What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2022-11-14 · 380 added, 761 removed, 615 unchanged (65% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2022 and December 31, 2021

September 30,

As of March 31, 2023 and December 31, 2022

2023 December 31,

11 unchanged sentences

Mortgage loans payable, net(1) $ 1,233,745,000 $ 1,229,847,000

Lines of credit and term loans, net(1) 1,292,043,000 1,226,634,000

Lines of credit and term loan, net(1) 1,313,222,000 1,281,794,000

Accounts payable and accrued liabilities(1) 231,469,000 243,831,000

Accounts payable due to affiliates(1) — 866,000

Identified intangible liabilities, net 10,429,000 10,837,000

11 unchanged sentences

200,000,000 shares authorized;

77,895,942 and 77,176,406 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

19,536,622 and 19,535,095 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

194,000 194,000

1 unchanged sentence

800,000,000 shares authorized;

186,275,548 and 185,855,625 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

46,673,686 and 46,675,367 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

467,000 467,000

8 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

As of September 30, 2022 and December 31, 2021

As of March 31, 2023 and December 31, 2022

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

represented liabilities of American Healthcare REIT Holdings, LP or its consolidated subsidiaries as of September 30, 2022 and December 31, 2021.

represented liabilities of American Healthcare REIT Holdings, LP or its consolidated subsidiaries as of March 31, 2023 and December 31, 2022.

American Healthcare REIT Holdings, LP is a variable interest entity, or 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 2022 Credit Facility, as defined in Note 9, held by American Healthcare REIT Holdings, LP in the amount of $ 963,900,000 as of September 30, 2022 and the 2018 Credit Facility and 2019 Credit Facility, each 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 creditors of American Healthcare REIT Holdings, LP or its consolidated subsidiaries do not have recourse against American Healthcare REIT, Inc., except for the 2022 Credit Facility, as defined in Note 8, held by American Healthcare REIT Holdings, LP in the amount of $ 977,900,000 and $ 965,900,000 as of March 31, 2023 and December 31, 2022, respectively, which was guaranteed by American Healthcare REIT, Inc.

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three and Nine Months Ended September 30, 2022 and 2021

Three Months Ended September 30,

Nine Months Ended September 30,

2022 2021 2022 2021

For the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31,

Revenues and grant income:

12 unchanged sentences

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 39,011,000 ) ( 23,325,000 )

Gain in fair value of derivative financial instruments — 1,860,000 500,000 5,456,000

Gain (loss) on dispositions of real estate investments 2,113,000 276,000 2,796,000 ( 101,000 )

Impairment of real estate investments ( 21,851,000 ) — ( 39,191,000 ) ( 3,335,000 )

(Loss) income f rom unconsolidated entities

( 344,000 ) 384,000 1,680,000 ( 2,288,000 )

(Loss) gain in fair value of derivative financial instruments ( 195,000 ) 500,000

(Loss) gain on dispositions of real estate investments ( 132,000 ) 756,000

(Loss) income from unconsolidated entities ( 306,000 ) 1,386,000

Gain on re-measurement of previously held equity interest 726,000 —

Foreign currency loss

( 3,695,000 ) ( 1,394,000 ) ( 8,689,000 ) ( 741,000 )

Foreign currency gain (loss) 1,008,000 ( 1,387,000 )

Other income 1,608,000 1,260,000

3 unchanged sentences

( 27,615,000 ) ( 897,000 )

( 7,644,000 ) ( 4,036,000 ) ( 24,083,000 ) ( 28,270,000 )

Net (income) loss attr ibutable to noncontrolling interests

( 5,861,000 ) ( 1,201,000 ) ( 9,688,000 ) 3,508,000

Ne t loss a ttributable to controlling interest

$ ( 13,505,000 ) $ ( 5,237,000 ) $ ( 33,771,000 ) $ ( 24,762,000 )

N et loss pe r Class T and Class I common share attributable to controlling interest — basic and diluted

$ ( 0.05 ) $ ( 0.03 ) $ ( 0.13 ) $ ( 0.14 )

Net loss (income) attributable to noncontrolling interests 1,743,000 ( 2,059,000 )

Net loss attributable to controlling interest $ ( 25,872,000 ) $ ( 2,956,000 )

Net loss per Class T and Class I common share attributable to controlling interest — basic and diluted $ ( 0.39 ) $ ( 0.05 )

Weighted average number of Class T and Class I common shares outstanding — basic and diluted 66,026,173 65,629,204

$ ( 27,615,000 ) $ ( 897,000 )

Other comprehensive loss:

Other comprehensive income (loss):

Foreign currency translation adjustments 122,000 ( 194,000 )

Total other comprehensive loss ( 477,000 ) ( 207,000 ) ( 1,164,000 ) ( 96,000 )

Total other comprehensive income (loss) 122,000 ( 194,000 )

Comprehensive loss ( 27,493,000 ) ( 1,091,000 )

Comprehensi ve (income) loss a ttributable to noncontrolling interests

( 5,861,000 ) ( 1,201,000 ) ( 9,688,000 ) 3,508,000

Comprehensive loss (income) attributable to noncontrolling interests 1,743,000 ( 2,059,000 )

Comprehensive loss attributable to controlling interest $ ( 25,750,000 ) $ ( 3,150,000 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three and Nine Months Ended September 30, 2022 and 2021

Three Months Ended September 30, 2022

For the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31, 2023

Stockholders’ Equity

7 unchanged sentences

Interests Total Equity

BALANCE — June 30, 2022 264,364,596 $ 2,635,000 $ 2,541,504,000 $ ( 1,024,328,000 ) $ ( 2,653,000 ) $ 1,517,158,000 $ 172,602,000 $ 1,689,760,000

Issuance of common stock under the DRIP 395,174 4,000 3,667,000 — — 3,671,000 — 3,671,000

BALANCE — December 31, 2022

66,210,462 $ 661,000 $ 2,540,424,000 $ ( 1,138,304,000 ) $ ( 2,690,000 ) $ 1,400,091,000 $ 167,674,000 $ 1,567,765,000

Issuance of nonvested restricted common stock 1,956 — — — — — — —

7 unchanged sentences

— — — ( 16,565,000 ) — ( 16,565,000 ) — ( 16,565,000 )

Net (loss) income — — — ( 13,505,000 ) — ( 13,505,000 ) 5,507,000 ( 7,998,000 ) (1)

Other comprehensive loss — — — — ( 477,000 ) ( 477,000 ) — ( 477,000 )

BALANCE — September 30, 2022 264,171,490 $ 2,633,000 $ 2,532,047,000 $ ( 1,064,270,000 ) $ ( 3,130,000 ) $ 1,467,280,000 $ 172,226,000 $ 1,639,506,000

Three Months Ended September 30, 2021

Stockholders’ Equity

Class T and Class I

Shares Amount Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Equity Noncontrolling

Interests Total Equity

BALANCE — June 30, 2021 179,658,367 $ 1,798,000 $ 1,730,002,000 $ ( 886,983,000 ) $ ( 1,897,000 ) $ 842,920,000 $ 163,551,000 $ 1,006,471,000

Amortization of nonvested restricted common stock — — 13,000 — — 13,000 — 13,000

Distributions to noncontrolling interests — — — — — — ( 9,005,000 ) ( 9,005,000 )

Adjustment to value of redeemable noncontrolling interests — — 62,000 — — 62,000 27,000 89,000

Distributions declared ($ 0.05 per share)

Net loss — — — ( 25,872,000 ) — ( 25,872,000 ) ( 1,375,000 ) ( 27,247,000 ) (1)

Other comprehensive income — — — — 122,000 122,000 — 122,000

BALANCE — March 31, 2023

66,210,308 $ 661,000 $ 2,546,299,000 $ ( 1,180,741,000 ) $ ( 2,568,000 ) $ 1,363,651,000 $ 163,338,000 $ 1,526,989,000

Net (loss) income — — — ( 5,237,000 ) — ( 5,237,000 ) 1,084,000 ( 4,153,000 ) (1)

Other comprehensive loss — — — — ( 207,000 ) ( 207,000 ) — ( 207,000 )

BALANCE — September 30, 2021 179,658,367 $ 1,798,000 $ 1,730,077,000 $ ( 901,994,000 ) $ ( 2,104,000 ) $ 827,777,000 $ 155,657,000 $ 983,434,000

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31, 2022

Stockholders’ Equity

11 unchanged sentences

Issuance of common stock under the DRIP

Issuance of nonvested restricted common stock 74,758 1,000 ( 1,000 ) — — — — —

Amortization of nonvested restricted common stock and stock units — — 2,705,000 — — 2,705,000 — 2,705,000

306,518 3,000 11,301,000 — — 11,304,000 — 11,304,000

Amortization of nonvested restricted common stock — — 811,000 — — 811,000 — 811,000

Stock based compensation — — — — — — 21,000 21,000

Repurchase of common stock

( 112,094 ) ( 1,000 ) ( 4,133,000 ) — — ( 4,134,000 ) — ( 4,134,000 )

Distributions to noncontrolling interests — — — — — — ( 3,515,000 ) ( 3,515,000 )

1 unchanged sentence

Reclassification of noncontrolling interests to mezzanine equity

Adjustment to value of redeemable noncontrolling interests — — ( 11,297,000 ) — — ( 11,297,000 ) ( 3,297,000 ) ( 14,594,000 )

Distributions declared ($ 0.30 per share)

— — — — — — ( 21,000 ) ( 21,000 )

Net (loss) income — — — ( 33,771,000 ) — ( 33,771,000 ) 9,365,000 ( 24,406,000 ) (1)

Other comprehensive loss — — — — ( 1,164,000 ) ( 1,164,000 ) — ( 1,164,000 )

BALANCE — September 30, 2022

264,171,490 $ 2,633,000 $ 2,532,047,000 $ ( 1,064,270,000 ) $ ( 3,130,000 ) $ 1,467,280,000 $ 172,226,000 $ 1,639,506,000

Nine Months Ended September 30, 2021

Stockholders’ Equity

Class T and Class I

Shares Amount Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Equity Noncontrolling

Interests Total Equity

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 — — ( 1,000 ) — — ( 1,000 ) — ( 1,000 )

Amortization of nonvested restricted common stock — — 66,000 — — 66,000 — 66,000

Stock based compensation — — — — — — ( 14,000 ) ( 14,000 )

Distributions to noncontrolling interests — — — — — — ( 9,360,000 ) ( 9,360,000 )

Adjustment to value of redeemable noncontrolling interests — — ( 1,927,000 ) — — ( 1,927,000 ) ( 929,000 ) ( 2,856,000 )

1 unchanged sentence

— — — ( 26,354,000 ) — ( 26,354,000 ) — ( 26,354,000 )

Net loss — — — ( 24,762,000 ) — ( 24,762,000 ) ( 3,111,000 ) ( 27,873,000 ) (1)

Net (loss) income — — — ( 2,956,000 ) — ( 2,956,000 ) 1,872,000 ( 1,084,000 ) (1)

Other comprehensive loss — — — — ( 194,000 ) ( 194,000 ) — ( 194,000 )

BALANCE — September 30, 2021

BALANCE — March 31, 2022

65,952,428 $ 660,000 $ 2,538,780,000 $ ( 980,613,000 ) $ ( 2,160,000 ) $ 1,556,667,000 $ 174,154,000 $ 1,730,821,000

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Nine Months Ended September 30, 2022 and 2021

(1) For the three months ended September 30, 2022 and 2021, amounts exclude $ 354,000 and $ 117,000 , respectively, of net income attributable to redeemable noncontrolling interests.

For the nine months ended September 30, 2022 and 2021, amounts exclude $ 323,000 and $( 397,000 ), respectively, of net income (loss) attributable to redeemable noncontrolling interests.

(1) For the three months ended March 31, 2023 and 2022, amounts exclude $( 368,000 ) and $ 187,000 , respectively, of net (loss) income attributable to redeemable noncontrolling interests.

