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): April 4, 2019

Griffin-American Healthcare REIT IV, Inc.

(Exact name of registrant as specified in its charter)

Maryland	000-55775	47-2887436
(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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    x

Item 7.01 Regulation FD Disclosure.

On April 8, 2019, Griffin-American Healthcare REIT IV, Inc. (the “Company”) issued a letter to its stockholders announcing an updated estimated per share net asset value (“NAV”) of the Company’s Class T and Class I common stock of $9.54, as well as updates to the Company’s distribution reinvestment plan (“DRIP”) and share repurchase plan (“SRP”) prices, as discussed in greater detail in Item 8.01 of this Current Report on Form 8-K below. 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 April 8, 2019, the Company also issued a press release announcing the updated 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 April 4, 2019, the Company’s board of directors (the “Board”), at the recommendation of the Audit Committee of the Board (the “Committee”), which Committee is comprised solely of independent directors, unanimously approved and established an updated estimated per share NAV of the Company’s Class T and Class I common stock of $9.54. The updated 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 of Class T and Class I common stock outstanding on a fully diluted basis, calculated as of December 31, 2018 (the “Valuation Date”). The Company is providing this updated 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 Institute for Portfolio Alternatives (“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 changes between the Valuation Date and the date of this filing that would materially impact the updated estimated per share NAV.

The Board previously determined an estimated per share NAV of the Company’s Class T and Class I common stock of $9.65 calculated as of December 31, 2017. The Company intends to publish an updated estimated per share NAV on at least an annual basis.

Background

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 estimated per share NAV of the Company’s common stock, 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 IV Advisor, LLC, the Company’s external advisor (the “Advisor”), and CBRE Capital Advisors, Inc. (“CBRE Cap”), an independent FINRA registered broker-dealer firm that specializes in providing real estate financial services. The engagement of CBRE Cap was approved by the Committee. CBRE Cap engaged CBRE Valuation & Advisory Services, an affiliate of CBRE Cap that conducts appraisals and valuations of real properties, to perform cash flow projections and unlevered, ten-year discounted cash flow (“DCF”) analyses from restricted-use appraisals for each of the Company’s operating assets as of the Valuation Date. CBRE Cap prepared a valuation report (the “Valuation Report”), summarizing key information and assumptions and providing an appraised value on 56medical office and healthcare related properties (the “Appraised Properties”) owned by the Company as of the Valuation Date, reduced by CBRE Cap’s valuation of the interest held by the Company’s joint venture partners, unaffiliated third parties, with respect to the Central Florida Senior Housing Portfolio (“Central Florida”) and the Pinnacle Portfolio (“Pinnacle”),then adjusting for CBRE Cap’s valuation of the Company’s mortgage loans, term loan and line of credit payables (the “Debt Liabilities”), and CBRE Cap’s estimate of the Advisor’s subordinated participation in net sales proceeds due upon liquidation of the Company’s portfolio. The Valuation Report also included the value consideration of five assets

acquired by the Company in November and December 2018 at the acquisition prices, the Company’s approximately six percent interest in a joint venture that owns approximately 97 percent of Trilogy Investors, LLC (“Trilogy”), the parent company of Trilogy Health Services, LLC, at the net cash purchase price, the Company’s cash, other assets and other liabilities as of the Valuation Date to calculate an estimated per share NAV of the Company’s common stock.

Upon the Committee’s receipt and review of the Valuation Report, meeting with representatives from CBRE Cap and consideration of the material assumptions and valuation methodologies applied and described therein, the Committee concluded that the range of $9.29 to $9.94 for the estimated per share NAV of the Company’s Class T and Class I common stock contained in the Valuation Report was reasonable, and after the recommendation from the Advisor that the Committee recommend to the Board $9.54 as the estimated per share NAV of the Company’s Class T and Class I common stock, the Committee recommended to the Board that it adopt $9.54 as the estimated per share NAV of the Company’s Class T and Class I common stock, which valueis the mid-point of the range of values determined by CBRE Cap in its Valuation Report. On April 4, 2019, upon the Board’s receipt and review of the Valuation Report, the Board accepted the recommendation of the Committee and approved $9.54 as the estimated per share NAV of the Company’s Class T and Class I common stock as of December 31, 2018, exclusive of any portfolio premium. The Company currently expects to publish an updated estimated per share NAV of the Company’s Class T and Class I common stock on at least an annual basis.

