CHICAGO—Last week, Aviv REIT, Inc., a Chicago-based trust that specializes in owning healthcare properties, released its first quarter results and seems to have scored a hit with analysts. Its AFFO for the quarter was $23.6 million, or $0.46 per share, compared to $20.9 million, or $0.41 per share, for fourth quarter of 2013, an increase of 12%. Company officials attribute the growth to the company's acquisition activity.
The trust, which conducted a $304 million IPO in March 2013, reported $104.4 million of acquisitions at an initial cash yield of 10%. This followed $159 million of acquisitions in the fourth quarter and $239 million of total investments in 2013. In March, for example, it acquired nine post-acute and long-term care skilled nursing facilities in Kentucky and Iowa in two separate transactions for $48.5 million.
Furthermore, company officials also said last week that they had in the second quarter to date made an additional $76.7 million of acquisitions and raised $211.7 million of net proceeds through the issuance of 9.2 million common shares. Most recently, Aviv bought eight post-acute and long-term care skilled nursing facilities in California and Texas, in three separate transactions for $70.7 million. The company currently owns 303 properties that are triple-net leased to 39 operators in 29 states.
"With $189 million of investments already completed year-to-date, our recent equity offering has provided us with liquidity to execute on our strong pipeline of identified acquisitions and we are confident we can continue to take advantage of the opportunities that exist in the skilled nursing industry," said Craig M. Bernfield, chairman and chief executive officer of Aviv.
The company also reported that its adjusted EBITDA for the first quarter was $37.6 million, compared to $33.5 million for the last quarter of 2013, an increase of 12%. And net income for the first quarter was $11.5 million, compared to $11 million for the last quarter of 2013. Company officials added that comparisons to last year's first quarter were not relevant due to the IPO.
“We believe the company is now in a solid financial position with over $450 million of dry powder including an undrawn $400 million credit facility,” according to RBC Capital Markets, which released a report on Aviv last week. Furthermore, the company's “reported FFO met our estimate and surpassed consensus.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