See Note 12, Redeemable Noncontrolling Interests, for a further discussion.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30,

For the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

$ ( 27,615,000 ) $ ( 897,000 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

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

Depreciation and amortization 44,670,000 42,311,000

2 unchanged sentences

Stock based compensation 1,072,000 779,000

Impairment of real estate investments 39,191,000 3,335,000

(Gain) loss on dispositions of real estate investments ( 2,796,000 ) 101,000

(Income) loss from unconsolidated entities ( 1,680,000 ) 2,288,000

Loss (gain) on dispositions of real estate investments 132,000 ( 756,000 )

Loss (income) from unconsolidated entities 306,000 ( 1,386,000 )

Gain on re-measurement of previously held equity interest ( 726,000 ) —

Foreign currency loss 8,427,000 783,000

Foreign currency (gain) loss ( 1,063,000 ) 1,335,000

Loss on extinguishments of debt — 4,591,000

Change in fair value of derivative financial instruments 195,000 ( 500,000 )

Other adjustments — 850,000

Changes in operating assets and liabilities:

5 unchanged sentences

Security deposits, prepaid rent and other liabilities 5,757,000 ( 5,192,000 )

Net cash provided by (used in) operating activities 113,441,000 ( 1,493,000 )

Net cash provided by operating activities 23,862,000 22,360,000

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of real estate investments ( 75,125,000 ) ( 79,854,000 )

Developments and capital expenditures ( 21,500,000 ) ( 20,856,000 )

Acquisitions of real estate investments ( 11,680,000 ) ( 19,878,000 )

Acquisition of previously held equity interest ( 335,000 ) —

1 unchanged sentence

Investments in unconsolidated entities ( 6,000,000 ) ( 200,000 )

Issuance of note receivable ( 3,000,000 ) —

Real estate and other deposits ( 705,000 ) ( 507,000 )

10 unchanged sentences

Repurchase of common stock ( 78,000 ) ( 4,134,000 )

Distributions to noncontrolling interests in total equity ( 3,516,000 ) ( 3,511,000 )

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30,

Distributions to noncontrolling interests in total equity $ ( 9,821,000 ) $ ( 9,356,000 )

Contributions from redeemable noncontrolling interests 273,000 —

For the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31,

Contribution from redeemable noncontrolling interest $ — $ 173,000

Distributions to redeemable noncontrolling interests ( 560,000 ) ( 695,000 )

Repurchase of redeemable noncontrolling interests and stock warrants — ( 88,000 )

Repurchase of redeemable noncontrolling interest ( 15,803,000 ) —

Payment of offering costs ( 3,000 ) ( 9,000 )

Security deposits ( 145,000 ) ( 199,000 )

Net cash provided by financing activities 7,969,000 138,271,000

Net cash used in financing activities ( 14,300,000 ) ( 1,307,000 )

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ ( 23,757,000 ) $ ( 6,314,000 )

17 unchanged sentences

Accrued developments and capital expenditures $ 26,102,000 $ 14,750,000

Capital expenditures from financing obligations $ — $ 1,409,000

Tenant improvement overage $ — $ 223,000

Acquisition of real estate investment with financing obligation $ — $ 15,504,000

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30,

Issuance of common stock under the DRIP $ — $ 11,304,000

3 unchanged sentences

Accrued offering costs $ 1,255,000 $ —

Issuance of redeemable noncontrolling interests $ — $ 132,000

The following represents the net increase (decrease) in certain assets and liabilities in connection with our acquisitions and dispositions of investments:

1 unchanged sentence

Other assets $ 162,000 $ 5,023,000

Mortgage loan payable $ 33,241,000 $ —

Mortgage loan payable, net $ — $ ( 12,059,000 )

Accounts payable and accrued liabilities $ 548,000 $ ( 21,000 )

Due to affiliates $ — $ 6,000

Financing obligations $ 12,000 $ 56,000

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Nine Months Ended September 30, 2022 and 2021

The use of the words “we,” “us” or “our” refers to Griffin-American Healthcare REIT III, Inc., or GAHR III, 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., or GAHR IV) 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 GAHR IV is included for background purposes.

For the Three Months Ended March 31, 2023 and 2022

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

and its subsidiaries, including American Healthcare REIT Holdings, LP, except where otherwise noted.

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.

American Healthcare REIT, Inc., a Maryland corporation, is a self-managed real estate investment trust, or REIT, that owns a diversified portfolio of clinical healthcare real estate properties, focusing primarily on medical office buildings, or MOBs, senior housing facilities, skilled nursing facilities, or SNFs, 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.

Our healthcare facilities operated under a RIDEA structure include our senior housing operating properties, or SHOP, 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.

1 unchanged sentence

however, we have selectively developed, and may continue to selectively develop, healthcare 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 October 1, 2021, pursuant to an Agreement and Plan of Merger dated June 23, 2021, or the Merger Agreement, GAHR III merged with and into Continental Merger Sub, LLC, a Maryland limited liability company and newly formed wholly owned subsidiary of GAHR IV, or Merger Sub, with Merger Sub being the surviving company, or the REIT Merger.

On October 1, 2021, also pursuant to the Merger Agreement, Griffin-American Healthcare REIT IV Holdings, LP, a Delaware limited partnership and subsidiary and operating partnership of GAHR IV, or GAHR IV Operating Partnership, merged with and into Griffin-American Healthcare REIT III Holdings, LP, a Delaware limited partnership, or our operating partnership, with our operating partnership being the surviving entity, or the Partnership Merger.

We collectively refer to the REIT Merger and the Partnership Merger as the Merger.

We have elected to be taxed as a REIT for U.S.

federal income tax purposes.

We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Code.

On October 1, 2021, Griffin-American Healthcare REIT III, Inc., or GAHR III, merged with and into a wholly owned subsidiary, or Merger Sub, of Griffin-American Healthcare REIT IV, Inc., or GAHR IV, with Merger Sub being the surviving company, which we refer to as the REIT Merger, and our operating partnership, Griffin-American Healthcare REIT IV Holdings, LP, merged with and into Griffin-American Healthcare REIT III Holdings, LP, or the Surviving Partnership, with the Surviving Partnership being the surviving entity, which we refer to as 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.

and our operating partnership, also referred to as the surviving partnership, was renamed American Healthcare REIT Holdings, LP.

The REIT Merger qualified 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.

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.

AHI Acquisition

Also on October 1, 2021, immediately prior to the consummation of the Merger, GAHR III acquired a newly formed entity, American Healthcare Opps Holdings, LLC, or NewCo, which we refer to as the AHI Acquisition, pursuant to a contribution and exchange agreement dated June 23, 2021, or the Contribution Agreement, between GAHR III;

our operating partnership;

American Healthcare Investors, LLC, or AHI;

Griffin Capital Company, LLC, or Griffin Capital;

Platform Healthcare Investor T-II, LLC;

and the Surviving Partnership was renamed American Healthcare REIT Holdings, LP, or our operating partnership.

Also on October 1, 2021, immediately prior to the consummation of the Merger, and pursuant to a contribution and exchange agreement dated June 23, 2021, GAHR III acquired a newly formed entity, American Healthcare Opps Holdings, LLC, or NewCo, which we refer to as the AHI Acquisition.

Following the Merger and the AHI Acquisition, our company became self-managed.

Operating Partnership

We conduct substantially all of our operations through our operating partnership and we are the sole general partner of our operating partnership.

As of both March 31, 2023 and December 31, 2022 , we owned 95.0 % of the partnership units, or OP units, in our operating partnership, and the remaining 5.0 % limited OP units, were owned by AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T.

Hanson, the non-executive Chairman of our board of directors, or our board, Danny Prosky, our Chief Executive Officer and President, and Mathieu B.

Streiff, one of our directors, or collectively, the AHI Principals;

Platform Healthcare Investor TII, LLC;

Flaherty Trust;

and Jeffrey T.

Hanson, our former Chief Executive Officer and current non-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 Chief Operating

AMERICAN HEALTHCARE REIT, INC.

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

Officer and current Executive Vice President, or collectively, the AHI Principals.

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.

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 became self-managed.

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.

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 , 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.

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.

Our former advisor, subject to the oversight and review of our board of directors, or our board, provided asset management, property management, acquisition, disposition and other advisory services on our behalf consistent with our investment policies and objectives.

Following the Merger and the 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.

Also, on October 1, 2021 and in connection with the AHI Acquisition, our operating partnership redeemed all 22,222 shares of our common stock owned by our former advisor and the 20,833 shares of our Class T common stock owned by GAHR IV Advisor in GAHR IV.

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 DigitalBridge Group, Inc.

DBRG), or DigitalBridge, and 7.8 % owned by James F.

Flaherty III.

We were not affiliated with Griffin Capital, DigitalBridge or Mr.

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.

and a wholly owned subsidiary of Griffin Capital Company, LLC, or collectively, the NewCo Sellers.

See Note 12, Redeemable Noncontrolling Interests, and Note 13, Equity — Noncontrolling Interests in Total Equity, for a further discussion of the ownership in our operating partnership.

Public Offerings

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 subsequent distribution reinvestment plan offerings.

AMERICAN HEALTHCARE REIT, INC.

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

As of March 31, 2023, after taking into consideration the impact of the Merger and the reverse stock split as discussed in Note 2, Summary of Significant Accounting Policies, we had issued 65,445,557 shares for a total of $ 2,737,716,000 of common stock since February 26, 2014 in our initial public offerings and our distribution reinvestment plan, or DRIP, offerings (includes historical offering amounts sold by GAHR III and GAHR IV prior to the Merger).

On September 16, 2022, we filed with the United States Securities and Exchange Commission, or the SEC, a Registration Statement on Form S-11 (File No.

333-267464), with respect to a proposed primary public offering of our shares of common stock in conjunction with a contemplated listing of our common stock on the New York Stock Exchange.

333-267464), with respect to a proposed public offering by us of our shares of common stock in conjunction with a contemplated listing of our common stock on the New York Stock Exchange, or the Proposed Listing.

Such registration statement and contemplated listing are not yet effective.

The potential public offering is subject to market conditions, and there can be no assurance as to whether, or when, any such offering may be completed, or as to the size, public offering price or other terms of such offering.

AMERICAN HEALTHCARE REIT, INC.

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

See Note 13, Equity — Common Stock, and Note 13, Equity — Distribution Reinvestment Plan, for a further discussion of our public offerings.

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We currently operate through six reportable business segments:

integrated senior health campuses, medical office buildings, skilled nursing facilities, senior housing — leased, hospitals and SHOP.

As of September 30, 2022, we owned and/or operated 312 buildings and integrated senior health campuses, or approximately 19,432,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,548,366,000 , including the fair value of the properties acquired in the Merger.

In addition, as of September 30, 2022, we also owned a real estate-related debt investment purchased for $ 60,429,000 .

integrated senior health campuses, MOBs, SHOP, SNFs, senior housing — leased and hospitals.

As of March 31, 2023, we owned and/or operated 314 buildings and integrated senior health campuses, including completed development and expansion projects, or approximately 19,956,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,626,119,000 .

In addition, as of March 31, 2023, we also owned a real estate-related debt investment purchased for $ 60,429,000 .

Our residents, tenants, operating partners and managers, our industry and the U.S.

economy continue to be adversely affected by the COVID-19 pandemic and related supply chain disruptions and labor shortages.

The timing and extent of the economic recovery from the COVID-19 pandemic is dependent upon many factors, including the emergence and severity of COVID-19 variants, the continued effectiveness and frequency of booster vaccinations and the duration and implications of continued restrictions and safety measures.

As the COVID-19 pandemic is still impacting the healthcare system to a certain extent, 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 September 30, 2022.

economy have been adversely affected by the impact of the COVID-19 pandemic.

While the COVID-19 pandemic has subsided from its peaks, the timing and extent of the economic recovery from the COVID-19 pandemic is dependent upon many factors, including the emergence and severity of new COVID-19 variants, the effectiveness of vaccines, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, the overall pace of recovery, among others.

As the lasting economic effects of the responses to the COVID-19 pandemic, such as inflation and labor market challenges, are still impacting the healthcare system to a certain extent, such effects continue 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 such economic 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 March 31, 2023.

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

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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.

On November 15, 2022 we effected a one-for-four reverse stock split of our common stock and a corresponding reverse split of the OP units, or the Reverse Splits.

All numbers of common shares and per share data, as well as the OP units, in our accompanying condensed consolidated financial statements and related notes have been retroactively adjusted for all periods presented to give effect to the Reverse Splits.

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 both March 31, 2023 and December 31, 2022, we owned a 95.0 % general partnership interest therein, and the remaining 5.0 % was owned by the NewCo Sellers.

AMERICAN HEALTHCARE REIT, INC.

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

We are the sole general partner of our operating partnership and as of September 30, 2022 and December 31, 2021, we owned an approximately 95.0 % and 94.9 % general partnership interest therein, respectively, and the remaining 5.0 % and 5.1 %, respectively, was owned by the NewCo Sellers.

Prior to the Merger on October 1, 2021, we owned greater than a 99.99 % general partnership interest in our operating partnership and our former advisor was a limited partner that owned less than a 0.01 % noncontrolling limited partnership interest in our operating partnership.

On October 1, 2021, in connection with the AHI Acquisition, our operating partnership redeemed our former advisor’s 222 limited partnership units in our operating partnership and the 208 limited partnership units owned by GAHR IV Advisor in GAHR IV Operating Partnership.

The accounts of our operating partnership are consolidated in our accompanying condensed 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).

14 unchanged sentences

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

AMERICAN HEALTHCARE REIT, INC.

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

Revenue Recognition — Resident Fees and Services Revenue

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

Three Months Ended September 30,

Senior Health

Campuses SHOP(1) Total Integrated

Senior Health

Campuses SHOP(1) Total

Over time $ 265,705,000 $ 38,740,000 $ 304,445,000 $ 213,823,000 $ 20,975,000 $ 234,798,000

Point in time 63,046,000 815,000 63,861,000 51,520,000 564,000 52,084,000

Total resident fees and services

$ 328,751,000 $ 39,555,000 $ 368,306,000 $ 265,343,000 $ 21,539,000 $ 286,882,000

Nine Months Ended September 30,

Three Months Ended March 31,

Senior Health

6 unchanged sentences

$ 361,770,000 $ 46,860,000 $ 408,630,000 $ 281,012,000 $ 37,962,000 $ 318,974,000

AMERICAN HEALTHCARE REIT, INC.

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

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

Three Months Ended September 30,

Senior Health

Campuses SHOP(1) Total Integrated

Senior Health

Campuses SHOP(1) Total

Private and other payors

$ 151,296,000 $ 36,228,000 $ 187,524,000 $ 122,467,000 $ 21,258,000 $ 143,725,000

112,547,000 — 112,547,000 84,616,000 — 84,616,000

64,908,000 3,327,000 68,235,000 58,260,000 281,000 58,541,000

Total resident fees and services

$ 328,751,000 $ 39,555,000 $ 368,306,000 $ 265,343,000 $ 21,539,000 $ 286,882,000

Nine Months Ended September 30,

Three Months Ended March 31,

Senior Health

12 unchanged sentences

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.

AMERICAN HEALTHCARE REIT, INC.

