Capital Senior Living Corporation Acquires Two Communities and Closes on Sale of Four Non-Core Communities

by Jeff Shaw

DALLAS — Capital Senior Living Corporation (NYSE:CSU) has announced the completion of three transactions: the acquisition of two seniors living communities, the disposition of four non-core communities and the refinance of an existing community loan.

The company also announced that it recently executed early rate locks on refinancing transactions associated with two communities at an average interest rate of approximately 3.85 percent, both of which are expected to close by the end of the first quarter of 2015.

“We are extremely pleased to add two high-occupancy communities with excellent financial and operating metrics to our consolidated operations and to complete the sale of the four communities that are not core to Capital Senior,” says Lawrence A. Cohen, the company’s CEO. “The completed loan refinance reflects the appreciation in value of this owned community and allows the company to continue to benefit from historically low interest rates and fix this debt at attractive rates while extending the maturity to 2025.”

The two acquired communities were purchased for $32.8 million. One of the transactions was completed in mid-December and the other in mid-January. They are comprised of 127 assisted living units. The communities are financed with $24.5 million of 10-year fixed-rate debt that is non-recourse to the company with a blended interest rate of 4.41 percent.

In January, the Company sold the four non-core communities for $36.5 million and will receive approximately $18 million in net proceeds after relieving the debt associated with the communities and paying customary transaction and closing costs. The communities sold were comprised of 547 independent living units.

In December, the company refinanced the debt associated with one community, lowering the interest rate and yielding $9.3 million in incremental cash proceeds from the new loan after customary transaction and closing costs. The new mortgage is $18.9 million with a 4.46 percent fixed interest rate and matures in January 2025. The new mortgage replaced $8.4 million of fixed-rate debt with an interest rate of 5.75 percent that was set to mature in March 2017.

The company executed early rate lock agreements on $45 million of mortgage debt for two communities at an interest rate of approximately 3.85 percent with a 10-year maturity. These new mortgages will close by the end of the first quarter of 2015. This debt will refinance an existing mortgage of $8 million with an interest rate of 5.46 percent due to mature in August 2015 and one short-term bridge loan of $21.6 million with floating rate interest of 2.92 percent due to mature July 2016. Net proceeds from these two refinance transactions will total approximately $15 million. The company plans to use these proceeds to pay off two short-term, floating-rate bridge loans totaling $14 million.

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