8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 5, 2016

Griffin-American Healthcare REIT III, Inc.

(Exact name of registrant as specified in its charter)

Maryland	000-55434	46-1749436
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
18191 Von Karman Avenue, Suite 300 Irvine, California		92612
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (949) 270-9200

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 3.03 Material Modification to Rights of Security Holders.

On October 5, 2016, Griffin-American Healthcare REIT III, Inc. (the “Company”) amended and restated its distribution reinvestment plan (the “Amended and Restated Distribution Reinvestment Plan”). The Amended and Restated Distribution Reinvestment Plan amends the price at which shares of the Company’s common stock will be issued pursuant to its distribution reinvestment plan and will be effective with the distribution payment to stockholders to be paid in the month of November 2016. Upon effectiveness of the Amended and Restated Distribution Reinvestment Plan, shares will be issued pursuant to such plan at a price equal to the most recent estimated value of one share of the Company’s common stock, as determined by the Company’s board of directors. Formerly, shares were issued pursuant to the plan at 95.0% of the estimated value of one share of the Company’s common stock, as estimated by the Company’s board of directors. In all other material respects, the terms of the distribution reinvestment plan remain unchanged by the Amended and Restated Distribution Reinvestment Plan.

The foregoing description of the amendment to the distribution reinvestment plan reflected in the Amended and Restated Distribution Reinvestment Plan is qualified in its entirety by reference to the Amended and Restated Distribution Reinvestment Plan attached as Exhibit 4.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On October 7, 2016, the Company issued a letter to its stockholders announcing an estimated per share net asset value (“NAV”) of the Company’s common stock of $9.01, as discussed in greater detail in Item 8.01 of this Current Report below, and amendments to its distribution reinvestment plan and share repurchase plan. A copy of the letter to stockholders, which is hereby incorporated into this filing in its entirety, is attached to this Current Report on Form 8-K as Exhibit 99.1.

On October 7, 2016, the Company also issued a press release announcing the estimated per share NAV. A copy of the press release, which is hereby incorporated into this filing in its entirety, is attached to this Current Report on Form 8-K as Exhibit 99.2.

The information furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.

Item 8.01 Other Events.

Estimated Per Share NAV

On October 5, 2016, the board of directors (the “Board”) of the Company, at the recommendation of the Audit Committee of the Board (the “Committee”), comprised solely of independent directors, unanimously approved and established an estimated per share NAV of the Company’s common stock of $9.01. The estimated per share NAV is based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, divided by the number of shares outstanding on a fully diluted basis, calculated as of June 30, 2016 (the “Valuation Date”). The Company is providing this estimated per share NAV to assist broker-dealers in connection with their obligations under National Association of Securities Dealers Conduct Rule 2340, as required by the Financial Industry Regulatory Authority (“FINRA”), with respect to customer account statements. This valuation was performed in accordance with the methodology provided in Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Valuation Guidelines”), in addition to guidance from the U.S. Securities and Exchange Commission (“SEC”). The Company believes that there were no material changes between the Valuation Date and the date of this filing that would impact the estimated per share NAV.

The Committee, pursuant to authority delegated by the Board, was responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodology used to determine the Company’s estimated per share NAV, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices and the reasonableness of the assumptions used in the valuations and appraisals.

The estimated per share NAV was determined after consultation with Griffin-American Healthcare REIT III Advisor, LLC, the Company’s external advisor (the “Advisor”), and Robert A. Stanger & Co, Inc. (“Stanger”), an independent third-party valuation firm. The engagement of Stanger was approved by the Committee. Stanger prepared an appraisal report (the “Appraisal Report”), summarizing key information and assumptions and providing an appraised value on 75 medical office and healthcare related properties (the “Appraised Properties”) owned by the Company as of the Valuation Date. Stanger also

prepared a net asset value report (the “NAV Report” and, together with the Appraisal Report, the “Reports”), which estimates the per share NAV of the Company’s common stock as of the Valuation Date of $9.01. The NAV Report incorporates the appraised value conclusions of the Appraisal Report and also includes Stanger’s valuation of the Company’s interest in its joint venture with respect to Trilogy Investors, LLC (“Trilogy” and with respect to the Company’s interest therein, the “Trilogy Interest”), Stanger’s valuation of the Company’s loans receivable (the “Debt Investments”) and Stanger’s estimate of the Advisor’s subordinated participation in net sales proceeds due upon liquidation of the Company’s portfolio. The NAV Report also relied upon the acquisition price of 10 properties (the “Recent Acquisitions”) acquired within the three months preceding the Valuation Date, seven of which were in Trilogy, the fair market value of the Company’s debt liabilities (the “Debt Liabilities”) calculated using a methodology in accordance with generally accepted accounting principles, and the value of the Company’s cash, other assets and liabilities, to calculate an estimated per share NAV of the Company’s common stock.

Upon the Committee’s receipt and review of the Reports, the Committee recommended $9.01 as the per share NAV to the Board. Upon the Board’s receipt and review of the Reports and the recommendation of the Committee, the Board approved $9.01 as the estimated per share NAV of the Company’s common stock as of June 30, 2016.

The table below sets forth the calculation of the Company’s estimated per share NAV as of June 30, 2016. Certain amounts are reflected net of non-controlling interests, as applicable.

Estimated Per Share NAV

(Dollars in Thousands, Except Share and Per Share Data)

	Estimated Value			Estimated Value Per Share
Appraised Properties (a)(c)	$	1,328,710		$	6.85
Trilogy Interest (b)(c)	625,603			3.23
Debt Investments	147,055			0.76
Cash and Other Assets	158,331			0.82
Debt Liabilities (d)	(433,670		)	(2.24		)
Other Liabilities	(79,582		)	(0.41		)
Advisor Promote	—			—
Estimated Net Asset Value June 30, 2016	$	1,746,447		$	9.01
Fully Diluted Shares Outstanding at June 30, 2016 (in thousands)	193,932
_____________
(a) Includes Recent Acquisitions at aggregate purchase price of $43.5 million. (b) Includes seven Recent Acquisitions at aggregate purchase price of $135.1 million in derivation of Trilogy Interest value. (c) Recent Acquisitions were not appraised or valued by Stanger. (d) Excludes $573.2 million of debt liabilities included in determination of Trilogy Interest Value.

Methodology and Key Assumptions

In determining an estimated per share NAV, the Board considered the recommendation of the Committee, the Reports provided by Stanger and information provided by the Advisor. The Company’s goal in calculating an estimated per share NAV is to arrive at a value that is reasonable and supportable using what the Committee and the Board each deems to be appropriate valuation methodologies and assumptions.

FINRA’s current rules provide no guidance on the methodology an issuer must use to determine its estimated per share NAV. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated per share NAV, and these differences could be significant. The estimated per share NAV is not audited and does not represent the fair value of the Company’s assets less its liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of the Company’s assets and liabilities or the amount the Company’s shares of common stock would trade at on a national securities exchange. The estimated asset values may not represent current market value or book value. The estimated value of the Appraised Properties does not necessarily represent the value the Company would receive or accept if the assets were marketed for sale. The value of the Company’s shares will fluctuate over time in response to developments related to individual assets in the Company’s portfolio and the management of those assets and in response to the

real estate and finance markets. The estimated per share NAV does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount compared to the sum of the individual property values. The estimated per share NAV also does not take into account estimated disposition costs and fees for real estate properties or interests therein that are not held for sale.