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

Accounts Receivable, Net — Resident Fees and Services Revenue

3 unchanged sentences

$ 55,484,000 $ 45,669,000 $ 20,832,000 $ 121,985,000

Ending balance — September 30, 2022

Ending balance — March 31, 2023

60,233,000 43,155,000 18,824,000 122,212,000

Increase $ 9,153,000 $ 9,656,000 $ 6,656,000 $ 25,465,000

Increase (decrease) $ 4,749,000 $ ( 2,514,000 ) $ ( 2,008,000 ) $ 227,000

Deferred Revenue — Resident Fees and Services Revenue

Deferred revenue is included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets.

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:

Beginning balance — January 1, 2023

Ending balance — September 30, 2022

Ending balance — March 31, 2023

Increase $ 4,313,000

In addition to the deferred revenue above, as of December 31, 2021, we had approximately $ 12,969,000 remaining in Medicare advance payments that were received during 2020 through an expanded program of the Centers for Medicare & Medicaid Services.

Such amounts were included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheet as of December 31, 2021, and were fully applied to Medicare claims and recognized as resident fees and services revenue for the nine months ended September 30, 2022.

Resident and Tenant Receivables and Allowances

3 unchanged sentences

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.

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

As of September 30, 2022 and December 31, 2021, we had $ 14,283,000 and $ 12,378,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the nine months ended September 30, 2022 and 2021, we increased allowances by $ 16,476,000 and $ 9,098,000 , respectively, and reduced allowances for collections or adjustments by $ 5,451,000 and $ 5,828,000 , respectively.

For the nine months ended September 30, 2022 and 2021, $ 9,120,000 and $ 3,105,000 , respectively, of our receivables were written off against the related allowances.

Accounts Payable and Accrued Liabilities

As of September 30, 2022 and December 31, 2021, accounts payable and accrued liabilities primarily include insurance reserves of $ 40,474,000 and $ 36,440,000 , respectively, reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 34,859,000 and $ 31,101,000 , respectively, accrued property taxes of $ 29,043,000 and $ 22,102,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 25,096,000 and $ 22,852,000 , respectively, and accrued distributions to common stockholders of $ 26,417,000 and $ 8,768,000 , respectively.

Recently Issued Accounting Pronouncements

In July 2021, the FASB issued Accounting Standard Update, or 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

Tenant receivables, which are related to real estate revenue, and unbilled deferred rent receivables are reduced for amounts where collectability is not probable, which are recognized as direct reductions of real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2023 and December 31, 2022, we had $ 14,391,000 and $ 14,071,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the three months ended March 31, 2023 and 2022, we increased allowances by $ 4,037,000 and $ 5,223,000 , respectively, and reduced allowances for collections or adjustments by $ 1,827,000 and $ 2,099,000 , respectively.

For the three months ended March 31, 2023 and 2022, $ 1,890,000 and $ 1,630,000 , respectively, of our receivables were written off against the related allowances.

AMERICAN HEALTHCARE REIT, INC.

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

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 was effective for fiscal years beginning after December 15, 2021.

Early adoption was permitted.

We adopted such accounting pronouncement on January 1, 2022, which did not have a material impact to our consolidated financial statements and disclosures as we have no material sales-type or direct financing leases.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments — Credit Losses (Topic 326):

Troubled Debt Restructuring and Vintage Disclosures, or ASU 2022-02, which eliminates certain previously issued accounting guidance for troubled debt restructurings, or TDRs, and enhances disclosure requirements surrounding refinancings, restructurings, and write-offs.

Current GAAP provides an exception to general recognition and measurement guidance for loan restructurings if they meet specific criteria to be considered TDRs.

If a modification is a TDR, incremental expected losses are recorded in the allowance for credit losses upon modification and specific disclosures are required.

The new amendment eliminates the TDR recognition and measurement guidance and requires the reporting entity to evaluate whether the modification represents a new loan or a continuation of an existing loan, consistent with accounting for other loan modifications.

The amendment also requires public business entities to disclose current-period gross write-offs by year of origination for certain financing receivables and net investments in leases.

For entities that have adopted the previously issued guidance amended by this update, ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which we adopted during the year ended December 31, 2020, this update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted for entities that have adopted the previously issued guidance amended by this update.

We are currently evaluating this guidance to determine the impact to our condensed consolidated financial statements and disclosures.

Real Estate Investments, Net

Our real estate investments, net consisted of the following as of September 30, 2022 and December 31, 2021:

September 30,

Accounts Payable and Accrued Liabilities

As of March 31, 2023 and December 31, 2022, accounts payable and accrued liabilities primarily include insurance reserves of $ 41,602,000 and $ 39,893,000 , respectively, reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 39,718,000 and $ 38,624,000 , respectively, accrued property taxes of $ 26,168,000 and $ 24,926,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 26,102,000 and $ 30,211,000 , respectively, and accrued distributions to common stockholders of $ 16,554,000 and $ 26,484,000 , respectively.

Real Estate Investments, Net and Business Combinations

Our real estate investments, net consisted of the following as of March 31, 2023 and December 31, 2022:

Building, improvements and construction in process $ 3,682,324,000 $ 3,670,361,000

4 unchanged sentences

$ 3,568,117,000 $ 3,581,609,000

Depreciation expense for the three months ended September 30, 2022 and 2021 was $ 35,327,000 and $ 24,769,000 , respectively, and for the nine months ended September 30, 2022 and 2021 was $ 104,077,000 and $ 73,622,000 , respectively.

For the three months ended September 30, 2022, we incurred capital expenditures of $ 14,578,000 for our medical office buildings, $ 9,154,000 for our integrated senior health campuses, $ 1,867,000 for our SHOP and $ 93,500 for our hospitals.

We did no t incur any capital expenditures for our properties within our skilled nursing facilities and senior housing — leased segments for the three months ended September 30, 2022.

For the nine months ended September 30, 2022, we incurred capital expenditures of $ 25,932,000 for our integrated senior health campuses, $ 21,156,000 for our medical office buildings, $ 4,918,000 for our SHOP and $ 93,500 for our hospitals.

We did no t incur any capital expenditures for our properties within our skilled nursing facilities and senior housing — leased segments for the nine months ended September 30, 2022.

For the three and nine months ended September 30, 2022, we determined that five and eight of our SHOP, respectively, were impaired and recognized an aggregate impairment charge of $ 21,851,000 and $ 39,191,000 , respectively, which reduced the total carrying value of such eight SHOP to $ 63,154,000 as of September 30, 2022.

The fair value of one of our SHOP was determined by the sales price from an executed purchase and sale agreement with a third-party buyer, which was considered a Level 2 measurement within the fair value hierarchy.

The fair value of our remaining seven SHOP were based on their projected sales prices, which were considered Level 2 measurements within the fair value hierarchy.

We did not recognize impairment charges on real estate investments for the three months ended September 30, 2021.

For the nine months ended September 30, 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 based on the contract sales price of an executed purchase and sale agreement with a third-party buyer, and adjusted for anticipated selling costs, which was considered a Level 2 measurement within the fair value hierarchy.

AMERICAN HEALTHCARE REIT, INC.

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

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 .

Acquisitions and Development of Real Estate Investments

Included in the capital expenditure amounts above are costs for the development and expansion of our integrated senior health campuses.

For the nine months ended September 30, 2022, we exercised our right to purchase a leased property that cost $ 15,462,000 to develop and incurred $ 1,204,000 to expand one of our existing integrated senior health campuses.

In addition, for the nine months ended September 30, 2022, we, through a majority-owned subsidiary of Trilogy Investors, LLC, or Trilogy, acquired a land parcel in Indiana for a contract purchase price of $ 320,000 , plus closing costs.

In April and May 2022, we, through a majority-owned subsidiary of Trilogy, of which we own 72.9 %, exercised the purchase options to acquire four previously leased real estate investments located in Indiana and Kentucky for an aggregate contract purchase price of $ 54,805,000 , which investments are included in our integrated senior health campuses segment.

We financed such acquisitions with cash on hand and a mortgage loan payable with a principal balance of $ 52,725,000 .

We accounted for our acquisitions of land and previously leased real estate investments completed during the nine months ended September 30, 2022 as asset acquisitions.

We incurred and capitalized direct acquisition related expenses of $ 292,000 .

The following table summarizes the purchase price of such assets acquired, adjusted for $ 37,464,000 operating lease right-of-use assets and $ 36,326,000 operating lease liabilities, and based on their relative fair values:

Depreciation expense for the three months ended March 31, 2023 and 2022 was $ 35,899,000 and $ 34,422,000 , respectively.

For the three months ended March 31, 2023, we incurred capital expenditures of $ 10,201,000 for our integrated senior health campuses, $ 3,574,000 for our MOBs and $ 1,750,000 for our SHOP.

We did no t incur any capital expenditures for our properties within our hospitals, SNFs and senior housing — leased segments for the three months ended March 31, 2023.

Acquisition of Real Estate Investment

On February 15, 2023, we, through a majority-owned subsidiary of Trilogy Investors, LLC, or Trilogy, acquired an integrated senior health campus located in Kentucky for a contract purchase price of $ 11,000,000 , plus immaterial closing costs.

We financed such acquisition with cash on hand and a mortgage loan payable placed on the property at the time of acquisition with a principal balance of $ 7,700,000 .

We accounted for our acquisition of a real estate investment completed during the three months ended March 31, 2023 as an asset acquisition.

The following table summarizes the purchase price of such acquisition based on relative fair values:

Building and improvements $ 10,139,000

2 unchanged sentences

Disposition of Real Estate Investment

During the nine months ended September 30, 2022, we disposed of one integrated senior health campus in Indiana for a contract sales price of $ 12,000,000 and recognized a gain on sale of $ 2,092,000 .

Sale of Controlling Interests in Real Estate Investments

On February 8, 2022, we sold approximately 74.0 % of our ownership interests in several real estate development assets within our integrated senior health campuses segment for an aggregate sales price of $ 19,622,000 and we recognized an aggregate gain on sale of $ 683,000 for the nine months ended September 30, 2022.

At the time of sale, we retained approximately 26.0 % ownership interests in such real estate development assets.

As of September 30, 2022, we own approximately 31.6 % ownership interests in such real estate development assets, which interests are accounted for as investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of September 30, 2022.

From February 8, 2022 through September 30, 2022, our interests in the net earnings or losses of such unconsolidated entities were included in income or loss from unconsolidated entities in our accompanying condensed consolidated statements of operations and comprehensive loss.

On February 1, 2023, we disposed of one facility within our Central Florida Senior Housing Portfolio within our SHOP segment, for a contract sales price of $ 7,730,000 and recognized a gain on sale of $ 11,000 .

Business Combinations

On January 3, 2022, we, through a majority-owned subsidiary of Trilogy, acquired an integrated senior health campus in Kentucky from an unaffiliated third party.

The contract purchase price for such property acquisition was $ 27,790,000 plus immaterial closing costs.

We acquired such property using cash on hand and placed a mortgage loan payable of $ 20,800,000 on the property at the time of acquisition.

On April 1, 2022, we, through a majority-owned subsidiary of Trilogy, acquired a 50.0 % interest in a pharmaceutical business in Florida from an unaffiliated third party and incurred transaction costs of $ 938,000 .

Prior to such pharmaceutical business acquisition, we, through a majority-owned subsidiary of Trilogy, owned the other 50.0 % interest in such business, which investment was included in investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of December 31, 2021.

Therefore, through March 31, 2022, our 50.0 % interest in the net earnings or losses of such unconsolidated entity was included in income or loss from unconsolidated entities in our accompanying condensed consolidated statements of operations and comprehensive loss.

On February 15, 2023, we, through a majority-owned subsidiary of Trilogy, acquired from an unaffiliated third party, a 60.0 % controlling interest in a privately held company, Memory Care Partners, LLC, or MCP, that operated integrated senior health campuses located in Kentucky.

The contract purchase price for the acquisition of MCP was $ 900,000 , which was acquired using cash on hand.

Prior to such acquisition, we owned a 40.0 % interest in MCP, which was accounted for as an equity method investment and was included in investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of December 31, 2022.

In connection with the acquisition of the remaining interest in MCP, we now own a 100 % controlling interest in MCP.

As a result, we re-measured the fair value of our previously held equity interest in MCP and recognized a gain on re-measurement of $ 726,000 in our accompanying condensed consolidated statements of operations and comprehensive loss.

AMERICAN HEALTHCARE REIT, INC.

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

On August 1, 2022, we, through a majority-owned subsidiary of Trilogy, acquired the 50.0 % controlling interest in a privately held company, RHS Partners, LLC, or RHS, that owns and/or operates 16 integrated senior health campuses located in Indiana, from an unaffiliated third party.

The contract purchase price for the acquisition of RHS was $ 36,661,000 plus immaterial closing costs, which was primarily acquired using cash on hand.

Prior to such acquisition, we owned 50.0 % interest in RHS, which was accounted for as an equity method investment and was included in investments in unconsolidated entities within other assets, net in our accompanying condensed consolidated balance sheet as of December 31, 2021.

Therefore, through July 31, 2022, our 50.0 % equity interest in the net earnings or losses of RHS was included in income or loss from unconsolidated entities in our accompanying condensed consolidated statements of operations and comprehensive loss.

In connection with the acquisition of RHS, we re-measured the fair value of our previously held equity interest in RHS and recognized a gain on re-measurement of $ 19,567,000 in our accompanying condensed consolidated statements of operations and comprehensive loss.

We accounted for the three acquisitions for the nine months ended September 30, 2022 above as business combinations, which are included within our integrated senior health campuses segment.

