AR Global’s Healthcare Trust REIT faced major changes in 2024. The company rebranded as National Healthcare Properties Inc. and made big moves to save money. They switched to managing things in-house and did a 4-for-1 reverse stock split.
These steps aimed to make the stock more appealing and save over $25 million each year. But the company hit some bumps. The value of each share dropped to $13 by the end of 2023. This was 7.1% less than the year before. They also changed how they give out money to investors. Instead of monthly cash, they now give out shares every three months based on the stock’s value.
The money picture got worse in 2024. In the first half of the year, they lost about $139 million. This was way more than the $38.3 million loss in the same time last year. A big reason for this was the $98.2 million they paid to end deals with AR Global and its partners.
Despite these issues, the company still owns a lot of healthcare properties. They have 207 buildings across 32 states, worth about $2.6 billion. To move forward, they hired BMO Capital Markets Corp. to help them maybe list on the stock market by 2025.
If you own AR Global Healthcare REIT, please contact our experienced investment fraud lawyers for a free consultation on recovering your losses.
The AR Global’s Healthcare Trust REIT Stock Losses Complaints show how fast things can change in real estate investing. This story has more twists and turns ahead.
Key Takeaways
Table of Contents
- AR Global’s Healthcare Trust REIT changed its name to National Healthcare Properties Inc. on September 30, 2024, and switched to self-management on October 1, 2024, aiming to save over $25 million yearly.
- The company’s per-share net asset value (NAV) dropped to $13 as of December 31, 2023, a 7.1% decrease from the previous year’s $14 NAV.
- In the first half of 2024, the REIT reported a net loss of $139 million and negative funds from operations (FFO) of $95.6 million, largely due to $98.2 million in termination fees paid to AR Global and its affiliates.
- The REIT owns 207 properties across 32 states, including 45 senior housing properties with 4,069 units in 12 states, with a total gross asset value of about $2.6 billion.
- The company hired BMO Capital Markets Corp. to explore a potential public stock listing by 2025, depending on favorable market conditions.
Strategic Changes in AR Global’s Healthcare Trust REIT
Internalization of management
AR Global’s Healthcare Trust REIT made a big change on October 1, 2024. They switched to managing themselves instead of using outside help. This move aims to save over $25 million each year in costs.
The company hopes to improve how it runs things and make its goals match what shareholders want. Self-management marks a shift from AR Global affiliates handling the REIT’s affairs. The company believes this step will lead to better control and more aligned interests. By cutting out the middleman, they plan to streamline operations and boost efficiency.
This change shows the REIT’s push for more direct oversight of its healthcare-related real estate portfolio.
Rebranding as National Healthcare Properties Inc.
AR Global’s Healthcare Trust REIT has changed its name to National Healthcare Properties Inc. This new name better shows the company’s focus on healthcare real estate. The change happened after the company brought its management in-house on September 30, 2024.
National Healthcare Properties Inc. aims to grow and create more value for its shareholders. The new name reflects this goal. It also shows the company’s plan to be a leader in healthcare real estate.
This move could help attract more investors who are interested in this sector.
Our new name, National Healthcare Properties Inc., aligns with our strategic vision in healthcare real estate.
4-for-1 reverse stock split
Following the rebranding, National Healthcare Properties Inc. took a bold step. The company executed a 4-for-1 reverse stock split. This move aimed to boost stock marketability and liquidity.
The split aligned the share price with industry peers.
After the split, the company set a new estimated per-share net asset value (NAV) at $13. This change impacted the stock’s trading range. It also affected how investors viewed the REIT’s value.
The reverse split showed the company’s efforts to improve its market position.
Engagement of BMO Capital Markets Corp. as a financial adviser
AR Global’s Healthcare Trust REIT hired BMO Capital Markets Corp. as a financial adviser. This move aims to explore a potential public stock listing by 2025. BMO Capital Markets will help the REIT assess market conditions and prepare for a possible initial public offering (IPO).
The engagement of BMO Capital Markets shows AR Global’s focus on growth and investor value. A public listing could offer more liquidity for shareholders and access to new capital. Yet, the REIT stresses that any listing depends on favorable market conditions.
