) $ 1,245,000 $ 9,946,000 $ 113,000 $ 1,262,000 $ 10,042,000 $ 11,304,000 $ ( 1,588,000 ) 2011 12/01/15 Paddock Springs Warsaw, IN $ 8,762,000 488,000 — 10,602,000 654,000 10,436,000 11,090,000 ( 848,000 ) 2019 02/14/19 Amber Manor Care Center Petersburg, IN 5,623,000 446,000 6,063,000 354,000 515,000 6,348,000 6,863,000 ( 1,100,000 ) 1990 12/01/15 The Meadows of Leipsic Health Campus Leipsic, OH (c) 1,242,000 6,988,000 689,000 1,317,000 7,602,000 8,919,000 ( 1,295,000 ) 1986 12/01/15 Springview Manor Lima, OH (c) 260,000 3,968,000 333,000 278,000 4,283,000 4,561,000 ( 688,000 ) 1978 12/01/15 Willows at Bellevue Bellevue, OH 16,507,000 587,000 15,575,000 1,176,000 788,000 16,550,000 17,338,000 ( 2,684,000 ) 2008 12/01/15 Briar Hill Health Campus North Baltimore, OH (c) 673,000 2,688,000 452,000 700,000 3,113,000 3,813,000 ( 566,000 ) 1977 12/01/15 Cypress Pointe Health Campus Englewood, OH (c) 921,000 10,291,000 10,263,000 1,624,000 19,851,000 21,475,000 ( 2,079,000 ) 2010 12/01/15 The Oaks at NorthPointe Woods Battle Creek, MI (c) 567,000 12,716,000 161,000 567,000 12,877,000 13,444,000 ( 2,049,000 ) 2008 12/01/15 Westlake Health Campus Commerce, MI 14,406,000 815,000 13,502,000 ( 192,000 ) 541,000 13,584,000 14,125,000 ( 2,177,000 ) 2011 12/01/15 Springhurst Health Campus Greenfield, IN 20,011,000 931,000 14,114,000 3,110,000 2,241,000 15,914,000 18,155,000 ( 3,010,000 ) 2007 12/01/15 and 05/16/17 Glen Ridge Health Campus Louisville, KY (c) 1,208,000 9,771,000 1,622,000 1,333,000 11,268,000 12,601,000 ( 1,932,000 ) 2006 12/01/15 St. Mary Healthcare Lafayette, IN 5,281,000 348,000 2,710,000 222,000 393,000 2,887,000 3,280,000 ( 483,000 ) 1969 12/01/15 The Oaks at Woodfield Grand Blanc, MI (c) 897,000 12,270,000 256,000 1,080,000 12,343,000 13,423,000 ( 2,043,000 ) 2012 12/01/15 Stonegate Health Campus Lapeer, MI (c) 538,000 13,159,000 169,000 567,000 13,299,000 13,866,000 ( 2,174,000 ) 2012 12/01/15 Senior Living at Forest Ridge New Castle, IN (c) 204,000 5,470,000 140,000 238,000 5,576,000 5,814,000 ( 915,000 ) 2005 12/01/15 Highland Oaks Health Center McConnelsville, OH (c) 880,000 1,803,000 1,149,000 1,316,000 2,516,000 3,832,000 ( 543,000 ) 1978 12/01/15 River Terrace Health Campus Madison, IN (c) — 13,378,000 4,185,000 76,000 17,487,000 17,563,000 ( 2,789,000 ) 2016 03/28/16 St. Charles Health Campus Jasper, IN 11,531,000 467,000 14,532,000 1,564,000 558,000 16,005,000 16,563,000 ( 2,551,000 ) 2000 06/24/16 and 06/30/16 Bethany Pointe Health Campus Anderson, IN 19,757,000 2,337,000 26,524,000 2,429,000 2,499,000 28,791,000 31,290,000 ( 4,639,000 ) 1999 06/30/16 River Pointe Health Campus Evansville, IN 14,195,000 1,118,000 14,736,000 1,402,000 1,126,000 16,130,000 17,256,000 ( 2,732,000 ) 1999 06/30/16 144 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Waterford Place Health Campus Kokomo, IN $ 15,027,000 $ 1,219,000 $ 18,557,000 $ 1,493,000 $ 1,448,000 $ 19,821,000 $ 21,269,000 $ ( 3,324,000 ) 2000 06/30/16 Autumn Woods Health Campus New Albany, IN (c) 1,016,000 13,414,000 1,794,000 1,048,000 15,176,000 16,224,000 ( 2,698,000 ) 2000 06/30/16 Oakwood Health Campus Tell City, IN 9,225,000 783,000 11,880,000 1,136,000 874,000 12,925,000 13,799,000 ( 2,330,000 ) 2000 06/30/16 Cedar Ridge Health Campus Cynthiana, KY (c) 102,000 8,435,000 3,598,000 205,000 11,930,000 12,135,000 ( 2,299,000 ) 2005 06/30/16 Aspen Place Health Campus Greensburg, IN 9,540,000 980,000 10,970,000 885,000 1,212,000 11,623,000 12,835,000 ( 1,890,000 ) 2012 08/16/16 The Willows at East Lansing East Lansing, MI 16,484,000 1,449,000 15,161,000 1,486,000 1,496,000 16,600,000 18,096,000 ( 2,844,000 ) 2014 08/16/16 The Willows at Howell Howell, MI (c) 1,051,000 12,099,000 6,643,000 1,123,000 18,670,000 