What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-13 compared with 2023-08-14 · 390 added, 291 removed, 923 unchanged (42% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2023 and December 31, 2022

As of September 30, 2023 and December 31, 2022

(In thousands, except share and per share amounts) (Unaudited)

September 30,

2023 December 31,

26 unchanged sentences

200,000,000 shares authorized;

19,562,539 and 19,535,095 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

19,562,539 and 19,535,095 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

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

800,000,000 shares authorized;

46,673,320 and 46,675,367 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

46,673,320 and 46,675,367 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 2,548,390 2,540,424

7 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)

As of June 30, 2023 and December 31, 2022

As of September 30, 2023 and December 31, 2022

(In thousands) (Unaudited)

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

represented liabilities of American Healthcare REIT Holdings, LP or its consolidated subsidiaries as of June 30, 2023 and December 31, 2022.

represented liabilities of American Healthcare REIT Holdings, LP or its consolidated subsidiaries as of September 30, 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 8, held by American Healthcare REIT Holdings, LP in the amount of $ 926,400 and $ 965,900 as of June 30, 2023 and December 31, 2022, respectively, which was 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 $ 910,900 and $ 965,900 as of September 30, 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 Six Months Ended June 30, 2023 and 2022

For the Three and Nine Months Ended September 30, 2023 and 2022

(In thousands, except share and per share amounts) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2023 2022 2023 2022

12 unchanged sentences

Interest expense:

Interest expense (including amortization of deferred financing costs, debt discount/premium and gain/loss on debt extinguishments) ( 40,990 ) ( 20,345 ) ( 80,001 ) ( 43,670 )

Interest expense (including amortization of deferred financing costs, debt discount/premium and loss on debt extinguishments) ( 42,005 ) ( 27,524 ) ( 122,006 ) ( 71,194 )

Gain in fair value of derivative financial instruments 3,402 — 8,200 500

(Loss) gain on dispositions of real estate investments ( 2,072 ) ( 73 ) ( 2,204 ) 683

Gain on dispositions of real estate investments, net 31,981 2,113 29,777 2,796

Impairment of real estate investments ( 12,510 ) ( 21,851 ) ( 12,510 ) ( 39,191 )

(Loss) income from unconsolidated entities ( 505 ) ( 344 ) ( 924 ) 1,680

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

Foreign currency gain (loss) 1,068 ( 3,607 ) 2,076 ( 4,994 )

Gain on re-measurement of previously held equity interests — 19,567 726 19,567

Foreign currency (loss) gain ( 1,704 ) ( 3,695 ) 372 ( 8,689 )

Other income 1,755 670 5,952 2,399

3 unchanged sentences

( 6,446 ) ( 7,644 ) ( 45,928 ) ( 24,083 )

Net (income) loss attributable to noncontrolling interests ( 316 ) ( 1,768 ) 1,427 ( 3,827 )

Net loss (income) attributable to noncontrolling interests 457 ( 5,861 ) 1,884 ( 9,688 )

Net loss attributable to controlling interest $ ( 5,989 ) $ ( 13,505 ) $ ( 44,044 ) $ ( 33,771 )

2 unchanged sentences

$ ( 6,446 ) $ ( 7,644 ) $ ( 45,928 ) $ ( 24,083 )

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments ( 180 ) ( 477 ) 66 ( 1,164 )

Total other comprehensive income (loss) 124 ( 493 ) 246 ( 687 )

Total other comprehensive (loss) income ( 180 ) ( 477 ) 66 ( 1,164 )

Comprehensive loss ( 6,626 ) ( 8,121 ) ( 45,862 ) ( 25,247 )

Comprehensive (income) loss attributable to noncontrolling interests ( 316 ) ( 1,768 ) 1,427 ( 3,827 )

Comprehensive loss (income) attributable to noncontrolling interests

457 ( 5,861 ) 1,884 ( 9,688 )

Comprehensive loss attributable to controlling interest $ ( 6,169 ) $ ( 13,982 ) $ ( 43,978 ) $ ( 34,935 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three and Six Months Ended June 30, 2023 and 2022

For the Three and Nine Months Ended September 30, 2023 and 2022

(In thousands, except share and per share amounts) (Unaudited)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Stockholders’ Equity

7 unchanged sentences

Interests Total Equity

BALANCE — March 31, 2023

BALANCE — June 30, 2023

66,235,859 $ 661 $ 2,547,135 $ ( 1,209,578 ) $ ( 2,444 ) $ 1,335,774 $ 160,628 $ 1,496,402

Issuance of nonvested restricted common stock 24,200 — — — — — — —

Vested restricted stock units(1) 4,120 — ( 72 ) — — ( 72 ) — ( 72 )

Amortization of nonvested restricted common stock and stock units — — 1,558 — — 1,558 — 1,558

Stock based compensation — — — — — — 21 21

Repurchase of common stock ( 2,769 ) — ( 87 ) — — ( 87 ) — ( 87 )

Distributions to noncontrolling interests — — — — — — ( 764 ) ( 764 )

3 unchanged sentences

— — — ( 16,616 ) — ( 16,616 ) — ( 16,616 )

Net (loss) income — — — ( 12,183 ) — ( 12,183 ) 434 ( 11,749 ) (2)

Other comprehensive income — — — — 124 124 — 124

BALANCE — June 30, 2023

Net loss — — — ( 5,989 ) — ( 5,989 ) ( 379 ) ( 6,368 ) (1)

Other comprehensive loss — — — — ( 180 ) ( 180 ) — ( 180 )

BALANCE — September 30, 2023

66,235,859 $ 661 $ 2,548,390 $ ( 1,232,183 ) $ ( 2,624 ) $ 1,314,244 $ 159,464 $ 1,473,708

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2023 and 2022

(In thousands, except share and per share amounts) (Unaudited)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Stockholders’ Equity

7 unchanged sentences

Interests Total Equity

BALANCE — March 31, 2022 65,952,428 $ 660 $ 2,538,780 $ ( 980,613 ) $ ( 2,160 ) $ 1,556,667 $ 174,154 $ 1,730,821

Offering costs — common stock — — 1 — — 1 — 1

BALANCE — June 30, 2022 66,091,145 $ 661 $ 2,543,478 $ ( 1,024,328 ) $ ( 2,653 ) $ 1,517,158 $ 172,602 $ 1,689,760

Issuance of common stock under the DRIP 98,794 1 3,670 — — 3,671 — 3,671

10 unchanged sentences

Other comprehensive loss — — — — ( 477 ) ( 477 ) — ( 477 )

BALANCE — June 30, 2022 66,091,145 $ 661 $ 2,543,478 $ ( 1,024,328 ) $ ( 2,653 ) $ 1,517,158 $ 172,602 $ 1,689,760

BALANCE — September 30, 2022 66,042,869 $ 660 $ 2,534,020 $ ( 1,064,270 ) $ ( 3,130 ) $ 1,467,280 $ 172,226 $ 1,639,506

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2023 and 2022

For the Three and Nine Months Ended September 30, 2023 and 2022

(In thousands, except share and per share amounts) (Unaudited)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Stockholders’ Equity

21 unchanged sentences

Other comprehensive income — — — — 66 66 — 66

BALANCE — June 30, 2023

BALANCE — September 30, 2023

66,235,859 $ 661 $ 2,548,390 $ ( 1,232,183 ) $ ( 2,624 ) $ 1,314,244 $ 159,464 $ 1,473,708

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY — (Continued)

For the Three and Six Months Ended June 30, 2023 and 2022

For the Three and Nine Months Ended September 30, 2023 and 2022

(In thousands, except share and per share amounts) (Unaudited)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Stockholders’ Equity

26 unchanged sentences

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

BALANCE — June 30, 2022

BALANCE — September 30, 2022

66,042,869 $ 660 $ 2,534,020 $ ( 1,064,270 ) $ ( 3,130 ) $ 1,467,280 $ 172,226 $ 1,639,506

(1) For the three months ended September 30, 2023 and 2022, amounts exclude $( 78 ) and $ 354 , respectively, of net (loss) income attributable to redeemable noncontrolling interests.

For the nine months ended September 30, 2023 and 2022, amounts exclude $( 564 ) and $ 323 , respectively, of net (loss) income attributable to redeemable noncontrolling interests.

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

(2) The amounts are shown net of common stock withheld from issuance to satisfy employee minimum tax withholding requirements in connection with the vesting of restricted stock units.

See Note 12, Equity — AHR 2015 Incentive Plan, for further discussion.

(2) For the three months ended June 30, 2023 and 2022, amounts exclude $( 118 ) and $( 218 ), respectively, of net loss attributable to redeemable noncontrolling interests.

