UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): July 13, 2005 (July 7, 2005)
AMERICAN RETIREMENT CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Tennessee 01-13031 62-1674303
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
111 Westwood Place, Suite 200
Brentwood, Tennessee 37027
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(Address of Principal Executive Offices) (Zip Code)
(615) 221-2250
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(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 obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On July 7, 2005, we acquired all of the real property interests underlying
Freedom Plaza Care Center (FPCC), a 128-bed skilled nursing and 44-unit assisted
living center in Peoria, Arizona for $20.3 million. We previously operated FPCC
pursuant to a long-term operating lease with Maybrook Realty, which was 50%
owned by W.E. Sheriff, our chairman, chief executive officer and president. We
consummated the acquisition pursuant to an option under the lease, which
provided for a fixed purchase price of $20.3 million. We also contemporaneously
acquired the third-party ground lessor's interest in the property, including an
adjacent parcel of land, for a purchase price of $3.1 million. The total
purchase price for these two transactions was $23.4 million, which was supported
by a fair market value appraisal. We paid the purchase price with $4.7 million
of cash and the proceeds of an $18.7 million mortgage loan obtained from Bank of
America, N.A. The loan is evidenced by a loan agreement and two promissory notes
and is secured by the community. The $18.7 million mortgage loan matures on July
1, 2010, and requires principal payments to be made on an 18-year amortization
schedule. Half of the outstanding principal balance of the loan will bear
interest at a fixed rate of 6.61% and the other half of the outstanding
principal balance will bear interest at a variable rate calculated, at our
election, at either the prime rate plus 1% or the eurodollar fixed rate plus
2.375% (or a combination thereof).
As a result of these transactions, we simultaneously acquired the real
estate interests of both Maybrook and the ground lessor in FPCC and,
consequently, own 100% of the community. On July 7, 2005, we also entered into a
$4.5 million construction loan administration agreement (and related promissory
note) with Bank of America, N.A. in order to finance a 21 assisted living unit
and 20 dementia bed expansion of the community. The $4.5 million loan matures on
July 1, 2010, requires quarterly principal payments beginning April 1, 2008, and
bears interest at a variable rate calculated, at our election, at either the
prime rate plus 1% or the eurodollar fixed rate plus 2.375% (or a combination
thereof).
Item 7.01. Regulation FD Disclosure
On July 7, 2005, we issued a press release describing the foregoing
transactions. A copy of the press release is furnished herewith as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
99.1 Press Release dated June 7, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AMERICAN RETIREMENT CORPORATION
By: /s/ Bryan D. Richardson
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Bryan D. Richardson
Executive Vice President - Finance
and Chief Financial Officer
Date: July 13, 2005
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated June 7, 2005