Global Medical REIT Inc. (NYSE:GMRE) Files An 8-K Entry into a Material Definitive Agreement
Item 2.03 Entry into a Material Definitive Agreement.

Central Texas Rehabilitation Clinic – Austin, Texas

Global Medical REIT, Inc. (the “Company”) entered into a purchase contract, effective July 5, 2017, (the “Austin Purchase Agreement”) with Norvin Austin Rehab LLC, a Delaware limited liability company and an affiliate of Norvin Healthcare Properties (the “Austin Seller”), to acquire (i) a 59,258 square-foot, inpatient rehabilitation facility in Austin, Texas (the “Rehab Center”) and (ii) approximately 1.27 acres of land that has been planned to accommodate the development of a 40-bed, long-term acute care hospital (together with the Rehab Center, the “Austin Facility”), and the tenant shall have the right during the initial lease term to cause the landlord to develop such land, at the landlord’s sole cost and expense, so long as both the landlord and tenant agree to a development plan and the lease terms that will govern the tenant’s occupancy of such development upon its completion. The aggregate purchase price of the Austin Facility is $40,650,000.

The Austin Seller currently leases the Austin Facility to CTRH, LLC, which is a joint venture between subsidiaries of Kindred Healthcare and Seton Healthcare, which is part of the Ascension Health System, to an absolute triple-net lease agreement (the “Austin Facility Lease”) with a remaining lease term of approximately 9.8 years, subject to four five-year renewal options by the tenant. Initial annual rent will be approximately $2.9 million, subject to annual increases of approximately 3.0%. Currently, 80% of the lease payments are guaranteed by Kindred Healthcare. The Austin Facility Lease also contains a right of first offer, which, upon notification of the landlord’s intent to sell the Austin Facility, allows the tenant to submit an offer to purchase the Austin Facility from the landlord on the landlord’s proposed terms and a right of first refusal, which, upon receipt of an offer from a third party to purchase the Austin Facility, allows the tenant to purchase the Austin Facility from the landlord on the same terms. Upon the closing of the acquisition of the Austin Facility, the Company intends, through a wholly-owned subsidiary of the Company’s operating partnership, Global Medical REIT L.P. (the “OP”), to assume the Austin Facility Lease.

The Company’s obligation to close the acquisition is subject to certain conditions. The Company has the right to terminate, without penalty, the Austin Purchase Agreement on or before August 14, 2017, if, in its sole discretion, it is not satisfied with the results of its ongoing due diligence investigation. If the Company does not terminate the contract by August 14, 2017, the Company’s earnest money deposit in the amount of $300,000 becomes non-refundable, and the Company must deposit an additional earnest money deposit in the amount of $300,000, for a total of $600,000 in earnest money funds, which will then be non-refundable except in the event of an Austin Seller default or failure of a condition to closing. The Austin Purchase Agreement is also subject to other customary terms and conditions as set forth in the Austin Purchase Agreement. Although the Company believes completion of this acquisition is probable, there is no assurance that the Company will close this acquisition.

The above descriptions of the terms and conditions of the Austin Purchase Agreement and the transactions contemplated thereby are only a summary and are not intended to be a complete description of the terms and conditions. All of the terms and conditions of the Austin Purchase Agreement are set forth in Exhibit10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.

Carrus Specialty Hospital and Carrus Rehabilitation Hospital – Sherman, Texas

On June 30, 2017, the Company, through a wholly owned subsidiary of the OP, closed on the acquisition of the buildings and land known as the Carrus Specialty Hospital and the Carrus Rehabilitation Hospital (collectively, the “Carrus Facility”) located in Sherman, Texas for an aggregate purchase price of $26,000,000. The Company previously reported on a Current Report on Form 8-K filed with the United States Securities and Exchange Commission (the “Commission”) on May 23, 2017 that it had entered into a purchase contract (the “Carrus Purchase Agreement”) with SDB Partners, LLC (the “Carrus Seller”) to acquire the Carrus Facility.

Upon the closing of the acquisition of the Carrus Facility, the Company, through a wholly-owned subsidiary of the OP, entered into a new absolute triple-net lease agreement (the “Carrus Lease”), to which the subsidiary, as landlord, is leasing the Carrus Facility to the Carrus Seller, as tenant. The Carrus Seller has entered into two separate subleases with Texoma Hospital Partners, LLC (“THP”) and Carrus Rehabilitation Hospital, LLC (“Carrus Rehab”). The Carrus Lease has a 20-year term, subject to two consecutive 10-year renewal options by the tenant. Initial rent equals the product of (i) 8.8% and (B) the sum of the of the aggregate purchase price plus capitalized closing expenses, subject to annual rent escalations of 2.5%, beginning after the second year of the lease term. Carrus Healthcare, LLC, a Texas limited liability company, THP and Carrus Rehab are serving as guarantors of the Carrus Lease on a joint and several basis.

The above description of the terms and conditions of the Carrus Purchase Agreement and Carrus Lease and the transactions contemplated thereby is only a summary and is not intended to be a complete description of their terms and conditions. All of the terms and conditions of the purchase contract and lease are set forth in the Carrus Purchase Agreement, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 23, 2017 and the Carrus Lease that is filed as Exhibit 10.2 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.

Item 2.03 Completion of Acquisition or Disposition of Assets.

The information disclosed above in Item 2.03 – Carrus Specialty Hospital and Carrus Rehabilitation Hospital – Sherman, Texas is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

In connection with the closing of the acquisition of the Carrus Facility, the OP incurred approximately $27.1 million of additional indebtedness under its revolving credit facility, the terms of which were previously disclosed in Item 2.03 of the Company’s Current Report on Form 8-K as filed with the Commission on March 6, 2017 and are herein incorporated by reference. As of June 30, 2017, the outstanding balance of the OP’s revolving credit facility was approximately $144.5 million.

Item 2.03 Financial Statements and Exhibits.

The financial statements that are required to be filed to this item will be filed by amendment not later than 71days after the date on which this initial Current Report on Form8-K is required to be filed.

The pro forma financial information that is required to be filed to this item will be filed by amendment not later than 71 days after the date on which this initial Current Report on Form8-K is required to be filed.

Global Medical REIT Inc. Exhibit
EX-10.1 2 v470388_ex10-1.htm EXHIBIT 10.1   Exhibit 10.1   PURCHASE AND SALE AGREEMENT   THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of the Effective Date (as defined on the Title Company’s Agreement and Receipt attached hereto),…
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About Global Medical REIT Inc. (NYSE:GMRE)

Global Medical REIT Inc. focuses on operating as a real estate investment trust. The Company is engaged primarily in the acquisition and leasing of licensed purpose-built healthcare facilities in certain markets with various clinical operators. The Company seeks to invest in these purpose-built, specialized facilities, such as surgery centers, specialty hospitals and outpatient treatment centers. Its tenant-operators are physician group tenant-operators, community hospital tenant-operators and corporate medical treatment chain operators. Its properties include a six building, 52,266 square foot medical clinic portfolio in Tennessee; a combined approximately 27,190 square foot surgery center and medical office building located in West Mifflin, Pennsylvania; an approximately 8,840 square foot medical office building known as the Orthopedic Surgery Center, located in Asheville, North Carolina, and a 56-bed long term acute care hospital located at 1870 South 75th Street, Omaha, Nebraska.