19,793,000 ( 2,340,000 ) 2015 08/16/16 The Willows at Okemos Okemos, MI 7,555,000 1,171,000 12,326,000 791,000 1,210,000 13,078,000 14,288,000 ( 2,319,000 ) 2014 08/16/16 Shelby Crossing Health Campus Macomb, MI 17,324,000 2,533,000 18,440,000 2,011,000 2,612,000 20,372,000 22,984,000 ( 3,728,000 ) 2013 08/16/16 Village Green Healthcare Center Greenville, OH 7,021,000 355,000 9,696,000 612,000 373,000 10,290,000 10,663,000 ( 1,632,000 ) 2014 08/16/16 The Oaks at Northpointe Zanesville, OH (c) 624,000 11,665,000 989,000 650,000 12,628,000 13,278,000 ( 2,155,000 ) 2013 08/16/16 The Oaks at Bethesda Zanesville, OH 4,585,000 714,000 10,791,000 679,000 743,000 11,441,000 12,184,000 ( 1,893,000 ) 2013 08/16/16 White Oak Health Campus Monticello, IN (c) 1,005,000 13,207,000 14,000 1,005,000 13,221,000 14,226,000 ( 1,255,000 ) 2010 09/23/16 and 07/30/20 Woodmont Health Campus Boonville, IN 7,873,000 790,000 9,633,000 1,001,000 1,010,000 10,414,000 11,424,000 ( 1,852,000 ) 2000 02/01/17 Silver Oaks Health Campus Columbus, IN (c) 1,776,000 21,420,000 1,434,000 1,000 24,629,000 24,630,000 ( 4,062,000 ) 2001 02/01/17 Thornton Terrace Health Campus Hanover, IN 5,580,000 764,000 9,209,000 879,000 826,000 10,026,000 10,852,000 ( 1,707,000 ) 2003 02/01/17 The Willows at Hamburg Lexington, KY 11,618,000 1,740,000 13,422,000 574,000 1,775,000 13,961,000 15,736,000 ( 2,015,000 ) 2012 02/01/17 The Lakes at Monclova Monclova, OH 19,591,000 2,869,000 12,855,000 10,232,000 3,186,000 22,770,000 25,956,000 ( 2,443,000 ) 2013 12/01/17 The Willows at Willard Willard, OH (c) 610,000 12,256,000 9,568,000 213,000 22,221,000 22,434,000 ( 2,811,000 ) 2012 02/01/17 145 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Westlake Health Campus — Commerce Villa Commerce, MI (c) $ 261,000 $ 6,610,000 $ 1,228,000 $ 553,000 $ 7,546,000 $ 8,099,000 ( 965,000 ) 2017 11/17/17 Orchard Grove Health Campus Romeo, MI $ 25,737,000 2,065,000 11,510,000 17,998,000 3,441,000 28,132,000 31,573,000 ( 2,100,000 ) 2016 07/20/18 and 11/30/17 The Meadows of Ottawa Ottawa, OH (c) 695,000 7,752,000 666,000 728,000 8,385,000 9,113,000 ( 1,133,000 ) 2014 12/15/17 Valley View Healthcare Center Fremont, OH 10,666,000 930,000 7,635,000 1,496,000 1,089,000 8,972,000 10,061,000 ( 850,000 ) 2017 07/20/18 Novi Lakes Health Campus Novi, MI 12,628,000 1,654,000 7,494,000 2,649,000 1,663,000 10,134,000 11,797,000 ( 1,639,000 ) 2016 07/20/18 The Willows at Fritz Farm Lexington, KY 9,280,000 1,538,000 8,637,000 425,000 1,563,000 9,037,000 10,600,000 ( 823,000 ) 2017 07/20/18 Trilogy Real Estate Gahanna, LLC Gahanna, OH 14,325,000 1,146,000 — 16,741,000 1,202,000 16,685,000 17,887,000 ( 502,000 ) 2020 11/13/20 Oaks at Byron Center Byron Center, MI 14,343,000 2,000,000 — 15,834,000 2,193,000 15,641,000 17,834,000 ( 644,000 ) 2020 07/08/20 Harrison Springs Health Campus Corydon, IN (c) 2,017,000 11,487,000 1,099,000 2,025,000 12,578,000 14,603,000 ( 852,000 ) 2016 09/05/19 The Cloister at Silvercrest New Albany, IN — 139,000 634,000 — 139,000 634,000 773,000 ( 37,000 ) 1940 10/01/19 Trilogy Healthcare of Ferdinand II, LLC Ferdinand, IN 11,222,000 — — 14,599,000 — 14,599,000 14,599,000 ( 784,000 ) 2019 11/19/19 Trilogy Healthcare of Hilliard, LLC Hilliard, OH 12,239,000 1,702,000 17,976,000 — 1,833,000 17,845,000 19,678,000 ( 37,000 ) 2021 12/08/21 Forest Springs Health Campus Louisville, KY (c) 964,000 16,691,000 47,000 975,000 16,727,000 17,702,000 ( 672,000 ) 2015 07/30/20 Gateway Springs Health Campus Hamilton, OH 11,505,000 1,277,000 10,923,000 1,592,000 1,417,000 12,375,000 13,792,000 ( 336,000 ) 2020 12/28/20 The Meadows of Delphos Kendallville, IN — 1,806,000 9,243,000 — 1,806,000 9,243,000 11,049,000 ( 311,000 ) 2016 01/19/21 Delphos, OH 78,587,000 