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Exhibit 99.3
FOR IMMEDIATE RELEASE
January 30, 2001
For more information contact:
Raymond Braun - (419) 247-2800
Mike Crabtree - (419) 247-2800
HEALTH CARE REIT, INC. REPORTS ON CLOSING OF
SUMMERVILLE TRANSACTION
Toledo, Ohio, January 30, 2001..... HEALTH CARE REIT, INC. (NYSE/HCN) reported
today on the completion of its restructuring agreement with Summerville Assisted
Living, Inc. ("Summerville") and the re-leasing of the Summerville facilities.
As previously disclosed, the company reached an agreement with Summerville for
Health Care REIT to restructure its investment in the large assisted living
operator. The restructuring results from Summerville's decision to realign its
portfolio of communities into specific targeted markets in order to leverage
operating efficiencies and maximize value. Health Care REIT's facilities are
located outside Summerville's targeted markets. Summerville also agreed to
substantially repay Health Care REIT's subdebt and permit it to re-lease 10 of
its 11 facilities to new operators.
"We are pleased with the Summerville transaction, which provides important
benefits to both parties," commented George L. Chapman, chairman and CEO. "The
reorganized Summerville is well positioned to complete the stabilization of its
facilities and meet its goals. Health Care REIT has the benefit of re-leasing
the 10 facilities with five experienced, regional operators. It also furthers
our historical commitment to operator diversification."
SUMMERVILLE TRANSACTION
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Summerville gave consideration of approximately $11.41 million to satisfy all of
its obligations to the company. This amount included $6.1 million cash, 2.5
percent of the common stock of the reorganized Summerville, which the company
has valued at $1.6 million, and a secured note of $3.71 million. As a result of
this transaction, the company will charge $726,000 against its allowance for
loan losses in the fourth quarter of 2000.
PREFERRED STOCK INVESTMENT
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The company owned non-yielding preferred stock of Summerville with a basis of
$2.0 million. As part of Summerville's recapitalization, this investment was
substantially diluted. Accordingly, based upon an internal valuation, Health
Care REIT elected to write-off its preferred stock investment in the fourth
quarter of 2000.
FFO EFFECT
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Although the preferred stock write-off is non-cash and non-recurring, the
company has determined, in accordance with the NAREIT definition, to reduce
funds from operations ("FFO") by the loss on investment, resulting in a
reduction in fourth quarter 2000 FFO of $0.07 per share. Excluding the loss
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PRESS RELEASE
SUMMERVILLE TRANSACTION
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on investment, FFO is expected to be $0.66 per share. For 2001, it is
anticipated that FFO will modestly decrease by $0.01 to $0.0125 per share as a
result of the restructuring.
RE-LEASING OF FACILITIES
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The company had the following operating lease investments with Summerville,
which are now operated by the companies specified in the following table:
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FACILITY CITY STATE LEASE AMOUNT NEW OPERATOR
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Dunwoody Atlanta GA $16,552,340 Merrill Gardens LLC
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Brick Brick NJ 10,473,504 Gordon Health Ventures
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Pineville Charlotte NC 11,047,412 Southern Assisted Living, Inc.
- ---------------------- ------------------- ---------- ---------------------- ----------------------------------------------
Durham Durham NC 11,615,286 Southern Assisted Living, Inc.
- ---------------------- ------------------- ---------- ---------------------- ----------------------------------------------
Ellicott City Ellicott City MD 14,317,942 Morningside Developments
- ---------------------- ------------------- ---------- ---------------------- ----------------------------------------------
Gardnerville Gardnerville NV 13,357,027 Merrill Gardens LLC
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Kenner Kenner LA 10,966,382 Summerville
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Sarah Pierce Litchfield CT 8,864,156 Gordon Health Ventures
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Merrillville Merrillville IN 7,377,368 Balanced Care Corporation
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Naples Naples FL 18,195,736 Merrill Gardens LLC
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Roswell Roswell GA 10,256,844 Merrill Gardens LLC
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TOTALS: $133,023,997
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The lease amounts, lease rates and annual escalators are substantially the same
as the leases to Summerville.
FACILITIES UPDATE
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In its quarterly earnings calls, the company will provide updated census and
other operating data with respect to these facilities.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate
investment trust that invests in health care facilities, primarily nursing homes
and assisted living facilities. At September 30, 2000, the company had
investments in 209 health care facilities in 34 states and had total assets of
approximately $1.2 billion. For more information on Health Care REIT, Inc., via
facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More
information is available on the Internet at http://www.hcreit.com.
This document may contain "forward-looking" statements as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties, which may cause the company's actual
results in the future to differ materially from expected results. These risks
and uncertainties include, among others, general economic conditions, the
availability of capital, competition within the financial services and real
estate markets, the performance of operators within Health Care REIT's
portfolio, and regulatory and other changes in the health care sector, as
described in the company's filings with the Securities and Exchange Commission.
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