Independent Valuation Firm

Stanger was selected by the Committee to render its Reports as further described below. Stanger is actively engaged in the business of appraising commercial real estate properties and debt investments similar to those owned by the Company. While the Company and other entities managed or sponsored by affiliates of the Advisor have engaged or may engage Stanger in the future for services of various kinds, the Company believes that there are no material conflicts of interest with respect to its engagement of Stanger. The Company engaged Stanger, with approval from the Committee, to deliver its Reports to assist in the net asset value determination and Stanger received normal and customary compensation for those efforts. In addition, the Company has agreed to indemnify Stanger against certain liabilities arising out of this engagement. In the two years prior to the date of this filing, Stanger has not been engaged by the Company or the Advisor with respect to the properties that are the subject of the Appraisal Report, the properties and assets that are a part of the Trilogy Interest or with respect to the Debt Investments, as an appraiser. Stanger was previously engaged by the special committee of another real estate investment trust (“REIT”) sponsored by an affiliate of the Advisor for various services, including financial advisory services, in connection with a merger of such REIT in 2014, for which Stanger was paid usual and customary financial advisory fees. Stanger has also been engaged previously to provide a valuation of certain profits interests associated with Trilogy. Stanger may from time to time in the future perform other services for the Company or the Advisor. The compensation the Company paid to Stanger related to the valuation is based on the scope of work and not on the appraised values of the Appraised Properties or the estimated per share NAV of the Company. The appraisals were performed in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practice (“USPAP”), the real estate appraisal industry standards created by The Appraisal Foundation. The Appraisal Report was reviewed, approved and signed by an individual with the professional designation of MAI licensed in the state where each real property is located. The use of the Appraisal Report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. In preparing its Reports, Stanger did not, and was not requested to, solicit third-party indications of interest for the Company’s common stock in connection with possible purchases thereof or the acquisition of all or any part of the Company.

Stanger collected reasonably available material information that it deemed relevant in appraising the Company’s Appraised Properties, estimating the value of the Trilogy Interest and the Debt Investments and estimating the Company’s per share NAV. Stanger relied in part on information provided by the Advisor, including (i) property historical and projected operating revenues, expenses and occupancy; (ii) property lease agreements and/or lease abstracts; (iii) purchase option agreements or summaries; (iv) historical and projected earnings of the Ancillary Businesses (as defined below); and (v) information regarding recent or planned capital expenditures. In conducting its investigation and analyses, Stanger took into account customary and accepted financial and commercial procedures and considerations as they deemed relevant. Although Stanger reviewed information supplied or otherwise made available by the Company or the Advisor, they assumed and relied upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to them by any other party and did not independently verify any such information. Stanger has assumed that any operating or financial forecasts and other information and data provided to or otherwise reviewed by or discussed with Stanger were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the Company’s management, the Board, and/or the Advisor. Stanger relied on the Company to advise them promptly if any information previously provided became inaccurate or was required to be updated during the period of their review.

Although Stanger considered comments received from the Company or the Advisor during the valuation process, the final appraised values of the Company’s Appraised Properties and the value estimate of the Trilogy Interest and Debt Investments were determined by Stanger. The Reports are addressed solely to the Committee to assist it in calculating and recommending to the Board an estimated per share NAV of the Company’s common stock. The Reports are not addressed to the public, may not be relied upon by any other person to establish an estimated per share NAV of the Company’s common stock, and do not constitute a recommendation to any person to purchase or sell any shares of the Company’s common stock.

As of the Valuation Date, the aggregate value of the Appraised Properties, the Trilogy Assets (defined below), the Recent Acquisitions, and Debt Investments was approximately $2.891 billion compared with an aggregate initial investment, including subsequent capital expenditures, of approximately $2.695 billion.

The foregoing is a summary of the standard assumptions, qualifications, and limitations that generally apply to the Reports. The Reports, including the analysis, opinions, and conclusions set forth in such reports, are qualified by the assumptions, qualifications, and limitations set forth in the respective reports.

Valuation Methodology

Valuation of Appraised Properties

To estimate the value of the Appraised Properties, Stanger performed a site visit and conducted an appraisal for the 75 Appraised Properties, consisting of 49 medical office properties, two net-leased hospitals, one net-leased skilled nursing facility, 10 net-leased senior housing properties and 13 senior housing properties operated utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). In determining its value opinion of each Appraised Property, Stanger utilized all information that it deemed relevant, including information from the Advisor and its own data sources, including trends in capitalization rates, leasing rates and other economic factors. In conducting its appraisals of the Appraised Properties, and pursuant to its engagement, Stanger utilized the income approach to valuation, specifically a direct capitalization analysis and discounted cash flow analysis for the medical office properties and triple-net leased hospitals, and a direct capitalization analysis for the triple-net leased skilled nursing facility, triple-net leased senior housing properties and the RIDEA senior housing properties. The direct capitalization analysis was performed by applying a market capitalization rate for each applicable Appraised Property to the estimated stabilized forward-year annual net operating income at each such property. In selecting each capitalization rate, Stanger took into account, among other factors, prevailing capitalization rates in the applicable property sector, the property’s location, age and condition, the property’s operating trends and, for triple-net leased properties, the lease coverage ratios, and other unique property factors. In applying the discount cash flow analysis, a market discount rate and terminal capitalization rate was applied to multi-year property projections which factored in, among other things, the leases encumbering the properties, market conditions with respect to lease-up or releasing and property historical and projected operating trends. As applicable, Stanger adjusted the capitalized value of each Appraised Property for any excess land, deferred maintenance or capital needs, rent abatements and lease-up costs to estimate the “as-is” value of each Appraised Property. Stanger then adjusted the “as-is” property values, as appropriate, for the Company’s allocable ownership interest in the Appraised Properties to account for the interests of any third-party investment partners, including any priority distributions. Stanger’s Appraisal Report was certified by an appraiser licensed in the state in which the Appraised Properties were located. As of the Valuation Date, the aggregate estimated value of the Appraised Properties was approximately $1.285 billion. The following summarizes the key assumptions that were used in the discounted cash flow and direct capitalization analyses to arrive at the value of the Appraised Properties:

	Range		Weighted Average*
	Min.	Max.
Medical Office Properties
Discount Rate	6.75%	8.75%	7.71%
Terminal Capitalization Rate	6.00%	8.00%	6.96%
Direct Capitalization Rate	5.75%	8.00%	6.77%
Triple-Net Hospitals
Discount Rate	5.40%	8.25%	5.83%
Terminal Capitalization Rate	6.50%	7.25%	6.61%
Direct Capitalization Rate	5.25%	6.75%	5.48%
Triple-Net Skilled Nursing
Direct Capitalization Rate	8.25%	8.25%	8.25%
Triple-Net Senior Housing
Direct Capitalization Rate	6.25%	6.50%	6.46%
RIDEA Senior Housing
Direct Capitalization Rate	6.50%	6.50%	6.50%
* Weighted by valuation net operating income.

Valuation of Trilogy Interest

Trilogy includes both a healthcare real estate portfolio comprised of 100 continuing care retirement and skilled nursing communities providing skilled nursing, assisted living, independent living, adult day care and/or memory care services, and also ancillary businesses comprised of pharmacy and therapy businesses (the “Ancillary Businesses”, and together with the Trilogy healthcare real estate portfolio, the “Trilogy Assets”). As part of its valuation, Stanger performed a site visit of each of the Trilogy continuing care retirement and skilled nursing communities. The Trilogy healthcare portfolio was valued utilizing the income approach, specifically a direct capitalization analysis, similar to the process described above in “Valuation of Appraised Properties.” The Ancillary Businesses were also valued utilizing a direct capitalization analyses applied to 2016 budgeted earnings before interest, taxes, depreciation and amortization (EBITDA). From the aggregate gross value of the Trilogy Assets, Stanger added or subtracted, as appropriate, outstanding borrowings based on their value determined by the Advisor, the value held by third-party landlords that lease assets to Trilogy, as determined by Stanger utilizing a direct capitalization analysis, the value of any in-the-money purchase options on such leased properties held by Trilogy, any capital improvements projected by management for the healthcare properties and other balance sheet assets and liabilities as provided by the Advisor to derive an estimated equity value of Trilogy. Stanger then applied the terms of the Trilogy joint venture agreement, including any distribution priorities and factoring in the value of warrants and profits interests given to management, to its Trilogy equity value estimate to establish the value of the Company’s Trilogy Interest. As of the Valuation Date, Stanger’s estimate of the value of the Trilogy Assets (excluding the seven Recent Acquisitions) and Trilogy Interest was approximately $1.280 billion and $625.6 million, respectively. The following summarizes the key assumptions that were used in the direct capitalization analyses to arrive at Stanger’s estimated value of the Trilogy Assets that were utilized in the determination of the Trilogy Interest value:

	Range		Weighted Average
	Min.	Max.
Healthcare Properties
Direct Capitalization Rate	5.92%	11.25%	8.32%
Ancillary Businesses
Direct Capitalization Rate	17.58%	19.70%	18.12%

Valuation of Debt Investments

The estimated value of the Debt Investments was determined by Stanger for each Debt Investment by applying a discounted cash flow (“DCF”) analysis over the projected remaining term of the investment. The cash flows used in the DCF analysis were based on the investment’s contractual agreement and corresponding interest and principal payments. The expected cash flow was then discounted at an interest rate that Stanger deemed appropriate based on what Stanger determined a current market participant would require for instruments with similar collateral and duration assuming an orderly market environment, taking into account items such as remaining loan term, loan-to-value ratio, collateral type, debt service coverage, security position, prepayment provisions and other factors deemed relevant, as available. The range of discount rates used by Stanger for the Debt Investments were 6.00% to 9.00% and the weighted average discount rate was approximately 7.48%.