For the six months ended June 30, 2023 and 2022, amounts exclude $( 486 ) and $( 31 ), respectively, of net loss attributable to redeemable noncontrolling interests.

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

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

(In thousands) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

5 unchanged sentences

Stock based compensation 4,235 2,658

Gain on dispositions of real estate investments, net ( 29,777 ) ( 2,796 )

Impairment of real estate investments 12,510 39,191

Loss (gain) on dispositions of real estate investments 2,204 ( 683 )

Loss (income) from unconsolidated entities 924 ( 1,680 )

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

Gain on re-measurement of previously held equity interests ( 726 ) ( 19,567 )

Foreign currency (gain) loss ( 351 ) 8,427

13 unchanged sentences

Acquisitions of real estate investments ( 45,382 ) ( 75,125 )

Acquisition of previously held equity interest ( 335 ) —

Acquisitions of previously held equity interests ( 335 ) ( 13,713 )

Investments in unconsolidated entities ( 12,000 ) ( 4,437 )

Issuance of notes receivable ( 13,778 ) ( 3,000 )

Real estate and other deposits ( 1,279 ) ( 528 )

5 unchanged sentences

Payments on the lines of credit and term loan ( 306,484 ) ( 1,002,100 )

Borrowings under financing obligation 16,283 —

Payments on financing and other obligations ( 34,292 ) ( 12,892 )

Deferred financing costs ( 3,418 ) ( 5,829 )

Debt extinguishment costs ( 269 ) ( 3,222 )

Payments on financing and other obligations ( 7,779 ) ( 12,141 )

Distributions paid to common stockholders ( 59,685 ) ( 35,391 )

Repurchase of common stock ( 165 ) ( 16,233 )

Payments to taxing authorities in connection with common stock directly withheld from employees ( 72 ) —

Distributions to noncontrolling interests in total equity ( 6,612 ) ( 7,052 )

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

(In thousands) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Payments to taxing authorities in connection with common stock directly withheld from employees $ ( 72 ) $ —

Distributions to noncontrolling interests in total equity ( 7,371 ) ( 9,821 )

Contribution from redeemable noncontrolling interest — 273

23 unchanged sentences

Accrued developments and capital expenditures $ 19,329 $ 25,096

Capital expenditures from financing obligations $ 1,301 $ —

Tenant improvement overage $ 2,359 $ 605

4 unchanged sentences

Accrued offering costs $ 1,685 $ 1,796

AMERICAN HEALTHCARE REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Nine Months Ended September 30, 2023 and 2022

(In thousands) (Unaudited)

Nine Months Ended September 30,

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

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three and Six Months Ended June 30, 2023 and 2022

For the Three and Nine Months Ended September 30, 2023 and 2022

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

18 unchanged sentences

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 June 30, 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.

As of both September 30, 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.

5 unchanged sentences

Public Offerings

As of June 30, 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).

As of September 30, 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), and on July 14, 2023, we filed with the SEC Amendment No.

333-267464), which was last amended on November 7, 2023 upon filing with the SEC Amendment No.

2 to Registration Statement on Form S-11, 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.

5 unchanged sentences

We currently operate through six reportable business segments:

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

As of June 30, 2023, we owned and/or operated 300 buildings and integrated senior health campuses, including completed development and expansion projects, representing approximately 19,142,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,517,298,000 .

In addition, as of June 30, 2023, 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 September 30, 2023, we owned and/or operated 298 buildings and integrated senior health campuses, including completed development and expansion projects, representing approximately 18,875,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $ 4,485,940,000 .

In addition, as of September 30, 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 have been adversely affected by the impact of the COVID-19 pandemic and the economic impact of the pandemic.

economy have been adversely affected by the impacts of the COVID-19 pandemic, including its economic impact.

While the immediate effects of the COVID-19 pandemic have subsided, the timing and extent of the economic recovery towards pre-pandemic norms is dependent upon many factors, including the emergence and severity of future COVID-19 variants, the effectiveness and frequency of booster vaccinations, the duration and implications of ongoing or future restrictions and safety measures, the availability of ongoing government financial support to our tenants, operating partners and managers and the overall pace of economic recovery, among others.

As an owner and operator of healthcare facilities, we expect to continue to be adversely affected by the long-term effects of the COVID-19 pandemic for some period of time;

however, it is not possible to predict the full extent of its future impact on us, the operations of our properties or the markets in which they are located, or the overall healthcare industry.

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 June 30, 2023.

however, it is not possible to predict the full extent of its future impact on us, including our residents, tenants, operating partners and managers, the operations of our properties or the markets in which they are located, or the overall healthcare industry.

We have evaluated such economic impacts of the COVID-19 pandemic on our business thus far and have incorporated information concerning such impacts into our assessments of liquidity, impairment and collectability from tenants and residents as of September 30, 2023.

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

7 unchanged sentences

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.

Our condensed consolidated financial statements have been and are prepared on the going concern basis of accounting, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

As of September 30, 2023, the 2019 Trilogy Credit Facility, as defined in Note 8, Lines of Credit and Term Loan, for our consolidated subsidiary of which we indirectly own approximately 74.0 %, has an outstanding balance of approximately $ 367,000,000 and matures in less than 12 months on September 5, 2024.

The 2019 Trilogy Credit Facility is secured by 28 of our integrated senior health campuses and is non-recourse to us.

We also do not guarantee the 2019 Trilogy Credit Facility for any nonperformance of the principal or interest payments.

Management plans to refinance the outstanding balance prior to its maturity.

Management also believes that given the current value of these campuses relative to the current outstanding balance of the 2019 Trilogy Credit Facility, it is probable such loan could be refinanced under current lending conditions to extend the maturity date beyond 12 months from the filing date of our accompanying condensed consolidated financial statements.

AMERICAN HEALTHCARE REIT, INC.

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

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.

1 unchanged sentence

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 June 30, 2023 and December 31, 2022, we owned a 95.0 % general partnership interest therein, and the remaining 5.0 % limited partnership interest 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 both September 30, 2023 and December 31, 2022, we owned a 95.0 % general partnership interest therein, and the remaining 5.0 % limited partnership interest was owned by the NewCo Sellers.

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).

19 unchanged sentences

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 (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Senior Health

5 unchanged sentences

Total resident fees and services $ 372,291 $ 43,915 $ 416,206 $ 328,751 $ 39,555 $ 368,306

$ 362,856 $ 47,766 $ 410,622 $ 287,582 $ 38,643 $ 326,225

Six Months Ended June 30,

Nine Months Ended September 30,

Senior Health

7 unchanged sentences

The following tables disaggregate our resident fees and services revenue by payor class (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Senior Health

8 unchanged sentences

$ 372,291 $ 43,915 $ 416,206 $ 328,751 $ 39,555 $ 368,306

Six Months Ended June 30,

Nine Months Ended September 30,

Senior Health

19 unchanged sentences

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

Ending balance — June 30, 2023

Ending balance — September 30, 2023

58,195 46,385 29,975 134,555

Increase (decrease) $ 2,715 $ ( 192 ) $ ( 2,124 ) $ 399

Increase $ 2,711 $ 716 $ 9,143 $ 12,570

Deferred Revenue — Resident Fees and Services Revenue

2 unchanged sentences

Beginning balance — January 1, 2023

Ending balance — June 30, 2023

Ending balance — September 30, 2023

Increase $ 2,992

5 unchanged sentences

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 June 30, 2023 and December 31, 2022, we had $ 15,046,000 and $ 14,071,000 , respectively, in allowances, which were determined necessary to reduce receivables by our expected future credit losses.

For the six months ended June 30, 2023 and 2022, we increased allowances by $ 9,090,000 and $ 9,581,000 , respectively, and reduced allowances for collections or adjustments by $ 3,596,000 and $ 3,643,000 , respectively.

For the six months ended June 30, 2023 and 2022, $ 4,519,000 and $ 3,518,000 , respectively, of our receivables were written off against the related allowances.

Accounts Payable and Accrued Liabilities

As of June 30, 2023 and December 31, 2022, accounts payable and accrued liabilities primarily include insurance reserves of $ 42,307,000 and $ 39,893,000 , respectively, reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 39,408,000 and $ 38,624,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 25,664,000 and $ 30,211,000 , respectively, accrued property taxes of $ 25,415,000 and $ 24,926,000 , respectively, and accrued distributions to common stockholders of $ 16,559,000 and $ 26,484,000 , respectively.

