ATLANTA, Ga., Sept. 22, 2015 /PRNewswire/ -- AdCare Health
Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA), a
self-managed healthcare real estate investment company that invests
primarily in real estate purposed for senior living and long-term
healthcare, today announced it has signed a letter of intent to
purchase a skilled nursing facility with 55 operational beds in
Florida for approximately
$4.8 million, net of reserves. The
proposed transaction signals AdCare's entrance into the
Florida market, and represents the
first acquisition since the Company's transition to a healthcare
property holding and leasing company.
The Company also has also executed a letter of intent with one
of its existing operators to lease the facility upon purchase. The
terms of the long-term lease agreement are expected to include a
15-year term with initial annual cash rent of $420,000 in the first year, and a 3% annual
escalator.
"This agreement to purchase a Tampa
Bay area facility represents the first of what we expect
will be several transactions that expand and further diversify our
portfolio of properties," commented Bill
McBride, AdCare's Chairman and Chief Executive Officer.
"With this transaction we will be expanding our geographic presence
to the attractive Florida market
and deploying our capital in an accretive fashion which we believe
will increase shareholder value. It has always been our long-term
plan to expand our portfolio of properties. Entry into this new
market with the purchase and simultaneous leasing of the property
to one of our existing, high-quality operators does just that."
Terms of the Transaction
Under the terms of the letter of intent, AdCare is expected to
purchase the facility for approximately $4.8
million, net of reserves. As part of the transaction, the
Company will assume the existing HUD debt associated with the
property.
"One of the key considerations with this acquisition was the
attractive HUD financing already in place," added Allan Rimland, AdCare's President and Chief
Financial Officer. "In addition, we are acquiring this facility at
an attractive per-bed price. The fact that one of our existing
operators has agreed to operate the facility pursuant to a
long-term lease, as well as the existing, assumable financing are
both significant positives for AdCare, and we are excited to enter
the Florida market."
The purchase is expected to close in the first quarter of
2016. The purchase of the facility and its lease to one of our
existing operators is subject to, among other things, satisfactory
due diligence, HUD approval and the negotiation and execution of a
definitive purchase agreement and lease agreement, each of which
will contain customary representations, warranties, covenants and
closing conditions. There is no assurance that these transactions
will be completed on the terms described in this press release or
that they will be completed at all.
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA)
is a self-managed healthcare real estate investment company that
invests primarily in real estate purposed for senior living and
long-term healthcare through facility lease and sub-lease
transactions. The Company currently owns, leases or manages for
third parties 39 facilities. For more information about AdCare,
visit www.adcarehealth.com.
Important Cautions Regarding Forward-Looking
Statements
Statements contained in this press release that are not
historical facts may be forward-looking statements within the
meaning of federal law. Such statements can be identified by the
use of forward-looking terminology, such as "believes," "expects,"
"plans," "intends," "anticipates" and variations of such words or
similar expressions, but their absence does not mean that the
statement is not forward-looking. Statements in this press release
that are forward-looking include, among other things, statements
regarding the anticipated purchase and lease of the Tampa Bay area facility and the timing and
terms thereof. Such forward-looking statements reflect management's
beliefs and assumptions and are based upon information currently
available to management and involve known and unknown risks,
results, performance or achievements of AdCare, which may differ
materially from those expressed or implied in such statements. Such
factors are identified in the public filings made by AdCare with
the Securities and Exchange Commission, including AdCare's Annual
Report on Form 10-K for the year ended December 31, 2014. There is no assurance that
such factors or other factors will not affect the accuracy of such
forward-looking statements. Except where required by law, AdCare
undertakes no obligation to revise or update any forward-looking
statements to reflect events or circumstances after the date of
this press release.
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SOURCE AdCare Health Systems, Inc.