ATLANTA, June 22, 2016 /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 the execution of a new master sublease
for three of its Georgia
facilities with affiliates of Peach Health Group LLC.
"We welcome Peach Health as the new operator of three of our
healthcare facilities located in Georgia previously operated by affiliates of
New Beginnings Care, LLC," commented Bill
McBride, AdCare's Chairman and Chief Executive Officer.
"Peach Health Group and its affiliates are well-respected operators
in Georgia that currently operate
11 other facilities in the state and have established a solid
reputation for strong clinical and operational expertise. In
addition, Peach Health Group affiliates have experience in
reopening closed facilities in Georgia."
"The new long-term master sublease with affiliates of Peach
Health is yet another example of the efforts we are undertaking to
strengthen our tenant roster and increase the value of our real
estate portfolio," added Mr. McBride. "In the case of the
Jeffersonville facility, we are
taking the opportunity, while recertifying the building and
changing our tenant, to make significant improvements to the
physical plant which should enable the facility to be more
competitive and generate a higher rental rate once stabilized. We
anticipate making similar improvements to the other two facilities
in the near future."
The master sublease is subject to landlord consent and certain
and other conditions. The master sublease is structured as a triple
net lease and includes an initial term of just over 11 years,
monthly initial cash rent of $110,000
and a 3.0% annual rent escalator. For two of the properties, the
master sublease provides for no or reduced rent for eight months
after the earlier of the recertification of such property to
receive Medicare and Medicaid reimbursements or April 1, 2017. In addition, the Company is
providing a working capital line of credit to the tenants of up to
$1 million for a period of one year
at an interest rate of 13.5% per annum. The line of credit is
secured by a first priority security interest in the assets and
accounts receivable of the tenants.
On January 22, 2016, New
Beginnings Care, LLC and its affiliates filed petitions to
reorganize their finances under the Bankruptcy Code. New Beginnings
operated the Company's Oceanside, Savannah
Beach and Jeffersonville
facilities. Both the Oceanside and Jeffersonville facilities have been
decertified by the Center for Medicare Services and are currently
closed.
For additional information regarding the master sublease, please
refer to the Company's Current Report on Form 8-K, filed with the
Securities and Exchange Commission on June
22, 2016.
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 38 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. 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,
2015, and AdCare's subsequently filed Quarterly Reports on
Form 10-Q. 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.