SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
August 10, 2001 (August 9, 2001)
SENIOR HOUSING PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 001-15319 04-3445278
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification number)
400 Centre Street, Newton, Massachusetts 02458
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:617-796-8350
Item 5. Other Events.
On August 9, 2001 Senior Housing Properties Trust ("SNH" or the
"Company") announced that it has entered an agreement to acquire 31 senior
housing communities from Crestline Capital Corporation for approximately $600
million. The 31 communities contain 7,487 living units. The communities are all
managed by Marriott International, Inc. ("Marriott") under long-term agreements
that extend through 2027 with renewal options thereafter. SNH will identify or
create a tenant entity for the communities in order to maintain REIT status
under applicable IRS rules.
A majority of the living units in these communities are independent
living apartments, although many of the properties also have an assisted living
component and some special care or skilled nursing beds. Current occupancy at
these properties is approximately 91%; and about 90% of the gross operating
revenues at these properties are paid by residents from private resources rather
than Medicare or Medicaid.
Some of the properties being acquired are subject to approximately $235
million of existing debt, which may be assumed by SNH as part of the purchase
price. Crestline will issue approximately $150 million of new debt prior to the
closing, which may be assumed by SNH. SNH also has the option to obtain up to
$25 million of unsecured seller financing for two years at an interest rate of
10% per annum. The remainder of the acquisition price may be initially funded by
drawings under SNH's available bank credit facility. The Company will consider
various alternatives for longer term financing before and after the closing.
The 31 communities are located in 13 states, as follows:
State Number of Properties Number of Units
----- -------------------- ---------------
Arizona 3 913
California 2 405
Delaware 5 869
Florida 6 1,423
Indiana 1 221
Kansas 1 207
Kentucky 3 606
Massachusetts 1 125
New Jersey 1 416
New Mexico 1 208
State Number of Properties Number of Units
----- -------------------- ---------------
Ohio 1 315
South Carolina 1 164
Texas 5 1,615
Total: 13 states 31 properties 7,487/units
The transaction is subject to the conditions described below in
addition to closing conditions customary in real estate transactions. Because
the properties to be acquired by SNH represent a substantial part of Crestline's
assets, a Crestline shareholders' vote will be required. Similarly, third party
approvals from Marriott under the management agreements and from certain lenders
will be required. Also, as is common in all transactions affecting senior
housing and healthcare facilities, licensing and regulatory approvals in the
states where the properties are located may be required. At this time, SNH
expects that this transaction will close in early 2002.
THIS CURRENT REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES REFORM ACT OF 1995. THESE FORWARD LOOKING
STATEMENTS INCLUDE REFERENCES TO THE POSSIBILITY THAT EXISTING DEBT MAY BE
ASSUMED, REFERENCES TO THE POSSIBLE AVAILABILITY OF NEW FINANCING, REFERENCES TO
SNH'S ABILITY TO LOCATE OR CREATE A TENANT IN COMPLIANCE WITH IRS REIT RULES,
AND REFERENCES OR IMPLICATIONS THAT REQUIRED APPROVALS, CONSENTS AND LICENSES
WILL BE OBTAINED. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON SNH'S CURRENT
BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE,
FINANCING FOR THIS ACQUISITION MAY NOT BE AVAILABLE; SNH MAY BE UNABLE TO LOCATE
OR CREATE A TENANT IN COMPLIANCE WITH IRS RULES; SNH MAY BE UNABLE TO REMAIN A
REIT; SNH MAY BE UNABLE TO PAY EXISTING OR INCREASED DIVIDENDS; AND THE
APPROVALS AND CONSENTS REQUIRED TO CONCLUDE THIS TRANSACTION MAY NOT BE
OBTAINED. SOME OF THESE FORWARD LOOKING STATEMENTS MAY NOT OCCUR FOR REASONS
WHICH WE CONTROL AND SOME MAY NOT OCCUR FOR REASONS BEYOND OUR CONTROL. FOR
EXAMPLE, WE MAY REFUSE TO MAKE ACCOMMODATIONS NECESSARY TO OBTAIN THIRD PARTY
APPROVALS, OR CHANGES IN CAPITAL MARKETS WHICH ARE BEYOND OUR CONTROL MAY MAKE
REASONABLE FINANCING FOR THIS TRANSACTION IMPOSSIBLE. INVESTORS SHOULD
UNDERSTAND THAT THIS TRANSACTION MAY NOT OCCUR. INVESTORS SHOULD NOT PLACE UNDUE
RELIANCE UPON FORWARD LOOKING STATEMENTS.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SENIOR HOUSING PROPERTIES TRUST
By: /s/ David J. Hegarty
Name: David J. Hegarty
Title: President, Chief Operating Officer
and Chief Financial Officer
Date: August 10, 2001
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