The following is a summary of our adjustments to allowances for the nine months ended September 30, 2023 and 2022 (in thousands):

Nine Months Ended September 30,

Beginning balance

$ 14,071 $ 12,378

Additional allowances 14,035 16,476

Write-offs ( 7,011 ) ( 9,120 )

Recoveries collected or adjustments ( 6,446 ) ( 5,451 )

Ending balance

$ 14,649 $ 14,283

AMERICAN HEALTHCARE REIT, INC.

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

Recently Issued Accounting Pronouncement

In July 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU , 2023-03 , Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718):

Accounts Payable and Accrued Liabilities

As of September 30, 2023 and December 31, 2022, accounts payable and accrued liabilities primarily include insurance reserves of $ 43,050,000 and $ 39,893,000 , respectively, reimbursement of payroll-related costs to the managers of our SHOP and integrated senior health campuses of $ 40,650,000 and $ 38,624,000 , respectively, accrued property taxes of $ 28,619,000 and $ 24,926,000 , respectively, accrued developments and capital expenditures to unaffiliated third parties of $ 19,329,000 and $ 30,211,000 , respectively, and accrued distributions to common stockholders of $ 16,559,000 and $ 26,484,000 , respectively.

Recently Issued Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2020-04, Facilitation of the Effects of Reference Rate Reform of Financial Reporting , or ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria.

ASU 2020-04 applies to the aforementioned transactions that reference the London Inter-bank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of the reference rate reform.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) , or ASU 2021-01, which clarifies that certain optional expedients and exceptions for contract modification and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting or contract price alignment that is modified as a result of the discontinuation of the use of LIBOR as a benchmark interest rate due to reference rate reform.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , or ASU 2022-06, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024.

ASU 2020-04, ASU 2021-01 and ASU 2022-06 are effective for fiscal years and interim periods beginning after March 12, 2020 and through the effective date December 31, 2024, as extended by ASU 2022-06.

We adopted such accounting pronouncements on January 1, 2023, which has not had a material impact on our consolidated financial statements and disclosures as of September 30, 2023.

In July 2023, the FASB issued ASU 2023-03 , Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

6 unchanged sentences

These updates were immediately effective and did not have a material impact on our consolidated financial statements and disclosures.

In August 2023, the FASB issued ASU 2023-05, Business Combinations — Joint Venture Formations (Subtopic 805- 60):

Recognition and Initial Measurement, or ASU 2023-05.

ASU 2023-05 applies to the initial formation of a “joint venture” or a “corporate joint venture” as defined in the accounting literature and requires a joint venture to apply a new basis of accounting by initially measuring and recognizing all contributions received upon its formation at fair value.

In particular, a joint venture will measure its total assets and liabilities upon formation as the fair value of the joint venture as a whole, which would equal the fair value of all of the joint venture’s outstanding equity interests.

The new guidance does not change the definition of a joint venture, the accounting by the investors for their investments in a joint venture (e.g., equity method accounting) or the accounting by a joint venture for contributions received after its formation.

ASU 2023-05 will be applied prospectively and is effective for all newly-formed joint venture entities with a formation date on or after January 1, 2025.

Early adoption is permitted.

We do not expect the adoption of ASU 2023-05 on January 1, 2025 to have a material impact to our consolidated financial statements and disclosures.

AMERICAN HEALTHCARE REIT, INC.

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

Real Estate Investments, Net and Business Combinations

Our real estate investments, net consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

Our real estate investments, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

September 30,

Building, improvements and construction in process $ 3,588,614 $ 3,670,361

4 unchanged sentences

$ 3,430,640 $ 3,581,609

Depreciation expense for the three months ended June 30, 2023 and 2022 was $ 37,139,000 and $ 34,328,000 , respectively, and for the six months ended June 30, 2023 and 2022 was $ 73,038,000 and $ 68,750,000 , respectively.

For the three months ended June 30, 2023, we incurred capital expenditures of $ 18,858,000 for our integrated senior health campuses, $ 7,268,000 for our MOBs, $ 2,179,000 for our SHOP and $ 245,000 for our senior housing — leased.

We did no t incur any capital expenditures for our properties within our hospitals and SNFs segments for the three months ended June 30, 2023.

For the six months ended June 30, 2023, we incurred capital expenditures of $ 29,059,000 for our integrated senior health campuses, $ 10,842,000 for our MOBs, $ 3,929,000 for our SHOP and $ 245,000 for our senior housing — leased.

We did not incur any capital expenditures for our properties within our hospitals and SNFs segments for the six months ended June 30, 2023.

For both the three and six months ended June 30, 2023, we did not recognize impairment charges on real estate investments.

During both the three and six months ended June 30, 2022, we determined that four of our SHOP were impaired and recognized an aggregate impairment charge of $ 17,340,000 , which reduced the total carrying value of such assets to $ 19,325,000 .

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

We disposed of three of such impaired facilities during the fourth quarter of 2022 and one of such impaired facilities during the first quarter of 2023.

See the “Dispositions of Real Estate Investments” section below.

Depreciation expense for the three months ended September 30, 2023 and 2022 was $ 36,929,000 and $ 35,327,000 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 109,967,000 and $ 104,077,000 , respectively.

The following is a summary of our capital expenditures for the three and nine months ended September 30, 2023 (in thousands):

September 30,

Integrated senior health campuses $ 8,806 $ 37,865

MOBs 5,235 16,077

SHOP 5,006 8,935

Senior housing — leased 172 417

Hospitals — —

Total $ 19,219 $ 63,294

Acquisitions of Real Estate Investments and Previously Leased Real Estate Investments

Acquisitions of Real Estate Investments

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 .

On June 30, 2023, we, through a majority-owned subsidiary of Trilogy, acquired a land parcel in Ohio for a contract purchase price of $ 660,000 , plus closing costs, for the future expansion of an existing integrated senior health campus.

For the nine months ended September 30, 2023, using cash on hand and debt financing, we, through a majority-owned subsidiary of Trilogy Investors, LLC, or Trilogy, completed the acquisition of one integrated senior health campus.

The following is a summary of our property acquisition for the nine months ended September 30, 2023 (dollars in thousands):

Location Date Acquired Contract

Purchase Price Mortgage

Louisville, KY 02/15/23 $ 11,000 $ 7,700

In addition, on June 30, 2023, we, through a majority-owned subsidiary of Trilogy, acquired a land parcel in Ohio for a contract purchase price of $ 660,000 , plus closing costs, for the future expansion of an existing integrated senior health campus.

AMERICAN HEALTHCARE REIT, INC.

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

We accounted for our acquisition of land and real estate investment completed during the six months ended June 30, 2023 as asset acquisitions.

The following table summarizes the purchase price of such acquisitions based on their relative fair values (in thousands):

Acquisitions of Previously Leased Real Estate Investments

For the nine months ended September 30, 2023, using cash and debt financing, we, through a majority-owned subsidiary of Trilogy, acquired three previously leased real estate investments located in Indiana and Ohio.

The following is a summary of such acquisitions, which are included in our integrated senior health campuses segment (dollars in thousands):

Location Date Acquired Contract

Purchase Price Mortgage

Loan Payable Financing

Washington, IN 07/13/23 $ 14,200 $ 12,212 $ —

Tell City, IN 07/13/23 2,400 1,988 —

New Albany, OH 07/13/23 16,283 — 16,283

Total $ 32,883 $ 14,200 $ 16,283

We accounted for our acquisitions of land and real estate investments completed during the nine months ended September 30, 2023 as asset acquisitions.

The following table summarizes the purchase price of such assets acquired at the time of acquisition based on their relative fair values and adjusted for $ 28,623,000 operating lease right-of-use assets and $ 30,498,000 operating lease liabilities (in thousands):

Building and improvements $ 38,517

2 unchanged sentences

Dispositions of Real Estate Investments

For the six months ended June 30, 2023, we disposed of five SHOP and 11 MOBs.

We recognized a total aggregate net loss on such dispositions of $ 1,975,000 .

For the nine months ended September 30, 2023, we disposed of six SHOP and 14 MOBs.

We recognized a total aggregate net gain on such dispositions of $ 30,022,000 .

The following is a summary of such dispositions (dollars in thousands):

16 unchanged sentences

Brooksville, FL(1) 1 SHOP 06/30/23 7,800

Spring Hill, FL(1) 1 SHOP 08/01/23 7,800

Morristown, NJ 1 MOB 08/09/23 62,210

Evendale, OH 1 MOB 08/29/23 11,900

Longview, TX 1 MOB 09/19/23 1,500

Total 20 $ 176,840

AMERICAN HEALTHCARE REIT, INC.

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

(1) As of September 30, 2023, we had disposed of all of the facilities that comprised the Central Florida Senior Housing Portfolio.

See Note 11, Redeemable Noncontrolling Interests, for information about the ownership of the Central Florida Senior Housing Portfolio.

