ATLANTA, Jan. 20, 2015 /PRNewswire/ -- AdCare
Health Systems, Inc. (NYSE MKT: ADK), (NYSE MKT: ADK.PRA), a
leading long-term care provider, today announced that, as part of
its ongoing strategic plan to transition from an owner and operator
of healthcare facilities to a healthcare property holding and
leasing company, it has signed an agreement with Aria Health Group,
LLC operators to lease 10 of its skilled nursing facilities in
Arkansas.
The lease on the 10 facilities in Arkansas will be effective on March 1, 2015, when all licenses and other
approvals required by the State of
Arkansas are expected to be obtained by the operator.
Under the terms of the triple net lease agreements, the lessees
of the facilities will be responsible for day-to-day management,
ongoing maintenance and facility improvements for the duration of
the leases. The initial term of the leases is five years with a
five year renewal option. The annual rent in the first year will
total $6.5 million and will escalate
at 2% each year through the initial term and 3% per year upon
renewal.
"We are pleased and excited to work with a new operating partner
in Arkansas," commented
Bill McBride, AdCare's President and
Chief Executive Officer. "Aria has a very strong management team
with a significant operating presence in the state. This
transaction represents another significant step forward in the
execution of our strategic plan of transitioning to a healthcare
property holding and leasing company. We continue to move quickly
to secure the necessary approvals and to finalize negotiations with
additional operators to lease our remaining facilities."
Management currently expects that a majority of the remaining
facilities will be leased or subleased, subject to approval from
landlord, lenders, regulators, and/or the U.S. Department of
Housing and Urban Development ("HUD"), by the end of the first
quarter of 2015.
Aria Health Group, LLC, which currently operates six facilities
in Arkansas, and is a full-service
management company focused on the hospice, long-term care, and
senior housing sectors of the health care industry.
Since the Board approved the strategic plan to transition the
Company's business from an owner and operator of healthcare
facilities to a healthcare facilities holding and leasing company,
the Company has entered into agreements to lease or sublease 24 of
its 37 healthcare facilities. Of these 24 healthcare
facilities,
- Eight are completed transactions.
- The Company expects to complete transfer of operations on the
10 Aria buildings during the first quarter of 2015.
- The remaining six healthcare facilities are expected to close
during the first quarter of 2015 when financing approval is
obtained from HUD.
About AdCare Health Systems
AdCare Health
Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA) is a
recognized provider of senior living and health care facility
management. The Company owns and manages long-term care facilities
and retirement communities, and since the Company's inception in
1988, its mission has been to provide the highest quality of
healthcare services to the elderly through its operating
subsidiaries, including a broad range of skilled nursing and
sub-acute care services. The Company has implemented a strategic
plan pursuant to which, through a series of leasing transactions,
it will transition from an owner and operator of healthcare
facilities to a healthcare property holding and leasing company.
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
announcement that are forward-looking include, but are not limited
to: (i) statements regarding the strategic plan to transition the
Company to a healthcare property holding and leasing company; (ii)
statements regarding operating expenses, cash flow, return on
investment, profitability and shareholder value; (iii) statements
regarding dividend yield; and (iv) statements regarding the outlook
for financial metrics.
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 and include, among others,
AdCare's ability to secure lines of credit and/or an acquisition
credit facility, AdCare's ability to refinance its current debt on
more favorable terms, AdCare's ability to expand its borrowing
arrangement with certain existing lenders, AdCare's ability to
raise equity capital, AdCare's ability to improve operating
results, changes in the health care industry because of political
and economic influences, changes in regulations governing the
health care industry, changes in reimbursement levels including
those under the Medicare and Medicaid programs and changes in the
competitive marketplace. 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.