Debt Liabilities:

The Company used a methodology in accordance with generally accepted accounting principles to determine the fair market value of its debt. The value for each Debt Liability was determined by applying a DCF analysis over the projected remaining term of the investment. The cash flows used in the DCF analysis were based on the investment’s contractual agreement and corresponding interest and principal payments. The expected cash flow was then discounted at an interest rate based on the inquiries of current market participants as to what interest would be required for instruments with similar collateral and duration assuming an orderly market environment. As of the Valuation Date, the estimated value of the Debt Liabilities (including those within Trilogy) was $1.007 billion, compared to an aggregate outstanding principal amount of $1.102 billion. While Stanger did not determine the value of the Debt Liabilities or review the calculations underlying same, Stanger did review the market interest rates used by the Company in determining the fair market value and determined that in the aggregate, the market interest rates utilized were reasonable.

Cash, Other Assets and Liabilities

To derive the estimated per share NAV, Stanger added the Company’s other tangible assets and liabilities from the Company’s June 30, 2016 balance sheet, to its estimated value of the real estate assets, mortgage loans, and loans receivable. The carrying value of a majority of the Company’s other assets and liabilities are considered to equal their fair value due to their short maturities or liquid nature. Certain balances, such as straight-line rent receivables, lease intangible assets and liabilities, deferred financing costs, unamortized lease commissions, and unamortized lease incentives, have been eliminated for the purpose of the valuation due to the fact that the value of those balances were already considered in the valuation of the respective investments or liabilities.

Advisor Subordinated Participation

The estimated per share NAV was calculated by Stanger net of the Advisor’s subordinated participation in net sale proceeds in the event of a liquidation of the portfolio, which the Company advised Stanger was equal to 15% of net sale proceeds after stockholders are paid return of capital plus a 7% cumulative, non-compounded return.

The Board’s Determination of the Estimated Per Share NAV

On October 5, 2016, Stanger delivered its final Reports to the Audit Committee. The Audit Committee was given an opportunity to confer with the Advisor and Stanger regarding the methodologies and assumptions used therein. The Audit Committee then recommended that the Board establish $9.01 as the Company’s per share NAV. The Board is ultimately and solely responsible for the establishment of the estimated value per share of the Company’s common stock. In arriving at its determination of the estimated value per share, the Board considered all information provided in light of its own familiarity with the Company’s assets and unanimously approved the estimated value recommended by the Audit Committee, or a per share NAV of $9.01.

Sensitivity Analysis

Changes to the key assumptions used to arrive at the estimated per share NAV, including the capitalization rates and discount rates used to value the Appraised Properties, Trilogy Assets and Debt Investments, could have a significant impact on the underlying value of the Company’s assets. The following table presents the impact on the estimated per share NAV of the Company’s common stock resulting from a 5.0% increase and decrease to the discount rates and terminal capitalization rates for those Appraised Properties for which the value conclusion was determined upon a DCF analyses, the direct capitalization rates for those Appraised Properties and the Trilogy Assets, the value of which was determined based upon a direct capitalization analysis and the market interest rate for the Debt Investments:

	Range of Value
	Low			Concluded			High
Estimated Per Share Net Asset Value	$	8.44		$	9.01		$	9.63
Weighted Average Discount Rate (Appraised Properties)	7.77		%	7.40		%	7.03		%
Weighted Average Terminal Capitalization Rate (Appraised Properties)	7.26		%	6.92		%	6.57		%
Weighted Average Capitalization Rate (Appraised Properties)	7.01		%	6.67		%	6.34		%
Weighted Average Capitalization Rate (Trilogy)	9.81		%	9.35		%	8.88		%
Weighted Average Discount Rate (Debt Investments)	7.85		%	7.48		%	7.11		%

The following table presents the impact on the estimated per share NAV of the Company’s common stock resulting from a 5.0% increase and decrease to discount rates and terminal capitalization rates for those Appraised Properties for which the value conclusion was determined upon a DCF analyses, the direct capitalization rates for those Appraised Properties and the Trilogy Assets, the value of which was determined based upon a direct capitalization analysis and the market interest rate for the Debt Investments:

	Range of Value
	Low		Concluded		High
Appraised Properties	$	8.68	$	9.01	$	9.36
Trilogy Joint Venture	$	8.78	$	9.01	$	9.26
Debt Investments	$	8.99	$	9.01	$	9.02
Total	$	8.44	$	9.01	$	9.63

Limitations and Risks of Estimated Per Share NAV

As with any valuation, the methodologies used to determine the estimated per share NAV are based upon a number of estimates and assumptions that may prove later to be inaccurate or incomplete. Further, different market participants using different assumptions and estimates could derive different estimated values.

Although the Board relied on estimated values of the Company’s assets and liabilities in establishing the estimated per share NAV, the estimated per share NAV may bear no relationship to the Company’s book or asset value. In addition, the estimated per share NAV may not represent the price at which the shares of the Company’s common stock would trade on a national securities exchange, the amount realized in a sale, merger or liquidation of the Company or the amount a stockholder would realize in a private sale of shares.

The estimated value of the Company’s assets and liabilities is as of a specific date and such value is expected to fluctuate over time in response to future events, including but not limited to, changes to commercial real estate values, particularly healthcare-related real estate, changes in market interest rates for real estate debt, changes in capitalization rates, rental and growth rates, changes in laws or regulations impacting the healthcare industry, demographic changes, returns on competing investments, changes in the amount of distributions on the Company’s common stock, repurchases of the Company’s common stock, the proceeds obtained for any common stock transactions, local and national economic factors and the factors specified in in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. There is no assurance that the methodologies used to establish the estimated per share NAV would be acceptable to the Financial Industry Regulatory Authority, Inc. or in compliance with Employee Retirement Income Security Act guidelines with respect to their reporting requirements.

The Company currently expects to utilize an independent valuation firm to update the estimated per share NAV in the second half of 2017, in accordance with IPA Valuation Guidelines, but is not required to update the estimated per share NAV more frequently than annually.

Share Repurchase Plan

On October 5, 2016, the Company amended and restated its share repurchase plan (the “Amended and Restated Share Repurchase Plan”). The Amended and Restated Share Repurchase Plan, which will take effect with respect to share repurchase requests submitted during the fourth quarter 2016, amends the price at which shares of the Company’s common stock will be repurchased pursuant to the share repurchase plan by amending the definition of the term “Repurchase Amount,” as such term is used in the share repurchase plan. Upon effectiveness of the Amended and Restated Share Repurchase Plan, the Repurchase Amount that will be used to calculate the price at which shares will be repurchased will be the lesser of (i) the amount per share that a stockholder paid for their shares of the Company’s common stock or (ii) the most recent estimated value of one share of the Company’s common stock, as determined by the Company’s board of directors. Formerly, as a result of the termination of the Company’s initial public offering of shares in April 2015, the Repurchase Amount was an amount determined by the Company’s board of directors, in its discretion.

In addition, the Amended and Restated Share Repurchase Plan amends the price at which shares will be repurchased as a result of a stockholder’s death or qualifying disability. Upon effectiveness of the Amended and Restated Share Repurchase Plan, shares repurchased in connection with a stockholder’s death or qualifying disability will be repurchased at a price per share

equal to 100% of the Repurchase Amount. Formerly, shares repurchased in connection with a stockholder’s death or qualifying disability were repurchased at 100% of the price paid by the stockholder to acquire the shares of the Company’s common stock.

