ATLANTA, Feb. 3, 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 affiliates of
Wellington Healthcare Services, an operator of long-term care
facilities, to lease two of its skilled nursing facilities in
Georgia.
The lease, contingent on all licenses and other approvals
required by the State of Georgia,
is expected to become effective on or before April 1, 2015.
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
renewal option. The annual rent in the first year will total
$3.9 million and will escalate at
$24,000 each year throughout the
initial term.
"We are making steady and consistent progress in our plans to
transition to a healthcare property holding and leasing company,"
commented Bill McBride, AdCare's
President and Chief Executive Officer. "With the signing of this
agreement with Wellington, we have
signed agreements to transition more than two-thirds of our owned
properties to the new leasing model. Our team is working diligently
to identify quality partners such as Wellington, to negotiate agreements and queue
them up for the requisite approvals. While there is still work to
be done, I am pleased with our progress."
The company reaffirms expectations for the majority of the
remaining facilities to 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.
Wellington Healthcare Services, via its subsidiaries and
affiliates, currently operates 10 facilities in four Southeastern
states and focuses on all aspects of long term care.
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 26 of
its 37 healthcare facilities. Of these 26 healthcare
facilities,
- Eight are completed transactions.
- As previously announced, the Company signed an agreement for
the lease of 10 facilities to Aria Health Group, LLC and expects to
complete transfer of operations during the first quarter of
2015.
- The Company also expects to complete transfer of operations on
the two Wellington facilities
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.
Company
Contact
|
Investor
Relations
|
Bill McBride,
CEO
|
Brett Maas, Managing
Partner
|
AdCare Health
Systems, Inc.
|
Hayden IR
|
Tel (404)
781-2884
|
Tel (646)
536-7331
|
bill.mcbride@adcarehealth.com
|
brett@haydenir.com
|
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SOURCE AdCare Health Systems, Inc.