The table below sets forth the calculation of the Company’s estimated per share NAV as of December 31, 2018 and December 31, 2017. Certain amounts are reflected net of non-controlling interests, as applicable. Year-over-year amounts may not be directly comparable due to in-period acquisitions, capital investments and changes to the Company’s equity base and share count.

Estimated Per Share NAV

	As of December 31, 2018						As of December 31, 2017
	Estimated Value			Estimated Value Per Share			Estimated Value			Estimated Value Per Share
Appraised Properties and Other Properties(1)	$	915,567,000		$	13.22		$	517,909,000		$	12.27
Equity Investment in Trilogy	48,000,000			0.69			—			—
Cash and Other Assets	32,421,000			0.47			12,055,000			0.29
Debt Liabilities	(292,025,000		)	(4.22		)	(95,568,000		)	(2.26		)
Other Liabilities	(43,146,000		)	(0.62		)	(27,297,000		)	(0.65		)
Advisor Subordinated Participation	—			—			—			—
Estimated Net Asset Value	$	660,817,000		$	9.54		$	407,099,000		$	9.65
Fully Diluted Shares Outstanding	69,255,179						42,207,368
_____________

(1) Appraised Properties net of interest held by the Company’s joint venture partners. Other Properties includes $107,199,000 of properties at acquisition prices as of December 31, 2018.

Methodology and Key Assumptions

In determining an estimated per share NAV of the Company’s common stock, the Board considered the recommendation of the Committee, the Valuation Report provided by CBRE Cap 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.

Independent Valuation Firm

CBRE Cap was selected by the Committee to render its Valuation Report as further described below. CBRE Group, Inc. (“CBRE”) is a Fortune 500 and S&P 500 company headquartered in Los Angeles, California and one of the world’s largest commercial real estate services and investment firms (in terms of 2018 revenue). CBRE Cap, a subsidiary of CBRE, is a FINRA registered broker-dealer firm that specializes in providing real estate financial services. CBRE Cap and its affiliates possess substantial experience in the valuation of assets similar to those owned by the Company and regularly undertake the valuation of securities in connection with public offerings, private placements, business combinations and similar transactions.

While the Company, its affiliates and other entities managed or sponsored by affiliates of the Advisor may have engaged or may engage CBRE Cap or its affiliates 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 CBRE Cap. The Company engaged CBRE Cap, with approval from the Committee, to deliver its Valuation Report to assist in the estimated per share NAV determination. For the preparation of the Valuation Report, the Company paid CBRE Cap a customary fee for service of this nature, no part of which was contingent relating to the provision of services or specific findings. In addition, the Company has agreed to indemnify CBRE Cap against certain liabilities arising out of this engagement. CBRE Cap previously was engaged by the Company as an appraiser to provide its estimate of the per share NAV of the Company’s Class T and Class I common stock calculated as of December 31, 2017. With the exception of this prior engagement by the Company and the current engagement, in the two years prior to the date of this filing, neither CBRE Cap nor its affiliates have been engaged by the Company, the Advisor, or its affiliates with respect to valuation services. CBRE Cap or its affiliates may from time to time in the future perform similar or other services for the Company or the Advisor or their respective affiliates. The compensation the Company paid to CBRE Cap 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 appraisal of the Company’s real property assets (“MAI Appraisal”) was performed in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practice, the real estate appraisal industry standards created by The Appraisal Foundation. The MAI Appraisal was commissioned by CBRE Cap from CBRE Valuation and Advisory Services. The MAI Appraisal was prepared by personnel who are members of the Appraisal Institute and have the Member of Appraisal Institute (“MAI”) designations. In preparing its Valuation Report, CBRE Cap 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.