In all other material respects, the terms of the share repurchase plan remain unchanged by the Amended and Restated Share Repurchase Plan.

The foregoing description of the amendments to the Company’s share repurchase plan reflected in the Amended and Restated Share Repurchase Plan is qualified in its entirety by reference to the Amended and Restated Share Repurchase Plan attached as Exhibit 4.2 to this Current Report on Form 8-K and incorporated herein by reference.

Forward-Looking Statements

Certain statements contained in this Current Report on Form 8-K, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, statements related to the Company’s expectations regarding the performance of its business and the estimated per share NAV of the Company’s common stock. Stanger relied on forward-looking information, some of which was provided by or on behalf of the Company, in preparing its valuation materials. Therefore, neither such statements nor Stanger’s valuation materials are intended to, nor shall they, serve as a guarantee of the Company’s performance in future periods. You can identify these forward-looking statements by the use of words such as “believes,” “expects,” “will,” “should,” “projects,” “intends,” “estimates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as updated by the Company’s subsequent Quarterly Reports on Form 10-Q for the periods ended March 31, 2016 and June 30, 2016 filed with the U.S. Securities and Exchange Commission. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Current Report on Form 8-K and in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Actual events may cause the value and returns on the Company’s investments to be less than that used for purposes of the Company’s estimated per share NAV.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
4.1	Amended and Restated Distribution Reinvestment Plan
4.2	Amended and Restated Share Repurchase Plan
99.1	Griffin-American Healthcare REIT III, Inc. Letter to Stockholders dated October 7, 2016
99.2	Griffin-American Healthcare REIT III, Inc. Press Release dated October 7, 2016
99.3	Consent of Robert A. Stanger Co., Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Griffin-American Healthcare REIT III, Inc.
October 7, 2016	By: /s/ Jeffrey T. Hanson
	Name: Jeffrey T. Hanson
	Title: Chief Executive Officer

Exhibit Index

Exhibit No.	Description
4.1	Amended and Restated Distribution Reinvestment Plan
4.2	Amended and Restated Share Repurchase Plan
99.1	Griffin-American Healthcare REIT III, Inc. Letter to Stockholders dated October 7, 2016
99.2	Griffin-American Healthcare REIT III, Inc. Press Release dated October 7, 2016
99.3	Consent of Robert A. Stanger Co., Inc.

EX-4.1

EXHIBIT 4.1

AMENDED AND RESTATED

DISTRIBUTION REINVESTMENT PLAN

GRIFFIN-AMERICAN HEALTHCARE REIT III, INC.

Griffin-American Healthcare REIT III, Inc., a Maryland corporation (the “Company”), has adopted this Amended and Restated Distribution Reinvestment Plan (the “Plan”), to be administered by the Company or an unaffiliated third party (the “Administrator”) as agent for participants in the Plan (“Participants”), on the terms and conditions set forth below.

1. Election to Participate. Any purchaser of shares of common stock of the Company, par value $0.01 per share (the “Shares”), may become a Participant by making a written election to participate on such purchaser’s Subscription Agreement at the time of subscription for Shares. Any stockholder who has not previously elected to participate in the Plan may so elect at any time by completing and executing an authorization form obtained from the Administrator or any other appropriate documentation as may be acceptable to the Administrator. Participants in the Plan can choose to have all or a portion of their cash distributions (other than “Excluded Distributions” as defined below) with respect to all Shares owned by them reinvested pursuant to the Plan. Participants may also change the percentage of distributions that will be reinvested at any time by notifying the Administrator.

2. Distribution Reinvestment. The Administrator will receive all cash distributions (other than Excluded Distributions) paid by the Company or an Affiliated Participant with respect to Shares of Participants (collectively, the “Distributions”). Participation will commence with the next Distribution payable after receipt of the Participant’s election pursuant to Paragraph 1 hereof, provided it is received at least ten (10) days prior to the last day of the period to which such Distribution relates. Subject to the preceding sentence, regardless of the date of such election, a holder of Shares will become a Participant in the Plan effective on the first day of the period following such election, and the election will apply to all Distributions attributable to such period and to all periods thereafter. As used in this Plan, the term “Excluded Distributions” shall mean those cash or other distributions designated as Excluded Distributions by the Board of the Company.

3. General Terms of Plan Investments.

(a) The Company intends to offer Shares pursuant to the Plan at a price equal to the most recent estimated value of one share as determined by the Company’s board of directors, regardless of the price per Share paid by the Participant for the Shares in respect of which the Distributions are paid.

(b) Selling commissions will not be paid for the Shares purchased pursuant to the Plan.

(c) Dealer manager fees will not be paid for the Shares purchased pursuant to the Plan.

(d) For each Participant, the Administrator will maintain an account which shall reflect for each period in which Distributions are paid (a “Distribution Period”) the Distributions received by the Administrator on behalf of such Participant. A Participant’s account shall be reduced as purchases of Shares are made on behalf of such Participant.

(e) Distributions shall be invested in Shares by the Administrator promptly following the payment date with respect to such Distributions to the extent Shares are available for purchase under the Plan. If sufficient Shares are not available, any such funds that have not been invested in Shares within 30 days after receipt by the Administrator and, in any event, by the end of the fiscal quarter in which they are received, will be distributed to Participants. Any interest earned on such accounts will be paid to the Company and will become property of the Company.

(f) Participants may acquire fractional Shares so that 100% of the Distributions will be used to acquire Shares. The ownership of the Shares shall be reflected on the books of the Company or its transfer agent.

4. Absence of Liability. Neither the Company nor the Administrator shall have any responsibility or liability as to the value of the Shares or any change in the value of the Shares acquired for the Participant’s account. Neither the Company nor the Administrator shall be liable for any act done in good faith, or for any good faith omission to act hereunder.

5. Suitability. Each Participant shall notify the Administrator in the event that, at any time during his participation in the Plan, there is any material change in the Participant’s financial condition or inaccuracy of any representation under the Subscription Agreement for the Participant’s initial purchase of Shares. A material change shall include any anticipated or actual decrease in net worth or annual gross income or any other change in circumstances that would cause the Participant to

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fail to meet the minimum income and net worth standards set forth in the Company’s prospectus for the Participant’s initial purchase of Shares.

6. Reports to Participants. Within ninety (90) days after the end of each calendar year, the Administrator will mail to each Participant a statement of account describing, as to such Participant, the Distributions received, the number of Shares purchased and the per Share purchase price for such Shares pursuant to the Plan during the prior year. In accordance with Section 5 hereof, the Participant is required to notify the Administrator in the event there is any material change in the Participant’s financial condition or if any representation made by the Participant under the Subscription Agreement for the Participant’s initial purchase of Shares becomes inaccurate. All material information regarding the Distributions to the Participant and the effect of reinvesting such Distributions, including tax information regarding a Participant’s participation in the Plan, will be sent to each Participant by the Company or the Administrator at least annually.

7. Taxes. Taxable Participants may incur a tax liability for Distributions even though they have elected not to receive their Distributions in cash but rather to have their Distributions reinvested in Shares under the Plan.

8. Reinvestment in Subsequent Programs. The Company may determine, in its sole discretion, to cause the Administrator to provide to each Participant (other than Alabama investors, who are not eligible) notice of the opportunity to have some or all of such Participant’s Distributions (at the discretion of the Administrator and, if applicable, the Participant) invested through the Plan in any publicly offered limited partnership, real estate investment trust or other real estate program sponsored by the Company or subsequent publicly offered limited partnership, real estate investment trust or other real estate program sponsored by the Company or its affiliates (a “Subsequent Program”). If the Company makes such an election, Participants (other than Alabama investors, who are not eligible) may invest Distributions in equity securities issued by such Subsequent Program through the Plan only if the following conditions are satisfied:

(i)  prior to the time of such reinvestment, the Participant has received the final prospectus and any supplements thereto offering interests in the Subsequent Program and such prospectus allows investment pursuant to a distribution reinvestment plan;

(ii)  a registration statement covering the interests in the Subsequent Program has been declared effective under the Securities Act of 1933, as amended;

(iii)  the offering and sale of such interests are qualified for sale under the applicable state securities laws;

(iv)  the Participant executes the subscription agreement included with the prospectus for the Subsequent Program; and

(v)  the Participant qualifies under applicable investor suitability standards as contained in the prospectus for the Subsequent Program.

