ATLANTA, May 3, 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 completed the purchase of an assisted living and memory care facility with 106 operational beds located in Alabama for $5.5 million on May 1, 2017.
The Company also announced the commencement of a long-term lease to operate the facility to an affiliate of C.Ross Management, LLC. C.Ross, AdCare's largest operator, operates 22 facilities in Georgia and Alabama through its affiliates. The terms of the long-term lease agreement, include a 13-year term with initial annual cash rent of $450,000 in the first year and a 2% annual rent escalator.
Allan Rimland, AdCare's President and Chief Executive Officer, commented, "The purchase of this facility provided us with the opportunity to deploy cash at an attractive return on capital and expands our presence in Alabama. In addition, an affiliate of C.Ross Management operates the adjacent Coosa Valley skilled nursing facility, thereby providing opportunities for operational improvements at each of the properties. Most importantly, this facility represents the first acquisition by the company after the transition of the company from an owner, operator and manager of senior housing facilities to a property holding and leasing company."
The company financed the acquisition with conventional mortgage debt of $4.1 million with a term of five years bearing an interest rate of 4.50% per annum and cash on hand of $1.4 million.
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 30 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, 2016, 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.