NEWPORT BEACH, CA—Griffin-American Healthcare REIT II, Inc. has disclosed operating results for the company's fourth quarter and year ended Dec. 31, indicating strong growth.

“Griffin-American Healthcare REIT II enjoyed another year of tremendous growth and impressive accomplishments in 2012,” said Jeff Hanson, chairman and chief executive officer. “Not only did our nationwide portfolio of healthcare-related real estate more than triple in size based on aggregate purchase price compared to 2011, but as a result, important financial metrics also grew exponentially. Normalized modified funds from operations and net operating income, for example, experienced growth of approximately 180 percent and 148 percent, respectively, as compared to 2011 due to our significant acquisition activity.”

2012 Highlights and Recent Accomplishments

• Completed fourth quarter and 2012 acquisitions totaling $231.2 million and $885.9 million, respectively, based on purchase price. The company's portfolio grew approximately 202 percent during 2012, based on purchase price, from $439 million as of Dec. 31, 2011 to $1.325 billion as of Dec. 31, 2012.
• The company's property portfolio achieved an aggregate average occupancy of 96.6 percent as of Dec. 31, 2012 and had leverage of 33 percent (total debt divided by total assets). The portfolio's average remaining lease term was 9.5 years at the close of 2012, based on leases in effect as of Dec. 31, 2012.
• Declared and paid daily distributions equal to an annualized rate of 6.6 percent to stockholders of record, based upon a $10.00 per share calculation, from January 1 to October 31, 2012. Declared and paid daily distributions equal to an annualized rate of 6.65 percent to stockholders of record, based upon a $10.22 per share calculation, from November 1 to December 31, 2012.
• On June 5, 2012, the company entered into a $200 million unsecured line of credit with Merrill Lynch, Pierce, Fenner & Smith Incorporated and KeyBanc Capital Markets as joint lead arrangers. Bank of America serves as administrative agent with KeyBank National Association acting as syndication agent. The unsecured credit facility replaced two secured lines of credit that totaled $116.5 million.
• Normalized modified funds from operations, or normalized MFFO, equaled $49.2 million in 2012, representing growth of approximately 180 percent compared to $17.6 million in 2011. Normalized MFFO is MFFO as defined by the Investment Program Association, or IPA, adjusted for the cost associated with the purchase during the third quarter 2012 from an unaffiliated third party of the rights to any subordinated distribution that may have been owed to the company's former sponsor. Year-over-year growth in normalized MFFO is primarily due to the acquisition of additional properties. Funds from operations, or FFO, equaled approximately $(24.9) million, compared with $9 million during 2011. Negative FFO is due largely to the significant acquisition-related expenses incurred during the year. (Please see financial reconciliation tables and notes at the end of this release for more information regarding normalized MFFO and FFO.)
• Net operating income, or NOI, totaled approximately $79.6 million in 2012, representing an increase of approximately 148 percent over 2011 NOI of approximately $32.1 million. Net loss in 2012 was $63.2 million as compared to a loss of $5.8 million in 2011. Net loss is due largely to expensing acquisition-related expenses in connection with the purchase of our properties, as well as depreciation and amortization expense of our properties, a non-cash item, in accordance with accounting principles generally accepted in the United States of America, or GAAP. Year-over-year growth in NOI is primarily due to the acquisition of additional properties. (Please see financial reconciliation tables and notes at the end of this release for more information regarding NOI and net loss.)

Subsequent Events

• Thus far during the first quarter 2013, the company has acquired five medical office buildings for an aggregate purchase price of approximately $47 million. The acquired buildings are located in Greeley, Colorado; Ruston, Louisiana; and Abilene, Texas.

“We are incredibly pleased with our accomplishments during 2012,” said Danny Prosky, president and chief operating officer. “Griffin-American Healthcare REIT II's portfolio of medical office buildings, skilled nursing facilities, assisted living facilities and hospitals grew from $439 million to $1.325 billion, based on aggregate acquisition price, and became more broadly diversified in terms of geography, asset type and revenue sources. We are meeting or exceeding nearly all of our projections for performance and are executing in accordance with our vision to build and manage one of the finest performing REITs in the country.”