Impairment of Real Estate Investments

As we continue to evaluate additional non-strategic properties for sale, we determined that two of our SHOP were impaired and recognized an aggregate impairment charge of $ 12,510,000 for the three and nine months ended September 30, 2023, which reduced the total aggregate carrying value of such assets to $ 15,977,000 .

The remaining $ 3,477,000 carrying value of one such SHOP was then reclassified to properties held for sale, which is included in other assets, net in our accompanying condensed consolidated balance sheet.

The fair value of one SHOP was based on its projected sales price from independent third-party letters of intent, which were considered Level 2 measurements within the fair value hierarchy.

The fair value of the other SHOP was determined by a third-party appraiser based on the sales comparison approach with the most significant inputs based on a price per unit and price per square foot analysis within the area for similar types of assets.

The ranges of these inputs were $ 190,000 to $ 200,000 per unit and $ 250 to $ 260 per square foot, which were considered Level 3 measurements within the fair value hierarchy.

In 2022, we commenced an initiative to evaluate non-strategic assets for sale.

In doing so, 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 , for the three and nine months ended September 30, 2022, respectively, which reduced the total carrying value of such eight SHOP to $ 63,154,000 .

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

We disposed of three such impaired facilities during the fourth quarter of 2022, and we disposed of the remaining five such impaired facilities during the nine months ended September 30, 2023.

See the “Dispositions of Real Estate Investments” section above.

Business Combinations

7 unchanged sentences

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.

Further, 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

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 owned the other 50.0 % interest in such business, which was accounted for as an equity method investment.

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.

AMERICAN HEALTHCARE REIT, INC.

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

transaction costs of $ 938,000 .

Prior to such pharmaceutical business acquisition, we owned the other 50.0 % interest in such business, which was accounted for as an equity method investment.

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

On August 1, 2022, we, through a majority-owned subsidiary of Trilogy, acquired a 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 a 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 the remaining interest in RHS, we now own a 100 % controlling interest in RHS.

As a result, 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.

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.

The fair values of the assets acquired and liabilities assumed were preliminary estimates at acquisition.

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

The table below summarizes the acquisition date fair values of the assets acquired and liabilities assumed of our business combinations during the six months ended June 30, 2023 and 2022 (in thousands):

The table below summarizes the acquisition date fair values of the assets acquired and liabilities assumed of our business combinations during the nine months ended September 30, 2023 and 2022 (in thousands):

Acquisition 2022

10 unchanged sentences

Security deposits and other liabilities ( 812 ) ( 15,994 )

Mortgage loans payable — ( 45,300 )

Accounts payable and accrued liabilities ( 1,676 ) ( 15,060 )

8 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, the carrying amount of the debt security investment was $ 84,933,000 and $ 83,000,000 , respectively, net of unamortized closing costs of $ 633,000 and $ 767,000 , respectively.

Accretion on the debt security for the three months ended June 30, 2023 and 2022 was $ 1,046,000 and $ 986,000 , respectively, and for the six months ended June 30, 2023 and 2022 was $ 2,066,000 and $ 1,966,000 , 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 June 30, 2023 and 2022 was $ 68,000 and $ 58,000 , respectively, and for the six months ended June 30, 2023 and 2022 was $ 133,000 and $ 114,000 , 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 and six months ended June 30, 2023 and 2022.

AMERICAN HEALTHCARE REIT, INC.

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

Identified intangible assets, net and identified intangible liabilities, net consisted of the following as of June 30, 2023 and December 31, 2022 (dollars in thousands):

As of September 30, 2023 and December 31, 2022, the carrying amount of the debt security investment was $ 85,922,000 and $ 83,000,000 , respectively, net of unamortized closing costs of $ 563,000 and $ 767,000 , respectively.

Accretion on the debt security for the three months ended September 30, 2023 and 2022 was $ 1,060,000 and $ 960,000 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 3,126,000 and $ 2,926,000 , 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, 2023 and 2022 was $ 71,000 and $ 60,000 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 204,000 and $ 174,000 , 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 and nine months ended September 30, 2023 and 2022.

Identified intangible assets, net and identified intangible liabilities, net consisted of the following as of September 30, 2023 and December 31, 2022 (dollars in thousands):

September 30,

Amortized intangible assets:

In-place leases, net of accumulated amortization of $ 46,451 and $ 38,930 as of June 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.4 years and 7.0 years as of June 30, 2023 and December 31, 2022, respectively)

In-place leases, net of accumulated amortization of $ 45,275 and $ 38,930 as of September 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.5 years and 7.0 years as of September 30, 2023 and December 31, 2022, respectively)

$ 47,766 $ 75,580

Above-market leases, net of accumulated amortization of $ 6,503 and $ 6,360 as of June 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 8.2 years and 9.0 years as of June 30, 2023 and December 31, 2022, respectively)

Above-market leases, net of accumulated amortization of $ 6,676 and $ 6,360 as of September 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.7 years and 9.0 years as of September 30, 2023 and December 31, 2022, respectively)

16,667 30,194

Customer relationships, net of accumulated amortization of $ 859 and $ 785 as of June 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 13.2 years and 13.7 years as of June 30, 2023 and December 31, 2022, respectively)

Customer relationships, net of accumulated amortization of $ 897 and $ 785 as of September 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 12.9 years and 13.7 years as of September 30, 2023 and December 31, 2022, respectively)

Unamortized intangible assets:

3 unchanged sentences

Amortized intangible liabilities:

Below-market leases, net of accumulated amortization of $ 3,169 and $ 2,508 as of June 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 8.1 years and 8.4 years as of June 30, 2023 and December 31, 2022, respectively)

Below-market leases, net of accumulated amortization of $ 3,187 and $ 2,508 as of September 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.9 years and 8.4 years as of September 30, 2023 and December 31, 2022, respectively)

$ 9,346 $ 10,837

Total identified intangible liabilities, net $ 9,346 $ 10,837

Amortization expense on identified intangible assets for the three months ended June 30, 2023 and 2022 was $ 7,711,000 and $ 6,121,000 , respectively, which included $ 859,000 and $ 1,113,000 , 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 six months ended June 30, 2023 and 2022 was $ 24,782,000 and $ 14,360,000 , respectively, which included $ 9,942,000 and $ 2,227,000 , 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 three months ended September 30, 2023 and 2022 was $ 15,351,000 and $ 5,534,000 , respectively, which included $ 3,573,000 and $ 1,113,000 , 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, 2023 and 2022 was $ 40,133,000 and $ 19,894,000 , respectively, which included $ 13,515,000 and $ 3,340,000 , 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.

Amortization expense on below-market leases for the three months ended June 30, 2023 and 2022 was $ 404,000 and $ 414,000 , respectively, and for the six months ended June 30, 2023 and 2022 was $ 812,000 and $ 1,023,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

In addition, we fully amortized $ 2,756,000 of above-market leases and $ 5,750,000 of in-place leases during the three months ended September 30, 2023 in connection with the transition of our senior housing — leased facilities within Michigan ALF Portfolio to a RIDEA structure.

AMERICAN HEALTHCARE REIT, INC.

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

The aggregate weighted average remaining life of the identified intangible assets was 7.8 years and 7.7 years as of June 30, 2023 and December 31, 2022, respectively.

The aggregate weighted average remaining life of the identified intangible liabilities was 8.1 years and 8.4 years as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, estimated amortization expense on the identified intangible assets and liabilities for the six months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter was as follows (in thousands):

Amortization expense on below-market leases for the three months ended September 30, 2023 and 2022 was $ 470,000 and $ 413,000 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 1,282,000 and $ 1,436,000 , respectively, which is recorded as an increase to real estate revenue in our accompanying condensed consolidated statements of operations and comprehensive loss.

In connection with the transition of our senior housing — leased facilities within Michigan ALF Portfolio to a RIDEA structure, we fully amortized $ 112,000 of below-market leases during the three months ended September 30, 2023.

The aggregate weighted average remaining life of the identified intangible assets was 7.7 years as of both September 30, 2023 and December 31, 2022.