CBRE Cap collected reasonably available material information that it deemed relevant in appraising the Company’s Appraised Properties and Debt Liabilities and estimating the per share NAV of the Company’s stock. CBRE Cap relied in part on information provided by the Company and 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) loan agreements, collateral information and amortization schedules; and (v) information regarding recent or planned capital expenditures. In conducting its investigation and analyses, CBRE Cap took into account customary and accepted financial and commercial procedures and considerations as they deemed relevant. Although CBRE Cap 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. CBRE Cap has assumed that any operating or financial forecasts and other information and data provided to or otherwise reviewed by or discussed with CBRE Cap were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments (including subjective judgments) of the Company’s management, the Board, and/or the Advisor. CBRE Cap 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. CBRE Cap assumes no obligation to update or otherwise revise these materials. CBRE Cap and its affiliates are not responsible for the accuracy of the information provided to it by the Company and the Advisor.

Although CBRE Cap considered comments received from the Company or the Advisor during the valuation process, the final appraised values of the Company’s Appraised Properties, including the estimated value of the Company’s joint venture interests and Debt Liabilities in the Valuation Report, were determined by CBRE Cap. The Valuation Report was based upon market, economic, financial and other information, circumstances and conditions existing prior to the Valuation Date, and any material

change in such information, circumstances or conditions may have a material effect on the estimated per share NAV. The Valuation Report is 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 Valuation Report is not addressed to the public, may not be and should not be relied upon by any other person to establish an estimated per share NAV of the Company’s common stock, and does not constitute a recommendation by CBRE Cap to any person to purchase or sell any shares of the Company’s common stock and should not be represented as such. Neither CBRE Cap nor any of its affiliates, including CBRE Valuation & Advisory Services, is responsible for or participated in the Board’s determination of the estimated per share NAV of the Company’s common stock, the price of shares repurchased pursuant to the Company’s SRP or the offering price of shares sold pursuant to the Company’s DRIP.

In performing its analyses, CBRE Cap made numerous assumptions as of various points in time with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are necessarily subject to change and beyond the control of CBRE Cap and the Company. The analyses performed by CBRE Cap are not necessarily indicative of actual values, trading values or actual future results of the Company’s common stock that might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. CBRE Cap relied on the appraisals and valuations of real properties conducted by CBRE Valuation & Advisory Services, and CBRE Cap’s analyses do not purport to be standalone appraisals or to reflect the prices at which the properties may actually be sold, and such estimates are inherently subject to uncertainty. The actual value of the Company’s common stock may vary significantly depending on numerous factors that generally impact the price of securities, the financial condition of the Company and the state of the real estate industry more generally. Accordingly, with respect to the estimated per share NAV of the Company’s common stock, neither the Company nor CBRE Cap can give any assurance that:

• a stockholder would be able to resell his or her shares at the estimated per share NAV of the Company;

• a stockholder would ultimately realize distributions per share equal to the estimated per share NAV of the Company upon liquidation of the Company’s assets and settlement of the Company’s liabilities or a sale of the Company;

• the Company’s shares would trade at a price equal to or greater than the estimated per share NAV of the Company’s common stock if the Company listed them on a national securities exchange;

• a third party would acquire the Company at a value equal to or greater than the estimated per share NAV of the Company’s common stock; or

• the methodology used to establish the estimated per share NAV of the Company’s common stock would be acceptable to FINRA or under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for compliance with its reporting requirements.

In addition, the estimated per share NAV of the Company’s common stock does not reflect “enterprise value” which may include an adjustment for:

• the large size of the Company’s portfolio given that some buyers may be willing to pay more for a large portfolio than they are willing to pay for each property in the portfolio separately;

• any other intangible value associated with a going concern; or

• the possibility that the Company’s shares could trade at a premium or a discount to net asset value if we listed our shares on a national securities exchange.

Furthermore, because the estimated per share NAV is intended to reflect the estimated value on the date that the per share NAV is determined, the estimated per share NAV of $9.54 for the Class T common stock does not reflect any obligation to pay future stockholder servicing fees that may potentially become payable after the Valuation Date. As a result, the estimated liability for future stockholder servicing fees, which is accrued at the time each share is sold, has no effect on the per share NAV for shares of Class T common stock.

