ATLANTA, May 5, 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 provided an update on its strategic transition to
a property holding and leasing company. AdCare:
- Completed the transfer of operations of eight Arkansas facilities to a third-party operator
effective May 1, 2015;
- Signed agreements to lease two Oklahoma facilities which are expected to
transfer operations in the third quarter of 2015, subject to the
receipt of required licenses and other state regulatory approvals;
and,
- Signed an asset purchase agreement to sell another facility in
Oklahoma for approximately
$3.5 million, subject to certain
termination provisions and the satisfaction of closing
conditions. The sale is expected to close in the third quarter
of 2015.
"Our progress continues to be steady, swift and on target with
the transition plan envisioned by our Board," stated Bill McBride, AdCare's Chairman and Chief
Executive Officer. "Today, we place another mile marker along our
journey to transition to a property holding and leasing company,
with the majority of our properties transitioned to new
operators."
Transition Update
The Company completed, effective May 1,
2015, the operations transfer of eight skilled nursing
facilities in Arkansas pursuant to
lease agreements previously signed with affiliates of Aria Health
Group, LLC. Lease agreements with affiliates of Aria for the
Company's two remaining Arkansas
facilities were terminated on May 1,
2015. The Company is seeking to sell or lease these
facilities to other regional operators.
The Company signed agreements with affiliates of Southwest LTC
Management Services LLC to lease two of the Company's facilities in
Oklahoma. Southwest LTC operates
twenty skilled nursing facilities and one assisted living facility
in Texas. The lease agreements
with Southwest are expected to become effective in the third
quarter of 2015, subject to Southwest's receipt of licenses and
other approvals required by the state of Oklahoma. The initial term of the leases is
ten years with two five-year renewal options. The initial annual
rent will be approximately $1.0
million and then escalate each year thereafter.
The Company signed an asset purchase agreement to sell another
skilled nursing facility in Oklahoma to Gracewood Manor, LLC for
$3.5 million. The agreement may
be terminated by Gracewood Manor for any reason before the 30th day
of the due diligence period set forth in the agreement. The sale is
expected to close during the third quarter of 2015 subject to the
completion of satisfactory due diligence, the receipt of required
licenses and other state regulatory approvals, and the satisfaction
of other customary closing conditions.
Since the Board approved the strategic plan to transition the
Company's business from an owner and operator of healthcare
facilities to a healthcare property holding and leasing company,
the Company has entered into agreements for 36 of its 40 healthcare
facilities. Of these 36 healthcare facilities:
- Twenty-five facilities have transferred operations to
third-party operators or are under a management contract with an
indefinite term;
- The Company expects to transition seven facilities to
third-party operators in Ohio and
Georgia during the second quarter
of 2015, subject to HUD approval;
- The Company expects to transition one facility to a third-party
operator in North Carolina during
the second quarter of 2015, subject to receipt of required
licenses;
- The Company expects to transition two facilities to a
third-party operator in Oklahoma
during the third quarter of 2015, subject to receipt of required
licenses and other approvals; and
- The Company expects to close the sale of a facility in
Oklahoma during the third quarter
of 2015, subject to certain termination provisions and the closing
conditions described above.
The remaining four facilities are pending final disposition.
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 40 facilities, primarily in the
Southeast. 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 strategic plan to transition the Company to a
healthcare facilities holding and leasing company, statements
regarding the expected dates for transitioning facility operations
to third-party operators and statements regarding the sale of the
Oklahoma facility. 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 the Company'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.
In addition, each facility mentioned in this press release is
operated by a separate, wholly owned, independent operating
subsidiary that has its own management, employees and assets.
References to the consolidated company and its assets and
activities, as well as the use of terms such as "we," "us," "our,"
and similar verbiage, is not meant to imply that AdCare Health
Systems, Inc. has direct operating assets, employees or revenue or
that any of the facilities, the home health business or other
related businesses are operated by the same entity.
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SOURCE AdCare Health Systems, Inc.