2,345,000 8,150,000 — 2,345,000 8,150,000 10,495,000 ( 353,000 ) 2018 01/19/21 Lima, OH — 2,397,000 9,638,000 — 2,397,000 9,638,000 12,035,000 ( 381,000 ) 2018 01/19/21 Springfield, OH — 2,803,000 11,928,000 — 2,803,000 11,928,000 14,731,000 ( 451,000 ) 2018 01/19/21 Sylvania, OH — 2,548,000 15,059,000 — 2,548,000 15,059,000 17,607,000 ( 585,000 ) 2017 01/19/21 Union Township, OH — 2,789,000 12,343,000 — 2,789,000 12,343,000 15,132,000 ( 449,000 ) 2018 01/19/21 146 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Harrison Trial Health Campus Harrison, OH $ 14,935,000 $ 1,750,000 $ 17,114,000 $ — $ 2,045,000 $ 16,819,000 $ 18,864,000 $ ( 310,000 ) 2021 04/28/21 The Oaks of Belmont Grand Rapids, MI 14,512,000 767,000 17,043,000 — 1,058,000 16,752,000 17,810,000 ( 392,000 ) 2021 03/13/21 Cedar Creek Health Campus Lowell, IN — 2,326,000 12,650,000 — 2,326,000 12,650,000 14,976,000 ( 160,000 ) 2014 07/07/21 Auburn MOB (Medical Office) Auburn, CA — 567,000 6,472,000 192,000 567,000 6,664,000 7,231,000 ( 66,000 ) 1997 10/01/21 Pottsville MOB (Medical Office) Pottsville, PA — 1,478,000 8,854,000 — 1,478,000 8,854,000 10,332,000 ( 85,000 ) 2004 10/01/21 Charlottesville MOB (Medical Office) Charlottesville, VA — 4,902,000 19,741,000 13,000 4,902,000 19,754,000 24,656,000 ( 222,000 ) 2001 10/01/21 Rochester Hills MOB (Medical Office) Rochester Hills, MI 2,492,000 2,218,000 8,380,000 261,000 2,218,000 8,641,000 10,859,000 ( 96,000 ) 1990 10/01/21 Cullman MOB III (Medical Office) Cullman, AL — — 19,224,000 226,000 — 19,450,000 19,450,000 ( 160,000 ) 2010 10/01/21 Iron MOB Portfolio (Medical Office) Cullman, AL — — 14,799,000 544,000 — 15,343,000 15,343,000 ( 135,000 ) 1994 10/01/21 Cullman, AL — — 12,287,000 721,000 — 13,008,000 13,008,000 ( 118,000 ) 1998 10/01/21 Sylacauga, AL — — 11,273,000 — — 11,273,000 11,273,000 ( 108,000 ) 1997 10/01/21 Mint Hill MOB (Medical Office) Mint Hill, NC — — 24,110,000 — — 24,110,000 24,110,000 ( 237,000 ) 2007 10/01/21 Lafayette Assisted Living Portfolio (SHOP) Lafayette, LA — 1,206,000 9,076,000 4,000 1,206,000 9,080,000 10,286,000 ( 60,000 ) 1996 10/01/21 Lafayette, LA — 1,039,000 4,684,000 25,000 1,039,000 4,709,000 5,748,000 ( 32,000 ) 2014 10/01/21 Evendale MOB (Medical Office) Evendale, OH — 1,776,000 11,695,000 171,000 1,776,000 11,866,000 13,642,000 ( 156,000 ) 1988 10/01/21 Battle Creek MOB (Medical Office) Battle Creek, MI — 1,156,000 7,910,000 28,000 1,156,000 7,938,000 9,094,000 ( 98,000 ) 1996 10/01/21 Reno MOB (Medical Office) Reno, NV — — 82,515,000 402,000 — 82,917,000 82,917,000 ( 684,000 ) 2005 10/01/21 Athens MOB Portfolio (Medical Office) Athens, GA — 860,000 7,989,000 — 860,000 7,989,000 8,849,000 ( 88,000 ) 2006 10/01/21 Athens, GA — 1,106,000 11,531,000 500,000 1,106,000 12,031,000 13,137,000 ( 102,000 ) 2006 10/01/21 SW Illinois Senior Housing Portfolio (Senior Housing) Columbia, IL — 1,117,000 9,700,000 — 1,117,000 9,700,000 10,817,000 ( 71,000 ) 2007 10/01/21 Columbia, IL — 147,000 2,106,000 — 147,000 2,106,000 2,253,000 ( 15,000 ) 1999 10/01/21 Millstadt, IL — 259,000 3,980,000 — 259,000 3,980,000 4,239,000 ( 28,000 ) 2004 10/01/21 147 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Red Bud, IL $ — $ 690,000 $ 5,175,000 $ — $ 690,000 $ 5,175,000 $ 5,865,000 $ ( 37,000 ) 2006 10/01/21 Waterloo, IL — 934,000 8,932,000 — 934,000 8,932,000 9,866,000 ( 64,000 ) 2012 10/01/21 Lawrenceville MOB (Medical Office) Lawrenceville, GA — 1,663,000 12,019,000 — 1,663,000 12,019,000 13,682,000 ( 124,000 ) 2005 10/01/21 Northern California Senior Housing Portfolio (SHOP) Belmont, CA — 10,491,000 9,650,000 14,000 10,491,000 9,664,000 20,155,000 ( 66,000 ) 1958/2000 10/01/21 Menlo Park, CA — 3,730,000 3,018,000 ( 1,000 ) 3,730,000 3,017,000 6,747,000 ( 20,000 ) 1945 10/01/21 Roseburg MOB (Medical Office) Roseburg, OR — — 28,140,000 — — 28,140,000 28,140,000 ( 241,000 ) 2003 10/01/21 Fairfield County MOB Portfolio (Medical Office) Stratford, CT — 1,209,000 4,272,000 53,000 1,209,000 4,325,000 5,534,000 ( 58,000 ) 1963 10/01/21 Trumbull, CT — 2,797,000 10,400,000 40,000 2,797,000 10,440,000 13,237,000 ( 133,000 ) 1987 10/01/21 Central Florida Senior Housing Portfolio (SHOP) Bradenton, FL — 1,325,000 7,871,000 37,000 1,325,000 7,908,000 9,233,000 ( 54,000 ) 1973/1983 10/01/21 Brooksville, FL — 1,545,000 11,107,000 6,000 1,545,000 11,113,000 12,658,000 ( 83,000 ) 1960/2007 10/01/21 Brooksville, FL — 756,000 6,939,000 81,000 756,000 7,020,000 7,776,000 ( 51,000 ) 2008 10/01/21 Lake Placid, FL — 590,000 2,847,000 38,000 590,000 2,885,000 3,475,000 ( 20,000 ) 2008 10/01/21 Lakeland, FL — 383,000 15,622,000 55,000 383,000 15,677,000 16,060,000 ( 102,000 ) 1985 10/01/21 Pinellas Park, FL — 1,065,000 7,610,000 38,000 1,065,000 7,648,000 8,713,000 ( 53,000 ) 2016 10/01/21 Sanford, FL — 1,803,000 9,504,000 90,000 1,803,000 9,594,000 11,397,000 ( 66,000 ) 1984 10/01/21 Spring Hill, FL — 2,623,000 12,200,000 19,000 2,623,000 12,219,000 14,842,000 ( 90,000 ) 1988 10/01/21 Winter Haven, FL — 2,654,000 19,811,000 803,000 2,654,000 20,614,000 23,268,000 ( 140,000 ) 1984 10/01/21 Central Wisconsin Senior Care Portfolio (Skilled Nursing) Sun Prairie, WI — 543,000 2,587,000 — 543,000 2,587,000 3,130,000 ( 22,000 ) 1960/2006 10/01/21 Waunakee, WI — 2,171,000 10,198,000 30,000 2,171,000 10,228,000 12,399,000 ( 87,000 ) 1974/2005 10/01/21 Sauk Prairie MOB (Medical Office) Prairie du Sac, WI — 2,044,000 19,669,000 333,000 2,044,000 20,002,000 22,046,000 ( 173,000 ) 2014 10/01/21 Surprise MOB (Medical Office) Surprise, AZ — 1,827,000 10,968,000 353,000 1,827,000 11,321,000 13,148,000 ( 116,000 ) 2012 10/01/21 Southfield MOB (Medical Office) Southfield, MI 5,662,000 1,634,000 16,550,000 182,000 1,634,000 16,732,000 18,366,000 ( 198,000 ) 1975/2014 10/01/21 Pinnacle Beaumont ALF (SHOP) Beaumont, TX — 1,775,000 17,541,000 ( 2,000 ) 1,775,000 17,539,000 19,314,000 ( 118,000 ) 2012 10/01/21 Grand Junction MOB (Medical Office) Grand Junction, CO — 2,460,000 34,188,000 — 2,460,000 34,188,000 36,648,000 ( 305,000 ) 2013 10/01/21 148 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Edmonds MOB (Medical Office) Edmonds, WA $ — $ 4,523,000 $ 22,414,000 $ 269,000 $ 4,523,000 $ 22,683,000 $ 27,206,000 $ ( 203,000 ) 1991/2008 10/01/21 Pinnacle Warrenton ALF (SHOP) Warrenton, MO — 514,000 7,059,000 11,000 514,000 7,070,000 7,584,000 ( 49,000 ) 1986 10/01/21 Glendale MOB (Medical Office) Glendale, WI — 665,000 6,782,000 141,000 665,000 6,923,000 7,588,000 ( 75,000 ) 2004 10/01/21 Missouri SNF Portfolio (Skilled Nursing) Florissant, MO — 800,000 10,363,000 — 800,000 10,363,000 11,163,000 ( 77,000 ) 1987 10/01/21 Kansas City, MO — 2,090,000 10,527,000 — 2,090,000 10,527,000 12,617,000 ( 91,000 ) 1974 10/01/21 Milan, MO — 493,000 7,057,000 — 493,000 7,057,000 7,550,000 ( 52,000 ) 1980 10/01/21 Missouri, MO — 729,000 10,187,000 — 729,000 10,187,000 10,916,000 ( 73,000 ) 1963 10/01/21 Salisbury, MO — 515,000 8,852,000 — 515,000 8,852,000 9,367,000 ( 65,000 ) 1970 10/01/21 Sedalia, MO — 631,000 24,172,000 — 631,000 24,172,000 24,803,000 ( 163,000 ) 1975 10/01/21 St. Elizabeth, MO — 437,000 4,561,000 — 437,000 4,561,000 4,998,000 ( 34,000 ) 1981 10/01/21 Trenton, MO — 310,000 4,875,000 — 310,000 4,875,000 5,185,000 ( 35,000 ) 1967 10/01/21 Flemington MOB Portfolio (Medical Office) Flemington, NJ — 1,419,000 11,110,000 368,000 1,419,000 11,478,000 12,897,000 ( 116,000 ) 2002 10/01/21 Flemington, NJ — 578,000 3,340,000 92,000 578,000 3,432,000 4,010,000 ( 43,000 ) 1993 