Healthcare Trust to Internalize Management

Rhea-AI Summary

Healthcare Trust, Inc. (Nasdaq: HTIA / HTIBP) has announced a significant move towards self-management by entering into a definitive agreement to internalize management functions currently performed by external advisors. The transition is expected to close around September 27, 2024, subject to customary conditions.

CEO Michael Anderson expressed enthusiasm for this change, stating it would better position the company to execute its strategy and maximize shareholder value. This move is seen as a critical step towards growing shareholder value and potentially achieving a public listing for HTI's common stock. However, the company cautions that there's no guarantee of the internalization closing within the anticipated timeframe or of successfully listing its common stock on a national securities exchange.

Positive

• Transition to self-management may improve operational efficiency
• Potential for increased shareholder value through internalization
• Step towards possible public listing of common stock

Negative

• Uncertainty about successful completion of internalization by September 2024
• No guarantee of achieving public listing for common stock

Insights

Corporate Strategy Analyst

The internalization of management for Healthcare Trust, Inc. (HTI) is a significant strategic shift that could have substantial implications for the company's operations and financial performance. This move typically aims to reduce costs and align management interests more closely with shareholders.

Key points to consider:

• Potential for improved operational efficiency and cost savings by eliminating external management fees
• Enhanced corporate governance and transparency for investors
• Possible short-term transition costs but likely long-term benefits
• The planned September 2024 timeline gives ample preparation time

While the move is generally positive, investors should monitor the execution of this transition and its impact on HTI's financial performance post-internalization.

REIT Specialist

HTI's decision to internalize management aligns with a broader trend in the REIT sector, potentially enhancing its appeal to investors. This move could position HTI more favorably for a future public listing of its common stock, a key strategic goal mentioned in the announcement.

Critical considerations:

• Improved NAV: Elimination of external management fees often leads to higher Net Asset Value
• Investor perception: Internally managed REITs generally trade at higher multiples
• Capital markets access: Could facilitate easier access to equity and debt markets
• M&A potential: May make HTI a more attractive acquisition target or merger partner

While the internalization is promising, success will depend on the seamless integration of management functions and the company's ability to maintain operational excellence during and after the transition.

NEW YORK--(BUSINESS WIRE)-- Healthcare Trust, Inc. (Nasdaq: HTIA / HTIBP) (“HTI”) announced today that it has entered into a definitive agreement with Healthcare Trust Advisors, LLC (the “Advisor”), the external advisor to HTI, and AR Global Investments, LLC, the indirect parent company of Advisor and Healthcare Trust Properties, LLC (the “Property Manager”), the external property manager to HTI, to transition to self-management and internalize management functions currently performed by the Advisor and Property Manager (the “Internalization”). The Company expects the Internalization to close on or about September 27, 2024, subject to satisfaction of certain customary conditions to closing.

“The HTI management team is very excited about transitioning HTI to an internally managed company. We believe an internally managed structure best positions the Company to execute its strategy and maximize value for its stockholders,” said Michael Anderson, Chief Executive Officer of HTI. “This transaction is yet another exciting milestone for the Company and we believe it is a critical step towards growing shareholder value and achieving a public listing for HTI’s common stock.”

There can be no assurance that the Internalization will close within the anticipated time frame or at all, or that the HTI will be able to list its shares of common stock on a national securities exchange.

Important Notice

The statements in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the timing of the closing of, and HTI’s ability to consummate, the Internalization. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of HTI’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of (i) a resurgence of the global COVID-19 pandemic, including actions taken to contain or treat COVID-19, (ii) the geopolitical instability due to the ongoing military conflict between Russia and Ukraine and Israel and Hamas, including related sanctions and other penalties imposed by the U.S. and European Union, and the related impact on HTI, HTI’s tenants, HTI’s operators and the global economy and financial markets, and (iii) inflationary conditions and higher interest rate environments, as well as those risks and uncertainties set forth in the Risk Factors section of HTI’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 15, 2024, as amended by the Form 10-K/A filed on March 22, 2024, and all other filings with the Securities and Exchange Commission after that date, as such risks, uncertainties and other important factors may be updated from time to time in HTI’s subsequent filings with the Securities and Exchange Commission. Further, forward-looking statements speak only as of the date they are made, and HTI undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required to do so by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240807441237/en/

Investors and Media:

Email: investorrelations@ar-global.com

Phone: (866) 902-0063

Source: Healthcare Trust, Inc.

FAQ

What is Healthcare Trust, Inc. (HTIA) planning to do with its management structure?

Healthcare Trust, Inc. (HTIA) is planning to transition to self-management by internalizing management functions currently performed by external advisors and property managers.

When is Healthcare Trust, Inc. (HTIA) expected to complete its management internalization?

Healthcare Trust, Inc. (HTIA) expects to complete its management internalization on or about September 27, 2024, subject to certain customary closing conditions.

What does Healthcare Trust, Inc. (HTIA) hope to achieve through this management internalization?

Healthcare Trust, Inc. (HTIA) aims to better position itself to execute its strategy, maximize shareholder value, and potentially achieve a public listing for its common stock through this management internalization.

Is there any guarantee that Healthcare Trust, Inc. (HTIA) will successfully list its common stock after internalization?

No, there is no guarantee that Healthcare Trust, Inc. (HTIA) will successfully list its common stock on a national securities exchange after the internalization process.