On January 3, 2022, we, through a majority-owned subsidiary of Trilogy, acquired an integrated senior health campus in Kentucky from an unaffiliated third party.

The contract purchase price for such property acquisition was $ 27,790,000 plus immaterial transaction costs.

We acquired such property using cash on hand and placed a mortgage loan payable of $ 20,800,000 on the property at the time of acquisition.

The table below summarizes the acquisition date fair values of the assets acquired and liabilities assumed of our business combinations during the three months ended March 31, 2023 and 2022.

Based on quantitative and qualitative considerations, such business combinations were not material to us individually or in the aggregate and therefore, pro forma financial information is not provided.

We did not complete any acquisitions accounted for as business combinations for the nine months ended September 30, 2021.

The table below summarizes the acquisition date fair values of the assets acquired and liabilities assumed of our 2022 acquisitions accounted for as business combinations.

The fair values of the assets acquired and liabilities assumed during 2022 were preliminary estimates.

Any necessary adjustments will be finalized within one year from the date of acquisition.

Operating lease right-of-use assets $ 153,777,000

Any necessary adjustments are finalized within one year from the date of acquisition.

Acquisition 2022

Building and improvements $ — $ 17,235,000

Goodwill 3,331,000 1,827,000

Accounts receivable, net 19,472,000

In-place leases — 3,420,000

5 unchanged sentences

Total assets acquired 4,001,000 28,378,000

Operating lease liabilities ( 161,121,000 )

Mortgage loan payable ( 45,300,000 )

Security deposits and other liabilities ( 812,000 ) ( 7,747,000 )

4 unchanged sentences

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.

Our investment in a commercial mortgage-backed debt security, or 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.

1 unchanged sentence

The debt security is subordinate to all other interests in the mortgage trust and is not guaranteed by a government-sponsored entity.

As of September 30, 2022 and December 31, 2021, the carrying amount of the debt security investment was $ 82,067,000 and $ 79,315,000 , respectively, net of unamortized closing costs of $ 830,000 and $ 1,004,000 , respectively.

Accretion on the

As of March 31, 2023 and December 31, 2022, the carrying amount of the debt security investment was $ 83,955,000 and $ 83,000,000 , respectively, net of unamortized closing costs of $ 701,000 and $ 767,000 , respectively.

Accretion on the debt security for the three months ended March 31, 2023 and 2022 was $ 1,020,000 and $ 980,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Amortization expense of closing costs for the three months ended March 31, 2023 and 2022 was $ 65,000 and $ 56,000 , respectively, which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive 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.

We did not record a credit loss for the three months ended March 31, 2023 and 2022.

AMERICAN HEALTHCARE REIT, INC.

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

debt security for the three months ended September 30, 2022 and 2021 was $ 960,000 and $ 922,000 , respectively, and for the nine months ended September 30, 2022 and 2021 was $ 2,926,000 and $ 2,710,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Amortization expense of closing costs for the three months ended September 30, 2022 and 2021 was $ 60,000 and $ 52,000 , respectively, and for the nine months ended September 30, 2022 and 2021 was $ 174,000 and $ 148,000 , respectively, which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive 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 three and nine months ended September 30, 2022 and 2021.

Identified Intangible Assets, Net

Identified intangible assets, net consisted of the following as of September 30, 2022 and December 31, 2021:

September 30,

Intangible assets subject to amortization:

In-place leases, net of accumulated amortization of $ 34,036,000 and $ 28,120,000 as of September 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 7.4 years and 8.2 years as of September 30, 2022 and December 31, 2021, respectively)

Identified intangible assets, net consisted of the following as of March 31, 2023 and December 31, 2022:

Amortized intangible assets:

In-place leases, net of accumulated amortization of $ 43,513,000 and $ 38,930,000 as of March 31, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.1 years and 7.0 years as of March 31, 2023 and December 31, 2022, respectively)

$ 67,684,000 $ 75,580,000

Above-market leases, net of accumulated amortization of $ 5,419,000 and $ 2,082,000 as of September 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 9.2 years and 9.7 years as of September 30, 2022 and December 31, 2021, respectively)

Above-market leases, net of accumulated amortization of $ 6,094,000 and $ 6,360,000 as of March 31, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 8.3 years and 9.0 years as of March 31, 2023 and December 31, 2022, respectively)

21,111,000 30,194,000

Customer relationships, net of accumulated amortization of $ 747,000 and $ 635,000 as of September 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 13.9 years and 14.7 years as of September 30, 2022 and December 31, 2021, respectively)

Customer relationships, net of accumulated amortization of $ 822,000 and $ 785,000 as of March 31, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 13.4 years and 13.7 years as of March 31, 2023 and December 31, 2022, respectively)

2,018,000 2,055,000

Internally developed technology and software, net of accumulated amortization of $ 399,000 as of December 31, 2021 (with a weighted average remaining life of 0.7 years as of December 31, 2021)

Intangible assets not subject to amortization:

Unamortized intangible assets:

Certificates of need 97,679,000 97,667,000

1 unchanged sentence

$ 219,279,000 $ 236,283,000

Amortization expense on identified intangible assets for the three months ended September 30, 2022 and 2021 was $ 5,534,000 and $ 784,000 , respectively, which included $ 1,113,000 and $ 67,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive loss.

Amortization expense on identified intangible assets for the nine months ended September 30, 2022 and 2021 was $ 19,894,000 and $ 3,481,000 , respectively, which included $ 3,340,000 and $ 407,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive loss.

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

The aggregate weighted average remaining life of the identified intangible assets was 8.1 years and 8.8 years as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022, estimated amortization expense on the identified intangible assets for the three months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter was as follows:

Amortization expense on identified intangible assets for the three months ended March 31, 2023 and 2022 was $ 17,071,000 and $ 8,239,000 , respectively, which included $ 9,083,000 and $ 1,114,000 , respectively, of amortization recorded as a decrease to real estate revenue for above-market leases in our accompanying condensed consolidated statements of operations and comprehensive loss.

On March 1, 2023, we transitioned our SNFs within Central Wisconsin Senior Care Portfolio to a RIDEA structure, which resulted in a full amortization of $ 8,073,000 of above-market leases and $ 885,000 of in-place leases.

The aggregate weighted average remaining life of the identified intangible assets was 7.5 years and 7.7 years as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023, estimated amortization expense on the identified intangible assets for the nine months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter was as follows:

2023 $ 20,289,000

4 unchanged sentences

Thereafter 30,529,000

$ 108,590,000

Total $ 90,813,000

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

Other Assets, Net

Other assets, net consisted of the following as of September 30, 2022 and December 31, 2021:

September 30,

Other assets, net consisted of the following as of March 31, 2023 and December 31, 2022:

Deferred rent receivables $ 47,911,000 $ 46,867,000

Prepaid expenses, deposits, other assets and deferred tax assets, net 31,219,000 25,866,000

Lease commissions, net of accumulated amortization of $ 5,938,000 and $ 4,911,000 as of September 30, 2022 and December 31, 2021, respectively

19,032,000 16,120,000

Inventory 19,053,000 19,775,000

Lease commissions, net of accumulated amortization of $ 6,636,000 and $ 6,260,000 as of March 31, 2023 and December 31, 2022, respectively

18,384,000 19,217,000

Investments in unconsolidated entities 15,399,000 9,580,000

Deferred financing costs, net of accumulated amortization of $ 5,011,000 and $ 8,469,000 as of September 30, 2022 and December 31, 2021, respectively

Deferred financing costs, net of accumulated amortization of $ 6,503,000 and $ 5,704,000 as of March 31, 2023 and December 31, 2022, respectively

3,795,000 4,334,000

Lease inducement, net of accumulated amortization of $ 2,105,000 and $ 1,842,000 as of September 30, 2022 and December 31, 2021, respectively (with a weighted average remaining life of 8.2 years and 8.9 years as of September 30, 2022 and December 31, 2021, respectively)

Lease inducement, net of accumulated amortization of $ 2,281,000 and $ 2,193,000 as of March 31, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.7 years and 7.9 years as of March 31, 2023 and December 31, 2022, respectively)

2,719,000 2,807,000

$ 138,480,000 $ 128,446,000

Deferred financing costs included in other assets were related to the 2018 Credit Facility, 2019 Credit Facility, 2019 Trilogy Credit Facility and the senior unsecured revolving credit facility portion of the 2022 Credit Facility.

See Note 9, Lines of Credit and Term Loans, for a further discussion.

Amortization expense on lease inducement for both the three months ended September 30, 2022 and 2021 was $ 87,000 , and amortization expense on lease inducement for both the nine months ended September 30, 2022 and 2021 was $ 263,000 , which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Deferred financing costs included in other assets, net were related to the 2019 Trilogy Credit Facility and the senior unsecured revolving credit facility portion of the 2022 Credit Facility.

See Note 8, Lines of Credit and Term Loan, for a further discussion.

Amortization expense on lease inducement for both the three months ended March 31, 2023 and 2022 was $ 88,000 , which is recorded as a decrease to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

Mortgage Loans Payable, Net

As of September 30, 2022 and December 31, 2021, mortgage loans payable were $ 1,177,244,000 ($ 1,159,159,000 , net of discount/premium and deferred financing costs) and $ 1,116,216,000 ($ 1,095,594,000 , net of discount/premium and deferred financing costs), respectively.

As of September 30, 2022, we had 64 fixed-rate mortgage loans payable and 13 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 6.52 % per annum based on interest rates in effect as of September 30, 2022 and a weighted average effective interest rate of 3.85 %.

As of March 31, 2023 and December 31, 2022, mortgage loans payable were $ 1,257,057,000 ($ 1,233,745,000 , net of discount/premium and deferred financing costs) and $ 1,254,479,000 ($ 1,229,847,000 , net of discount/premium and deferred financing costs), respectively.

As of March 31, 2023, we had 68 fixed-rate mortgage loans payable and 12 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 7.76 % per annum based on interest rates in effect as of March 31, 2023 and a weighted average effective interest rate of 4.46 %.

As of December 31, 2022, we had 68 fixed-rate mortgage loans payable and 11 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 7.26 % per annum based on interest rates in effect as of December 31, 2022 and a weighted average effective interest rate of 4.29 %.

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.

AMERICAN HEALTHCARE REIT, INC.

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

Mortgage loans payable, net consisted of the following as of September 30, 2022 and December 31, 2021:

September 30,

Mortgage loans payable, net consisted of the following as of March 31, 2023 and December 31, 2022:

Total fixed-rate debt $ 880,770,000 $ 885,892,000

5 unchanged sentences

Mortgage loans payable, net $ 1,233,745,000 $ 1,229,847,000

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

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

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Beginning balance $ 1,229,847,000 $ 1,095,594,000

Borrowings under mortgage loans payable 7,700,000 88,659,000

Assumption of mortgage loans payable 45,300,000 —

Amortization of deferred financing costs

4 unchanged sentences

Early payoff of mortgage loans payable — ( 78,437,000 )

Payoff of a mortgage loan payable due to disposition of real estate investment ( 8,637,000 ) —

Deferred financing costs

1 unchanged sentence

Ending balance $ 1,233,745,000 $ 1,103,006,000

For the three and nine months ended September 30, 2022, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 628,000 and $ 1,877,000 , respectively, which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

For the three and nine months ended September 30, 2022, such aggregate loss on debt extinguishment was primarily related to the payoff of a mortgage loan payable due to the disposition of a real estate investment and the write-off of unamortized loan discount related to eight mortgage loans payable that we refinanced on January 1, 2022 that were due to mature in 2044 through 2052.

For the three and nine months ended September 30, 2021, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 0 and $ 2,293,000 , respectively, which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive 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 that were due to mature in 2053.

AMERICAN HEALTHCARE REIT, INC.

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

As of September 30, 2022, the principal payments due on our mortgage loans payable for the three months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter were as follows:

For the three months ended March 31, 2023, we did not incur any gain or loss on the extinguishment of mortgage loans payable.

For the three months ended March 31, 2022, we incurred an aggregate loss on the extinguishment of mortgage loans payable of $ 1,430,000 , which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

Such loss was primarily related to the write-off of unamortized loan discount related to eight mortgage loans payable that we refinanced on January 1, 2022 that were due to mature in 2044 through 2052.

As of March 31, 2023, the principal payments due on our mortgage loans payable for the nine months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter were as follows:

2023 $ 128,240,000

4 unchanged sentences

Thereafter 495,645,000

$ 1,177,244,000

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, which was further amended on October 1, 2021 to provide for updates regarding the Combined Company subsequent to the Merger, 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 .

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.

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 paid an extension fee of $ 795,000 .

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 below.

2019 Credit Facility

On October 1, 2021, upon consummation of the Merger, we, through the surviving partnership, were subject to GAHR III’s credit agreement, as amended, or the 2019 Corporate Credit Agreement, with Bank of America;

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 .

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.

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.

As of December 31, 2021, borrowings outstanding under the 2019 Credit Facility totaled $ 480,000,000 and the weighted average interest rate on such borrowings outstanding was 2.60 % per annum.

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

AMERICAN HEALTHCARE REIT, INC.

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

amended and restated the 2019 Corporate Credit Agreement in its entirety, or the 2022 Credit Agreement.

See below for a further discussion.

Total $ 1,257,057,000

Lines of Credit and Term Loan

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 amended, restated, superseded and replaced the 2019 Corporate Credit Agreement and the 2018 Credit Agreement for 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 .

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 an agreement, or the 2022 Credit Agreement, to amend and restate the credit agreement for our existing credit facility with Bank of America, N.A., or Bank of America, KeyBank National Association, Citizens Bank, National Association, and the lenders named therein.

