ATLANTA, Feb. 19, 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 C-Ross
Management, 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 for one of the two properties on or
before April 1, 2015 and the other on
or before June 1, 2015, pending
approval by the U.S. Department of Housing and Urban Development
("HUD").
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 $1.4 million and will escalate
at $24,000 each year through the
initial term and 2% upon renewal.
"We are continuing to make 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 this
announcement, we now have signed agreements to transition nearly
three fourths of our owned properties to the new leasing model. Our
team is working diligently to identify quality partners 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 HUD, by the end of the
first quarter of 2015.
C-Ross Management currently operates eight facilities in two
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 28 of
its 37 healthcare facilities. Of these 28 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 by the end of 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 Company also expects to complete transfer of operations on
the two C-Ross facilities during the second quarter of 2015.
- The remaining six healthcare facilities are expected to close
during the second 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.