Sunrise Completes Recapitalization of CNL Joint Venture, Enters Long Term Management Contract

Sunrise Senior Living, Inc. (NYSE: SRZ) has completed the recapitalization of seven communities it owns in a joint venture with CNL Income Partners.

Announced earlier this year, the deal is structured as a RIDEA joint venture with 68% owned by CNL Income Partners and approximately 32% by Sunrise.

According to Sunrise, the average unit occupancy has stabilized at 87.3% for the six months ended June 30, 2011. Occupancy growth at the properties is up 330 basis points for the second quarter 2011 and net operating income increase 13.6% from last year.

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As part of the deal, Sunrise secured a 7% long term management agreement with an unlimited ability to cure any performance shortfalls in the NOI threshold test starting in 2015.

“These recently developed Sunrise-built mansions have stabilized and performed well in a difficult environment,” said Mark Ordan, CEO of Sunrise. “Our financing execution demonstrates the high quality of this portfolio and the venture agreements secure our management contract and control of the assets for the long term.”

The seven properties have a total of 601 units in Dallas, Minneapolis, Detroit, California, Kansas City and Philadelphia. The mix includes 58.6% assisted living, 28.1% Alzheimer, and 13.3% independent living.

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Written by John Yedinak