Assisted Living Concepts, Inc. (NYSE:ALC) announced earlier this week that it entered into an agreement to acquire nine senior living residences from HCP, Inc. (NYSE: HCP). The nine residences are currently leased and operated by ALC under leases expiring between 2010 and 2012 and are currently at an occupancy level of 60%. The $27.5 million dollar transaction is expected to close by October 31 and contains a total of 365 units with two facilities in New Jersey and seven in Texas.
“We are pleased to have reached agreement with HCP to purchase these properties,” commented Laurie Bebo, President and Chief Executive Officer of Assisted Living Concepts, Inc. “In addition to upside opportunities in the existing portfolio, the better performing properties have excess land that may provide good expansion opportunities in the future. After this transaction is completed we will own 161 of our properties or 76% of our total residences.”
ALC also announced the expansion and extension of a loan agreement with TCF National Bank ("TCF") that increases the loan from $14.0 million to $26.25 million and extends the maturity from June 12, 2014 to September 30, 2015. The loan bears interest at the rate of 6.5% and is secured by mortgages on six of ALC’s senior housing residences.
"We are pleased to have completed a second round of financing with TCF," commented Laurie Bebo, President and Chief Executive Officer of Assisted Living Concepts, Inc. "Appraisals on the three properties added to secure this loan were in excess of $100,000 per unit, once again demonstrating the value of our business model for owned properties. We own 46 additional unencumbered properties."