9. Termination.

(a) A Participant may terminate or modify his participation in the Plan at any time by written notice to the Administrator. To be effective for any Distribution, such notice must be received by the Administrator at least ten (10) days prior to the last day of the Distribution Period to which it relates.

(b) Prior to the listing of the Shares on a national securities exchange, a Participant’s transfer of Shares will terminate participation in the Plan with respect to such transferred Shares as of the first day of the Distribution Period in which such transfer is effective, unless the transferee of such Shares in connection with such transfer demonstrates to the Administrator that such transferee meets the requirements for participation hereunder and affirmatively elects participation by delivering an executed authorization form or other instrument required by the Administrator.

10. State Regulatory Restrictions. The Administrator is authorized to deny participation in the Plan to residents of any state or foreign jurisdiction that imposes restrictions on participation in the Plan that conflict with the general terms and provisions of this Plan, including, without limitation, any general prohibition on the payment of broker-dealer commissions for purchases under the Plan.

11. Amendment or Termination by Company.

(a) The terms and conditions of this Plan may be amended by the Company at any time, including but not limited to an amendment to the Plan to substitute a new Administrator to act as agent for the Participants, by mailing an appropriate notice at least ten (10) days prior to the effective date thereof to each Participant; provided however, the Company may not amend the Plan to (a) provide for selling commissions or dealer manager fees to be paid for shares purchased pursuant to this Plan or (b) to revoke a Participant’s right to terminate or modify his participation in the Plan.

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(b) The Administrator may terminate a Participant’s individual participation in the Plan and the Company may terminate the Plan itself, at any time by providing ten (10) days’ prior written notice to a Participant, or to all Participants, as the case may be.

(c) After termination of the Plan or termination of a Participant’s participation in the Plan, the Administrator will send to each Participant funds in the amount of any Distributions in the Participant’s account that have not been invested in Shares. Any future Distributions with respect to such former Participant’s Shares made after the effective date of the termination of the Participant’s participation will be sent directly to the former Participant.

12. Participation by Limited Partners of Griffin-American Healthcare REIT III Holdings, LP. For purposes of this Plan, “stockholders” shall be deemed to include limited partners of Griffin-American Healthcare REIT III Holdings, LP (the “Partnership”), “Participants” shall be deemed to include limited partners of the Partnership that elect to participate in the Plan, and “Distribution,” when used with respect to a limited partner of the Partnership, shall mean cash distributions on limited partnership interests held by such limited partner.

13. Governing Law. This Plan and the Participants’ election to participate in the Plan shall be governed by the laws of the State of Maryland.

14. Notice. Any notice or other communication required or permitted to be given by any provision of this Plan shall be in writing and, if to the Administrator, addressed to Griffin-American Healthcare REIT III, Inc. Distribution Reinvestment Plan Administrator, c/o DST Systems, Inc., P.O. Box 219133, Kansas City, Missouri 64121-9133, or such other address as may be specified by the Administrator by written notice to all Participants. Notices to a Participant may be given by letter addressed to the Participant at the Participant’s last address of record with the Administrator. Each Participant shall notify the Administrator promptly in writing of any changes of address.

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EX-4.2

EXHIBIT 4.2

GRIFFIN-AMERICAN HEALTHCARE REIT III, INC.

AMENDED AND RESTATED SHARE REPURCHASE PLAN

The Board of Directors (the “Board”) of Griffin-American Healthcare REIT III, Inc., a Maryland corporation (the “Company”), has adopted an amended and restated share repurchase plan (the “Repurchase Plan”) by which shares (“Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), may be repurchased by the Company from stockholders subject to certain conditions and limitations. The purpose of this Repurchase Plan is to provide limited interim liquidity for stockholders (under the conditions and limitations set forth below) until a liquidity event occurs. No stockholder is required to participate in the Repurchase Plan.

1.  Repurchase of Shares.     The Company may, at its sole discretion, repurchase Shares presented to the Company for cash to the extent it has sufficient funds to do so and subject to the conditions and limitations set forth herein. Any and all Shares repurchased by the Company shall be canceled, and will have the status of authorized but unissued Shares. Shares acquired by the Company through the Repurchase Plan will not be reissued unless they are first registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended, and other appropriate state securities laws or otherwise issued in compliance with such laws.

2.  Share Repurchases.

Repurchase Price.     Unless the Shares are being repurchased in connection with a stockholder’s death or qualifying disability (as discussed below), the price per Share at which the Company will repurchase Shares will be as follows:

• for stockholders who have continuously held their Shares for at least one year, 92.5% of the Repurchase Amount;

• for stockholders who have continuously held their Shares for at least two years, 95.0% of the Repurchase Amount;

• for stockholders who have continuously held their Shares for at least three years, 97.5% of the Repurchase Amount; and

• for stockholders who have continuously held their Shares for at least four years, 100% of the Repurchase Amount.

The Repurchase Amount for shares purchased under the Repurchase Plan shall be the lesser of the amount per share the stockholder paid for its shares of Common Stock or the most recent estimated value of one share of Common Stock as determined by the Board. The Board will announce any repurchase price adjustment and the time period of its effectiveness as a part of its regular communications with the stockholders.

The purchase price for repurchased Shares will be adjusted for any stock dividends, combinations, splits, recapitalizations, or similar corporate actions with respect to the Common Stock. At any time the repurchase price is determined by any method other than the net asset value of the shares, if the Company has sold property and has made one or more special distributions to the stockholders of all or a portion of the net proceeds from such sales, the per share repurchase price will be reduced by the net sale proceeds per share distributed to investors prior to the repurchase date.

The Board will, in its sole discretion, determine which distributions, if any, constitute a special distribution. While the Board does not have specific criteria for determining a special distribution, the Company expects that a special distribution will only occur upon the sale of a property and the subsequent distribution of the net sale proceeds.

Death or Qualifying Disability.     If Shares are to be repurchased in connection with a stockholder’s death or qualifying disability as provided in Section 4, the price per Share at which the Company will repurchase Shares shall be 100% of the Repurchase Amount. In addition, the Company will waive the one year holding period, as described in Section 4, for shares to be repurchased in connection with a stockholder’s death or qualifying disability. Appropriate legal documentation will be required for repurchase requests upon death or qualifying disability.

3.  Funding and Operation of Repurchase Plan.     The Company may make purchases pursuant to the Repurchase Plan quarterly, at its sole discretion, on a pro rata basis. The Board shall determine whether the Company has sufficient cash available to make repurchases pursuant to the Repurchase Plan in any given quarter. Subject to funds being available, the Company will limit the number of Shares repurchased to five percent (5.0%) of the weighted average number of Shares outstanding during the trailing calendar year prior to the repurchase date; provided however, that Shares subject to a repurchase requested upon the death of a stockholder will not be subject to this cap. Funding for the Repurchase Plan will come exclusively from cumulative proceeds we receive from the sale of Shares pursuant to the Company’s Distribution Reinvestment Plan.

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4.  Stockholder Requirements.     Any stockholder may request a repurchase with respect to all or a designated portion of its Shares, subject to the following conditions and limitations:

Holding Period.     Only Shares that have been held by the presenting stockholder for at least one (1) year are eligible for repurchase by the Company, except as provided below. Requests for the repurchase of Shares that are submitted prior to being eligible for repurchase will not be honored.

Death or Qualifying Disability.     The Company will repurchase Shares upon the death of a stockholder who is a natural person, including Shares held by such stockholder through a revocable grantor trust, or an IRA or other retirement or profit-sharing plan, after receiving written notice from the estate of the stockholder, the recipient of the Shares through bequest or inheritance, or, in the case of a revocable grantor trust, the trustee of such trust, who shall have the sole ability to request repurchase on behalf of the trust. If spouses are joint registered holders of Shares, the request to repurchase the shares may be made if either of the registered holders dies. This waiver of the one-year holding period will not apply to a stockholder that is not a natural person, such as a trust (other than a revocable grantor trust), partnership, corporation or other similar entity.