The aggregate weighted average remaining life of the identified intangible liabilities was 7.9 years and 8.4 years as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, estimated amortization expense on the identified intangible assets and liabilities for the three months ending December 31, 2023 and for each of the next four years ending December 31, and thereafter was as follows (in thousands):

Amortization Expense

9 unchanged sentences

Other Assets, Net

Other assets, net consisted of the following as of June 30, 2023 and December 31, 2022 (dollars in thousands):

Other assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (dollars in thousands):

September 30,

Deferred rent receivables $ 46,944 $ 46,867

Prepaid expenses, deposits, other assets and deferred tax assets, net 33,783 25,866

Investments in unconsolidated entities 21,306 9,580

Inventory — finished goods 21,998 19,775

Lease commissions, net of accumulated amortization of $ 6,646 and $ 6,260 as of June 30, 2023 and December 31, 2022, respectively

Investments in unconsolidated entities 20,807 9,580

Lease commissions, net of accumulated amortization of $ 6,794 and $ 6,260 as of September 30, 2023 and December 31, 2022, respectively

17,538 19,217

Derivative financial instrument 8,200 —

Deferred financing costs, net of accumulated amortization of $ 7,391 and $ 5,704 as of June 30, 2023 and December 31, 2022, respectively

Lease inducement, net of accumulated amortization of $ 2,368 and $ 2,193 as of June 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.4 years and 7.9 years as of June 30, 2023 and December 31, 2022, respectively)

Deferred financing costs, net of accumulated amortization of $ 8,013 and $ 5,704 as of September 30, 2023 and December 31, 2022, respectively

Lease inducement, net of accumulated amortization of $ 2,456 and $ 2,193 as of September 30, 2023 and December 31, 2022, respectively (with a weighted average remaining life of 7.2 years and 7.9 years as of September 30, 2023 and December 31, 2022, respectively)

Total $ 154,934 $ 128,446

1 unchanged sentence

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

Amortization expense on lease inducement for both the three and six months ended June 30, 2023 and 2022 was $ 88,000 and $ 176,000 , respectively, 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 June 30, 2023 and December 31, 2022, mortgage loans payable were $ 1,260,429,000 ($ 1,237,565,000 , 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 June 30, 2023, we had 71 fixed-rate mortgage loans payable and 12 variable-rate mortgage loans payable with effective interest rates ranging from 2.21 % to 8.01 % per annum based on interest rates in effect as of June 30, 2023 and a weighted average effective interest rate of 4.51 %.

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.

Amortization expense on lease inducement for both the three and nine months ended September 30, 2023 and 2022 was $ 87,000 and $ 263,000 , respectively, which is recorded as a decrease 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)

Mortgage loans payable, net consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

Total fixed-rate debt $ 929,442 $ 885,892

Total variable-rate debt 330,987 368,587

Mortgage Loans Payable, Net

Mortgage loans payable, net consisted of the following as of September 30, 2023 and December 31, 2022 (dollars in thousands):

September 30,

Total fixed-rate debt ( 71 loans and 68 loans as of September 30, 2023 and December 31, 2022, respectively)

$ 908,000 $ 885,892

Total variable-rate debt ( 13 loans and 11 loans as of September 30, 2023 and December 31, 2022, respectively)

335,358 368,587

Total fixed- and variable-rate debt 1,243,358 1,254,479

3 unchanged sentences

Mortgage loans payable, net $ 1,221,238 $ 1,229,847

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the six months ended June 30, 2023 and 2022 (in thousands):

Six Months Ended June 30,

Based on interest rates in effect as of September 30, 2023 and December 31, 2022, effective interest rates ranged from 2.21 % to 8.44 % per annum and 2.21 % to 7.26 % per annum, respectively, with a weighted average effective interest rate of 4.64 % and 4.29 %, respectively.

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.

The following table reflects the changes in the carrying amount of mortgage loans payable, net for the nine months ended September 30, 2023 and 2022 (in thousands):

Nine Months Ended September 30,

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

Borrowings under mortgage loans payable 85,477 156,120

Assumption of mortgage loans payable due to acquisition of real estate investments, net — 45,300

Amortization of deferred financing costs

3 unchanged sentences

Early payoff of mortgage loans payable ( 9,809 ) ( 78,437 )

Payoff of a mortgage loans payable due to disposition of real estate investment ( 26,856 ) ( 8,637 )

Deferred financing costs

Ending balance $ 1,237,565 $ 1,134,059

For the three and six months ended June 30, 2023, we did not incur any gain or loss on the early extinguishment of mortgage loans payable.

For the three and six months ended June 30, 2022, we incurred an aggregate gain (loss) on the early extinguishment of mortgage loans payable of $ 181,000 and $( 1,249,000 ), respectively, which is recorded as an decrease (increase) to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

Such aggregate net 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 June 30, 2023, the principal payments due on our mortgage loans payable for the six months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter were as follows (in thousands):

( 1,842 ) ( 1,044 )

Ending balance $ 1,221,238 $ 1,159,159

For the three and nine months ended September 30, 2023, we incurred a loss on the early extinguishment of mortgage loan payable of $ 345,000 , which is recorded as an increase to interest expense in our accompanying condensed consolidated statements of operations and comprehensive loss.

Such loss was related to the payoff of a mortgage loan payable due to the disposition of a real estate investment in August 2023.

For the three and nine months ended September 30, 2022, we incurred an aggregate loss on the early 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.

Such aggregate loss was primarily related to the payoff of a mortgage loan payable due to the disposition of a real estate investment in September 2022 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.

AMERICAN HEALTHCARE REIT, INC.

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

As of September 30, 2023, the principal payments due on our mortgage loans payable for the three months ending December 31, 2023 and for each of the next four years ending December 31, and thereafter were as follows (in thousands):

Thereafter 556,287

2 unchanged sentences

2022 Credit Facility

AMERICAN HEALTHCARE REIT, INC.

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

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.

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 .

15 unchanged sentences

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 June 30, 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 June 30, 2023 and December 31, 2022, borrowings outstanding under the 2022 Credit Facility totaled $ 926,400,000 ($ 925,549,000 , 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 6.82 % and 6.07 % per annum, respectively.

AMERICAN HEALTHCARE REIT, INC.

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

As of both September 30, 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 September 30, 2023 and December 31, 2022, borrowings outstanding under the 2022 Credit Facility totaled $ 910,900,000 ($ 910,076,000 , 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 7.07 % and 6.07 % per annum, respectively.

As of September 30, 2023, we have entered into interest rate swaps to mitigate the risk associated with the entire $ 550,000,000 outstanding borrowing amount of our term loan.

See Note 9, Derivative Financial Instruments, for a further discussion.

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.

12 unchanged sentences

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.

AMERICAN HEALTHCARE REIT, INC.

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

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.

In addition, all references to 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.

1 unchanged sentence

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.

We intend to satisfy the conditions pursuant to the 2019 Trilogy Credit Facility and pay the required extension fee in order to exercise our option to extend the maturity date for one 12 -month period.

The 2019 Trilogy Credit Facility was due to mature on September 5, 2023;

however, pursuant to the terms of the 2019 Trilogy Credit Agreement, at such time we extended the maturity date for one 12 -month period to mature on September 4, 2024, and paid an extension fee of $ 600,000 .

At our option, the 2019 Trilogy Credit Facility bears interest at per annum rates equal to (a) SOFR, plus 2.75 % for SOFR Rate Loans and (b) for Base Rate Loans, 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 and (iii) 1.00 % above one-month Adjusted Term SOFR.

As of both June 30, 2023 and December 31, 2022, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 400,000,000 .

As of June 30, 2023 and December 31, 2022, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 356,134,000 and $ 316,734,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 7.94 % 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.

As of both September 30, 2023 and December 31, 2022, our aggregate borrowing capacity under the 2019 Trilogy Credit Facility was $ 400,000,000 .

As of September 30, 2023 and December 31, 2022, borrowings outstanding under the 2019 Trilogy Credit Facility totaled $ 367,000,000 and $ 316,734,000 , respectively, and the weighted average interest rate on such borrowings outstanding was 8.18 % and 7.17 % per annum, respectively.

AMERICAN HEALTHCARE REIT, INC.

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

Derivative Financial Instruments

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

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

The following table provides information with respect to the derivative financial instrument held by us as of June 30, 2023, which was included in other assets, net in our accompanying condensed consolidated balance sheet (dollars in thousands):

Instrument Notional Amount Index Interest Rate Maturity Date Fair Value

June 30, 2023

The following table provides information with respect to the derivative financial instruments held by us as of September 30, 2023, which were included in other assets, net in our accompanying condensed consolidated balance sheet (dollars in thousands):

Instrument Notional Amount Index Interest Rate Effective Date Maturity Date Fair Value

September 30, 2023

Swap $ 275,000 one month

Term SOFR 3.74 % 02/01/23 01/19/26 $ 6,125

As of June 30, 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 June 30, 2023 and 2022, we recorded $ 4,993,000 and $ 0 , respectively, and for the six months ended June 30, 2023 and 2022, we recorded $ 4,798,000 and $ 500,000 , 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 instrument.

