Attached files
| file | filename |
|---|---|
| EX-10.1 - Sentio Healthcare Properties Inc | v183410_ex10-1.htm |
| EX-10.2 - Sentio Healthcare Properties Inc | v183410_ex10-2.htm |
| EX-10.4 - Sentio Healthcare Properties Inc | v183410_ex10-4.htm |
| EX-99.1 - Sentio Healthcare Properties Inc | v183410_ex99-1.htm |
| EX-10.3 - Sentio Healthcare Properties Inc | v183410_ex10-3.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
April
30, 2010
CORNERSTONE
HEALTHCARE PLUS REIT, INC.
(Exact
name of registrant as specified in its charter)
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Maryland
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000-53969
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20-5721212
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(State or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification
Number)
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1920
Main Street, Suite 400
Irvine,
California 92614
(Address
of principal executive offices)
(949)
852-1007
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions.
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¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14d-2(b)
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¨
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)
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¨
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)
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ITEM 1.01
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ENTRY INTO MATERIAL DEFINITIVE
AGREEMENT.
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The
information in this Report set forth under Items 2.01 and 2.03 is incorporated
herein by reference.
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ITEM 2.01
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COMPLETION OF ACQUISITION OR
DISPOSITION OF ASSETS
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Joint
Venture to Acquire Oakleaf Village
General
On April
30, 2010, through wholly-owned indirect subsidiaries, we entered into a
definitive purchase and sale agreement to acquire an 80% interest in a joint
venture entity that will own a portfolio of two assisted living facilities
located in South Carolina. Oakleaf Village at Lexington and Oakleaf Village at
Greenville (together, “Oakleaf Village”) have a total of 180 units, of which 132
are dedicated to assisted-living and 48 are committed to memory
care. Royal Senior Care, LLC, an unaffiliated company that
currently owns both properties, will be our joint venture partner in the $27.0
million transaction. Royal Senior Care specializes in the
acquisition, development and management of senior housing communities, primarily
in the southeastern United States. Based out of Miami, Florida, Royal
Senior Care owns and operates 15 independent living and assisted living
facilities with approximately 1,650 units in Florida, South Carolina and
Georgia.
Joint
Venture Parties and Structure
Parties. Through
two wholly-owned subsidiaries, Cornerstone Oakleaf Village, LLC and Cornerstone
Oakleaf Village TRS, LLC, we invested approximately $21.6 million to acquire
from Royal Senior Care, 80% of the respective equity interests in Royal
Cornerstone South Carolina Portfolio, LLC ( “Portfolio LLC”) and Royal
Cornerstone South Carolina Tenant Portfolio, LLC (“Tenant LLC”) (collectively,
we refer to the Portfolio LLC and the Tenant LLC as the “Oakleaf Joint
Venture”). Portfolio LLC, through its wholly-owned subsidiaries,
indirectly owns 100% of the two Oakleaf Village properties. Tenant
LLC owns 100% of the two operating companies that operate the licensed community
residential care facilities at the Oakleaf Village properties. RSC
South Carolina Interests, LLC, a wholly-owned subsidiary of Royal Senior Care,
holds the remaining 20% equity interests in Portfolio LLC and Tenant LLC,
respectively. As a result of the structure described above, we hold
an 80% indirect equity interest in the Oakleaf Joint Venture and an affiliate of
Royal Senior Care retains a 20% equity interest.
Management. Cornerstone
Oakleaf Village, LLC and Cornerstone Oakleaf Village TRS, LLC are the managing
members of Portfolio LLC and Tenant LLC, respectively. Through these
subsidiaries we generally have sole and exclusive authority to manage and
implement the policies, operations and affairs of the Oakleaf Joint Venture,
except that certain major decisions require the approval of all
members. Such major decisions include, among others, (i) the sale or
transfer of all or substantially all of the assets, (ii) acquisitions of new
properties, (iii) mergers and consolidations involving the Oakleaf Joint
Venture, (iv) causing or permitting the Oakleaf Joint Venture to incur any debt
in excess of $100,000 (with the exception of the senior mortgage loan described
under Item 2.03 below); admission of new members, (v) transfers
of membership interests to other persons (except for certain transfers to
affiliates of the existing members), (vi) causing or permitting the Oakleaf
Joint Venture to make loans to other persons, and (vi) adopting or modifying the
annual budget for the Oakleaf Joint Venture.
Property
Management. Subsidiaries of Tenant LLC shall initially enter
into management agreements with property managers affiliated with Royal Senior
Care for the management of Oakleaf Village. In the event that the
initial property managers, or any other affiliate of Royal Senior Care is
removed or otherwise ceases to serve as the property manager for Oakleaf
Village, the engagement of a replacement property manager shall be a major
decision for the Oakleaf Village Joint Venture, requiring the approval of each
of the members.
Oakleaf
Village
Oakleaf
Village at Greenville, in Greer, near Greenville South Carolina, is a 60,000
square foot facility consisting of 66 assisted living units and 24 memory care
units. It is located conveniently less than one mile from
Interstate-85 and four miles from the Greenville-Spartanburg
airport. The property is also located about five miles away from St.
Francis Eastside Hospital.