10/01/21 Lawrenceville MOB II (Medical Office) Lawrenceville, GA — 1,058,000 9,709,000 197,000 1,058,000 9,906,000 10,964,000 ( 116,000 ) 1990 10/01/21 Mill Creek MOB (Medical Office) Mill Creek, WA — 1,344,000 7,516,000 28,000 1,344,000 7,544,000 8,888,000 ( 69,000 ) 1991 10/01/21 Modesto MOB (Medical Office) Modesto, CA — — 16,065,000 8,000 — 16,073,000 16,073,000 ( 141,000 ) 1991/2016 10/01/21 Michigan ALF Portfolio (Senior Housing) Grand Rapids, MI — 1,196,000 8,955,000 — 1,196,000 8,955,000 10,151,000 ( 69,000 ) 1953/2016 10/01/21 Grand Rapids, MI 9,990,000 1,291,000 11,308,000 — 1,291,000 11,308,000 12,599,000 ( 87,000 ) 1989 10/01/21 Holland, MI — 716,000 6,534,000 — 716,000 6,534,000 7,250,000 ( 58,000 ) 2007/2017 10/01/21 Howell, MI — 836,000 4,202,000 — 836,000 4,202,000 5,038,000 ( 32,000 ) 2003 10/01/21 Lansing, MI — 1,300,000 11,629,000 — 1,300,000 11,629,000 12,929,000 ( 85,000 ) 1988/2015 10/01/21 Wyoming, MI — 1,343,000 13,347,000 — 1,343,000 13,347,000 14,690,000 ( 98,000 ) 1964/2016 10/01/21 Lithonia MOB (Medical Office) Lithonia, GA — 1,676,000 10,871,000 263,000 1,676,000 11,134,000 12,810,000 ( 108,000 ) 2015 10/01/21 149 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired West Des Moines SNF (Skilled Nursing) West Des Moines, IA $ — $ 509,000 $ 3,813,000 $ — $ 509,000 $ 3,813,000 $ 4,322,000 $ ( 29,000 ) 2004 10/01/21 Great Nord MOB Portfolio (Medical Office) Tinley Park, IL — — 15,423,000 237,000 — 15,660,000 15,660,000 ( 154,000 ) 2002 10/01/21 Chesterton, IN — 743,000 9,070,000 25,000 743,000 9,095,000 9,838,000 ( 98,000 ) 2007 10/01/21 Crown Point, IN — 265,000 5,467,000 — 265,000 5,467,000 5,732,000 ( 50,000 ) 2005 10/01/21 Plymouth, MN — 1,491,000 12,994,000 — 1,491,000 12,994,000 14,485,000 ( 122,000 ) 2014 10/01/21 Overland Park MOB (Medical Office) Overland Park, KS — 2,803,000 23,639,000 436,000 2,803,000 24,075,000 26,878,000 ( 207,000 ) 2017 10/01/21 Blue Badger MOB (Medical Office) Marysville, OH — 1,518,000 12,543,000 — 1,518,000 12,543,000 14,061,000 ( 105,000 ) 2014 10/01/21 Bloomington MOB (Medical Office) Bloomington, IL — 2,114,000 17,363,000 — 2,114,000 17,363,000 19,477,000 ( 122,000 ) 1990 10/01/21 Memphis MOB (Medical Office) Memphis, TN — 1,215,000 7,075,000 — 1,215,000 7,075,000 8,290,000 ( 62,000 ) 1984 10/01/21 Haverhill MOB (Medical Office) Haverhill, MA — 1,393,000 15,477,000 — 1,393,000 15,477,000 16,870,000 ( 166,000 ) 1987 10/01/21 Fresno MOB (Medical Office) Fresno, CA — 1,536,000 8,964,000 — 1,536,000 8,964,000 10,500,000 ( 97,000 ) 2007 10/01/21 Colorado Foothills MOB Portfolio (Medical Office) Arvada, CO — 695,000 6,369,000 2,000 695,000 6,371,000 7,066,000 ( 94,000 ) 1979 10/01/21 Centennial, CO — 873,000 11,233,000 12,000 873,000 11,245,000 12,118,000 ( 122,000 ) 1979 10/01/21 Colorado Springs, CO — 2,225,000 12,520,000 587,000 2,225,000 13,107,000 15,332,000 ( 121,000 ) 1999 10/01/21 Catalina West Haven ALF (SHOP) West Haven, UT — 1,936,000 10,415,000 32,000 1,936,000 10,447,000 12,383,000 ( 73,000 ) 2012 10/01/21 Louisiana Senior Housing Portfolio (SHOP) Gonzales, LA — 1,123,000 5,668,000 28,000 1,123,000 5,696,000 6,819,000 ( 43,000 ) 1996 10/01/21 Monroe, LA — 834,000 4,037,000 57,000 834,000 4,094,000 4,928,000 ( 30,000 ) 1994 10/01/21 New Iberia, LA — 952,000 5,257,000 4,000 952,000 5,261,000 6,213,000 ( 39,000 ) 1996 10/01/21 Shreveport, LA — 1,177,000 6,810,000 3,000 1,177,000 6,813,000 7,990,000 ( 48,000 ) 1996 10/01/21 Slidell, LA — 801,000 4,348,000 84,000 801,000 4,432,000 5,233,000 ( 33,000 ) 1996 10/01/21 Catalina Madera ALF (SHOP) Madera, CA — 1,312,000 15,299,000 16,000 1,312,000 15,315,000 16,627,000 ( 108,000 ) 2005 10/01/21 $ 1,116,216,000 $ 321,587,000 $ 3,197,760,000 $ 283,484,000 $ 329,292,000 $ 