See Note 13, Fair Value Measurements, and Note 19, Subsequent Event, for a further discussion of our derivative financial instruments.

Swap 275,000 one month

Term SOFR 4.41 % 08/08/23 01/19/26 2,075

$ 550,000 $ 8,200

As of September 30, 2023, our derivative financial instruments were not 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.

For the three months ended September 30, 2023 and 2022, we recorded $ 3,402,000 and $ 0 , respectively, and for the nine months ended September 30, 2023 and 2022, we recorded $ 8,200,000 and $ 500,000 , respectively, as a decrease to total 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.

See Note 13, Fair Value Measurements, for a further discussion of our derivative financial instruments.

Commitments and Contingencies

We are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

AMERICAN HEALTHCARE REIT, INC.

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

Environmental Matters

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Redeemable Noncontrolling Interests

As of both June 30, 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.

As of both September 30, 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 June 30, 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 June 30, 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.

AMERICAN HEALTHCARE REIT, INC.

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

As of both September 30, 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 approximately 97.4 % and 96.2 %, respectively, of the outstanding equity interests of Trilogy.

As of September 30, 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.

We account for such equity interests as redeemable noncontrolling interests in our accompanying condensed consolidated balance sheets in accordance with FASB Accounting Standards Codification Topic 480-10-S99-3A given certain features associated with such equity interests.

For the three and six months ended June 30, 2023, we redeemed a portion of the equity interests owned by current members of Trilogy’s management for an aggregate of $ 84,000 and $ 15,954,000 , respectively.

For the six months ended June 30, 2022, we did not redeem any equity interests of Trilogy.

As of June 30, 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.

For the nine months ended September 30, 2023, we redeemed a portion of the equity interests owned by current members of Trilogy’s management for an aggregate of $ 15,954,000 .

For the nine months ended September 30, 2022, we did not redeem any equity interests of Trilogy.

As of September 30, 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 — Dispositions of Real Estate Investments, for dispositions within our Central Florida Senior Housing Portfolio.

See Note 3, Real Estate Investments, Net and Business Combinations — Dispositions of Real Estate Investments, for dispositions within our Central Florida Senior Housing Portfolio in 2023.

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 and six months ended June 30, 2022.

AMERICAN HEALTHCARE REIT, INC.

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

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

(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 six months ended June 30, 2023 and 2022 (in thousands):

Six Months Ended June 30,

The changes in the carrying amount of redeemable noncontrolling interests consisted of the following for the nine months ended September 30, 2023 and 2022 (in thousands):

Nine Months Ended September 30,

Beginning balance $ 81,598 $ 72,725

4 unchanged sentences

Adjustment to redemption value ( 4,098 ) 14,594

Net loss attributable to redeemable noncontrolling interests ( 486 ) ( 31 )

Net (loss) income attributable to redeemable noncontrolling interests ( 564 ) 323

Ending balance $ 59,961 $ 85,869

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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 June 30, 2023 and December 31, 2022, no shares of preferred stock were issued and outstanding.

As of both September 30, 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 June 30, 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).

As of September 30, 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 further discussion.

AMERICAN HEALTHCARE REIT, INC.

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

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.

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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)

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

2 unchanged sentences

03/15/23 $ 31.40

For both the three and six months ended June 30, 2023, there were no distributions reinvested and no shares of our common stock were issued pursuant to our DRIP offerings.

For the three and six months ended June 30, 2022, $ 11,143,000 and $ 22,447,000 , respectively, in distributions were reinvested and 299,857 and 606,375 shares of our common stock, respectively, were issued pursuant to our DRIP offerings.

For both the three and nine months ended September 30, 2023, there were no distributions reinvested and no shares of our common stock were issued pursuant to our DRIP offerings.

For the three and nine months ended September 30, 2022, $ 3,671,000 and $ 26,118,000 , respectively, in distributions were reinvested and 98,794 and 705,169 shares of our common stock, respectively, were issued pursuant to our DRIP offerings.

Share Repurchase Plan

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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.

We did no t repurchase any shares of our common stock pursuant to our share repurchase plan for the three months ended June 30, 2023.

For the six months ended June 30, 2023, pursuant to our share repurchase plan, we repurchased 1,681 shares of common stock for $ 62,000 , at a repurchase price of $ 37.16 per share.

For the three and six months ended June 30, 2022, pursuant to our share repurchase plan, we repurchased 174,865 and 286,959 shares of common stock, respectively, for an aggregate of $ 6,449,000 and $ 10,583,000 , respectively, at a repurchase price of $ 36.88 per share.

We did no t repurchase any shares of our common stock pursuant to our share repurchase plan for the three months ended September 30, 2023.

For the nine months ended September 30, 2023, pursuant to our share repurchase plan, we repurchased 1,681 shares of common stock for $ 62,000 , at a repurchase price of $ 37.16 per share.

For the three and nine months ended September 30, 2022, pursuant to our share repurchase plan, we repurchased 152,035 and 438,994 shares of common stock, respectively, for an aggregate of $ 5,650,000 and $ 16,233,000 , respectively, at a repurchase price of $ 37.16 and $ 36.98 per share, respectively.

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

AMERICAN HEALTHCARE REIT, INC.

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

Noncontrolling Interests in Total Equity

As of June 30, 2023 and December 31, 2022, Trilogy REIT Holdings owned approximately 97.4 % and 96.2 %, respectively, of Trilogy.

As of September 30, 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 in 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 of both June 30, 2023 and December 31, 2022, NHI indirectly owned a 24.0 % membership interest in Trilogy REIT Holdings and as such, for the three and six months ended June 30, 2023 and 2022, 24.0 %of the net earnings of Trilogy REIT Holdings were allocated to noncontrolling interests.

As of both September 30, 2023 and December 31, 2022, NHI indirectly owned a 24.0 % membership interest in Trilogy REIT Holdings and as such, for the three and nine months ended September 30, 2023 and 2022, 24.0 % of the net earnings of Trilogy REIT Holdings were allocated to noncontrolling interests.

See Note 19, Subsequent Event, for a further discussion of our ownership in Trilogy REIT Holdings.

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.

1 unchanged sentence

We amortize the Profit Interests on a straight-line basis over the vesting periods, which are recorded to general and administrative expenses 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.

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 have redemption features outside of our control, similar to the common stock units held by Trilogy’s management.

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

AMERICAN HEALTHCARE REIT, INC.

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

There were no canceled, expired or exercised Profit Interests during the three and six months ended June 30, 2023 and 2022.

For the three months ended June 30, 2023 and 2022, we recognized stock compensation expense related to the time-based Profit Interests of $ 20,000 and $ 21,000 , respectively.

For the six months ended June 30, 2023 and 2022, we recognized stock compensation expense related to the time-based Profit Interests of $ 41,000 and $ 42,000 , respectively.

There were no canceled, expired or exercised Profit Interests during the three and nine months ended September 30, 2023 and 2022.

For the three months ended September 30, 2023 and 2022, we recognized stock compensation expense related to the time-based Profit Interests of $ 21,000 and $ 20,000 , respectively.

For both the nine months ended September 30, 2023 and 2022, we recognized stock compensation expense related to the time-based Profit Interests of $ 62,000 .

One of our consolidated subsidiaries issued non-voting preferred shares of beneficial interests to qualified investors for total proceeds of $ 125,000 .

1 unchanged sentence

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 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 June 30, 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 and six months ended June 30, 2023 and 2022.

As of both June 30, 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 and six months ended June 30, 2023 and 2022.

As of both June 30, 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 and six months ended June 30, 2023 and 2022.

As discussed in Note 1, Organization and Description of Business, as of both June 30, 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 June 30, 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.

As of both September 30, 2023 and December 31, 2022, we owned an 86.0 % interest in a consolidated limited liability company that owns Lakeview IN Medical Plaza.

As of both September 30, 2023 and December 31, 2022, we owned a 90.6 % membership interest in a consolidated limited liability company that owns Southlake TX Hospital.

As of both September 30, 2023 and December 31, 2022, we owned a 90.0 % interest in a joint venture that owns the Louisiana Senior Housing Portfolio.

As discussed in Note 1, Organization and Description of Business, as of both September 30, 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 September 30, 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 11, Redeemable Noncontrolling Interests, for further discussion.

AMERICAN HEALTHCARE REIT, INC.

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

AHR 2015 Incentive Plan

2 unchanged sentences

Restricted common stock

Pursuant to the AHR Incentive Plan, through June 30, 2023, we granted an aggregate of 315,459 shares of our restricted common stock, or RSAs, which include restricted Class T common stock and restricted Class I common stock, as defined in the AHR Incentive Plan.