Furthermore, and subject to the conditions and limitations described below, the Company will repurchase Shares held for less than the one-year holding period by a stockholder who is a natural person, including Shares held by such stockholder through a revocable grantor trust, or an IRA or other retirement or profit-sharing plan, with a “qualifying disability,” as defined below, after receiving written notice from such stockholder provided that the condition causing the qualifying disability was not pre-existing on the date that the stockholder became a stockholder. This waiver of the one-year holding period will not apply to a stockholder that is not a natural person, such as a trust (other than a revocable grantor trust), partnership, corporation or other similar entity.

In order for a disability to be considered a “qualifying disability,” (1) the stockholder must receive a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the Shares to be redeemed, and (2) such determination of disability must be made by the governmental agency responsible for reviewing the disability retirement benefits that the stockholder could be eligible to receive (the “applicable governmental agency”). The “applicable governmental agencies” are limited to the following: (1) if the stockholder paid Social Security taxes and therefore could be eligible to receive Social Security disability benefits, then the applicable governmental agency is the Social Security Administration or the agency charged with responsibility for administering Social Security disability benefits at that time if other than the Social Security Administration; (2) if the stockholder did not pay Social Security benefits and therefore could not be eligible to receive Social Security disability benefits, but the stockholder could be eligible to receive disability benefits under the Civil Service Retirement System (“CSRS”), then the applicable governmental agency is the U.S. Office of Personnel Management or the agency charged with responsibility for administering CSRS benefits at that time if other than the Office of Personnel Management; or (3) if the stockholder did not pay Social Security taxes and therefore could not be eligible to receive Social Security benefits but suffered a disability that resulted in the stockholder’s discharge from military service under conditions that were other than dishonorable and therefore could be eligible to receive military disability benefits, then the applicable governmental agency is the Veteran’s Administration or the agency charged with the responsibility for administering military disability benefits at that time if other than the Veteran’s Administration.

Disability determinations by governmental agencies for purposes other than those listed above, including but not limited to worker’s compensation insurance, administration or enforcement of the Rehabilitation Act or Americans with Disabilities Act, or waiver of insurance premiums, will not entitle a stockholder to the special repurchase terms applicable to stockholders with a “qualifying disability” unless permitted in the discretion of the board of directors. Repurchase requests following an award by the applicable governmental agency of disability benefits must be accompanied by: (1) the investor’s initial application for disability benefits and (2) a Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Veteran’s Administration record of disability-related discharge or such other documentation issued by the applicable governmental agency that we deem acceptable and demonstrates an award of the disability benefits.

We understand that the following disabilities do not entitle a worker to Social Security disability benefits:

• disabilities occurring after the legal retirement age;

• temporary disabilities; and

• disabilities that do not render a worker incapable of performing substantial gainful activity.

Therefore, such disabilities will not qualify for the special repurchase terms except in the limited circumstances when the investor is awarded disability benefits by the other “applicable governmental agencies” described above. However, where a stockholder requests the repurchase of his or her Shares due to a disability, and such stockholder does not have a “qualifying

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disability” under the terms described above, our board of directors may redeem the stockholder’s Shares in its discretion on the special terms available for a qualifying disability.

A stockholder that is a trust may request repurchase of the Shares held by the trust on the terms available in connection with the death or disability of a stockholder if the deceased or disabled was the sole beneficiary of the trust or if the only other beneficiary of the trust is the spouse of the deceased or disabled.

Distribution Reinvestment Plan Shares.     In the event that a stockholder requests repurchase of 100% of the Shares owned by the stockholder on the date of presentment, the Company will waive the one-year holding period requirement for any Shares presented that were acquired pursuant to the Company’s distribution reinvestment plan.

Minimum — Maximum.     A stockholder must present for repurchase a minimum of 25.0%, and a maximum of 100%, of the Shares owned by the stockholder on the date of presentment. Fractional shares may not be presented for repurchase unless the stockholder is presenting 100% of his Shares. The Company will treat a repurchase request that would cause the stockholder to own fewer than 250 Shares as a request to redeem 100% of that stockholder’s Shares. A repurchase request relating to 100% of the Shares owned by the presenting stockholder will be treated by the Company as an automatic termination of such stockholder’s participation in the Company’s distribution reinvestment plan or any other automatic investment program that may be in effect on the date of presentment.

No Encumbrances.     All Shares presented for repurchase must be owned by the stockholder(s) making the presentment, or the party presenting the Shares must be authorized to do so by the owner(s) of the Shares. Such Shares must be fully transferable and not subject to any liens or other encumbrances. Upon receipt of a request for repurchase, the Company will conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. The Company will not repurchase any shares subject to a lien. The Company will bear any costs in conducting the Uniform Commercial Code search.

Share Repurchase Form.     The presentment of Shares must be accompanied by a completed Share Repurchase Request form, a copy of which is attached hereto as Exhibit “A,” executed by the stockholder, its trustee or authorized agent. With respect to Shares held through an IRA or other custodial account, the custodian must provide an authorized signature and medallion stamp guarantee. An estate, heir or beneficiary that wishes to have shares repurchased following the death of a stockholder must mail or deliver to us a written request on a Share Repurchase Request form, including evidence acceptable to our board of directors of the death of the stockholder, and executed by the executor or executrix of the estate, the heir or beneficiary, or their trustee or authorized agent. A stockholder requesting the redemption of his or her shares due to a qualifying disability must mail or deliver to us a written request on a Share Repurchase Request form, including the evidence and documentation described above, or evidence acceptable to our board of directors of the stockholder’s disability. If the shares are to be repurchased under the conditions outlined herein, we will forward the documents necessary to affect the repurchase, including any signature guaranty we may require. All Share certificates, if applicable, must be properly endorsed.

Deadline for Presentment.     All Shares presented and all completed Share Repurchase Request forms must be received by the Repurchase Agent (as defined below) on or before the last day of the second month of each calendar quarter in order to have such Shares eligible for repurchase for that quarter. The Company will repurchase Shares on or about the first day following the end of each calendar quarter.

If the Company can not purchase all shares presented for repurchase in any calendar quarter, based upon insufficient cash available and/or the limit on the number of Shares it may repurchase during any calendar year, it will attempt to honor repurchase requests on a pro rata basis; provided however, that the Company may give priority to the repurchase of a deceased stockholder’s shares. The Company will treat the unsatisfied portion of the repurchase request as a request for repurchase the following calendar quarter if sufficient funds are available at that time, unless the requesting stockholder withdraws its request for repurchase. Such pending requests generally will be honored on a pro rata basis. The Company will determine whether it has sufficient funds available as soon as practicable after the end of each calendar quarter, but in any event prior to the applicable payment date.

Repurchase Request Withdrawal.     A stockholder may withdraw his or her repurchase request upon written notice to the Company at any time prior to the date of repurchase.

Ineffective Withdrawal.     In the event the Company receives a written notice of withdrawal from a stockholder after the Company has repurchased all or a portion of such stockholder’s Shares, the notice of withdrawal shall be ineffective with respect to the Shares already repurchased, but shall be effective with respect to any of such stockholder’s Shares that have not been repurchased. The Company shall provide any such stockholder with prompt written notice of the ineffectiveness or partial ineffectiveness of such stockholder’s written notice of withdrawal.

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Repurchase Agent.     All repurchases will be effected on behalf of the Company by a registered broker-dealer (the “Repurchase Agent”), who shall contract with the Company for such services. All recordkeeping and administrative functions required to be performed in connection with the Repurchase Plan will be performed by the Repurchase Agent.

Termination, Amendment or Suspension of Plan.     The Repurchase Plan will terminate and the Company will not accept Shares for repurchase in the event the Shares are listed on any national securities exchange, the subject of bona fide quotes on any inter-dealer quotation system or electronic communications network or are the subject of bona fide quotes in the pink sheets. Additionally, the Company’s board of directors, in its sole discretion, may terminate, amend or suspend the Repurchase Plan if it determines to do so is in the best interest of the Company. A determination by the Board to terminate, amend or suspend the Repurchase Plan will require the affirmative vote of a majority of the directors, including a majority of the independent directors. If the Company terminates, amends or suspends the Repurchase Plan, the Company will provide stockholders with thirty (30) days advance written notice and the Company will disclose the changes in the appropriate current or periodic report filed with the U.S. Securities and Exchange Commission.

