DEER PARK, Texas — Capital Senior Living Corp. (NYSE: CSU) has completed the transfer of its independent living community in the Houston suburb of Deer Park to Fannie Mae, the holder of the community’s non-recourse debt.
The Deer Park community is the first of 18 properties the company will transition to Fannie Mae under a cooperative process initiated in August 2020. A Dallas-based operator, CSU plans to enhance liquidity and improve operating cash flow by eliminating underperforming operations and focusing on its core owned and managed portfolio.
CSU expects all 18 of the community transitions to be completed by the end of the first quarter of 2021. The company receives a monthly management fee of approximately $200,000 for operating the 18 communities.
CSU expects to extinguish $19.4 million in debt related to the Deer Park community when the legal transfer is complete, which is expected to occur in January 2021. The transfer of all 18 communities will reduce the company’s debt by $217.7 million and improve annual cash flow by approximately $10 million, according to a press release from the company.
“The transition of the Deer Park community is another step in our strategy to create a more focused, higher-performing portfolio while also reducing our liabilities and improving our liquidity,” says Kimberly Lody, CSU’s president and CEO.
Upon completion of all asset transitions, CSU’s portfolio will consist of 68 senior living properties that primarily serve the middle-market senior population.