Pursuant to the AHR Incentive Plan, through September 30, 2023, we granted an aggregate of 315,459 shares of our restricted common stock, or RSAs, which include restricted Class T common stock and restricted Class I common stock, as defined in the AHR Incentive Plan.

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.

1 unchanged sentence

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

AMERICAN HEALTHCARE REIT, INC.

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

Restricted stock units

Pursuant to the AHR Incentive Plan, through June 30, 2023, we granted our executive officers an aggregate 70,751 of performance-based restricted stock units, or PBUs, representing the right to receive shares of our Class T common stock upon vesting.

Pursuant to the AHR Incentive Plan, through September 30, 2023, we granted our executive officers an aggregate 70,751 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 our executive officers and certain employees 169,529 time-based restricted stock units, or TBUs, representing the right to receive shares of our Class T common stock upon vesting.

1 unchanged sentence

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.

A summary of the status of our nonvested RSAs and RSUs as of June 30, 2023 and December 31, 2022 and the changes for the six months ended June 30, 2023 is presented below:

A summary of the status of our nonvested RSAs and RSUs as of September 30, 2023 and December 31, 2022 and the changes for the nine months ended September 30, 2023 is presented below:

RSAs Number of

5 unchanged sentences

Forfeited — $ — ( 3,452 ) $ 31.40

Balance — June 30, 2023

Balance — September 30, 2023

186,868 $ 36.18 230,429 $ 32.45

(1) Amount includes 2,280 shares of common stock that were withheld from issuance to satisfy employee minimum tax withholding requirements associated with the vesting of RSUs during the six months ended June 30, 2023.

For the three months ended June 30, 2023 and 2022, we recognized $ 1,564,000 and $ 980,000 , respectively, and for the six months ended June 30, 2023 and 2022, we recognized $ 2,615,000 and $ 1,791,000 , respectively, in stock compensation expense related to awards granted pursuant to the AHR Incentive Plan based on the grant date fair value for time based awards and for performance-based awards that are probable of vesting, which grant date fair value is equal to the most recently published estimated per share NAV.

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

For the three months ended September 30, 2023 and 2022, we recognized $ 1,558,000 and $ 914,000 , respectively, and for the nine months ended September 30, 2023 and 2022, we recognized $ 4,173,000 and $ 2,705,000 , respectively, in stock compensation expense related to awards granted pursuant to the AHR Incentive Plan.

Such stock compensation expense is based on the grant date fair value for time based awards and for performance-based awards that are probable of vesting, which grant date fair value is equal to the most recently published estimated per share NAV.

Stock compensation expense is included in general and administrative expenses in our accompanying condensed consolidated statements of operations and comprehensive loss.

AMERICAN HEALTHCARE REIT, INC.

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

Fair Value Measurements

Assets and Liabilities Reported at Fair Value

The table below presents our assets and liabilities measured at fair value on a recurring basis as of June 30, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

The table below presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

Quoted Prices in

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(Level 2) Significant

Unobservable Inputs

(Level 3) Total

Derivative financial instrument $ — $ 4,798 $ — $ 4,798

Derivative financial instruments $ — $ 8,200 $ — $ 8,200

Total assets at fair value $ — $ 8,200 $ — $ 8,200

There were no transfers into and out of fair value measurement levels during the six months ended June 30, 2023 and 2022.

There were no transfers into and out of fair value measurement levels during the nine months ended September 30, 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 entered into an interest rate swap to manage interest rate risk associated with variable-rate debt.

We entered into interest rate swaps 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.

Such valuation reflected the contractual terms of the derivatives, including the period to maturity, and used

AMERICAN HEALTHCARE REIT, INC.

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

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.

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 values of our interest rate swaps were 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 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 June 30, 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.

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 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 September 30, 2023, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of 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.

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.

3 unchanged sentences

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.

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.

1 unchanged sentence

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 June 30, 2023 and December 31, 2022 were as follows (in thousands):

The carrying amounts and estimated fair values of such financial instruments as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

September 30,

Amount(1) Fair

11 unchanged sentences

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

AMERICAN HEALTHCARE REIT, INC.

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

Current Income Tax

5 unchanged sentences

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

As of both June 30, 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.

As of both September 30, 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 both June 30, 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.

As of both September 30, 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 June 30, 2023 and 2022, we recognized $ 49,216,000 and $ 50,060,000 , respectively, of revenues related to operating lease payments, of which $ 9,711,000 and $ 9,663,000 , respectively, was for variable lease payments.

For the six months ended June 30, 2023 and 2022, we recognized $ 91,519,000 and $ 100,790,000 , respectively, of revenues related to operating lease payments, of which $ 19,750,000 and $ 20,076,000 , respectively, was for variable lease payments.

As of June 30, 2023, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for the six months ending December 31, 2023 and for each of the next four years ending December 31 and thereafter for properties that we wholly own (in thousands):

For the three months ended September 30, 2023 and 2022, we recognized $ 45,582,000 and $ 50,041,000 , respectively, of revenues related to operating lease payments, of which $ 9,800,000 and $ 9,522,000 , respectively, was for variable lease payments.

For the nine months ended September 30, 2023 and 2022, we recognized $ 137,101,000 and $ 150,860,000 , respectively, of revenues related to operating lease payments, of which $ 29,551,000 and $ 29,598,000 , respectively, was for variable lease payments.

As of September 30, 2023, 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, 2023 and for each of the next four years ending December 31 and thereafter for properties that we wholly own (in thousands):

2023 $ 34,625

6 unchanged sentences

Certain leases also include options to purchase the leased property.

As of June 30, 2023, we had future lease payments of $ 6,054,000 for an operating lease that had not yet commenced.

Such operating lease will commence in fiscal year 2023 with a lease term of five years .

AMERICAN HEALTHCARE REIT, INC.

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

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.

2 unchanged sentences

The components of lease costs were as follows (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Lease Cost Classification 2023

6 unchanged sentences

Total lease cost $ 11,368 $ 9,519

Six Months Ended June 30,

AMERICAN HEALTHCARE REIT, INC.

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

Nine Months Ended September 30,

Lease Cost Classification 2023

8 unchanged sentences

Additional information related to our leases for the periods presented below was as follows (dollars in thousands):

Lease Term and Discount Rate June 30,

Lease Term and Discount Rate September 30,

Weighted average remaining lease term (in years):

6 unchanged sentences

7.76 % 7.66 %

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental Disclosure of Cash Flows Information 2023 2022

2 unchanged sentences

Right-of-use assets obtained in exchange for operating lease liabilities $ 6,153 $ 153,777

AMERICAN HEALTHCARE REIT, INC.

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

Operating Leases

As of June 30, 2023, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the six 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 (in thousands):

2023 $ 19,240

As of September 30, 2023, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the three 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 (in thousands):

Thereafter 202,020

2 unchanged sentences

Present value of operating lease liabilities $ 231,148

AMERICAN HEALTHCARE REIT, INC.

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

Finance Leases

As of June 30, 2023, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the six 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 (in thousands):

As of September 30, 2023, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for the three 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 (in thousands):

Total undiscounted finance lease payments 121

1 unchanged sentence

Segment Reporting

As of June 30, 2023, we evaluated our business and made resource allocations based on six reportable business segments:

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

As of September 30, 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).

5 unchanged sentences

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.

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, 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 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 interests, 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.

Summary information for the reportable segments during the three and six months ended June 30, 2023 and 2022 was as follows (in thousands):

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, 2023 and 2022 was as follows (in thousands):

Senior Health

1 unchanged sentence

Leased SNFs Hospitals Three Months

June 30, 2023

September 30,

Revenues and grant income:

11 unchanged sentences

Interest expense:

Interest expense (including amortization of deferred financing costs and debt discount/premium) ( 40,990 )

Interest expense (including amortization of deferred financing costs, debt discount/premium, and loss on debt extinguishments) ( 42,005 )

Gain in fair value of derivative financial instruments 3,402

Loss on dispositions of real estate investments ( 2,072 )

Gain on dispositions of real estate investments, net 31,981

Impairment of real estate investments ( 12,510 )

Loss from unconsolidated entities ( 505 )

Foreign currency gain 1,068

Foreign currency loss ( 1,704 )

Other income 1,755

8 unchanged sentences

Leased SNFs Hospitals Three Months

June 30, 2022

September 30,

Revenues and grant income:

14 unchanged sentences

Other income (expense):

Interest expense (including amortization of deferred financing costs, debt discount/premium and gain on debt extinguishments) ( 20,345 )

Loss on dispositions of real estate investments ( 73 )

Interest expense:

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

Gain on dispositions of real estate investments 2,113

Impairment of real estate investments ( 21,851 )

