The first phase of the transaction, the purchase of four properties for $37 million, has been completed. Ventas says it expects to fund the transaction with cash, its revolving credit facility and the assumption of approximately $41 million of non-recourse property-level debt. The assumed debt encumbers seven of the properties, has a weighted average interest rate less than 7%, and comes due in 2005.

The purchase price in the transaction represents an approximately 11.2% capitalization rate on the properties' EBITDA, and a per unit cost of $58,000. The annual rent on the 14 properties is expected to be $10.6 million, representing an initial cash yield of 9.25%.

Ventas says the annual lease payments will escalate each year by the greater of 1.5% or 75% of the increase in the consumer price index. Ventas says the initial GAAP yield on investment of 10.3% could be exceeded over the life of the leases, due to the CPI rent adjustment.