Advocat (Nasdaq:AVCA) has entered into an agreement with Omega Healthcare Investors, Inc. (NYSE:OHI) that provides it with $5 million in financing for capital improvements to four nursing centers it leases from Omega.
Advocat provides a broad range of long-term care services to the elderly including skilled nursing and ancillary health care services through 46 nursing centers in primarily the Southeast and Southwest United States. Omega owns and leases to Advocat a total of 36 centers and since 2005 has provided $15 million for renovations. The additional $5 million will be invested in centers located in Arkansas, Kentucky, Ohio and Texas.
“The average age of our nursing centers is 32 years. Major renovations result in significant aesthetic upgrades and many of the projects include the addition of functionality as well as space for rehabilitation therapy,” said William R. Council, III, President and Chief Executive Officer.
The capital improvements are a fundamental part of the company’s growth strategy for improving occupancy, quality of care and profitability.
“Since we launched the program in 2005, the average return on investment has exceeded 38%. Most importantly, the renovation program is an important part of our objective to be the provider of choice of health care and related services to the elderly in the communities we serve,” he said.