ATLANTA — AdCare Health Systems, Inc. (NYSE MKT: ADK), (NYSE MKT: ADK.PRA), a long-term care provider, has signed an agreement with affiliates of Wellington Healthcare Services, an operator of long-term care facilities, to lease two of its skilled nursing facilities in Georgia. The move is part of AdCare’s ongoing strategic plan to transition from an owner and operator of healthcare facilities to a healthcare property holding and leasing company.
AdCare expects the lease, contingent on all licenses and other approvals required by the state of Georgia, to become effective by April.
Under the terms of the triple net lease agreements, the lessees of the facilities will be responsible for day-to-day management, ongoing maintenance and facility improvements for the duration of the leases. The initial terms of the leases are five years with a renewal option. The annual rent in the first year will total $3.9 million and will escalate at $24,000 each year throughout the initial term.
“We are making steady and consistent progress in our plans to transition to a healthcare property holding and leasing company,” says Bill McBride, AdCare’s president and CEO. “Our team is working diligently to identify quality partners such as Wellington, to negotiate agreements and queue them up for the requisite approvals. While there is still work to be done, I am pleased with our progress.”
Wellington Healthcare Services, via its subsidiaries and affiliates, currently operates 10 facilities in four southeastern states and focuses on all aspects of long-term care.