After review of the range contained in CBRE Cap’s Valuation Report, the Board used an aggregate value of the Appraised Properties and other properties as of the Valuation Date of approximately $915,567,000, the mid-point of the range of values, to determine the Company’s estimated per share NAV, compared with an aggregate initial investment of approximately $821,689,000.

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

Valuation Methodology

Valuation of Appraised Properties

To estimate the value of the Appraised Properties, CBRE Cap conducted an appraisal for the 45 Appraised Properties, consisting of 24 medical office properties and 21 senior housing and care properties wholly owned by the Company as well as 11 senior housing properties operated utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) owned in joint ventures with a minority partner.

In preparing the Valuation Report, CBRE Cap, among other things:

• reviewed financial and operating information requested from or provided by the Company and the Advisor;

• reviewed and discussed with senior management of the Company and its Advisor the historical and anticipated future financial performance of the Company’s properties, including forecasts prepared by the Company and the Advisor;

• commissioned the MAI Appraisals and performed analyses and studies for the properties;

• conducted or reviewed CBRE Cap proprietary research, including market and sector capitalization rate surveys;

• reviewed third-party research, including Wall Street equity reports and online data providers;

• compared financial information of the Company to similar information of companies that CBRE Cap deemed to be comparable;

• reviewed the Company’s reports filed with the SEC; and

• reviewed the audited financial statements for the period ended December 31, 2018.

In determining its value opinion of each Appraised Property, CBRE Cap 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, CBRE Cap utilized an unlevered, ten-year DCF analysis from MAI Appraisals. The terminal capitalization rate method was used to calculate the terminal value of the asset, with such rate based on MAI Appraisals and the specific geographic location of the assets and other relevant factors. In selecting each capitalization rate, CBRE Cap 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 net leased properties, the lease coverage ratios, and other unique property factors. In applying the DCF 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, CBRE Cap 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. CBRE Cap 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. CBRE Cap then applied the terms of the Central Florida and Pinnacle joint venture agreements, including any distribution priorities and factoring in the value of the promote given to the joint venture partners, to its Central Florida and Pinnacle equity value estimates to establish the value of the Company’s Central Florida and Pinnacle interests. CBRE Cap’s Appraisal Report was certified by an appraiser licensed in each state in which the Appraised Properties were located.

After review of the range contained in CBRE Cap’s Valuation Report, the Board used an aggregate estimated value of the Appraised Properties and other properties as of the Valuation Date of approximately $915,567,000, the mid-point of the range of values, to determine the Company’s estimated per share NAV. The following summarizes the key assumptions that were used in the DCF analyses to arrive at the value of the Appraised Properties as of December 31, 2018:

Assumptions	Range
Discount Rates
Medical Office Buildings	6.87% - 7.23%
Senior Housing and Care Properties	8.51% - 8.95%
Senior Housing Properties — RIDEA/Partially Owned Properties	8.07% - 8.48%
Terminal Capitalization Rates
Medical Office Buildings	6.42% - 6.75%
Senior Housing and Care Properties	7.75% - 8.15%
Senior Housing Properties — RIDEA/Partially Owned Properties	7.33% - 7.71%

Valuation of Debt Liabilities

The estimated value of the Debt Liabilities was determined by CBRE Cap by applying a DCF analysis over the projected remaining term of each debt liability. The cash flows used in the DCF analysis were based on the loan’s contractual agreement and corresponding interest and principal payments. The expected cash flow was then discounted at an interest rate that CBRE Cap deemed appropriate based on what CBRE Cap 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.

Equity Investment

The Company owns an approximately six percent interest in a joint venture that owns approximately 97 percent of Trilogy. The estimated value of this interest was reflected at the net cash purchase price.

Cash, Other Assets and Other Liabilities

To derive the estimated per share NAV, CBRE Cap increased or decreased the estimated value of the Appraised Properties, including the Central Florida and Pinnacle interests and Debt Liabilities, accordingly, by the Company’s other assets and other liabilities included in the Company’s December 31, 2018 balance sheet. The carrying value of a majority of the Company’s other assets and other 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 CBRE Cap net of the Advisor’s subordinated participation in net sales proceeds in the event of a liquidation of the portfolio, which the Company advised CBRE Cap was equal to 15.0% of net sales proceeds after stockholders are paid a full return of capital plus an annual 6.0% cumulative, non-compounded return. As of December 31, 2018, CBRE Cap attributed no value to the Advisor’s subordinated participation in net sales proceeds in the event of a liquidation of the portfolio.