The 2022 Credit Agreement provides for a credit facility with an aggregate maximum principal amount up to $ 1,050,000,000 , or the 2022 Credit Facility, which 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.

3 unchanged sentences

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:

The maximum principal amount of the 2022 Credit Facility may be

AMERICAN HEALTHCARE REIT, INC.

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

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.

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.

The 2022 Credit Facility bears interest at varying rates based upon, at our option, (i) Daily SOFR, plus the Applicable Rate for Daily SOFR Rate Loans or (ii) 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.

2 unchanged sentences

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.

As of September 30, 2022, our aggregate borrowing capacity under the 2022 Credit Facility was $ 1,050,000,000 , excluding the $ 25,000,000 in standby letters of credit described above.

As of September 30, 2022, borrowings outstanding under the 2022 Credit Facility totaled $ 963,900,000 ($ 963,008,000 , net of deferred financing costs related to the senior unsecured term loan facility portion of the 2022 Credit Facility) and the weighted average interest rate on such borrowings outstanding was 4.76 % per annum.

In January 2022, in connection with the 2022 Credit Agreement, we incurred an aggregate $ 3,161,000 loss on the extinguishment of a portion of senior unsecured term loans which formed part of the 2018 Credit Facility and the 2019 Credit Facility.

On March 1, 2023, we entered into an amendment to the 2022 Credit Agreement, or the First Amendment.

The material terms of the First Amendment provided for revisions to certain financial covenants for a limited period of time.

Except as modified by the terms of the First Amendment, the material terms of the 2022 Credit Agreement remain in full force and effect.

As of both March 31, 2023 and December 31, 2022, our aggregate borrowing capacity under the 2022 Credit Facility was $ 1,050,000,000 , excluding the $ 25,000,000 in standby letters of credit described above.

As of March 31, 2023 and December 31, 2022, borrowings outstanding under the 2022 Credit Facility totaled $ 977,900,000 ($ 976,988,000 , net of deferred financing costs related to the senior unsecured term loan facility portion of the 2022 Credit Facility) and $ 965,900,000 ($ 965,060,000 , net of deferred financing costs related to the senior unsecured term loan facility portion of the 2022 Credit Facility), respectively, and the weighted average interest rate on such borrowings outstanding was 6.57 % and 6.07 % per annum, respectively.

In January 2022, in connection with the 2022 Credit Agreement, we incurred an aggregate $ 3,161,000 loss on the extinguishment of a portion of senior unsecured term loan related to former credit facilities.

Such loss on extinguishment of debt is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss, and primarily consisted of lender fees we paid to obtain the 2022 Credit Facility.

2019 Trilogy Credit Facility

On October 1, 2021, upon consummation of the Merger, through Trilogy RER, LLC, we became 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;

We, through Trilogy RER, LLC, are party 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;

CIT Bank, N.A.;

4 unchanged sentences

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:

and a syndicate of other banks, as lenders named therein, with respect to a senior secured revolving credit facility that had 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

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

On December 20, 2022, we entered into an amendment to the 2019 Trilogy Credit Agreement, or the 2019 Trilogy Credit Amendment.

The material terms of the 2019 Trilogy Credit Amendment provided for an increase to the secured revolver amount from $ 325,000,000 to $ 365,000,000 , thereby increasing our aggregate maximum principal amount under the credit facility from $ 360,000,000 to $ 400,000,000 .

In addition, all references to the London Inter-bank Offered Rate, or LIBOR, were replaced with the Secured Overnight Financing Rate, or SOFR.

On March 30, 2023, we further amended the 2019 Trilogy Credit Agreement to update the definition of Implied Debt Service, which is used to calculate the Real Estate Borrowing Base Availability, for interest rate changes and to add an annual interest-only payment calculation option.

Except as modified by the terms of the amendments, the material terms of the 2019 Trilogy Credit Agreement remain in full force and effect.

Unless defined herein, all capitalized terms under this “2019 Trilogy Credit Facility” subsection are defined in the 2019 Trilogy Credit Amendment.

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 Amendment, 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) SOFR, plus 2.75 %

AMERICAN HEALTHCARE REIT, INC.

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

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

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

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

As of both September 30, 2022 and December 31, 2021, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 360,000,000 .

As of September 30, 2022 and December 31, 2021, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 329,035,000 and $ 304,734,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 5.84 % and 2.85 % per annum, respectively.

Derivative Financial Instruments

We have used derivative financial instruments to manage interest rate risk associated with variable-rate debt.

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

We did no t have any derivative financial instruments as of September 30, 2022.

The following table lists the derivative financial instruments held by us as of December 31, 2021, which were included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheets:

for SOFR Rate Loans, as defined in the 2019 Trilogy Credit Amendment, and (b) for Base Rate Loans, as defined in the 2019 Trilogy Credit Amendment, 1.75 % plus the highest of:

(i) the fluctuating rate per annum of interest in effect for such day as established 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 Amendment, and (iii) 1.00 % above one-month Adjusted Term SOFR.

As of both March 31, 2023 and December 31, 2022, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 400,000,000 .

As of March 31, 2023 and December 31, 2022, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 336,234,000 and $ 316,734,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 7.61 % and 7.17 % per annum, respectively.

Derivative Financial Instrument

We use a derivative financial instrument to manage interest rate risk associated with our variable-rate term loan pursuant to our 2022 Credit Facility and we record such derivative financial instrument in our accompanying condensed consolidated balance sheets as either an asset or a liability measured at fair value.

We did no t have any derivative financial instruments as of December 31, 2022.

The following table lists the derivative financial instrument held by us as of March 31, 2023, which was included in security deposits, prepaid rent and other liabilities in our accompanying condensed consolidated balance sheet:

Instrument Notional Amount Index Interest Rate Maturity Date Fair Value

December 31, 2021

Swap $ 250,000,000 one month LIBOR 2.10 % 01/25/22 $ 332,000

Swap $ 130,000,000 one month LIBOR 1.98 % 01/25/22 162,000

Swap $ 100,000,000 one month LIBOR 0.20 % 01/25/22 6,000

As of December 31, 2021, no ne of our derivative financial instruments were designated as hedges.

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.

On January 25, 2022, our interest rate swap contracts matured.

For the three months ended September 30, 2022 and 2021, we recorded $ 0 and $ 1,860,000 , respectively, and for the nine months ended September 30, 2022 and 2021, we recorded $ 500,000 and $ 5,456,000 , respectively, as a decrease to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss related to the change in the fair value of our derivative financial instruments.

March 31, 2023

Swap $ 275,000,000 one month

Term SOFR 3.74 % 01/19/26 $ ( 195,000 )

As of March 31, 2023, our derivative financial instrument was not designated as a hedge.

The derivative financial instrument not designated as a hedge is not speculative and is used to manage our exposure to interest rate movements, but does not meet the strict hedge accounting requirements.

For the three months ended March 31, 2023 and 2022, we recorded $ 195,000 and ($ 500,000 ), respectively, as an increase (decrease) to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss related to the change in the fair value of our derivative financial instrument.

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

Identified Intangible Liabilities, Net

As of September 30, 2022 and December 31, 2021, identified intangible liabilities, net consisted of below-market leases of $ 11,249,000 and $ 12,715,000 , respectively, net of accumulated amortization of $ 2,113,000 and $ 1,047,000 , respectively.

Amortization expense on below-market leases for the three months ended September 30, 2022 and 2021 was $ 413,000 and $ 45,000 , respectively, and for the nine months ended September 30, 2022 and 2021 was $ 1,436,000 and $ 137,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

AMERICAN HEALTHCARE REIT, INC.

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

The weighted average remaining life of below-market leases was 8.6 years and 9.1 years as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022, estimated amortization expense on below-market leases for the three months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter was as follows:

As of March 31, 2023 and December 31, 2022, identified intangible liabilities, net consisted of below-market leases of $ 10,429,000 and $ 10,837,000 , respectively, net of accumulated amortization of $ 2,898,000 and $ 2,508,000 , respectively.

Amortization expense on below-market leases for the three months ended March 31, 2023 and 2022 was $ 408,000 and $ 609,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

The weighted average remaining life of below-market leases was 8.2 years and 8.4 years as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023, estimated amortization expense on below-market leases for the nine months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter was as follows:

2023 $ 1,188,000

4 unchanged sentences

Thereafter 4,059,000

Total $ 10,429,000

AMERICAN HEALTHCARE REIT, INC.

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

Commitments and Contingencies

7 unchanged sentences

Redeemable Noncontrolling Interests

As a result of the Merger and the AHI Acquisition, as of September 30, 2022 and December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 95.0 % and 94.9 % general partnership interest, respectively, in our operating partnership and the remaining approximate 5.0 % and 5.1 % limited partnership interest, respectively, in our operating partnership is owned by the NewCo Sellers.

As of both March 31, 2023 and December 31, 2022, we, through our direct and indirect subsidiaries, owned a 95.0 % general partnership interest in our operating partnership and the remaining 5.0 % limited partnership interest in our operating partnership was 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 condensed consolidated balance sheets.

As of both September 30, 2022 and December 31, 2021, we, through Trilogy REIT Holdings LLC, or Trilogy REIT Holdings, in which we indirectly hold a 76.0 % ownership interest, owned 95.9 % of the outstanding equity interests of Trilogy.

As of both September 30, 2022 and December 31, 2021, certain members of Trilogy’s management and certain members of an advisory committee to Trilogy’s board of directors owned approximately 4.1 % of the outstanding equity interests of Trilogy.

As of both March 31, 2023 and December 31, 2022, we, through Trilogy REIT Holdings LLC, or Trilogy REIT Holdings, in which we indirectly hold a 76.0 % ownership interest, owned 97.4 % and 96.2 %, respectively, of the outstanding equity interests of Trilogy.

As of March 31, 2023 and December 31, 2022, certain members of Trilogy’s management and certain members of an advisory committee to Trilogy’s board of directors owned approximately 2.6 % and 3.8 %, 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 condensed consolidated balance sheets.

As a result of the Merger and through our operating partnership, as of September 30, 2022 and December 31, 2021, we own 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 as a result of the Merger, as of September 30, 2022 and December 31, 2021, we also own 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

For the three months ended March 31, 2023, we redeemed a portion of the equity interests owned by current members of Trilogy’s management for an aggregate of $ 15,870,000 .

For the three months ended March 31, 2022, we did not redeem any equity interests of Trilogy.

As of March 31, 2023 and December 31, 2022, we own, through our operating partnership, 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.

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

See Note 3, Real Estate Investments, Net and Business Combinations — Disposition of Real Estate Investment, for a disposition within our Central Florida Senior Housing Portfolio.

We previously owned 90.0 % of the joint venture with Avalon Health Care, Inc., or Avalon, that owned Catalina West Haven ALF and Catalina Madera ALF.

The noncontrolling interests held by Avalon had redemption features outside of our control and were accounted for as redeemable noncontrolling interests until December 1, 2022, when we exercised our right to purchase the remaining 10.0 % of the joint venture with Avalon for a contract purchase price of $ 295,000 .

As such, 10.0 % of the net earnings of such joint venture were allocated to redeemable noncontrolling interests in our accompanying consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022.

AMERICAN HEALTHCARE REIT, INC.

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

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

Both of our joint ventures with an affiliate of Meridian and with Avalon described above were acquired on October 1, 2021, upon consummation of the Merger.

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 nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Beginning balance $ 81,598,000 $ 72,725,000

4 unchanged sentences

Adjustment to redemption value ( 5,043,000 ) 2,856,000

Net income (loss) attributable to redeemable noncontrolling interests 323,000 ( 397,000 )

Net (loss) income attributable to redeemable noncontrolling interests ( 368,000 ) 187,000

Ending balance $ 59,884,000 $ 75,267,000

1 unchanged sentence

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 September 30, 2022 and December 31, 2021, no shares of preferred stock were issued and outstanding.

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 distribution reinvestment plan 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 of 1933, as amended, or the Securities Act, to register a maximum of $ 250,000,000 of additional shares of our common stock pursuant to the Initial DRIP through a subsequent offering, or the 2015 GAHR III DRIP Offering, and we commenced offering shares following the deregistration of the GAHR III initial offering until the termination and deregistration of the 2015 GAHR III DRIP Offering on March 29, 2019.

Effective October 5, 2016, we amended and restated the Initial DRIP, or the GAHR III 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.

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 GAHR III Amended and Restated DRIP, or 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 our distribution reinvestment plan, as amended, or the AHR DRIP, to offer up to $ 100,000,000 of shares of our common stock pursuant to a Registration Statement on Form S-3 under the Securities Act filed by GAHR IV, or the AHR DRIP Offering.

On November 14, 2022, our board suspended the AHR DRIP Offering beginning with the distributions declared, if any, for the quarter ending December 31, 2022.

See Note 22, Subsequent Events.

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 1, Organization and Description of Business — Public Offering and the “Distribution Reinvestment Plan” section below for a further discussion.

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.

As of both March 31, 2023 and December 31, 2022, no shares of preferred stock were issued and outstanding.

Pursuant to our charter, as amended, we are authorized to issue 1,000,000,000 shares of our common stock, par value $ 0.01 per share, whereby 200,000,000 shares are classified as Class T common stock and 800,000,000 shares are classified as Class I common stock.

As of March 31, 2023, after taking into consideration the Merger and the impact of the reverse stock split as discussed below, we had issued 65,445,557 shares for a total of $ 2,737,716,000 of common stock since February 26, 2014 in our initial public offerings and DRIP offerings (includes historical offering amounts sold by GAHR III and GAHR IV prior to the Merger).

