The senior housing portfolio is comprised of 742 assisted living units and 89 Alzheimer's units in Arizona, Colorado, Georgia, Kansas, Minnesota, Nevada, and Texas. The eight communities generated annualized total revenues of approximately $29 million for the nine months ended September 30, 2005. Occupancy at the end of October was 93%.

The estimated $53 million of equity in the transaction acquisition was funded by proportional capital contributions from the members of the joint venture entity. ARC will manage the portfolio pursuant to a long-term management agreement. Merrill Lynch Capital provided $85 million of debt financing. The debt has a five year term and requires the payment of interest only at a floating rate based upon LIBOR.

ARC chief executive Bill Sheriff says the joint venture structure allows ARC to maximize shareholder value by obtaining a strong return through its management fee and minority interest. The management contract includes a provision for additional returns for excelling, he says. ARC expects the transaction will be slightly accretive in 2005 with additional accretion in 2006.