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VENTAS TO ENTER LEASE TRANSACTION WITH CAPITAL SENIOR LIVING CORP. VALUED AT $85 MILLION

Lease Agreement

VENTAS TO ENTER LEASE TRANSACTION WITH CAPITAL SENIOR LIVING CORP. VALUED AT $85 MILLION | Document Parties: CAPITAL SENIOR LIVING CORP | Ventas, Inc You are currently viewing:
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CAPITAL SENIOR LIVING CORP | Ventas, Inc

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Title: VENTAS TO ENTER LEASE TRANSACTION WITH CAPITAL SENIOR LIVING CORP. VALUED AT $85 MILLION
Date: 7/5/2005
Industry: Real Estate Operations     Sector: Services

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Exhibit 99.2

 

Ventas, Inc. 10350 Ormsby Park Place, Ste 300 Louisville, Kentucky 40223 (502) 357 . 9000 (502) 357 . 9001 Fax

 

 

 

 

Contacts:

  

Debra A. Cafaro

 

  

Chairman, President and CEO

 

  

or

 

  

Richard A. Schweinhart

 

  

Senior Vice President and CFO

 

  

(502) 357-9000

 

VENTAS TO ENTER LEASE TRANSACTION WITH CAPITAL SENIOR LIVING CORP.

VALUED AT $85 MILLION

 

New Tenant Creates Future Growth Opportunities

 

LOUISVILLE, KY (July 5, 2005) – Ventas, Inc. (NYSE:VTR) (“Ventas” or the “Company”) said today that it has agreed to acquire and lease six seniors housing assets to subsidiaries of Capital Senior Living Corp. (NYSE:CSU) (“Capital Senior Living”) in a transaction valued at $85 million.

 

“This transaction advances Ventas’s strategy of expanding its diverse portfolio of healthcare and seniors housing assets with high quality facilities operated by experienced care providers such as Capital Senior Living,” said Debra A. Cafaro, Chairman, President and Chief Executive Officer of Ventas. “Adding another important relationship to our existing tenant base should provide Ventas with additional growth opportunities in the future.”

 

Ventas expects to acquire the six primarily independent living assets for a cost of $85 million, which represents $89,000 per unit and $71,000 per bed. The seller will be a joint venture between Capital Senior Living and an institutional private equity firm. Capital Senior Living currently manages those facilities for the joint venture. The assets contain approximately 950 units and 1,200 beds. They are located in mostly suburban markets in six states, and are all private pay, non-government reimbursed facilities.

 

When Ventas acquires the assets, they will be leased to subsidiaries of Capital Senior Living. The triple-net operating leases with Capital Senior Living will have an initial cash yield of 8%, which is expected to escalate at an average of 2.5% per year over the life of the leases. If these annual escalations are achieved, Ventas’s unlevered yield will be 9% over the initial ten-year base term of the leases. A subsidiary of Capital Senior Living, Capital Senior Living Properties, Inc., will guarantee the leases. Ventas expects the EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) to rent coverage on the portfolio to exceed 1.2:1x, upon stabilization and repositioning of one of the acquired assets, which should occur in the next six to twelve months.

 

Successful completion of the transaction is subject to satisfaction of certain conditions, including lender and regulatory approvals and other customary closing conditions. The portfolio currently is encumbered by $44 million in mortgage debt bearing interest at a blended, fixed annual rate of 7%, as well as $7 million of floating-rate debt to be retired at closing. Although Ventas expects to complete the transaction in the third quarter of 2005, there can be no assurance that the transaction will occur or, if so, when the closing will occur.

 

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Ventas to Enter Lease Transaction with Capital Senior Living Corp.

Page 2

July 5, 2005

 

Capital Senior Living is one of the nation’s largest operators of residential communities for senior adults. It emphasizes a continuum of care, which integrates independent living, assisted living and home care services, to provide residents the opportunity to age in place. Capital Senior Living currently operates 54 senior living communities in 20 states with an aggregate capacity of approximately 8,700 residents. In those communities, 84 percent of residents live independently and 16 percent of residents require assist


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