The Board’s Determination of the Estimated Per Share NAV

On April 4, 2019, CBRE Cap delivered its final Valuation Report to the Committee that contained a range for the Company’s estimated per share NAV of $9.29 to $9.94. The Committee was given an opportunity to confer with the Advisor and CBRE Cap regarding the methodologies and assumptions used therein, and the Advisor recommended that the Committee recommend to the Board $9.54 as the estimated per share NAV of the Company’s Class T and Class I common stock. On April 4, 2019, the Committee then recommended that the Board establish $9.54 as the estimated per share NAV of the Company’s Class T and Class I common stock, which value is the mid-point of the range of values determined by CBRE Cap. The Board is ultimately and solely responsible for the establishment of the estimated per share NAV of the Company’s Class T and Class I common stock. In arriving at its determination of the estimated per share NAV, 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 Committee, or an estimated per share NAV of the Company’s Class T and Class I common stock of $9.54.

Sensitivity Analysis

Changes to the key assumptions used to arrive at the estimated per share NAV range, including the capitalization rates and discount rates used to value the Appraised Properties, including the Central Florida and Pinnacle interests and Debt Liabilities, could have a significant impact on the underlying value of the Company’s assets. The following table presents the impact on the mid-point of the range of values determined by CBRE Cap resulting from a 2.5% increase and decrease to the discount rates and terminal capitalization rates discussed in the Valuation Methodology above, which represents a 5.0% sensitivity analysis.

Increase (Decrease) on the Estimated Value per Share Due to:

	Decrease of 2.5%		Increase of 2.5%
Terminal capitalization rate	$	0.16	$	(0.16	)
Discount rate	$	0.17	$	(0.16	)

Limitations and Risks of Estimated Per Share NAV

As with any valuation, the methodologies used by the Board to determine the estimated per share NAV are based upon a number of estimates, assumptions, judgements and opinions 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 value as determined by GAAP, as the Company’s book value for most real estate is based on the amortized cost of the property, subject to certain adjustments. 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.

Furthermore, in reaching an estimated per share NAV of the Company’s shares, the Board did not include a discount for debt that may include a prepayment obligation or a provision precluding assumption of the debt by a third party. In addition, costs that are likely to be incurred in connection with an appropriate exit strategy, whether that strategy involves a listing of the Company’s shares of common stock on a national securities exchange, a merger of the Company, or a sale of the Company’s portfolio, were not included in the Board’s estimate of the per share NAV of the Company’s 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 or other transactions, local and national economic factors and the factors specified in Part I, Item 1A, Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. There is no assurance that the methodologies used to establish the estimated per share NAV would be acceptable to FINRA or in compliance with ERISA guidelines with respect to their reporting requirements.

Revised Distribution Reinvestment Plan Share Price

Pursuant to the DRIP, distributions will be reinvested in shares of the Company’s Class T and Class I common stock at a price per share equal to the most recent estimated value of one share of the Company’s Class T common stock, as determined by the Board. Accordingly, commencing with the distribution payment to be paid to the Company’s stockholders in the month of May 2019, shares of the Company’s Class T and Class I common stock issued pursuant to the DRIP will be issued at $9.54 per share until such time as the Board determines an updated estimated per share NAV. Stockholders who presently participate in the DRIP do not need to take any action to continue their participation in the DRIP.

Share Repurchase Plan

Pursuant to the Company’s SRP, commencing with the quarter ending June 30, 2019, the “Repurchase Amount” that will be used to calculate the price at which shares will be repurchased will be equal to the lesser of: (i) the amount per share that a stockholder paid for its shares of the Company’s common stock; or (ii) the most recent estimated value of one share of the applicable class of common stock as determined by the Board (which, effective April 4, 2019, is $9.54 per share for the Company’s Class T and Class I common stock). Notwithstanding the foregoing, 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 amount per share the stockholder paid for its shares of the Company’s common stock.