3,473,539,000 $ 3,802,831,000 $ ( 423,424,000 ) 150 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 Initial Cost to Company Gross Amount of Which Carried at Close of Period(f) Description(a) Encumbrances Land Buildings and Improvements Cost Capitalized Subsequent to Acquisition(b) Land Buildings and Improvements Total(e) Accumulated Depreciation (g)(h) Date of Construction Date Acquired Leased properties(d) $ — $ 1,886,000 $ 81,382,000 $ 141,667,000 $ 2,320,000 $ 222,615,000 $ 224,935,000 $ ( 100,090,000 ) Construction in progress — 2,329,000 — 8,477,000 2,950,000 7,856,000 10,806,000 ( 372,000 ) $ 1,116,216,000 $ 325,802,000 $ 3,279,142,000 $ 433,628,000 $ 334,562,000 $ 3,704,010,000 $ 4,038,572,000 $ ( 523,886,000 ) ___________ (a) We own 100 % of our properties as of December 31, 2021, with the exception of Trilogy, Lakeview IN Medical Plaza, Southlake TX Hospital, Central Florida Senior Housing Portfolio, Pinnacle Beaumont ALF, Pinnacle Warrenton ALF, Catalina West Haven ALF, Louisiana Senior Housing Portfolio and Catalina Madera ALF. (b) The cost capitalized subsequent to acquisition is shown net of dispositions and impairments. (c) These properties are used as collateral for the secured revolver portion of the 2019 Trilogy Credit Facility, which had an outstanding balance of $ 304,734,000 as of December 31, 2021. See Note 9, Lines of Credit and Term Loans — 2019 Trilogy Credit Facility, for a further discussion. (d) Represents furniture, fixtures, equipment, land and improvements associated with properties under operating leases. 151 Table of Contents AMERICAN HEALTHCARE REIT, INC. SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION — (Continued) December 31, 2021 (e) The changes in total real estate for the years ended December 31, 2021, 2020 and 2019 are as follows: Amount Balance — December 31, 2018 $ 2,477,375,000 Acquisitions 32,330,000 Additions 114,078,000 Dispositions ( 8,050,000 ) Foreign currency translation adjustment 2,875,000 Balance — December 31, 2019 $ 2,618,608,000 Acquisitions $ 31,157,000 Additions 129,254,000 Dispositions and impairments ( 18,718,000 ) Foreign currency translation adjustment 1,971,000 Balance — December 31, 2020 $ 2,762,272,000 Acquisitions $ 1,225,626,000 Additions 87,909,000 Dispositions and impairments ( 36,645,000 ) Foreign currency translation adjustment ( 590,000 ) Balance — December 31, 2021 $ 4,038,572,000 (f) As of December 31, 2021, the unaudited aggregate cost of our properties was $ 3,933,364,000 for federal income tax purposes. (g) The changes in accumulated depreciation for the years ended December 31, 2021, 2020 and 2019 are as follows: Amount Balance — December 31, 2018 $ 254,694,000 Additions 90,914,000 Dispositions ( 7,614,000 ) Foreign currency translation adjustment ( 96,000 ) Balance — December 31, 2019 $ 337,898,000 Additions $ 91,617,000 Dispositions and impairments ( 4,530,000 ) Foreign currency translation adjustment 287,000 Balance — December 31, 2020 $ 425,272,000 Additions $ 109,036,000 Dispositions and impairments ( 10,320,000 ) Foreign currency translation adjustment ( 102,000 ) Balance — December 31, 2021 $ 523,886,000 (h) The cost of buildings and capital improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and capital improvements, up to 39 years, and the cost of tenant improvements is depreciated over the shorter of the lease term or useful life, up to 34 years. The cost of furniture, fixtures and equipment is depreciated over the estimated useful life, up to 28 years. 152 Table of Contents AMERICAN HEALTHCARE REIT, INC. EXHIBITS LIST December 31, 2021 The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the period ended December 31, 2021 (and are numbered in accordance with Item 601 of Regulation S-K). 