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Multi-faceted Deals For Assisted Living Switch

NEWTON, MA-Five Star will buy three of the buildings for $21.4 million and take adjusted leases for the other seven abdicated facilities and a compensation package.

By Ryan Clark | Updated on July 03, 2008

NEWTON, MA-Locally based Five Star Quality Care–a healthcare and senior living services company–will assume adjusted leases and purchase three senior living facilities from Senior Housing properties. NewSeasons Assisted Living Communities Inc. is making a deal with the owners, Senior Housing Properties Trust, to get itself out of its 10-facility lease obligations, previously leased up until 2017.

The 10 assisted living facilities total 873 units and were bought by Senior Housing properties for $87.6 million in 2003. At the time of purchase, the owner simultaneously stuck a deal with NewSeasons for the full lease-up of the fresh purchase. The lease terms were $8 million per year with an annual increase for 15 years. However, New Seasons and its parent company–Philadelphia-based Independence Blue Cross–are deciding to leave the assisted living business. Senior Housing is making a deal with New Seasons and Five Star that will allow New Seasons to abdicate its lease obligations.

“[Senior Housing] was pleased to have had NewSeasons as its tenant for the past five years, but we understand that business plans of large companies may change,” comments David Hegarty, president of Senior Housing, in a statement. “We expect that Five Star will be able to maintain and improve the services available at these high quality properties.”

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