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. CBRE Cap 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 CBRE Cap’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, 2018 filed with the SEC. 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
99.1	Griffin-American Healthcare REIT IV, Inc. Letter to Stockholders dated April 8, 2019
99.2	Griffin-American Healthcare REIT IV, Inc. Press Release dated April 8, 2019

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 IV, Inc.
April 8, 2019	By: /s/ Jeffrey T. Hanson
	Name: Jeffrey T. Hanson
	Title: Chief Executive Officer

EX-99.1

EXHIBIT 99.1

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

April 8, 2019                

Dear Fellow Stockholder:

Thank you for your investment in Griffin-American Healthcare REIT IV. We are writing today to provide you with an important company update, including information regarding a recently completed valuation of our portfolio and an updated estimated per share 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 IV invests in quality healthcare-related real estate assets. We purchased our first asset in June 2016 and since that time have built an exceptional portfolio of healthcare investments valued in excess of $982 million¹ and are pursuing approximately $154 million in additional pending acquisitions,² which would result in a total portfolio in excess of $1.1 billion upon the successful completion of these potential acquisitions.

In accordance with our investment strategy, we are pursuing a selective approach to acquiring real estate, one that we believe will result in a high-quality portfolio of healthcare assets that delivers strong financial performance. As our recently filed Annual Report on Form 10-K for the year ended December 31, 2018 demonstrates, our portfolio is performing very well, and enjoys strong overall occupancy, long weighted-average remaining lease terms, and rising net operating income, funds from operations and modified funds from operations.

Estimated Net Asset Value Per Share

On April 4, 2019, the board of directors of Griffin-American Healthcare REIT IV determined an updated estimated per share NAV of the company’s Class T and Class I common stock of $9.54 as of December 31, 2018, after having reviewed a valuation report that contained a range of values for the company’s common stock delivered by CBRE Capital Advisors, Inc. (“CBRE Cap”), an independent Financial Industry Regulatory Authority registered broker-dealer firm that specializes in providing real estate financial services. CBRE Cap engaged CBRE Valuation & Advisory Services, an affiliate of CBRE Cap that conducts appraisals and valuations of real properties, to perform certain analyses on the company’s operating assets. The valuation report delivered by CBRE Cap was prepared with numerous assumptions made and is not necessarily indicative of actual values, trading values or actual future results of the Company’s common stock that might be achieved. Subsequent to December 31, 2018, the real estate investment trust (“REIT”) has acquired two additional healthcare properties for a consolidated contract purchase price of $17,600,000, which is not assessed in the valuation. Additionally, pursuant to the Institute for Portfolio Alternatives’ practice guideline regarding valuations of publicly registered non-listed REITs to which the CBRE valuation methodology conforms, the estimated per share NAV does not include a portfolio premium that may accrue in a typical real estate transaction, nor does it reflect an enterprise value.

The estimated per share NAV was determined by the board of directors based on the recommendation of its audit committee, which is comprised solely of independent directors, that it adopt $9.54 as the estimated per share NAV, which represents the mid-point of the range of values contained in the valuation report provided by CBRE Cap. To determine the estimated range of values, CBRE Cap conducted a valuation analyses of our property portfolio. CBRE Cap then divided the estimated aggregate value of our property portfolio (reducing CBRE Cap’s valuation of the interest held by our joint venture partners), cash and other assets, less the estimated value of outstanding mortgage debt and other liabilities and CBRE Cap’s estimate of Griffin-American Healthcare REIT IV Advisor, LLC’s, the Company’s external advisor, subordinated participation in net sales proceeds due upon liquidation of our portfolio, by the number of shares of Class T and Class I common stock issued and outstanding on an adjusted fully diluted basis, calculated as of December 31, 2018. Certain properties in our portfolio were valued at their acquisition prices as of December 31, 2018. The board of directors is ultimately and solely responsible for the establishment of the estimated per share NAV. 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 April 8, 2019.

