AdCare may change name to Regional Health Properties

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AdCare Health Systems may change its name to Regional Health Properties under a reorganization to be considered at a special meeting of shareholders in the second quarter, perhaps in conjunction with the company's annual meeting in June, the company announced March 24 during its fourth quarter earnings call.

“The proposed reorganization and name change are consistent with our strategy of transitioning from an operating company to a property holding and leasing company, and we are exciting about operating under our new corporate name,” said Bill McBride, chairman and CEO.

AdCare created a subsidiary named Regional Health Properties in February, he said, so the change would represent a merging of AdCare with and into Regional Health Properties.

“The reorganization, if approved by the shareholders, ensures the effective adoption of certain charter provisions restricting the ownership and transfer of our common stock to allow the company to meet the continued listing requirements of the New York Stock Exchange,” he said.

Also, at some point in the future, AdCare could become a real estate investment trust if its board of directors determines that doing so would be in the best interest of the company and its shareholders.

Also during the earnings call, McBride said that in February, AdCare signed an agreement to purchase a 106-bed assisted living community in Alabama for $5.5 million and will lease it to an affiliate of C Ross Management. C Ross and its affiliates operate 21 facilities in Georgia and Alabama, including seven AdCare facilities.

McBride said that the assisted living community is adjacent to a skilled nursing facility already owned by AdCare and operated by C Ross.

“We believe that owning both of these two properties and leasing the two to C Ross will provide operational benefits … which should translate into increased value for both properties over time and, importantly for us, coverage ratios, which improve value,” McBride said. “That is why we purchased an assisted living property rather than a skilled nursing facility — because of the relationship with our existing nursing home.”

The company expects to close on the transaction in the second quarter.

McBride said the company is in “active discussions” with several of its other operators about additional acquisition and lease opportunities. AdCare also will be investing in some of its existing properties “to immediately increase rent and/or improve the credit profile of our facilities, especially our rent coverage ratios,” he said.

The portfolio occupancy rate was approximately 82.6% in the fourth quarter, and McBride said he was “pleased with the results, as the fourth quarter is generally a difficult operating quarter for the industry due to the holidays affecting admissions and labor prices.”

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