Oakleaf Village at Lexington, near
Columbia, South Carolina, is a 68,000 square foot facility also consisting of 66
assisted living facilities and 24 memory care units. Accessible from
local and interstate roadways such as Interstate-20, Route 378 and Route 1, the
property is strategically located with two medical facilities in a seven mile
radius. LMC Lexington, a community care center offers an array of medical
services ranging from urgent care to outpatient surgery and Lexington Medical
Center, a 384-bed metropolitan medical complex.
In
evaluating this property as a potential acquisition and determining the
appropriate amount of consideration to be paid for the property, we considered a
variety of factors including overall valuation of targeted net rental income,
quality of operator, location, demographics, existing and planned competitive
properties and price per square foot and analyzed how the property compares to
comparable properties in its market.
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ITEM 2.03
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CREATION OF A DIRECT FINANCIAL
OBLIGATION OR AN OBLIGATION UNDER AN OFF BALANCE SHEET ARRANGEMENT OF
REGISTRANT.
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We
acquired our interest in the Oakleaf Village Joint Venture subject to existing
indebtedness encumbering the Oakleaf Village property. On April 30,
2010, two wholly-owned subsidiaries of Portfolio LLC entered into an Amended and
Restated Loan Agreement with General Electric Capital Corporation and certain
other lenders for a loan in the aggregate amount of $18,000,000 secured by
security interests in the Oakleaf Village property (the “Senior
Loan”). The aggregate amount of the Senior Loan was composed of a
restatement date balance of $12,901,988 outstanding with respect to a prior
$13,500,000 loan (the “Initial Loan”), and an additional amount of $5,098,012
disbursed on the loan restatement date (the “Restatement Date
Loan”). Unless accelerated or extended in accordance with the loan
agreement, the Senior Loan matures on April 30, 2015, at which time all
outstanding principal, accrued and unpaid interest and any other amounts due
under the loan documents are due. The Restatement Date Loan bears
interest at a variable rate equal to 5.45% per annum plus the greater of 1.0% or
the 3-month LIBOR rate, determined as set forth in the loan agreement (the
“Contract Rate”). The outstanding balance of the Initial Loan bears
interest at a rate of 6.62% per annum until January 10, 2011 and thereafter at
the Contract Rate. From June 1, 2010 through the maturity date,
payments on the Restatement Date Loan are due monthly and consist of accrued
interest at the Contract Rate, plus principal amortization payments based upon a
30-year amortization schedule. From June 1, 2010 through January 10,
2011, payments on the Initial Loan are due monthly and consist of accrued
interest at 6.62% per annum, plus principal amortization payments based upon a
25-year amortization schedule, thereafter through maturity, payments on the
Initial Loan are due monthly and consist of accrued interest at the Contract
Rate, plus principal amortization payments based upon a 30-year amortization
schedule. The Senior Loan may be voluntarily prepaid prior to the
maturity date provided the borrower pays an exit fee equal to between 3% and 1%
of the amount prepaid (decreasing based on the time elapsed from the loan
restatement date), and, if such prepayment is before January 10, 2011, payment
of an additional swap termination fee in an amount determined by the lender as
set forth in the loan agreement. At closing, we received a credit
against the $21.6 million purchase price for our interests in the Oakleaf
Village Joint Venture, of $14,400,000, equal to 80% of the amount of
indebtedness due and outstanding under the Senior Loan.
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ITEM 9.01
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FINANCIAL STATEMENTS AND
EXHIBITS.
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(a)
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Financial
statements of businesses acquired. Audited financial
statements for Oakwood Village at Greenville and Oakwood Village at
Lexington will be filed by amendment to this Form 8-K no later than July
16, 2010.
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(b)
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Pro
forma financial information. Unaudited pro forma financial
information will be filed by amendment to this Form 8-K no later than July
16, 2010.
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(d)
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Exhibits.
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10.1
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Membership Interest Sale and
Purchase Agreement, by and between Royal Senior Care, LLC and Cornerstone
Oakleaf Village, LLC, a Delaware limited liability
company, dated March 5,
2010.
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10.2
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Amended
and Restated Limited Liability Company Agreement of Royal Cornerstone
South Carolina Portfolio, LLC, a Delaware limited liability company, by
and between Cornerstone Oakleaf Village, LLC, a Delaware limited liability
company, as a member and RSC South Carolina Interests, LLC, a Florida
limited liability company, as a member, dated April 30,
2010.
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10.3
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Amended
and Restated Limited Liability Company Agreement of Royal Cornerstone
South Carolina Tenant Portfolio, LLC, a Delaware limited liability
company, by and between Cornerstone Oakleaf Village TRS, LLC, a Delaware
limited liability company, as a member and RSC South Carolina Interests,
LLC, a Florida limited liability company, as a member, dated April 30,
2010.
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10.4
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Amended
and Restated Loan Agreement by and between RSC Oakleaf Greenville, LLC and
RSC Oakleaf Lexington, LLC as Borrower and General Electric Capital
Corporation, as Lender, dated April 30,
2010.
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99.1
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Press Release dated May
5, 2010
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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CORNERSTONE
HEALTHCARE PLUS REIT, INC.
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Dated: May
5, 2010
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By:
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/s/
Sharon C. Kaiser
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Sharon
C. Kaiser,
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Chief
Financial Officer
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