Senior Housing Properties Trust (SNH), a Newton, Mass.-based real estate investment trust (REIT), has entered agreements for early terminations of leases for 10 senior living communities currently operated by Sunrise Senior Living Inc. SNH will also purchase the inventory and certain improvements owned by Sunrise at these communities for a total of $1 million.
Following regulatory approval, SNH expects to lease these communities to its wholly owned taxable REIT subsidiaries, and the communities – which total 2,472 living units – will be managed by Five Star Quality Care Inc. According to SNH, the 10 communities had combined average occupancy in 2011 of approximately 87% and combined gross revenues of approximately $115.6 million – with a large majority of these revenues paid by residents from their private resources, not from government funded programs.
‘Because of the expected termination of Sunrise's leases at year-end 2013, SNH believes it is important for the community residents and for SNH that these operations be transferred to a manager with a longer-term outlook as soon as possible,’ says David J. Hegarty, SNH president. ‘Five Star operates some of the highest-quality retirement communities in the country, including several that have achieved national recognition for superior services to residents. SNH will be working with Five Star to conduct a thorough investigation of the staffing and capital needs at these communities; and SNH expects they will become among the best-run communities in the country.’