MCLEAN, Va., Oct. 31 /PRNewswire-FirstCall/ -- Sunrise Senior Living, Inc. (NYSE: SRZ) today announced that the previously disclosed transaction between an affiliate of Arcapita Inc. and Health Care REIT (HCN), under which HCN would have purchased a 90% interest in a venture owning 29 senior housing properties managed by Sunrise, has been terminated. The termination of the transaction will have no impact on Sunrise's 10% interest in the venture. Sunrise will continue to manage the properties under long term contracts expiring in 2025. Due to the termination of the HCN transaction, Sunrise will not receive the estimated cash distributions of approximately $50 million to $60 million and will not realize the estimated gain of approximately $41 million to $51 million in the fourth quarter of 2008 that Sunrise anticipated in connection with this transaction.
"We understand Health Care REIT's decision not to complete this transaction was due to current market conditions," said Mark Ordan, Sunrise's chief investment and administrative officer and CEO-designate. "We are pleased to continue owning 10% of these properties and to continue managing them for our capital partner. We have had a long and successful relationship with Arcapita and we look forward to continuing to partner with them on future projects. These are excellent communities in large and attractive markets and they are performing well.
"Given the extreme uncertainty of the current capital markets, in order to maintain as much financial flexibility as possible, we are working closely with our banks and other sources of capital to provide additional sources of liquidity. Although there can be no assurance as to these or other prospective matters in the current turbulent environment (including whether our bank lenders will exercise the rights previously described in our SEC filings if, as we expect to happen at the end of the fourth quarter of 2008, we fall out of compliance with our covenants under our bank credit facility, and whether we are able to secure alternative financing, if needed), as we will detail in our upcoming earnings call, we believe we have a strong collateral base and that Sunrise will continue to be the leading brand in the growing senior living sector. We intend to focus on managing efficiently, reducing overhead and conserving cash so that we can make Sunrise a leaner, more efficient company."
About Sunrise Senior Living
Sunrise Senior Living, a McLean, Va.-based company, employs approximately 40,000 people. As of June 30, 2008, Sunrise operated 445 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for approximately 55,000 residents. At quarter end, Sunrise also had 36 communities under construction in these countries with a combined capacity for 4,600 additional residents. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise, please visit http://www.sunriseseniorliving.com.
Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sunrise believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurances that its expectations will be realized. Sunrise's actual results could differ materially from those anticipated in these forward- looking statements as a result of various factors, including, but not limited to, the Company's ability to obtain a further modification or waiver of the financial covenants under its amended Bank Credit Facility; the Company's ability to raise funds from other potential capital sources; the Company's ability to achieve the anticipated savings from its cost- savings program; the outcome of the SEC's investigation; the outcomes of pending putative class action and derivative litigation; the outcome of the Trinity OIG investigation and qui tam proceeding; the outcome of the IRS audit of the Company's tax return for the tax year ended December 31, 2006 and employment tax returns for 2004, 2005 and 2006; the status of the exploration of strategic alternatives; Sunrise's ability to continue to recognize income from refinancings and sales of communities by ventures; risk of changes in Sunrise's critical accounting estimates; risk of further write-downs or impairments of its assets; risk of future fundings of guarantees and other support arrangements to some of its ventures, lenders to the ventures or third party owners; risk of declining occupancies in existing communities or slower than expected leasing of new communities; risk resulting from any international expansion; risk associated with any new service offerings; development and construction risks; risks associated with past or any future acquisition; compliance with government regulations; risk of new legislation or regulatory developments; business conditions; competition; changes in interest rates; unanticipated expenses; market factors that could affect the value of the Company's properties; the risks of downturns in general economic conditions; availability of financing for development; and other risks detailed in the Company's latest annual report on Form 10-K filed with the SEC, as may be amended or supplemented in our Form 10-Q filings. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
|SOURCE Sunrise Senior Living, Inc.|
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