2.1 Agreement and Plan of Merger, dated June 23, 2021, by and among Griffin-American Healthcare REIT IV, Inc., Griffin-American Healthcare REIT IV Holdings, LP, Continental Merger Sub, LLC, Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT III Holdings, LP (included as Exhibit 2.1 to our Current Report on Form 8-K (File No. 000-55775) filed June 24, 2021 and incorporated herein by reference) 3.1 Fourth Articles of Amendment and Restatement of Griffin-American Healthcare REIT IV, Inc., dated October 1, 2021 (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 1, 2021 and incorporated herein by reference) 3.2 Bylaws of American Healthcare REIT, Inc. (included as Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 5, 2021 and incorporated herein by reference) 4.1 Amended and Restated Distribution Reinvestment Plan of Griffin-American Healthcare REIT IV, Inc. (included as Exhibit 4.6 to our Registration Statement on Form S-3 (File No. 333-229301) filed January 18, 2019 and incorporated herein by reference) 4.2* Description of Registrant’s Securities 10.1*† American Healthcare REIT, Inc. Amended and Restated 2015 Incentive Plan , effective as of November 18, 2021 10. 2 First Amended and Restated Senior Secured Credit Agreement dated as of September 5, 2019, among Trilogy RER, LLC, and certain subsidiaries of Trilogy RER, LLC, Trilogy OpCo, LLC and Trilogy Pro Services, LLC, KeyBank National Association and the other lenders which are parties thereto from time to time, CIT Bank, N.A., Regions Bank, KeyBanc Capital Markets, Inc., Regions Capital Markets, Bank of America, N.A. and The Huntington National Bank (included as Exhibit 10.1 to Griffin-American Healthcare REIT III, Inc.’s Current Report on Form 8-K (File No. 000-55434) filed September 11, 2019 and incorporated herein by reference) 10. 3 Unconditional Guaranty of Payment dated as of September 5, 2019, by Trilogy Investors, LLC, Trilogy Healthcare Holdings, Inc., Trilogy Pro Services, LLC and Trilogy OpCo, LLC for the benefit of KeyBank National Association and the other lenders which are parties thereto from time to time, CIT Bank, N.A., Regions Bank, KeyBanc Capital Markets, Inc., Regions Capital Markets, Bank of America, N.A. and The Huntington National Bank (included as Exhibit 10.2 to Griffin-American Healthcare REIT III, Inc.’s Current Report on Form 8-K (File No. 000-55434) filed September 11, 2019 and incorporated herein by reference) 10. 4 † Form of Indemnification Agreement (included as Exhibit 10.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 1, 2021 and incorporated herein by reference) 10. 5 Second Amended and Restated Agreement of Limited Partnership of American Healthcare REIT Holdings, LP, dated October 1, 2021 (included as Exhibit 10.1 to our Current Report on Form 8-K (File No. 000-55775) filed October 5, 2021 and incorporated by reference) 10. 6 Amended and Restated Share Repurchase Plan (included as Exhibit 10.2 to our Current Report on Form 8-K (File No. 000-55775) filed October 5, 2021 and incorporated herein by reference) 10. 7 Registration Rights Agreement, dated October 1, 2021, by and between Griffin-American Healthcare REIT III, Inc. and Griffin-American Healthcare REIT III Holdings, LP (included as Exhibit 10.1 to Griffin-American Healthcare REIT III, Inc’s Current Report on Form 8-K (File No. 000-55434) filed October 1, 2021 and incorporated herein by reference) 10. 8 † Offer Letter, dated October 1, 2021, between Griffin-American Healthcare REIT III, Inc. and Jeffrey T. Hanson (included as Exhibit 10.2 to Griffin-American Healthcare REIT III, Inc.’s Current Report on Form 8-K (File No. 000-55434) filed October 1, 2021 and incorporated herein by reference) 10. 