5.  Miscellaneous.

Advisor Ineligible; No Fees.     The Advisor to the Company, Griffin-American Healthcare REIT III Advisor LLC, shall not be permitted to participate in the Repurchase Plan. The Company’s co-sponsors, Advisor, directors or any affiliates thereof shall not receive any fees arising out of the Company’s repurchase of shares.

Liability.     Neither the Company nor the Repurchase Agent shall have any liability to any stockholder for the value of the stockholder’s Shares, the repurchase price of the stockholder’s Shares, or for any damages resulting from the stockholder’s presentation of his or her Shares, the repurchase of the Shares pursuant to this Repurchase Plan or from the Company’s determination not to repurchase Shares pursuant to the Repurchase Plan, except as a result from the Company’s or the Repurchase Agent’s gross negligence, recklessness or violation of applicable law; provided however, that nothing contained herein shall constitute a waiver or limitation of any rights or claims a stockholder may have under federal or state securities laws.

Taxes.     Stockholders shall have complete responsibility for payment of all taxes, assessments, and other applicable obligations resulting from the Company’s repurchase of Shares.

Preferential Treatment of Shares Repurchased in Connection with Death or Disability.     If there are insufficient funds to honor all repurchase requests, preference will be given to shares to be repurchased in connection with a death or qualifying disability.

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EXHIBIT “A”

SHARE REPURCHASE REQUEST

The undersigned stockholder of Griffin-American Healthcare REIT III, Inc. (the “Company”) hereby requests that, pursuant to the Company’s Repurchase Plan, the Company repurchase the number of shares of Common Stock (the “Shares”) indicated below.

ACCOUNT NUMBER:
STOCKHOLDER’S NAME:
STOCKHOLDER’S ADDRESS:
TOTAL SHARES OWNED BY STOCKHOLDER:
NUMBER OF SHARES PRESENTED FOR REPURCHASE:	[ ] 100%
(Note: number of shares presented for repurchase must be equal to or exceed 25.0% of total shares owned.)
REASON FOR REPURCHASE REQUEST (SUBMIT REQUIRED DOCUMENTS, IF APPLICABLE):
[ ] DEATH [ ] QUALIFYING DISABILITY [ ] OTHER

By signing and submitting this form, the undersigned hereby acknowledges and represents to each of the Company and the Repurchase Agent the following:

The undersigned is the owner (or duly authorized agent of the owner) of the Shares presented for repurchase, and thus is authorized to present the Shares for repurchase.

The Shares presented for repurchase are eligible for repurchase pursuant to the Repurchase Plan. The Shares are fully transferable and have not been assigned, pledged, or otherwise encumbered in any way.

The undersigned hereby indemnifies and holds harmless the Company, the Repurchase Agent, and each of their respective officers, directors and employees from and against any liabilities, damages, expenses, including reasonable attorneys’ fees, arising out of or in connection with any misrepresentation made herein.

Stock certificates for the Shares presented for repurchase (if applicable) are enclosed, properly endorsed with signature guaranteed.

It is recommended that this Share Repurchase Request and any attached stock certificates be sent to the Repurchase Agent, at the address below, via overnight courier, certified mail, or other means of guaranteed delivery.

Mail: Griffin Capital Securities, Inc. Griffin-American Healthcare REIT III, Inc. Repurchase Agent c/o DST Systems, Inc. P.O. Box 219133 Kansas City, MO 64121-9133 Overnight Courier: Griffin Capital Securities, Inc. Griffin-American Healthcare REIT III, Inc. Repurchase Agent c/o DST Systems, Inc. 430 West 7th Street Kansas City, MO 64105-1407

Date:  ___________________

Stockholder Signature:______________________________________________________________________

Office Use Only

Date Request Received:

Medallion Stamp Guarantee (Required for custodial accounts)

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EX-99.1

EXHIBIT 99.1

18191 Von Karman Avenue Suite 300 Irvine, CA 92612 (949) 270-9200

October 7, 2016            

Dear Fellow Stockholder:

Thank you for your investment in Griffin-American Healthcare REIT III. We are writing today to provide you with an important company update, including information regarding a recently completed valuation of our portfolio and an estimated net asset value (“NAV”) of our shares that was determined by our board of directors as a result of this valuation process.

As you know, Griffin-American Healthcare REIT III invests in quality healthcare-related real estate, including medical office buildings, hospitals, senior housing, skilled nursing facilities and other healthcare-related facilities. We purchased our first asset in June 2014 and since that time have built an impressive international portfolio acquired for approximately $2.7 billion¹ on a consolidated basis as of June 30, 2016.

Our board of directors has authorized monthly distributions to stockholders equal to $0.60 per share on an annualized basis commencing on May 1, 2014 through December 31, 2016. We do not expect any changes to our distribution policy as a result of the valuation.

Estimated Net Asset Value Per Share

On October 5, 2016, the board of directors of Griffin-American Healthcare REIT III determined an estimated value per share of common stock of $9.01 as of June 30, 2016, following a valuation of the company’s property portfolio performed by Robert A. Stanger & Co. (“Stanger”). Subsequent to June 30, 2016, the REIT has acquired 16 additional healthcare properties for a consolidated purchase price of approximately $172.2 million, which is not assessed in the valuation. Additionally, pursuant to the Investment Program Association’s practice guideline regarding valuations of publicly registered non-listed REITs to which the Stanger valuation methodology conforms, the estimated per share NAV does not include a portfolio premium that may reasonably be expected to accrue in a typical real estate valuation process conducted for transaction purposes, nor does it reflect an enterprise value.

The estimated per share NAV was determined by the board of directors after Stanger, an independent third-party valuation firm, visited each of our properties and conducted valuation analyses of Griffin-American Healthcare REIT III’s property portfolio. Stanger then divided the aggregate value of our property portfolio, cash and other assets, less the estimated value of outstanding mortgage debt and other liabilities, by the number of shares issued and outstanding on an adjusted fully diluted basis. For a full description of the methodology and assumptions used to determine the estimated per share NAV, please see our Current Report on Form 8-K that we filed with the U.S. Securities and Exchange Commission on October 7, 2016.

Distribution Reinvestment Plan

Many of our stockholders participate in our distribution reinvestment plan (“DRIP”), wherein they receive additional shares of common stock in our company rather than receive a monthly cash distribution. In connection with the estimated per share NAV described herein, the board of directors has approved a new purchase price for DRIP shares equal to the estimated per share NAV of $9.01, which will be effective beginning with the distribution payment to stockholders to be paid in the month of November 2016. If you are a current DRIP participant, you do not need to do anything — you will automatically continue to be issued DRIP shares under the new purchase price. Please refer to the enclosed Amended and Restated Distribution Reinvestment Plan for additional information.

Share Repurchase Plan

In accordance with our share repurchase plan (“SRP”), the per share repurchase price will depend on the length of time the stockholder has held their shares as follows: after one year from the purchase date, 92.5 percent of the “repurchase amount”; after two years, 95 percent; after three years, 97.5 percent; and after four years, 100 percent. The “repurchase amount” is the lesser of the purchase price paid per share or the current estimated per share NAV. The estimated per share NAV of $9.01 will now serve as the repurchase amount for most stockholders, effective with respect to share repurchase requests submitted during the fourth quarter 2016, until such time as the board determines a new estimated per share NAV. Please refer to the enclosed Amended and Restated Share Repurchase Plan for additional information.

www.HealthcareREIT3.com

It is important to keep in mind that the estimated per share NAV of $9.01 is simply a snapshot as of a particular date and may fluctuate over time as we continue to purchase properties and actively manage our portfolio. The estimated per share NAV is not intended to represent the amount that you could expect to receive if you were to sell your shares now or when we complete a liquidity event.

We are very pleased with the growth and performance of Griffin-American Healthcare REIT III, which acquired its first property just 28 months ago. As we continue to pursue our strategic plan, we will work to further enhance the value of our portfolio and to maximize shareholder value. Should you have any questions, please contact our Investor Services department at 888-926-2688.

Thank you for your continued support.

