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Health care industry

Senior Housing Properties Trust Announces Lease with Five Star Quality Care for Rehabilitation Hospitals

Strategic Insights

— 1 min read

Senior Housing Properties Trust, a real estate investment trust based in Newton, Massachusetts, has announced that its lease with Five Star Quality Care for two rehabilitation hospitals in Braintree and Woburn, Massachusetts became effective on October 1, 2006. The lease requires Five Star to pay SNH monthly rent of $854,167, totaling $10,250,000 per year. This marks the transfer of operations from HealthSouth Corporation, which had leased the hospitals from SNH. The transition was delayed due to HealthSouth's failure to provide timely and accurate financial information, leading to a lawsuit against SNH.

Key Takeaways:

  • SNH has entered a lease with Five Star Quality Care for two rehabilitation hospitals in Braintree and Woburn, Massachusetts, with a monthly rent of $854,167 and a total annual rent of $10,250,000.
  • The lease became effective on October 1, 2006, following a lawsuit and court decisions against HealthSouth Corporation, which had leased the hospitals from SNH.
  • HealthSouth had failed to provide timely and accurate financial information, leading to a lease termination in 2004 and subsequent court rulings.
  • SNH spent over $3.5 million in litigation costs since the disputes with HealthSouth began.
  • A separate litigation between SNH and HealthSouth is pending, with SNH seeking to recover rents from HealthSouth for the period January 2002 through October 2004.
  • HealthSouth has denied SNH's allegations and has asserted counterclaims against SNH.
  • The outcome of the separate litigation is uncertain, and SNH has requested that the court order HealthSouth to pay some of SNH's litigation costs.

Statistics:

  • Monthly rent for the two rehabilitation hospitals: $854,167
  • Total annual rent: $10,250,000
  • Litigation costs spent by SNH: $3.5 million
  • Number of healthcare and senior living properties owned by SNH: 196
  • States in which SNH's properties are located: 33

Sources:

  • "Senior Housing Properties Trust (SNH) Announces Lease with Five Star Quality Care, Inc. (FVE) for Rehabilitation Hospitals" press release
  • Senior Housing Properties Trust (NYSE: SNH) public disclosure documents
  • Massachusetts Court decisions and orders against HealthSouth Corporation (OTC BB: HLSH)

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