Exhibit 99.1
[OBJECT OMITTED] Capital
Senior
Living
Corporation
For Immediate Release Contact: Ralph A. Beattie
972/770-5600
CAPITAL SENIOR LIVING CORPORATION
ANNOUNCES $85 MILLION SALE/LEASEBACK
WITH VENTAS HEALTHCARE PROPERTIES
DALLAS - (BUSINESS WIRE) - July 5, 2005 - Capital Senior Living Corporation (the
"Company") (NYSE:CSU), one of the country's largest operators of senior living
communities, today announced it has executed an agreement with Ventas, Inc.
("Ventas") (NYSE:VTR) for a six community, approximately $85 million
sale/leaseback transaction. The six communities being sold to Ventas are owned
by a joint venture between the Company and affiliates of Blackstone Real Estate
Advisors ("Blackstone"). The joint venture, formed in December of 2001, is owned
10% by the Company and 90% by Blackstone. The Company earns management fees from
the joint venture under long-term management contracts. Ventas is a leading
healthcare real estate investment trust that owns healthcare and senior housing
assets in 41 states.
The properties to be sold in this transaction have approximately 950 units and a
combined resident capacity of nearly 1200 and include Crown Pointe in Omaha,
Nebraska, The Harrison in Indianapolis, Indiana, Villa Santa Barbara in Santa
Barbara, California, West Shores Village in Hot Springs, Arkansas, Cottonwood
Village in Cottonwood, Arizona and The Amberleigh at Woodside Farms in Buffalo,
New York. Financial occupancy in the six communities is approximately 84%. The
transaction is expected to close in the third quarter of 2005, subject to lender
and regulatory approvals and other customary closing conditions.
The triple net operating lease which the Company executed with Ventas has an
initial term of ten years, with two 5-year renewal options. The initial lease
rate will be 8% and will be subject to conditional escalation provisions.
The Company expects to record a gain on the sale of these six properties, which
will be recognized over the initial lease term. Furthermore, the Company
anticipates receiving net proceeds from the transaction which represent its
equity interest and additional incentive payments from the joint venture. These
proceeds are estimated to be approximately $6.5 million, subject to adjustments
and prorations, compared to the Company's initial investment of approximately
$1.6 million.
Upon closing the transaction, the Company will begin consolidating the revenues
and expenses of the six communities on its income statement, along with the
lease expense.
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Annualizing results of operations through May 2005, the six communities had
approximately $20.0 million in revenue and $7.5 million in net operating income,
before management fees of approximately $1.0 million.
"The joint venture has been successful for both the Company and Blackstone,"
James A. Stroud, Chairman of the Company said. "The Company reported income from
its 10% joint venture interest, management fees from operations, and a back end
gain four times its initial investment. I am pleased with the results of this
joint venture structure."
"This sale/leaseback transaction adds significant top-line growth to the
Company," added Lawrence A. Cohen, Chief Executive Officer. "While we have been
earning management fees on these communities for some time, we will now be able
to consolidate the results of operations and benefit from improvement in
occupancies and increases in rental rates. These six high quality assets will
form an excellent foundation for our new relationship with Ventas, an industry
leader in senior housing investments."
"We are extremely pleased to enter into this transaction with Capital Senior
Living," said Raymond J. Lewis, Senior Vice President and Chief Investment
Officer of Ventas. "They are a premier operator in the senior housing industry
and we hope to find more opportunities to grow our relationship together."
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 54 senior living communities in 20 states with an
aggregate capacity of approximately 8,700 residents, including 39 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, 84 percent of residents live independently and 16
percent of residents require assistance with activities of daily living.
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
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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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