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NEWTON, MA-Senior Housing Properties Trust committed to purchase 35 senior-living properties from Five Star Quality Care Inc. for $165 million. This commitment was made in connection with Five Star’s recently announced agreement to acquire LTA Holdings Inc.–formerly known as LifeTrust America, Inc.–privately owned company that owns and operates senior living communities in the southeastern US.

Upon completion of Five Star ‘s acquisition of LTA, Senior Housing Properties, a locally based REIT, will purchase 35 independent- and assisted-living communities from Five Star that were previously owned by LTA. Concurrent with the purchase, Senior Housing Properties will also enter a long-term triple-net lease arrangement with Five Star for the same properties.

The 35 communities that SHP will acquire have 1,880 independent- and assisted-living units. In Tennessee the firm acquired eight communities totaling 477 units; in Virginia, there are four communities totaling 396 units; in South Carolina there are eight communities totaling 346 units; in Georgia there are seven communities totaling 287 units; in Kentucky there are four communities totaling 193 units; and, in Alabama there are four communities totaling 181 units.

The majority of these communities, which are 87% occupied, were built by LTA between 1997 and 2002, and the average age of all 35 communities is approximately five years. The rent payable by Five Star to Senior Housing Properties for these communities will be $14.9 million annually year, plus increases starting in 2006 based upon a percentage of the revenue increases at these communities.

Senior Housing will initially fund this acquisition using cash on hand, borrowings under its unsecured revolving credit facility and by the assumption of $49.5 million of mortgage debt. The mortgage debt is secured by some, but not all, of the properties being acquired by Senior Housing Properties.

“This transaction is consistent with out strategy of focusing on purchasing high-quality, private pay senior living-properties,” says David J. Hegarty, president and chief operating officer of Senior Housing Properties. “LTA’s communities are among the newest in the senior care industry. These high-quality communities produce rent coverage based on historical operations and 100% of the resident revenues at these properties come from private resources. The good working relationship we have with Five Star has enabled us to undertake a complex transaction.” Senior Housing Properties expects the closing of this transaction will occur concurrently with Five Star’s acquisition of LTA, which is expected to occur during the fourth quarter of 2004.

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