9 † Offer Letter, dated October 1, 2021, between Griffin-American Healthcare REIT III, Inc. and Danny Prosky (included as Exhibit 10.3 to Griffin-American Healthcare REIT III, Inc.’s Current Report on Form 8-K (File No. 000-55434) filed October 1, 2021 and incorporated herein by reference) 10.1 0 † Offer Letter, dated October 1, 2021, between Griffin-American Healthcare REIT III, Inc. and Mathieu B. Streiff (included as Exhibit 10.4 to Griffin-American Healthcare REIT III, Inc.’s Current Report on Form 8-K (File No. 000-55434) filed October 1, 2021 and incorporated herein by reference) 153 Table of Contents AMERICAN HEALTHCARE REIT, INC. EXHIBITS LIST — (Continued) December 31, 2021 10.1 1 † Offer Letter, dated October 1, 2021, between Griffin-American Healthcare REIT III, Inc. and Brian S. Peay (included as Exhibit 10.5 to Griffin-American Healthcare REIT III, Inc.’s Current Report on Form 8-K (File No. 000-55434) filed October 1, 2021 and incorporated herein by reference) 10.12*† American Healthcare Opps Holdings, LLC Executive Severance and Change in Control Plan, effective as of November 18, 2021 10. 1 3 * Eighth Amended and Restated Limited Liability Company Agreement of Trilogy REIT Holdings, LLC dated as of December 31, 2021, entered into by and among Trilogy Real Estate Investment Trust, Trilogy Management Services, LLC and Members, effective as of December 31, 2021 10.14 Amended and Restated Credit Agreement by and among American Healthcare REIT Holdings, L.P., American Healthcare REIT, Inc. and certain subsidiaries, Bank of America, N.A., KeyBank, National Association, Citizens Bank, National Association, Bank of the West, Fifth Third Bank, National Association, Truist Bank, Regions Bank, KeyBanc Capital Markets and BofA Securities, Inc. dated January 19, 2022 (included as Exhibit 10.1 to our Current Report on Form 8-K (File N o. 000-055775) f iled January 25, 2 022 and incorporated herein by reference) 10.15*† Transition Services Agreement by and among American Healthcare REIT, Inc., American Healthcare Opps Holdings, LLC and Jeffrey T. Hanson, dated March 24 , 2022 21.1* Subsidiaries of American Healthcare REIT, Inc. 23.1* Consent of Deloitte & Touche LLP 31.1* Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) _________ * Filed herewith. ** Furnished herewith. In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference. † Management contract or compensatory plan or arrangement. 154 Table of Contents Item 16. Form 10-K Summary. None. 155 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. American Healthcare REIT, Inc. (Registrant) By /s/ D ANNY P ROSKY Chief Executive Officer and President Danny Prosky Date: March 25, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ D ANNY P ROSKY Chief Executive Officer, President and Director Danny Prosky (Principal Executive Officer) Date: March 25, 2022 By /s/ B RIAN S. P EAY Chief Financial Officer Brian S. Peay (Principal Financial Officer and Principal Accounting Officer) Date: March 25, 2022 By /s/ J EFFREY T. H ANSON Executive Chairman of the Board of Directors Jeffrey T. Hanson Date: March 25, 2022 By /s/ M ATHIEU B. S TREIFF Chief Operating Officer and Director Mathieu B. Streiff Date: March 25, 2022 By /s/ B RIAN J. F LORNES Independent Director Brian J. Flornes Date: March 25, 2022 By /s/ H AROLD H. G REENE Independent Director Harold H. Greene Date: March 25, 2022 156 Table of Contents By /s/ D IANNE H URLEY Independent Director Dianne Hurley Date: March 25, 2022 By /s/ G ERALD W. R OBINSON Independent Director Gerald W. Robinson Date: March 25, 2022 By /s/ J. G RAYSON S ANDERS Independent Director J. Grayson Sanders Date: March 25, 2022 By /s/ W ILBUR H. S MITH III Independent Director Wilbur H. Smith III Date: March 25, 2022 157