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

On November 15, 2022 we effected a one-for-four reverse split of our common stock and a corresponding reverse split of the partnership units in our operating partnership.

As a result of the Reverse Splits, every four shares of our common stock, or four partnership units in our operating partnership, were automatically combined and converted into one issued and outstanding share of our common stock of like class, or one partnership unit of like class, as applicable, rounded to the nearest 1/100th share or unit.

The Reverse Splits impacted all classes of common stock and partnership units proportionately and had no impact on any stockholder’s or partner’s ownership percentage.

Neither the number of authorized shares nor the par value of the Class T common stock and Class I common stock were ultimately impacted.

All numbers of common shares and per share data, as well as partnership units in our operating partnership, in our accompanying condensed consolidated financial statements and related notes have been retroactively adjusted for all periods presented to give effect to the Reverse Splits.

Distribution Reinvestment Plan

Our DRIP allowed our stockholders to elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of our common stock in lieu of receiving cash distributions.

However, in connection with the Proposed Listing, on November 14, 2022, our board suspended the DRIP offering beginning with the distributions declared, if any, for the quarter ended December 31, 2022.

As a result of the suspension of the DRIP, unless and until our board reinstates the DRIP offering, stockholders who are current participants in the DRIP were or will be paid distributions in cash.

Our board has been establishing an estimated per share net asset value, or NAV, annually.

Shares of our common stock issued pursuant to our DRIP are issued at the current estimated per share NAV until such time as our board determined an updated estimated per share NAV.

AMERICAN HEALTHCARE REIT, INC.

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

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.

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 are classified as Class T common stock and 800,000,000 shares are classified as Class I common stock.

Distribution Reinvestment Plan

Following the deregistration of the Initial DRIP on April 22, 2015, we continued to offer shares of our common stock pursuant to the 2015 GAHR III DRIP Offering and 2019 GAHR III DRIP Offering which resulted in a total of $ 308,501,000 in distributions being reinvested that resulted in 33,110,893 shares of common stock being issued.

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.

As a result, beginning with the October 2021 distribution, which was paid in November 2021, stockholders who previously enrolled as participants in the AHR DRIP received distributions in shares of our common stock pursuant to the terms of the AHR DRIP, instead of cash distributions.

As of September 30, 2022, a total of $ 80,754,000 in distributions were reinvested that resulted in 8,575,687 shares of common stock being issued pursuant to the AHR DRIP Offering.

On November 14, 2022, our board suspended the AHR DRIP Offering beginning with the distributions declared, if any, for the quarter ending December 31, 2022.

See Note 22, Subsequent Events.

Since October 5, 2016, our board had approved and established an estimated per share net asset value, or 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:

The following is a summary of the historical estimated per share NAV:

Approval Date by our Board Estimated Per Share NAV

1 unchanged sentence

03/15/23 $ 31.40

03/24/22 $ 9.29

For the three and nine months ended September 30, 2022, $ 3,671,000 and $ 26,118,000 , respectively, in distributions were reinvested and 395,174 and 2,820,674 shares of our common stock, respectively, were issued pursuant to our DRIP Offerings.

For both the three and nine months ended September 30, 2021, there were no distributions reinvested pursuant to our DRIP Offerings.

For the three months ended March 31, 2023 and 2022, $ 0 and $ 11,304,000 , respectively, in distributions were reinvested and 0 and 306,518 shares of our common stock, respectively, were issued pursuant to our DRIP offerings.

Share Repurchase Plan

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

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

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

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

provided however, that shares subject to a repurchase requested upon the death or “qualifying disability,” as defined in our share repurchase plan, of a stockholder were not subject to this cap.

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

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 stock, as determined by our board, except that the repurchase price with respect to repurchases resulting from the death or qualifying disability of stockholders is equal to the most recently published estimated per share NAV.

On October 4, 2021, as a result of the Merger, 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.

AMERICAN HEALTHCARE REIT, INC.

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

During the three and nine months ended September 30, 2022, we repurchased 608,138 and 1,755,973 shares of our common stock, respectively, for an aggregate of $ 5,650,000 and $ 16,233,000 , respectively, at an average repurchase price of $ 9.29 and $ 9.24 per share, respectively.

During the three and nine months ended September 30, 2021, we did no t repurchase any shares of common stock.

In October 2022, we repurchased 478,136 shares of our common stock, for an aggregate of $ 4,442,000 , at a repurchase price of $ 9.29 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.

On November 14, 2022, our board suspended the share repurchase plan for all repurchases, including repurchases resulting from the death or qualifying disability of stockholders, beginning with share repurchase requests for the quarter ending December 31, 2022.

See Note 22, Subsequent Events.

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

On November 14, 2022, our board suspended our share repurchase plan beginning with share repurchase requests for the quarter ending December 31, 2022.

All share repurchase requests, including requests resulting from the death or qualifying disability of stockholders, received commencing with the quarter ended December 31, 2022, will not be processed, will be considered canceled in full and will not be considered outstanding repurchase requests.

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

Pursuant to our share repurchase plan, the repurchase price with respect to repurchases resulting from the death or qualifying disability of stockholders was equal to the most recently published estimated per share NAV.

For the three months ended March 31, 2023 and 2022, we repurchased 1,681 and 112,094 shares of common stock, respectively, for an aggregate of $ 62,000 and $ 4,134,000 , respectively, at a repurchase price of $ 37.16 and $ 36.88 per share, respectively, pursuant to our share repurchase plan.

Such repurchase requests were submitted prior to the suspension of our share repurchase plan.

Noncontrolling Interests in Total Equity

As of both September 30, 2022 and December 31, 2021, Trilogy REIT Holdings owned approximately 95.9 % 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.

As of March 31, 2023 and December 31, 2022, Trilogy REIT Holdings owned approximately 97.4 % and 96.2 %, respectively, of Trilogy.

We are the indirect owner of a 76.0 % interest of Trilogy REIT Holdings pursuant to an amended joint venture agreement with an indirect, wholly owned subsidiary of NorthStar Healthcare Income, Inc., or NHI.

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 %.

Through September 30, 2021, 30.0 % of the net earnings of Trilogy REIT Holdings were allocated to noncontrolling interests, and since October 1, 2021, 24.0 % of the net earnings of Trilogy REIT Holdings were allocated to a noncontrolling interest.

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 consisted 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 condensed consolidated statements of operations and comprehensive loss.

The performance-based Profit Interests were subject to a performance commitment and would have vested upon liquidity events as defined in the Profit Interests agreements.

The performance-based Profit Interests were measured at their fair value on the adoption date of ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , using a modified retrospective approach.

The nonvested awards were presented as noncontrolling interests in total equity in our accompanying condensed consolidated balance sheets, and were re-classified to redeemable noncontrolling interests upon vesting as they had redemption features outside of our control similar to the common stock units held by Trilogy’s management.

As of both March 31, 2023 and December 31, 2022, NHI indirectly owned a 24.0 % membership interest in Trilogy REIT Holdings and as such, for the three months ended March 31, 2023 and 2022, 24.0 % of the net earnings of Trilogy REIT Holdings were allocated to noncontrolling interests.

In connection with our operation of Trilogy, time-based profit interest units in Trilogy, or the Profit Interests, were issued to Trilogy Management Services, LLC and two independent directors of Trilogy, both unaffiliated third parties that manage or direct the day-to-day operations of Trilogy.

The Profit Interests are 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 amortize the Profit Interests on a straight-line basis over the vesting periods, which are recorded to general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss.

The nonvested Profit Interests are presented as noncontrolling interests in total equity in our accompanying condensed consolidated balance sheets, and are re-classified to redeemable noncontrolling interests upon vesting as they had redemption features outside of our control, similar to the common stock units held by Trilogy’s management.

See Note 12, 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 in cash and through the issuance of additional equity interests in Trilogy that are classified as redeemable noncontrolling interests in our accompanying condensed consolidated balance sheets.

There were no canceled, expired or exercised Profit Interests during the three and nine months ended September 30, 2022 and 2021.

For the three months ended September 30, 2022 and 2021, we recognized stock compensation expense related to the Profit Interests of $ 20,000 and $ 0 , respectively, and for the nine months ended September 30, 2022 and 2021, we recognized stock compensation expense related to the Profit Interests of $ 62,000 and $( 14,000 ), respectively.

There were no canceled, expired or exercised Profit Interests during the three months ended March 31, 2023 and 2022.

For both three months ended March 31, 2023 and 2022, we recognized stock compensation expense related to the time-based Profit Interests of $ 21,000 .

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 condensed 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 condensed consolidated statements of operations and comprehensive loss.

As of both September 30, 2022 and December 31, 2021, we owned an 86.0 % interest in a consolidated limited liability company that owns Lakeview IN Medical Plaza.

As such, 14.0 % of the net earnings of Lakeview IN Medical Plaza were allocated to noncontrolling interests for the three and nine months ended September 30, 2022 and 2021.

As of both September 30, 2022 and December 31, 2021, we owned a 90.6 % membership interest in a consolidated limited liability company that owns Southlake TX Hospital.

As such, 9.4 % of the net earnings of Southlake TX Hospital were allocated to noncontrolling interests for the three and nine months ended September 30, 2022 and 2021.

We classify the value of our subsidiary’s preferred shares of beneficial interests as noncontrolling interests in our accompanying condensed consolidated balance sheets and the dividends of the preferred shares

AMERICAN HEALTHCARE REIT, INC.

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

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 condensed consolidated statements of operations and comprehensive loss during the three and nine months ended September 30, 2022.

As discussed in Note 1, Organization and Description of Business, as a result of the Merger and the AHI Acquisition, as of September 30, 2022 and December 31, 2021, we, through our direct and indirect subsidiaries, own an approximately 95.0 % and 94.9 % general partnership interest, respectively, in our operating partnership and the remaining approximately 5.0 % and 5.1 % limited partnership interest, respectively, in our operating partnership is owned by the NewCo Sellers.

As of September 30, 2022 and December 31, 2021, approximately 4.0 % and 4.1 % of our total operating partnership units outstanding, respectively, is presented in total equity in our accompanying condensed consolidated balance sheets.

of beneficial interests in net income or loss attributable to noncontrolling interests in our accompanying condensed consolidated statements of operations and comprehensive loss.

As of both March 31, 2023 and December 31, 2022, we owned an 86.0 % interest in a consolidated limited liability company that owns Lakeview IN Medical Plaza.

As such, 14.0 % of the net earnings of Lakeview IN Medical Plaza were allocated to noncontrolling interests in our accompanying condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022.

As of both March 31, 2023 and December 31, 2022, we owned a 90.6 % membership interest in a consolidated limited liability company that owns Southlake TX Hospital.

As such, 9.4 % of the net earnings of Southlake TX Hospital were allocated to noncontrolling interests in our accompanying condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022.

As of both March 31, 2023 and December 31, 2022, we owned a 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 condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022.

As discussed in Note 1, Organization and Description of Business, as of both March 31, 2023 and December 31, 2022, we, through our direct and indirect subsidiaries, own a 95.0 % general partnership interest in our operating partnership and the remaining 5.0 % limited partnership interest in our operating partnership is owned by the NewCo Sellers.

As of both March 31, 2023 and December 31, 2022, 4.0 % of our total operating partnership units outstanding is presented in total equity in our accompanying condensed consolidated balance sheets.

See Note 12, Redeemable Noncontrolling Interests, for a further discussion.

2015 Incentive Plan

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.

Through September 30, 2022, we granted an aggregate of 1,157,213 shares of our restricted common stock under our incentive plan.

Such amount includes:

(i) 222,458 shares of our restricted Class T common stock, at a weighted average grant date fair value of $ 9.52 per share, to our independent directors;

(ii) 490,515 time-based shares of our restricted Class T common stock, at a grant date fair value of $ 9.22 per share or $ 9.29 per share, as applicable, to certain executive officers and key employees;

(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;

and (iv) 125,091 shares of our restricted Class I common stock issued upon the conversion of restricted common stock that GAHR III granted prior to the Merger.

Also, through September 30, 2022, we granted 117,410 performance-based restricted stock units pursuant to our incentive plan to certain executive officers representing the right to receive shares of our Class T common stock upon vesting, at a grant date fair value of $ 9.29 per unit, net of 46,096 performance-based restricted stock units that were forfeited during the nine months ended September 30, 2022.

Further, for the nine months ended September 30, 2022, we granted 76,800 time-based restricted stock units under our incentive plan, at a grant date fair value of $ 9.29 per share, to certain employees representing the right to receive shares of our Class T common stock upon vesting.

For the three months ended September 30, 2022 and 2021, we recognized stock based compensation expense related to awards granted pursuant to our incentive plan of $ 914,000 and $ 13,000 , respectively.

For the nine months ended September 30, 2022 and 2021, we recognized stock based compensation expense related to awards granted pursuant to our incentive plan of $ 2,705,000 and $ 66,000 , respectively.

Such stock based compensation expense was included in general and administrative in our accompanying condensed consolidated statements of operations and comprehensive loss.

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.

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.

AMERICAN HEALTHCARE REIT, INC.

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

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

Three Months Ended

September 30, 2021 Nine Months Ended

September 30, 2021

Asset management fees(1) $ 5,424,000 $ 16,187,000

Property management fees(2) 674,000 2,009,000

Development fees(3) 214,000 854,000

Operating expenses(4) 44,000 160,000

Construction management fees(5) 38,000 118,000

Lease fees(6) 25,000 410,000

Acquisition fees(7) 19,000 1,363,000

$ 6,438,000 $ 21,101,000

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

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

(3) Development fees were capitalized as part of the associated investments in our accompanying condensed consolidated balance sheets.