Sincerely,

Jeff Hanson	Danny Prosky
Chairman and Chief Executive Officer	President and Chief Operating Officer

Enclosures

(1) Based on consolidated purchase price of real estate and real estate-related investments, including development projects, in our total portfolio as of June 30, 2016.

18191 Von Karman Avenue Suite 300 Irvine, CA 92612 (949) 270-9200

Frequently Asked Questions     

1) Why did the board determine a new estimated per share NAV?

The board of directors determined an estimated per share net asset value (“NAV”) of our common stock in order to assist the broker-dealers that participated in our offering in meeting their customer account statement reporting obligations as required by the Financial Industry Regulatory Authority (“FINRA”).

2) Did the valuation include a portfolio premium or other adjustments to value?

The valuation performed by Stanger was conducted pursuant to industry guidelines that do not allow for the consideration of a portfolio premium or other adjustments that we would reasonably expect to accrue in a typical real estate valuation process conducted for transaction purposes, nor did it include an enterprise value.

3) How was the estimated per share NAV determined?

Robert A. Stanger & Co., Inc. (“Stanger”), an independent third party valuation firm, evaluated our property portfolio and calculated an estimated per share NAV of our common stock of $9.01 as of June 30, 2016. The audit committee of the board of directors, comprised solely of independent directors, engaged Stanger and reviewed Stanger’s valuation analyses and report, and recommended an estimated per share NAV to the full board. Based on the audit committee’s recommendation, the board of directors adopted an estimated per share NAV of $9.01. For a full description of the methodology and assumptions used to determine the estimated per share NAV, please see our Current Report on Form 8-K that we filed with the U.S. Securities and Exchange Commission on October 7, 2016.

4) Will my monthly distribution payment change?

No. We do not expect any changes to our distribution policy as a result of the valuation.

5) What impact does the estimated per share NAV have on the distribution reinvestment plan (“DRIP”)?

The board of directors has approved a new purchase price for DRIP shares equal to the estimated per share NAV of $9.01. Previously, DRIP shares were sold for $9.50 per share. The new DRIP price will be effective beginning with the distribution payment to stockholders to be paid in the month of November 2016. Stockholders currently enrolled in the DRIP do not need to do anything — they will automatically continue to be issued DRIP shares at the new price of $9.01. Please refer to the enclosed Amended and Restated Distribution Reinvestment Plan for additional information.

6) How will the share repurchase plan (“SRP”) change as a result of the estimated per share NAV?

Going forward, the per share repurchase price will be based on the “repurchase amount,” which is the lessor of the purchase price paid per share or the current estimated per share NAV. Shares accepted for repurchase will be repurchased at a price equal to 92.5 percent to 100 percent of the repurchase amount, depending on the length of ownership. Accordingly, the estimated per share NAV of $9.01 will serve as the repurchase amount for most stockholders, pending the future determination of a new estimated per share NAV. Please refer to the enclosed Amended and Restated Share Repurchase Plan for additional information.

7) When will the estimated per share NAV be reflected on my quarterly customer account statement?

Your quarterly customer account statement will reflect the $9.01 estimated per share NAV beginning with your fourth quarter statement, which will be provided to you in January 2017.

8) Will the estimated per share NAV change?

The board of directors expects to perform annual valuations of our property portfolio henceforth and will adjust the estimated per share NAV depending upon the results of these annual valuations.

www.HealthcareREIT3.com

9) Who can I contact for additional information?

Please contact our Investor Services department at 888-926-2688 should you have any questions.

This letter contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our expectations regarding our continued success, changes to our distribution policy, the estimated per share NAV of our common stock and our future determinations thereof, our ability to acquire additional properties, our ability to actively manage our portfolio, the completion of a liquidity event, our ability to successfully pursue our strategic plan, our ability to further enhance the value of our portfolio and our ability to maximize shareholder value. We intend for all forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the following: our strength and financial condition and uncertainties relating to the financial strength of our current and future real estate investments; uncertainties relating to our ability to successfully pursue our strategic plan; uncertainties relating to the local economies where our real estate investments are located; uncertainties relating to the requirements related to additional acquisitions; uncertainties relating to changes in general economic and real estate conditions; uncertainties regarding changes in the healthcare industry; uncertainties regarding changes in the Investment Program Association’s practice guideline regarding valuations of publicly registered non-listed REITs; uncertainties relating to the implementation of recent healthcare legislation; uncertainties relating to the implementation of our real estate investment strategy; and other risk factors as outlined in our company’s periodic reports, as filed with the U.S. Securities and Exchange Commission. Forward-looking statements in this document speak only as of the date on which such statements were made, and undue reliance should not be placed on such statements. We undertake no obligation to update any such statements that may become untrue because of subsequent events.

EX-99.2

EXHIBIT 99.2

Contact: Damon Elder

(949) 270-9207

delder@ahinvestors.com

Griffin-American Healthcare REIT III Announces

Estimated Per Share Value of $9.01

IRVINE, Calif. (Oct. 7, 2016) – Griffin-American Healthcare REIT III, Inc. announced today that its board of directors has approved an estimated per share net asset value (“NAV”) of its common stock of $9.01 as of June 30, 2016.

“We are very pleased with the growth and performance of Griffin-American Healthcare REIT III, which acquired its first property just 28 months ago and has since built a premier international healthcare portfolio purchased for approximately $2.7 billion¹ located throughout the United States and the United Kingdom,” said Jeff Hanson, chairman and CEO of Griffin-American Healthcare REIT III.

Following the recommendation of its audit committee, composed solely of independent directors, the estimated per share NAV was determined by the board of directors. Robert A. Stanger & Co., Inc. (“Stanger”), an independent third-party valuation firm, provided an estimated per share NAV of $9.01 to the company’s board of directors, which was based upon Stanger’s valuation analyses of Griffin-American Healthcare REIT III’s property portfolio plus cash and other assets, less the estimated value of outstanding mortgage debt and other liabilities, divided by the number of shares issued and outstanding on an adjusted fully diluted basis. This methodology complies with the Investment Program Association’s practice guideline regarding valuations of publicly registered non-listed REITs (“IPA guidelines”).

Consistent with the IPA guidelines, Stanger’s valuation does not include a portfolio premium that may reasonably be expected to accrue in a typical real estate valuation process conducted for transaction purposes, nor does it reflect an enterprise value.

About Griffin-American Healthcare REIT III, Inc.

Griffin-American Healthcare REIT III, Inc. qualified to be taxed as a real estate investment trust for federal income tax purposes beginning with its taxable year ended December 31, 2014, and intends to continue to qualify to be taxed as a REIT. Griffin-American Healthcare REIT III invests in a diversified portfolio of healthcare real estate assets, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. The REIT is co-sponsored by American Healthcare Investors and Griffin Capital Corporation. For more information regarding Griffin-American Healthcare REIT III, please visit www.HealthcareREIT3.com.

(1) Based on consolidated purchase price of real estate and real estate-related investments, including development projects, in our total portfolio as of June 30, 2016.

This release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend for all forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the following: our strength and financial condition and uncertainties relating to the financial strength of our current and future real estate investments; uncertainties relating to our ability to successfully pursue our strategic plan; uncertainties relating to the local economies where our real estate investments are located; uncertainties relating to changes in general economic and real estate conditions; uncertainties regarding changes in the healthcare industry; uncertainties relating to the implementation of recent healthcare legislation; uncertainties relating to the implementation of our real estate investment strategy; and other risk factors as outlined in our company’s periodic reports, as filed with the U.S. Securities and Exchange Commission. Forward-looking statements in this document speak only as of the date on which such statements were made, and undue reliance should not be placed on such statements. We undertake no obligation to update any such statements that may become untrue because of subsequent events.

EX-99.3

EXHIBIT 99.3

Consent of Independent Valuation Expert

Griffin-American Healthcare REIT III, Inc.

We hereby consent to the reference to our name and description of our role in the valuation process of certain real estate assets of Griffin-American Healthcare REIT III, Inc. (the “Company”) included in the Current Report on Form 8-K dated October 7, 2016 and incorporated by reference in the Company’s Registration Statement on Form S-3 (Registration No. 333-202975). In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended.

Robert A. Stanger & Co., Inc.

Shrewsbury, New Jersey

October 7, 2016