Income from unconsolidated entities 638

Loss from unconsolidated entities ( 344 )

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

Foreign currency loss ( 3,695 )

8 unchanged sentences

Campuses SHOP MOBs Senior

Leased SNFs Hospitals Six Months

June 30, 2023

Leased SNFs Hospitals Nine Months

September 30,

Revenues and grant income:

11 unchanged sentences

Interest expense:

Interest expense (including amortization of deferred financing costs and debt discount/premium) ( 80,001 )

Interest expense (including amortization of deferred financing costs, debt discount/premium, and loss on debt extinguishments) ( 122,006 )

Gain in fair value of derivative financial instruments 8,200

Loss on dispositions of real estate investments ( 2,204 )

Gain on dispositions of real estate investments, net 29,777

Impairment of real estate investments ( 12,510 )

Loss from unconsolidated entities ( 924 )

10 unchanged sentences

Campuses SHOP MOBs Senior

Leased SNFs Hospitals Six Months

June 30, 2022

Leased SNFs Hospitals Nine Months

September 30,

Revenues and grant income:

17 unchanged sentences

Gain in fair value of derivative financial instruments 500

Gain on dispositions of real estate investments 683

Gain on dispositions of real estate investments, net 2,796

Impairment of real estate investments ( 39,191 )

Income from unconsolidated entities 1,680

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

Foreign currency loss ( 8,689 )

4 unchanged sentences

Net loss $ ( 24,083 )

Total assets by reportable segment as of June 30, 2023 and December 31, 2022 were as follows (in thousands):

Total assets by reportable segment as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

September 30,

Integrated senior health campuses $ 2,178,158 $ 2,157,748

8 unchanged sentences

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

As of and for the six months ended June 30, 2023 and 2022, goodwill by reportable segment was as follows (in thousands):

As of and for the nine months ended September 30, 2023 and 2022, goodwill by reportable segment was as follows (in thousands):

Senior Health

4 unchanged sentences

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

Balance — June 30, 2023

Balance — September 30, 2023

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

4 unchanged sentences

Goodwill acquired 44,990 — — — — — 44,990

Balance — June 30, 2022

Balance — September 30, 2022

$ 164,846 $ 23,277 $ 47,812 $ 5,924 $ 8,640 $ 4,389 $ 254,888

3 unchanged sentences

The following is a summary of geographic information for our operations for the periods presented (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2023 2022 2023 2022

3 unchanged sentences

$ 464,240 $ 426,162 $ 1,384,037 $ 1,190,592

The following is a summary of real estate investments, net by geographic regions as of June 30, 2023 and December 31, 2022 (in thousands):

The following is a summary of real estate investments, net by geographic regions as of September 30, 2023 and December 31, 2022 (in thousands):

September 30,

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 June 30, 2023 and December 31, 2022, we had cash and cash equivalents in excess of FDIC insured limits.

As of September 30, 2023 and December 31, 2022, we had cash and cash equivalents in excess of FDIC insured limits.

We believe this risk is not significant.

3 unchanged sentences

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

Based on leases as of June 30, 2023, properties in two states in the United States accounted for 10.0 % or more of our total consolidated 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 June 30, 2023.

Properties located in Indiana and Michigan accounted for 34.6 % and 10.9 %, respectively, of our total consolidated property portfolio’s annualized base rent or annualized NOI.

Based on leases as of September 30, 2023, properties in two states in the United States accounted for 10.0 % or more of our total consolidated 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, 2023.

Properties located in Indiana and Ohio accounted for 31.3 % and 12.5 %, respectively, of our total consolidated property portfolio’s annualized base rent or annualized NOI.

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

Based on leases in effect as of June 30, 2023, our six reportable business segments, integrated senior health campuses, MOBs, SNFs, SHOP, senior housing — leased and hospitals accounted for 44.4 %, 35.0 %, 7.3 %, 6.1 %, 4.1 % and 3.1 %, respectively, of our total consolidated property portfolio’s annualized base rent or annualized NOI.

As of June 30, 2023, no ne of our tenants at our properties accounted for 10.0 % or more of our total consolidated property portfolio’s annualized base rent or annualized NOI.

Based on leases in effect as of September 30, 2023, our six reportable business segments, integrated senior health campuses, MOBs, SHOP, SNFs, senior housing — leased and hospitals accounted for 47.6 %, 31.5 %, 7.1 %, 7.0 %, 3.9 % and 2.9 %, respectively, of our total consolidated property portfolio’s annualized base rent or annualized NOI.

As of September 30, 2023, no ne of our tenants at our properties accounted for 10.0 % or more of our total consolidated 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 $ 962,000 and $ 1,498,000 for the three months ended June 30, 2023 and 2022, respectively, and $ 1,888,000 and $ 2,988,000 for the six months ended June 30, 2023 and 2022, respectively.

Net income (loss) applicable to common stock is calculated as net income (loss) attributable to controlling interest less distributions allocated to participating securities of $ 963,000 and $ 1,497,000 for the three months ended September 30, 2023 and 2022, respectively, and $ 2,851,000 and $ 4,485,000 for the nine months ended September 30, 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.

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 June 30, 2023 and 2022, there were 188,368 and 221,740 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 June 30, 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 June 30, 2023 and 2022, there were 163,133 and 19,200 nonvested time-based restricted stock units outstanding, respectively, 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 June 30, 2023, there were 70,751 nonvested performance-based restricted stock units outstanding, which were treated as contingently issuable shares pursuant to ASC Topic 718, Compensation — Stock Compensation .

As of September 30, 2023 and 2022, there were 186,868 and 223,064 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 September 30, 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 September 30, 2023 and 2022, there were 159,678 and 19,200 nonvested time-based restricted stock units outstanding, respectively, 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, 2023, there were 70,751 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 Event

Interest Rate Swap

We, through our operating partnership, entered into an interest rate swap transaction, or the Swap, with Regions Bank with an effective date of August 8, 2023 and a maturity date of January 19, 2026.

We entered into the Swap to mitigate the risk associated with the remaining $ 275,000,000 of our floating-rate term loan that was unhedged (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed-rate indebtedness) under our existing 2022 Credit Facility.

Beginning on September 1, 2023, we are required to make monthly fixed-rate payments at a rate of 4.41 % while the counterparty is obligated to make monthly floating-rate payments based on Term SOFR, which was 5.30 % as of August 8, 2023.

Option to Acquire Minority Joint Venture Partner’s Membership Interest in Trilogy REIT Holdings

On November 3, 2023, we entered into a Membership Interest Purchase Agreement, or the MIPA, with subsidiaries of NHI, which provides us with the option to purchase their 24.0 % minority membership interest in Trilogy REIT Holdings.

If we exercise this purchase option, we will own 100 % of Trilogy REIT Holdings, which (assuming that there are no changes in the equity capitalization of Trilogy prior to consummation of the purchase) will in turn cause us to indirectly own approximately 97.4 % of Trilogy.

Subject to our first satisfying certain closing conditions, the option is exercisable for a closing before September 30, 2025 assuming that we exercise both extension options described below.

If we exercise our purchase option, the all cash purchase price would be $ 240,500,000 if we consummate the purchase on or before March 31, 2024, would increase to $ 247,000,000 if we consummate the purchase from April 1, 2024 to and including December 31, 2024 and would further increase to $ 260,000,000 if we consummate the purchase on or after January 1, 2025.

AMERICAN HEALTHCARE REIT, INC.

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

The MIPA also allows us (at our election), instead of paying all cash, to consummate the purchase transaction by using a combination of cash and the issuance of new Series A Cumulative Convertible Preferred Stock, $ 0.01 par value per share, or our Convertible Preferred Stock, as purchase price consideration.

We must pay at least a minimum amount of the purchase price in cash, in which case we would pay the remaining amount in shares of our Convertible Preferred Stock.

The minimum cash amount will be $ 24,050,000 if we consummate the purchase on or before March 31, 2024, $ 24,700,000 if we consummate the purchase from April 1, 2024 to and including December 31, 2024, or $ 26,000,000 if we consummate the purchase on or after January 1, 2025, or the Minimum Cash Consideration.

If issued, our Convertible Preferred Stock will be perpetual, will have a cumulative cash dividend with an initial annual rate of 4.75 % (on the liquidation preference per share of $ 25.00 of our Convertible Preferred Stock) and will be redeemable by us at any time.

The annual dividend rate will increase over time, and the redemption price will vary based on the date of redemption.

In addition, holders of shares of our Convertible Preferred Stock will have the right, at any time on or after July 1, 2026 and from time to time, to convert some or all of such shares into shares of our common stock, subject to certain customary exceptions.

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