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

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

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

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

(6) Lease fees were capitalized as costs of entering into new leases and included in other assets, net in our accompanying condensed consolidated balance sheets.

(7) 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 condensed consolidated balance sheets.

Accounts Payable Due to Affiliates

We did no t have any amounts outstanding to our affiliates as of September 30, 2022 .

The following amounts were outstanding to our affiliates as of December 31, 2021:

Fee December 31, 2021

Lease commissions $ 245,000

Development fees 229,000

Construction management fees 152,000

Operating expenses 100,000

Asset and property management fees 83,000

Acquisition fees 57,000

AHR 2015 Incentive Plan

Pursuant to the Amended and Restated 2015 Incentive Plan, or the AHR Incentive Plan, 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 the AHR Incentive plan is 1,000,000 shares.

Restricted common stock

Pursuant to the AHR Incentive Plan, through March 31, 2023, we granted an aggregate of 291,259 shares of our restricted common stock, or RSAs, which include restricted Class T common stock and restricted Class I common stock.

RSAs were granted to our independent directors in connection with their initial election or re-election to our board or in consideration of their past services rendered.

In addition, certain executive officers and key employees received grants of restricted Class T common stock, as defined in the AHR Incentive Plan.

RSAs generally have a vesting period ranging from one to four years and are subject to continuous service through the vesting dates.

Restricted stock units

Pursuant to the AHR Incentive Plan, through March 31, 2023, we granted to our executive officers and certain employees an aggregate 29,352 of performance-based restricted stock units, or PBUs, representing the right to receive shares of our Class T common stock upon vesting.

We also granted to certain employees 19,200 time-based restricted stock units, or TBUs, representing the right to receive shares of our Class T common stock upon vesting.

PBUs and TBUs are collectively referred to as RSUs.

RSUs granted to executive officers and employees generally have a vesting period of up to three years and are subject to continuous service through the vesting dates, and any performance conditions, as applicable.

For the three months ended March 31, 2023 and 2022, we recognized stock compensation expense related to awards granted pursuant to the AHR Incentive Plan of $ 1,051,000 and $ 811,000 , respectively, based on the grant date fair value for time based awards and for performance based awards that are probable of vesting, which are equal to the most recently published estimated per share NAV.

Such stock compensation expense is included in general and administration in our accompanying condensed consolidated statements of operations and comprehensive loss.

AMERICAN HEALTHCARE REIT, INC.

2 unchanged sentences

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 September 30, 2022, 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

(Level 3) Total

Warrants $ — $ — $ 678,000 $ 678,000

Total liabilities at fair value $ — $ — $ 678,000 $ 678,000

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:

The table below presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall:

Quoted Prices in

6 unchanged sentences

(Level 3) Total

Derivative financial instruments $ — $ 500,000 $ — $ 500,000

— — 786,000 786,000

Derivative financial instrument $ — $ 195,000 $ — $ 195,000

Total liabilities at fair value $ — $ 195,000 $ — $ 195,000

$ — $ 500,000 $ 786,000 $ 1,286,000

There were no transfers into and out of fair value measurement levels during the nine months ended September 30, 2022 and 2021.

As of September 30, 2022 and December 31, 2021, we have recorded $ 678,000 and $ 786,000 , 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 condensed 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 September 30, 2022 and December 31, 2021, the carrying value is a reasonable estimate of fair value.

There were no transfers into and out of fair value measurement levels during the three months ended March 31, 2023 and 2022.

We did not have any assets and liabilities measured at fair value on a recurring basis as of December 31, 2022.

Derivative Financial Instruments

We used interest rate swaps and interest rate caps to manage interest rate risk associated with variable-rate debt.

We entered into an interest rate swap to manage interest rate risk associated with variable-rate debt.

We also previously used interest rate swaps or interest rate caps to manage such interest rate risk.

The valuation of these instruments was determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows of each derivative.

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

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

Such valuation reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves, as well as option volatility.

The fair value of our interest rate swap was determined by netting the discounted future fixed cash payments and the discounted expected variable cash receipts.

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

We incorporated 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 considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Although we determined that the majority of the inputs used to value our derivative financial instruments fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilized 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 assessed the significance of the impact of the credit valuation adjustments on the overall valuation of

AMERICAN HEALTHCARE REIT, INC.

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

our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives.

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

As of September 30, 2022, we did not have any derivative financial instruments.

We incorporated credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurement.

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

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

However, as of March 31, 2023, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative position and determined that the credit valuation adjustments were not significant to the overall valuation of our derivative.

As a result, we determined that our derivative valuation in its entirety was classified in Level 2 of the fair value hierarchy.

On January 25, 2022, our prior interest rate swap contracts matured and as of December 31, 2022, we did not have any derivative financial instruments.

Financial Instruments Disclosed at Fair Value

Our accompanying condensed 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 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.

AMERICAN HEALTHCARE REIT, INC.

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

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 September 30, 2022 and December 31, 2021 were as follows:

September 30,

The fair values of our mortgage loans payable and our lines of credit and term loan 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 loan are classified in Level 2 within the fair value hierarchy.

The carrying amounts and estimated fair values of such financial instruments as of March 31, 2023 and December 31, 2022 were as follows:

Amount(1) Fair

5 unchanged sentences

Mortgage loans payable $ 1,233,745,000 $ 1,097,904,000 $ 1,229,847,000 $ 1,091,667,000

Lines of credit and term loans $ 1,287,248,000 $ 1,294,231,000 $ 1,222,853,000 $ 1,226,636,000

Lines of credit and term loan $ 1,309,427,000 $ 1,315,836,000 $ 1,277,460,000 $ 1,285,205,000

(1) Carrying amount is net of any discount/premium and unamortized deferred financing costs.

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

As a REIT, we generally will not be subject to U.S.

federal income tax on taxable income that we distribute to our stockholders.

We have elected to treat certain of our consolidated subsidiaries as taxable REIT subsidiaries, or TRS, pursuant to the Code.

7 unchanged sentences

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

As of both September 30, 2022 and December 31, 2021,

AMERICAN HEALTHCARE REIT, INC.

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

we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

As of both March 31, 2023 and December 31, 2022, we did not have any tax benefits or liabilities for uncertain tax positions that we believe should be recognized in our accompanying condensed consolidated financial statements.

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

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

As of September 30, 2022 and December 31, 2021, our valuation allowance fully reserves the net deferred tax assets due to historical losses and inherent uncertainty of future income.

As of both March 31, 2023 and December 31, 2022, our valuation allowance fully reserves 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.

AMERICAN HEALTHCARE REIT, INC.

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

We have operating leases with tenants that expire at various dates through 2050.

For the three months ended September 30, 2022 and 2021, we recognized $ 50,041,000 and $ 28,320,000 , respectively, of revenues related to operating lease payments, of which $ 9,522,000 and $ 4,181,000 , respectively, was for variable lease payments.

For the nine months ended September 30, 2022 and 2021, we recognized $ 150,860,000 and $ 86,258,000 , respectively, of revenues related to operating lease payments, of which $ 29,598,000 and $ 13,835,000 , respectively, was for variable lease payments.

As of September 30, 2022, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the three months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter for properties that we wholly own:

For the three months ended March 31, 2023 and 2022, we recognized $ 42,303,000 and $ 50,731,000 , respectively, of revenues related to operating lease payments, of which $ 10,040,000 and $ 10,413,000 , respectively, was for variable lease payments.

As of March 31, 2023, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the nine months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter for properties that we wholly own:

2023 $ 115,063,000

5 unchanged sentences

Total $ 1,212,150,000

We lease certain land, buildings, furniture, fixtures, campus equipment, office equipment and automobiles.

We lease certain land, buildings, furniture, fixtures, campus and office equipment and automobiles .

We have lease agreements with lease and non-lease components, which are generally accounted for separately.

2 unchanged sentences

Certain leases also include options to purchase the leased property.

As of September 30, 2022, we had future lease payments of $ 28,747,000 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.

1 unchanged sentence

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

AMERICAN HEALTHCARE REIT, INC.

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

The components of lease costs were as follows:

Three Months Ended September 30,

Lease Cost Classification 2022 2021

Operating lease cost(1) Property operating expenses, rental expenses or general and administrative expenses $ 9,322,000 $ 5,530,000

Finance lease cost:

Amortization of leased assets

Depreciation and amortization 310,000 332,000

Interest on lease liabilities Interest expense 43,000 81,000

Sublease income Resident fees and services revenue or other income ( 156,000 ) ( 57,000 )

Total lease cost $ 9,519,000 $ 5,886,000

Nine Months Ended September 30,

Three Months Ended March 31,

Lease Cost Classification 2023

7 unchanged sentences

(1) Includes short-term leases and variable lease costs, which are immaterial.

AMERICAN HEALTHCARE REIT, INC.

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

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

Lease Term and Discount Rate September 30,

Lease Term and Discount Rate March 31,

Weighted average remaining lease term (in years):

6 unchanged sentences

7.61 % 7.66 %

Nine Months Ended September 30,

Three Months Ended March 31,

Supplemental Disclosure of Cash Flows Information 2023 2022

2 unchanged sentences

Right-of-use assets obtained in exchange for operating lease liabilities $ 1,155,000 $ —

AMERICAN HEALTHCARE REIT, INC.

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

Operating Leases

As of September 30, 2022, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the three months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet:

As of March 31, 2023, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the nine months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying condensed consolidated balance sheet:

2023 $ 29,017,000

8 unchanged sentences

Finance Leases

As of September 30, 2022, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the three months ending December 31, 2022 and for each of the next four years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities:

As of March 31, 2023, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the nine months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities:

2023 $ 53,000

2 unchanged sentences

Present value of finance lease liabilities $ 146,000

AMERICAN HEALTHCARE REIT, INC.

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

Segment Reporting

As of September 30, 2022, we evaluated our business and made resource allocations based on six reportable business segments:

integrated senior health campuses, medical office buildings, skilled nursing facilities, senior housing — leased, hospitals and SHOP.

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).

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.

Our skilled nursing and senior housing facilities are 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.

As of March 31, 2023, we evaluated our business and made resource allocations based on six reportable business segments:

integrated senior health campuses, MOBs, SHOP, SNFs, senior housing — leased and hospitals.

Our MOBs 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).

Our integrated senior health campuses each provide a range of independent living, assisted living, memory care, skilled nursing services and certain ancillary businesses that are owned and operated utilizing a RIDEA structure.

Our senior housing — leased and skilled nursing facilities are 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.

In addition, our senior housing —leased segment includes our debt security investment.

Our hospital investments are similarly structured to our leased skilled nursing and senior housing facilities.

Our SHOP segment includes senior housing facilities 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.

AMERICAN HEALTHCARE REIT, INC.

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

Our SHOP segment includes senior housing facilities, which may provide assisted living care, independent living, memory care or skilled nursing services, 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 loss, 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 of real estate investments, impairment of real estate investments, income or loss from unconsolidated entities, impairment of goodwill, foreign currency gain or loss, gain on re-measurement of previously held equity interest, 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.

1 unchanged sentence

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 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.

AMERICAN HEALTHCARE REIT, INC.

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

Summary information for the reportable segments during the three and nine months ended September 30, 2022 and 2021 was as follows:

Senior Health

Campuses SHOP Medical

Buildings Senior

Leased Skilled

Facilities Hospitals Three Months

September 30, 2022

Revenues and grant income:

Resident fees and services $ 328,751,000 $ 39,555,000 $ — $ — $ — $ — $ 368,306,000

Real estate revenue — — 37,128,000 5,143,000 6,633,000 2,419,000 51,323,000

Grant income 5,796,000 737,000 — — — — 6,533,000

Total revenues and grant income 334,547,000 40,292,000 37,128,000 5,143,000 6,633,000 2,419,000 426,162,000

Property operating expenses 299,197,000 38,290,000 — — — — 337,487,000

Rental expenses — — 14,155,000 160,000 437,000 98,000 14,850,000

Segment net operating income $ 35,350,000 $ 2,002,000 $ 22,973,000 $ 4,983,000 $ 6,196,000 $ 2,321,000 $ 73,825,000

General and administrative $ 9,626,000

Business acquisition expenses 231,000

Depreciation and amortization 40,422,000

Other income (expense):

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 27,524,000 )

Gain on dispositions of real estate investments

Impairment of real estate investments ( 21,851,000 )

Loss fr om unconsolidated entities

Gain on re-measurement of previously held equity interest 19,567,000

Foreign currenc y loss

( 3,695,000 )

Other income 670,000

Total net other expense ( 31,064,000 )

Loss bef ore income taxes

( 7,518,000 )

Income ta x expense

$ ( 7,644,000 )

AMERICAN HEALTHCARE REIT, INC.

