Under terms of the recently closed deal, Emeritus is leasing 11facilities totaling 1,462 units in six states from HCP for a termof 10 years. The purchase option price will be based on "thegreater of fair market value or $300 million," according to theEmeritus filing. It states that $300 million is the minimum optionprice, and the deal specifies "an appreciation sharing arrangementif the fair market value exceeds the minimum option price."

The 11 facilities that Emeritus is leasing from HCP are inCalifornia, Connecticut, Massachusetts, Maryland, New Jersey andVirginia. The 1,462 units and beds consist of approximately 21independent living units, 969 assisted living units, 292Alzheimer's units and 180 skilled nursing beds.

In years one through five of the lease, Emeritus will pay annualrent of $17.5 million, $21 million, $25 million, $28 million and$30 million. After that, the rent "will increase by the greater ofthe increase in the CPI or 3%," according to the Emeritusfiling.