Debt-Ridden Sunrise Senior Living Completes Sale of 21 Assisted Living Communities

Under severe pressure to raise cash and pare its debt, Sunrise Senior Living Inc. has sold 21 assisted living facilities to BLC Acquisitions, an affiliate of Brookdale Senior Living, for $204 million. The sale of the properties spread across 11 states closed Nov. 18.

Sunrise (NYSE: SRZ) received approximately $60 million in net proceeds after payment or assumption of approximately $134 million of mortgage loans, the posting of required escrows, various prorated items and adjustments, and payment of expenses by Sunrise.

Based in McLean, Va., Sunrise will use $25 million of the proceeds to pay down its bank credit facility and will place $20 million into a collateral account for the benefit of other creditors.

The asset sale comes as Sunrise aggressively tries to repair its balance sheet. As of September 30, Sunrise and its consolidated subsidiaries reported a total debt of $624.6 million, of which $151.5 million is scheduled to mature in 2009. Long-term debt that is in default totals nearly $412 million.

Sunrise operates 382 communities in the United States, Canada, Germany and the United Kingdom, with a combined unit capacity of 40,175 units.

The price of Sunrise stock closed at $3.10 per share on Friday, Nov. 27. While that’s a stunning improvement over the 52-week low of 28 cents set in March, the price remains considerably below the 52-week high of $5.89.

Nashville-based Brookdale (NYSE:BKD) owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 564 communities in 35 states. Brookdale has the capacity to serve more than 53,000 residents.

Brookdale’s stock price closed at $16.02 per share on Nov. 27, well above its 52-week low of $2.50. The stock price is below the 52-week high of $20.69 set in October.

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