The board of directors previously determined an estimated per share NAV of the company’s Class T and Class I common stock of $9.65 calculated as of December 31, 2017. The board of directors’ determination of the estimated per share NAV of $9.54 as of December 31, 2018 represents a moderate 1.1% decrease from the estimated per share NAV as of December 31, 2017.

www.HealthcareREIT4.com

However, such decrease was primarily due to the recent increased pace of the company’s equity fundraising, resulting in more shares outstanding at December 31, 2018 and leverage below the company’s target during 2018. The company intends to publish an updated estimated per share NAV on at least an annual basis.

Revised Distribution Reinvestment Plan Share Price

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 updated estimated per share NAV described herein, the board of directors has approved a new purchase price for shares of Class T and Class I common stock pursuant to the DRIP equal to the estimated per share NAV of $9.54, which will be effective beginning with the distribution payment to stockholders to be paid in the month of May 2019. 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.

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 its shares as follows: after one year from the purchase date, 92.5 percent of the “repurchase amount” (as defined below); after two years, 95 percent; after three years, 97.5 percent; and after four years, 100 percent. Commencing with the quarter ending June 30, 2019, the “repurchase amount” will be equal to the lesser of the stockholder’s purchase price paid per share or the most recent estimated value of one share of the applicable class of common stock as determined by our board of directors (which, effective April 4, 2019, is $9.54 per share for Class T and Class I common stock). However, for SRP requests submitted pursuant to the death and qualifying disability exception, shares will be repurchased at a price equal to 100% of the amount per share the stockholder paid to acquire such shares.

It is important to keep in mind that the estimated per share NAV of $9.54 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 pleased with the performance of Griffin-American Healthcare REIT IV, as well as the updated valuation of our portfolio. As we continue to pursue our strategic plan, we will work to further enhance the value of our portfolio and to maximize stockholder 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

Enclosure

¹  Based on the gross real estate and real estate-related investments value estimated by CBRE Cap as of Dec. 31, 2018, as well as the aggregate purchase price of subsequent acquisitions as of March 29, 2019.

²  Comprised of prospective real estate acquisitions for which the company has executed letters of intent and/or purchase and sale agreements as of March 29, 2019. These prospective acquisitions are subject to substantial closing conditions and the satisfaction of other requirements as detailed in the agreements. Accordingly, the closing of some or all of these pending transactions may not occur.

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

Frequently Asked Questions     

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

The board of directors determined an updated annual 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 CBRE Capital Advisors, Inc. (“CBRE Cap”), an independent FINRA registered broker-dealer firm that specializes in providing real estate financial services, 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 transaction, nor did it include an enterprise value.

3) How was the estimated per share NAV determined?

CBRE Cap and/or its affiliates evaluated, among other things, our property portfolio and determined a range of $9.29 to $9.94 for the estimated per share NAV of our Class T and Class I common stock as of December 31, 2018. The audit committee of the board of directors, comprised solely of independent directors, engaged CBRE Cap and reviewed CBRE Cap’s valuation analyses and report, and recommended an estimated per share NAV which represents the mid-point of the range of values determined by CBRE Cap to the full board of directors. Based on the audit committee’s recommendation, the board of directors adopted an estimated per share NAV of $9.54. The board of directors is ultimately and solely responsible for the establishment of the estimated per share NAV. 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 April 8, 2019.

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 new purchase price for shares of Class T and Class I common stock pursuant to the DRIP will be equal to the estimated per share NAV of $9.54, beginning with the distribution payment to stockholders to be paid in the month of May 2019. 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 $9.54 per share.

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

Commencing with the quarter ending June 30, 2019, the “repurchase amount” will be equal to the lesser of the stockholder’s purchase price paid per share or the most recent estimated value of one share of the applicable class of common stock as determined by our board of directors (which, effective April 4, 2019, is $9.54 per share for Class T and Class I common stock ). 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. For SRP requests submitted pursuant to the death and qualifying disability exception, shares will be repurchased at a price equal to 100% of the amount per share the stockholder paid to acquire such shares.

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

Your quarterly customer account statement will reflect the $9.54 estimated per share NAV beginning with your second quarter statement, which will be provided to you in July 2019.

8) Will the estimated per share NAV change?

The board of directors expects to perform annual valuations of our property portfolio and will adjust the estimated per share NAV accordingly.

9) Who can I contact for additional information?