This cautious approach reflects the company’s commitment to making sound financial decisions.
Financial Performance and Changes in NAV
AR Global’s Healthcare Trust REIT saw big changes in its money matters. The company’s value per share dropped to $13. Want to know more about how this affects investors? Keep reading!
Decrease in per-share net asset value (NAV) to $13
AR Global’s Healthcare Trust REIT saw its per-share net asset value (NAV) drop to $13 as of December 31, 2023. This marks a 7.1% decrease from the previous year’s NAV of $14. The change reflects ongoing challenges in the real estate investment trust (REIT) sector.
Investors who bought shares at the original launch price of $25.00 have seen a significant decline in their investment value.
The NAV decrease raises concerns about the REIT’s financial health and its ability to generate returns for shareholders. Financial advisors and brokerage firms may face questions about investment suitability and due diligence.
The Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) often scrutinize such declines in non-traded REITs. Investors worried about potential losses might consider seeking advice from securities lawyers or exploring options for recovery through FINRA arbitration.
Historical NAVs per share
AR Global’s Healthcare Trust REIT has seen fluctuations in its Net Asset Value (NAV) per share over recent years. The company’s historical NAV figures show a downward trend.
| Date | NAV per Share |
|---|---|
| December 31, 2018 | $17.50 |
| December 31, 2019 | $15.75 |
| December 31, 2020 | $14.50 |
| December 31, 2021 | $15.00 |
The NAV fell from $17.50 at the end of 2018 to $15.00 by the end of 2021. This drop represents a decrease of $2.50 per share over three years. The largest single-year decline occurred between 2018 and 2019, with a $1.75 reduction. The NAV slightly increased by $0.50 from 2020 to 2021. These changes reflect the REIT’s financial performance and market conditions during this period.
Change in distribution policy
AR Global’s Healthcare Trust REIT made big changes to how it pays investors. From March 2018 to June 2020, the company gave out $0.85 per share each year in monthly payments. But things shifted after that.
The REIT moved to quarterly stock dividends based on its net asset value. On January 3, 2024, the dividend rate was $0.015179 per share.
This new approach didn’t last long. In April 2024, the company didn’t declare its usual quarterly stock dividend. This move shocked many investors who counted on regular payouts. The change in policy left shareholders uncertain about future income from their investment in the healthcare-focused REIT.
Second quarter financials for 2024
AR Global’s Healthcare Trust REIT reported significant financial changes in the second quarter of 2024. The company faced substantial losses and shifts in key financial metrics.
| Financial Metric | Q2 2024 Result | Comparison to Previous Year |
|---|---|---|
| Net Loss | $139 million (first six months) | Up from $38.3 million in 2023 |
| Funds from Operations (FFO) | Negative $95.6 million (first half) | Significant decrease |
| Adjusted FFO | $5.8 million (first half) | Down from $8.4 million in 2023 |
These results show a stark contrast to the previous year’s performance. The company’s financial health took a hit, with losses growing and key metrics declining. The negative FFO stands out as a major concern for investors and analysts alike.
Impact on Funds from Operations (FFO) and Adjusted FFO
AR Global’s Healthcare Trust REIT saw a drop in its Funds from Operations (FFO) and Adjusted FFO. This decline hit investors hard, causing concern about the REIT’s financial health.
Negative FFO and Adjusted FFO in the first half of 2024
AR Global’s Healthcare Trust REIT faced financial challenges in early 2024. The company’s funds from operations (FFO) dropped to negative $95.6 million in the first half of the year.
This marked a big change from the positive $1.3 million FFO in the same period of 2023. The adjusted FFO also fell from $8.4 million to $5.8 million.
These numbers show a tough time for the non-traded real estate investment trust. The drop in FFO and adjusted FFO might worry investors who own shares in this healthcare-focused REIT.
Such changes often lead to questions about the trust’s financial health and future plans. Investors may want to keep an eye on how the company handles these issues in the coming months.
Attribution of financial change to termination fees
AR Global’s Healthcare Trust REIT faced major financial changes in 2024. The company paid $98.2 million in termination fees to AR Global and its affiliates. These fees greatly affected the REIT’s year-over-year financial results.