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

Summary information for the reportable segments during the three months ended March 31, 2023 and 2022 was as follows:

Senior Health

Campuses SHOP Medical

Buildings Senior

Leased Skilled

Facilities Hospitals Three Months

September 30, 2021

Revenues and grant income:

Campuses SHOP MOBs Senior

Leased SNFs Hospitals Three Months

March 31, 2023

Resident fees and services $ 361,770,000 $ 46,860,000 $ — $ — $ — $ — $ 408,630,000

$ 265,343,000 $ 21,539,000 $ — $ — $ — $ — $ 286,882,000

Real estate revenue — — 37,483,000 5,276,000 ( 1,632,000 ) 2,469,000 43,596,000

— — 19,677,000 3,622,000 3,665,000 2,704,000 29,668,000

Grant income 936,000 — — — — — 936,000

Total revenues and grant income 266,279,000 21,539,000 19,677,000 3,622,000 3,665,000 2,704,000 317,486,000

Total revenues 361,770,000 46,860,000 37,483,000 5,276,000 ( 1,632,000 ) 2,469,000 452,226,000

Property operating expenses 328,361,000 41,785,000 — — — — 370,146,000

239,151,000 17,670,000 — — — — 256,821,000

Rental expenses — — 14,408,000 199,000 469,000 119,000 15,195,000

— — 7,629,000 71,000 364,000 124,000 8,188,000

Segment net operating income

$ 27,128,000 $ 3,869,000 $ 12,048,000 $ 3,551,000 $ 3,301,000 $ 2,580,000 $ 52,477,000

Segment net operating income (loss) $ 33,409,000 $ 5,075,000 $ 23,075,000 $ 5,077,000 $ ( 2,101,000 ) $ 2,350,000 $ 66,885,000

General and administrative $ 13,053,000

4 unchanged sentences

Interest expense (including amortization of deferred financing costs and debt discount/premium) ( 39,011,000 )

Gain in fair value of derivative financial instruments 1,860,000

Gain on dispositions of real estate investments 276,000

Income from unconsolidated entities 384,000

Foreign currency loss ( 1,394,000 )

Loss in fair value of derivative financial instruments ( 195,000 )

Loss on disposition of real estate investment ( 132,000 )

Loss from unconsolidated entities ( 306,000 )

Gain on re-measurement of previously held equity interest 726,000

Foreign currency gain 1,008,000

Other income 1,608,000

6 unchanged sentences

Senior Health

Campuses SHOP Medical

Buildings Senior

Leased Skilled

Facilities Hospitals Nine Months

September 30, 2022

Revenues and grant income:

Resident fees and services $ 897,345,000 $ 116,160,000 $ — $ — $ — $ — $ 1,013,505,000

Real estate revenue — — 111,798,000 15,703,000 19,625,000 7,245,000 154,371,000

Grant income 21,861,000 855,000 — — — — 22,716,000

Total revenues and grant income 919,206,000 117,015,000 111,798,000 15,703,000 19,625,000 7,245,000 1,190,592,000

Property operating expenses 811,281,000 109,425,000 — — — — 920,706,000

Rental expenses — — 42,259,000 551,000 1,644,000 346,000 44,800,000

Segment net operating income $ 107,925,000 $ 7,590,000 $ 69,539,000 $ 15,152,000 $ 17,981,000 $ 6,899,000 $ 225,086,000

General and administrative $ 31,673,000

Business acquisition expenses 2,161,000

Depreciation and amortization 122,704,000

Other income (expense):

Interest expense:

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 71,194,000 )

Gain in fair value of derivative financial instruments 500,000

Gain on dispositions of real estate investments

Impairment of real estate investments ( 39,191,000 )

Income fro m unconsolidated entities

Gain on re-measurement of previously held equity interest 19,567,000

Foreign currenc y loss

( 8,689,000 )

Other income 2,399,000

Total net other expense ( 92,132,000 )

Loss b efore income taxes

( 23,584,000 )

Income ta x expense

$ ( 24,083,000 )

AMERICAN HEALTHCARE REIT, INC.

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

Senior Health

Campuses SHOP Medical

Buildings Senior

Leased Skilled

Facilities Hospitals Nine Months

September 30, 2021

Campuses SHOP MOBs Senior

Leased SNFs Hospitals Three Months

March 31, 2022

Revenues and grant income:

10 unchanged sentences

Segment net operating income $ 32,958,000 $ 4,070,000 $ 23,524,000 $ 5,119,000 $ 5,707,000 $ 2,306,000 $ 73,684,000

$ 63,666,000 $ 10,469,000 $ 37,581,000 $ 10,682,000 $ 9,885,000 $ 7,823,000 $ 140,106,000

General and administrative

5 unchanged sentences

Gain in fair value of derivative financial instruments 500,000

Loss on dispositions of real estate investments ( 101,000 )

Impairment of real estate investments ( 3,335,000 )

Loss from unconsolidated entities

( 2,288,000 )

Gain on dispositions of real estate investments 756,000

Income from unconsolidated entities 1,386,000

Foreign currency loss ( 1,387,000 )

4 unchanged sentences

Net loss $ ( 897,000 )

Total assets by reportable segment as of September 30, 2022 and December 31, 2021 were as follows:

September 30,

Total assets by reportable segment as of March 31, 2023 and December 31, 2022 were as follows:

Integrated senior health campuses $ 2,159,537,000 $ 2,157,748,000

Medical office buildings 1,392,302,000 1,412,247,000

MOBs 1,360,364,000 1,379,502,000

SHOP 640,159,000 635,190,000

Skilled nursing facilities 248,141,000 252,869,000

Senior housing — leased 250,468,000 249,576,000

SNFs 219,382,000 245,717,000

Hospitals 106,345,000 106,067,000

3 unchanged sentences

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

In connection with the AHI Acquisition, we recorded goodwill of $ 134,589,000 , which was allocated across our reporting segments.

As discussed in Note 4, Business Combinations, in connection with the acquisitions we completed during the nine months ended September 30, 2022 that were accounted for as business combinations, we recorded an aggregate goodwill of $ 44,990,000 , which was allocated to our integrated senior health campuses segment.

As of September 30, 2022, goodwill of $ 164,846,000 , $ 47,812,000 , $ 23,277,000 , $ 8,640,000 , $ 5,924,000 and $ 4,389,000 was allocated to our integrated senior health campuses, medical office buildings, SHOP, skilled nursing facilities, senior housing — leased and hospitals segments, respectively.

As of December 31, 2021, goodwill of $ 119,856,000 , $ 47,812,000 , $ 23,277,000 , $ 8,640,000 , $ 5,924,000 and $ 4,389,000 was allocated to our integrated senior health campuses, medical office buildings, SHOP, skilled nursing facilities, senior housing — leased and hospitals segments, respectively.

As of and for the three months ended March 31, 2023 and 2022, goodwill by reportable segment was as follows:

Senior Health

Campuses SHOP MOBs Senior

Leased SNFs Hospitals Total

Balance — December 31, 2022

$ 164,846,000 $ — $ 47,812,000 $ 5,924,000 $ 8,640,000 $ 4,389,000 $ 231,611,000

Goodwill acquired 3,331,000 — — — — — 3,331,000

Balance — March 31, 2023

$ 168,177,000 $ — $ 47,812,000 $ 5,924,000 $ 8,640,000 $ 4,389,000 $ 234,942,000

Senior Health

Campuses SHOP MOBs Senior

Leased SNFs Hospitals Total

Balance — December 31, 2021 $ 119,856,000 $ 23,277,000 $ 47,812,000 $ 5,924,000 $ 8,640,000 $ 4,389,000 $ 209,898,000

Goodwill acquired 1,827,000 — — — — — 1,827,000

Balance — March 31, 2022

$ 121,683,000 $ 23,277,000 $ 47,812,000 $ 5,924,000 $ 8,640,000 $ 4,389,000 $ 211,725,000

See Note 3, Real Estate Investments, Net and Business Combinations, for a further discussion of goodwill recognized in connection with our business combinations.

Our portfolio of properties and other investments are located in the United States, the UK and Isle of Man.

1 unchanged sentence

The following is a summary of geographic information for our operations for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Revenues and grant income:

2 unchanged sentences

$ 452,226,000 $ 376,131,000

The following is a summary of real estate investments, net by geographic regions as of September 30, 2022 and December 31, 2021:

September 30,

The following is a summary of real estate investments, net by geographic regions as of March 31, 2023 and December 31, 2022:

Real estate investments, net:

7 unchanged sentences

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

As of September 30, 2022 and December 31, 2021, we had cash and cash equivalents in excess of FDIC insured limits.

As of March 31, 2023 and December 31, 2022, 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.

Concentration of credit risk with respect to accounts receivable from tenants and residents 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 September 30, 2022, 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, 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 as of September 30, 2022.

Properties located in Indiana accounted for 42.3 % 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 September 30, 2022, our six reportable business segments, integrated senior health campuses, medical office buildings, skilled nursing facilities, senior housing — leased, hospitals and SHOP accounted for 45.3 %, 37.9 %, 7.8 %, 3.8 %, 3.0 % and 2.2 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

As of September 30, 2022, 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.

Based on leases as of March 31, 2023, 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, 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 as of March 31, 2023.

AMERICAN HEALTHCARE REIT, INC.

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

Properties located in Indiana accounted for 32.4 % 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 March 31, 2023, our six reportable business segments, integrated senior health campuses, MOBs, SHOP, SNFs, senior housing — leased and hospitals accounted for 42.6 %, 33.7 %, 10.3 %, 6.8 %, 3.8 % and 2.8 %, respectively, of our total property portfolio’s annualized base rent or annualized NOI.

As of March 31, 2023, 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.

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 $ 1,497,000 and $ 1,000 , respectively, for the three months ended September 30, 2022 and 2021, and $ 4,485,000 and $ 2,000 , respectively, for the nine months ended September 30, 2022 and 2021.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $ 926,000 and $ 1,490,000 for the three months ended March 31, 2023 and 2022, respectively.

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.

Time-based restricted stock units, 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 September 30, 2022 and 2021, there were 892,258 and 16,679 nonvested shares, respectively, of our restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings (loss) per share because such shares were anti-dilutive during these periods.

As of September 30, 2022 and 2021, there were 14,007,903 and 206 limited partnership units, respectively, of our operating partnership outstanding, but such units were also excluded from the computation of diluted earnings (loss) per share because such units were anti-dilutive during these periods.

As of September 30, 2022, there were 76,800 nonvested time-based restricted stock units outstanding, which were granted on April 1, 2022, but such units were excluded from the computation of diluted earnings (loss) per share because such restricted stock units were anti-dilutive during the period.

As of September 30, 2022, there were 117,410 nonvested performance-based restricted stock units outstanding, of which 113,205 were awarded in October 2021 and 4,205 were awarded in August 2022, with a grant date in April 2022 and August 2022, respectively, which were treated as contingently issuable shares pursuant to ASC Topic 718, Compensation — Stock Compensation .

TBUs, nonvested shares of our RSAs and limited partnership units of our operating partnership are participating securities and give rise to potentially dilutive shares of our common stock.

As of March 31, 2023 and 2022, there were 184,145 and 222,886 nonvested shares, respectively, of our RSAs outstanding, but such shares were excluded from the computation of diluted earnings (loss) per share because such shares were anti-dilutive during these periods.

As of both March 31, 2023 and 2022, there were 3,501,976 limited partnership units of our operating partnership outstanding, but such units were also excluded from the computation of diluted earnings (loss) per share because such units were anti-dilutive during these periods.

As of March 31, 2023, there were 19,200 nonvested time-based restricted stock units outstanding, which were granted on April 1, 2022, but such units were excluded from the computation of diluted earnings (loss) per share because such restricted stock units were anti-dilutive during the period.

As of March 31, 2023, there were 29,352 nonvested performance-based restricted stock units outstanding, which were treated as contingently issuable shares pursuant to ASC Topic 718, Compensation — Stock Compensation .

Such contingently issuable shares were excluded from the computation of diluted earnings (loss) per share because they were anti-dilutive during the period.

Subsequent Events

In connection with the filing of the Registration Statement on Form S-11 for a proposed public offering of our shares of common stock in conjunction with a contemplated listing of our common stock on the New York Stock Exchange, as discussed in Note 1, Organization and Description of Business — Public Offerings, our board approved the following:

Reverse Stock Split

On November 10, 2022, our board approved the following charter amendments to effect on November 15, 2022:

(i) a one-for-four reverse stock split of each issued and outstanding share of Class T common stock, par value $ 0.01 per share, and Class I common stock, par value $ 0.01 per share, which resulted in a par value of $ 0.04 per share for each class of shares of our common stock;

and (ii) a decrease to the par value per share of each share of our common stock outstanding as a result of the reverse stock split from $ 0.04 to $ 0.01 .

Suspension of DRIP

On November 14, 2022, our board approved the suspension of the AHR DRIP Offering beginning with the distributions declared, if any, for the quarter ending December 31, 2022.

As a result of the suspension of the AHR DRIP, there will be no further issuances of shares of our Class T or Class I common stock pursuant to the AHR DRIP unless and until our board reinstates the AHR DRIP Offering, and stockholders who are current participants in the AHR DRIP will receive cash distributions instead.

Suspension of Share Repurchase Plan

On November 14, 2022, our board approved the suspension of our share repurchase plan beginning with share repurchase requests for the quarter ending December 31, 2022.

All share repurchase requests outstanding as of the quarter ending December 31, 2022, including requests resulting from the death or qualifying disability of stockholders, shall not be processed, shall be considered canceled in full and shall not be considered outstanding repurchase requests.

Subsequent Event

Issuance of Restricted Stock Units

On April 3, 2023, pursuant to the AHR Incentive Plan, we granted our executive officers and certain employees 148,311 TBUs, which vest in three equal annual installments on April 3, 2024, April 3, 2025 and April 3, 2026 (subject to continuous employment through each vesting date) and represent the right to receive shares of our Class T common stock upon vesting.

In addition, our executive officers and certain employees received 41,399 PBUs representing the right to receive shares of our Class T common stock upon vesting.

The PBUs will cliff vest in the first quarter of 2026 (subject to continuous employment through that vesting date) with the amount vesting depending on meeting certain key performance criteria as further described in the AHR Incentive Plan.

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

What changed 10-Q

Item 1. Financial Statements