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

www.HealthcareREIT4.com

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 stockholder 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 company’s ability to close all or any of the prospective acquisitions discussed herein; uncertainties relating to changes in general economic and real estate conditions; uncertainties regarding changes in the healthcare industry; uncertainties regarding changes in the Institute for Portfolio Alternatives’ 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

Spotlight Marketing Communications

(949) 427-5172 ext. 702

damon@spotlightmarcom.com

Griffin-American Healthcare REIT IV Announces

Estimated Per Share Net Asset Value of $9.54

IRVINE, Calif. (April 8, 2019) – Griffin-American Healthcare REIT IV, Inc. announced today that its board of directors has approved an estimated per share net asset value (“NAV”) of its Class T and Class I common stock of $9.54 as of Dec. 31, 2018.

“We are very pleased with this valuation of our portfolio and with the overall performance of Griffin-American Healthcare REIT IV, which began to acquire its portfolio less than three years ago, in June 2016,” said Jeff Hanson, chairman and CEO of Griffin-American Healthcare REIT IV. “Since that time, we have constructed an exceptional portfolio of healthcare investments valued in excess of $982 million¹ and are pursuing a healthy pipeline of $154 million in pending acquisitions² that would add additional value to our company, which would result in a total portfolio in excess of $1.1 billion upon the successful completion of these potential acquisitions. Griffin-American Healthcare REIT IV is still in the early stages of its lifecycle, and this valuation report and our consistently strong performance leaves us very optimistic about our long-term prospects.”

CBRE Capital Advisors, Inc. (“CBRE Cap”), an independent FINRA-registered broker-dealer firm that specializes in providing real estate and financial services, was engaged by the company’s audit committee, comprised solely of independent directors, to conduct a valuation of the company’s assets and liabilities. Upon the audit committee’s receipt and review of CBRE Cap’s valuation report, meeting with representatives from CBRE Cap and consideration of the material assumptions and valuation methodologies applied and described therein, the audit committee recommended to the board of directors that it adopt $9.54 as the estimated per share NAV of the company’s Class T and Class I common stock, which represents the mid-point of the range of values determined by CBRE Cap in its valuation report. The valuation was performed in accordance with the methodology provided in the Investment Program Association’s practice guideline (“IPA guidelines”) regarding valuations of publicly registered non-listed real estate investment trusts (“REITs”).

Consistent with the IPA guidelines, CBRE Cap’s valuation does not include a portfolio premium that may accrue in a typical real estate transaction, nor does it reflect an enterprise value. The board of directors is ultimately and solely responsible for the establishment of the estimated per share NAV.

About Griffin-American Healthcare REIT IV, Inc.

Griffin-American Healthcare REIT IV intends to build a balanced and diversified portfolio of healthcare real estate assets, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. Griffin-American Healthcare REIT IV also seeks to provide: portfolio diversification, preservation of capital, monthly distributions and capital appreciation by increasing the value of its properties for its stockholders. Griffin-American Healthcare REIT IV qualified to be taxed as a real estate investment trust for federal income tax purposes beginning with its taxable year ended December 31, 2016, and it intends to continue to qualify to be taxed as a REIT. The REIT is co-sponsored by American Healthcare Investors, LLC and Griffin Capital Company, LLC. For more information regarding Griffin-American Healthcare REIT IV, please visit http://www.healthcarereit4.com.

(1) Based on the gross real estate and real estate-related investments value estimated by CBRE Cap as of Dec. 31, 2018, as well as the aggregate purchase price of subsequent acquisitions as of March 29, 2019.

(2) Comprised of prospective real estate acquisitions for which the company has executed letters of intent and/or purchase and sale agreements as of March 29, 2019. These prospective acquisitions are subject to substantial closing conditions and the satisfaction of other requirements as detailed in the agreements. Accordingly, the closing of some or all of these pending transactions may not occur.

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, with respect to our long-term prospects, the estimated per share NAV of our common stock and our future determinations thereof, our ability to acquire additional properties and our ability to further enhance the value of our portfolio. 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 the implementation of our real estate investment strategy; 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 company’s ability to close all or any of the prospective acquisitions discussed herein; 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.

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