The large payout led to negative Funds from Operations (FFO) and Adjusted FFO in the first half of 2024.
This financial shift raises questions about the REIT’s management decisions. Investors may worry about the impact on their equity and the REIT’s future performance. The next section will explore how these changes affected the company’s portfolio of healthcare-related real estate.
Portfolio Overview
Healthcare Trust owns a mix of medical buildings across the U.S. Its properties span many states and serve different health needs.
Diversified portfolio of healthcare-related real estate
AR Global’s Healthcare Trust REIT owns a diverse mix of medical properties. Their portfolio spans 207 buildings across the U.S., totaling 9.0 million square feet of rentable space.
These assets focus on medical offices and senior housing facilities. This broad range of healthcare real estate helps spread risk and capture different market opportunities.
The REIT’s strategy targets growing sectors within healthcare. Medical offices serve the rising need for outpatient care. Senior housing caters to an aging population seeking specialized living options.
By owning properties in various locations and sub-sectors, the REIT aims to create a stable income stream for investors.
Number of properties and states covered
AR Global’s Healthcare Trust REIT owns a large number of properties across the United States. Their portfolio spans multiple states and includes various types of healthcare-related real estate.
- Total Properties: 207
- This shows a significant presence in the healthcare real estate market.
- States Covered: 32
- The REIT has a wide geographic spread, reducing risk from local market changes.
- Senior Housing Properties: 45
- These properties make up a key part of the REIT’s portfolio.
- Senior Housing Units: 4,069
- This large number of units suggests a strong focus on the senior care sector.
- States with Senior Housing: 12
- The REIT has spread its senior housing investments across several states.
- Multi-Tenant Medical Office Buildings
- While not specified, these likely form another important part of the portfolio.
The REIT’s diverse portfolio helps spread risk and may offer steady income for investors. Next, we’ll look at the financial performance and changes in NAV.
Gross asset value of the company’s portfolio
AR Global’s Healthcare Trust REIT boasts a substantial portfolio. The company’s assets span across multiple states and healthcare sectors.
| Portfolio Metric | Value |
|---|---|
| Gross Asset Value | Approximately $2.6 billion |
| Net Market Lease Intangible Liabilities | $23.5 million (as of March 31, 2024) |
This large asset base shows the REIT’s strong market position. It reflects a wide range of healthcare properties. The portfolio’s size suggests a mix of different facility types. These may include hospitals, clinics, and care centers. Such diversity can help spread risk across various healthcare sectors.
Conclusion
AR Global’s Healthcare Trust REIT faces challenges amid strategic changes. Stock losses and financial setbacks have sparked investor concerns. The company’s rebranding and management shifts aim to boost performance.
Investors should stay informed about ongoing investigations and market trends. Seeking professional advice may help protect investments in this evolving healthcare real estate sector.
If you invested in AR Global REITS, call us today for a free consultation.
FAQs
1. What is the Healthcare Trust REIT stock losses investigation about?
The investigation looks into possible securities fraud and investor equity losses in Healthcare Trust Inc. (HTI), a non-traded real estate investment trust (REIT) linked to AR Global and Nicholas Schorsch.
2. Why are investors concerned about Healthcare Trust Inc.?
Investors worry about the illiquidity of their investments, potential conflicts of interest, and the impact of accounting scandals on their capital investment in HTI’s preferred shares and stocks.
3. Who is investigating these complaints?
Haselkorn & Thibaut are looking into investor protection claims against investment advisors and banks involved with HTI.
4. What risks did investors face with this REIT?
Investors dealt with illiquid investments, limited secondary market options, and potential stock fraud. These factors may have led to significant investment losses and valuation issues.
5. How can affected investors seek help?
Investors can contact securities arbitration lawyers to recover losses. They may also file complaints with regulatory bodies against their investment advisers for unsuitable recommendations.
6. What broader issues does this case highlight in the investment world?
This case underscores concerns about non-traded REITs, alternative investments, and hedge funds. It also raises questions about investor protection in complex financial products like derivatives and bonds.
