American Retirement Corp. Sells Properties, Pays Down Debt

NASHVILLE, TN-Locally based American Retirement Corp. has consummated a $171-million transaction with Health Care Property Investors Inc. and used the proceeds to pay down debt.

The senior living and health care services provider sold four retirement centers to HCPI, leased back three of them and obtained a long-term management contract for the fourth. It also financed through HCPI land parcels adjoining two of the properties it sold to HCPI.

American Retirement acquired the centers, which contain 1,170 units, between 1992 and 1994. They were carried on the company’s balance sheet at approximately $73 million and were valued in the transaction at $163.5 million.

American Retirement says is has used the proceeds to pay down debt, including $113 million of first mortgage debt with an average current interest rate of 6.8% and $52 million in mezzanine debt at 19.5% interest.

The terms of the three leasebacks is “up to 10 years, with up to two renewal extensions available at the company’s option,” according to American Retirement. The initial lease rate for the three leases will be 9.5% of HCPI’s purchase price.

American Retirement operates 12,900 units in 65 senior living communities in 14 states.