Exhibit 99.2
[OBJECT OMITTED] Capital
Senior
Living
Corporation
For Immediate Release Contact: Ralph A. Beattie
972/770-5600
CAPITAL SENIOR LIVING CORPORATION ACQUIRES FOUR SENIOR LIVING
COMMUNITIES; TRANSFERS THEM TO NEW JOINT VENTURE
Payback of one year anticipated: Company has a 5% equity ownership and retains
long-term management contract which generates $1 million in annual revenue
DALLAS - (BUSINESS WIRE) - December 8, 2004 - Capital Senior Living Corporation
(the "Company") (NYSE:CSU), one of the country's largest operators of senior
living communities, announced that it has acquired through a new joint venture
with Senior Housing Partners II, L. P. ("SHP II"), a fund managed on behalf of
its clients by Prudential Real Estate Investors ("PREI"), four senior living
communities (the "Spring Meadows Communities") which were formerly owned by
joint ventures in which affiliates of Lehman Brothers ("Lehman") and the Company
were members.
The Spring Meadows Communities are located in Libertyville, Illinois,
Naperville, Illinois, Summit, New Jersey and Trumbull, Connecticut. Combined
resident capacity is approximately 698 with 65 percent of the residents living
independently and 35 percent of the residents requiring some assistance with
activities of daily living.
The Company acquired Lehman's interests in the joint ventures that owned the
Spring Meadows Communities and then immediately caused these joint ventures in
which the Company became 100% owner to sell the Spring Meadows Communities to
the new joint venture with SHP II. Capital Senior Living has a five percent
interest in the newly formed joint venture and SHP II has a ninety five percent
interest.
These four Spring Meadows Communities were sold to the joint venture for
approximately $77.5 million, and the joint venture financed approximately $51.4
of the purchase with mortgage debt.
Proceeds from the sale of 95 percent of the interests in the joint ventures
owning the Spring Meadows Communities were approximately equal to the
consideration paid to Lehman for their interests in the joint ventures sold by
Lehman to the Company. The Company anticipates that the transaction will be
neutral to earnings in the fourth quarter.
In effect, the Company has converted advances it made to the Spring Meadows
Communities in the form of notes receivable and a nominal subordinated interest
into a five percent equity interest in the joint venture. The Company will share
five percent of
CAPITAL/Page 2
the future economic benefits of ownership, as well as additional returns from
the joint venture once return on investment hurdles are achieved.
The Company has managed the Spring Meadows Communities since the opening of each
community in late 2000 and early 2001 and will continue to manage the
communities under long-term management contracts which are expected to produce
over $1 million of revenue per year.
"We are very pleased to have a significant ownership position in these
properties," commented James A. Stroud, Chairman of the Company. "Two of the
communities are now stabilized and two are in lease-up, with significant
opportunities for additional value creation. Our involvement with these
communities since they opened will ensure a seamless transition to new
ownership."
"The joint venture with PREI is an exciting development for the Company," stated
Lawrence A. Cohen, Chief Executive Officer. "Our partners are extremely
knowledgeable and highly regarded in the industry. The joint venture structure
which we have established will provide a return of our entire investment in
little more than a year, through management fees and a return on equity, along
with future incentives."
"This is our second transaction with Capital Senior Living and we look forward
to a continued relationship. The Spring Meadows Communities are an exciting
addition to the SHP II portfolio," noted John W. Dark of PREI.
ABOUT PREI
PREI provides global real estate investment management services in the United
States, Europe, Asia and Latin America. PREI managed total assets of $22.9
billion on behalf of more than 350 clients as of September 30, 2004; net assets
under management (i.e., after deduction of associated debt and liabilities) were
$15.4 billion. For more information, visit www.prei.com.
ABOUT THE COMPANY
Capital Senior Living Corporation is one of the nation's largest operators of
residential communities for senior adults. The Company's operating philosophy
emphasizes a continuum of care, which integrates independent living, assisted
living and home care services, to provide residents the opportunity to age in
place.
The Company currently operates 56 senior living communities in 20 states with an
aggregate capacity of approximately 8,700 residents, including 41 senior living
communities which the Company owns or in which the Company has an ownership
interest, and 15 communities it manages for third parties. In the communities
operated by the company, 85 percent of residents live independently and 15
percent of residents require assistance with activities of daily living.
CAPITAL/Page 3
The forward-looking statements in this release are subject to certain risks and
uncertainties that could cause results to differ materially, including, but not
without limitation to, the Company's ability to find suitable acquisition
properties at favorable terms, financing, licensing, business conditions, risks
of downturns in economic conditions generally, satisfaction of closing
conditions such as those pertaining to licensure, availability of insurance at
commercially reasonable rates, and changes in accounting principles and
interpretations among others, and other risks and factors identified from time
to time in our reports filed with the Securities and Exchange Commission.
Contact Ralph A. Beattie, Chief Financial Officer, at 972-770-5600 or Matt
Hayden, Hayden Communications, Inc. at 858-456-4533 for more information.
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