ATLANTA, Feb. 16, 2017
ATLANTA, Feb. 16, 2017 /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 it has signed a letter of intent to purchase an assisted living facility with 106 operational beds located in Alabama for $5.5 million.
The Company also announced it has executed a letter of intent with an affiliate of C.Ross Management, LLC to lease the facility upon purchase. C.Ross, AdCare's largest tenant, operates 21 facilities in Georgia and Alabama. The terms of the long-term lease agreement are expected to include a 13-year term with initial annual cash rent of $450,000 in the first year and a 2% annual rent escalator.
Bill McBride, AdCare's Chairman and Chief Executive Officer, commented, "The purchase of this facility at an attractive valuation provides us with the opportunity to deploy cash in a manner that is accretive to shareholders and expands our presence in Alabama. Furthermore, we are teaming up with our largest operator, C.Ross Management who operates seven of our facilities, including two facilities in Alabama."
The company intends to finance the acquisition with conventional mortgage debt and cash on hand. The purchase is expected to close in the second quarter of 2017. The purchase of the facility and the lease to an affiliate of C.R. Management is subject to, among other things, satisfactory due diligence, debt financing and the negotiation and execution of a definitive purchase agreement and lease agreement, each of which will contain customary representations, warranties, covenants and closing conditions. There is no assurance that this transaction will be completed on the terms described in this press release or that they will be completed at all.
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. AdCare currently owns, leases or manages for third parties 29 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. 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.