Emeritus Corporation (NYSE: ESC) announced this week that they have entered into a non-binding letter of intent to lease 26 senior living communities from HCP as part of the Sunrise / HCP restructure and settlement agreement. Emeritus will lease the facilities for an initial term of 15 years with two available extension options of 10 years each and the transaction is scheduled to close in the fourth quarter of 2010. The lease agreements are expected to contain purchase options on 10 of the communities, exercisable beginning in year 11 and extending through the remaining term of the leases. The communities consist of approximately 3,080 units, comprised of 1,931 assisted living, 607 memory care, 405 skilled nursing and 137 independent living units.
"We are very pleased with the anticipated addition of these 26 high quality communities to our portfolio, and our continuing relationship with HCP. These communities further our growth strategy in markets where we currently operate and will fit nicely into our existing infrastructure and, additionally, represent a significant opportunity to create value for both HCP and Emeritus," stated Mr. Dan Baty, Chairman and Co-CEO.