HCP Files Complaint Against Sunrise Senior Living
01 July 2009 - 12:21AM
Dow Jones News
Real estate investment trust HCP Inc. (HCP) filed complaints
against senior-housing operator Sunrise Senior Living Inc. (SRZ) on
Monday, and is looking to terminate agreements on 64
properties.
HCP is alleging breach of contract and said Sunrise is operating
the properties in its own interest and its affiliates "at the
expense of HCP and its tenant," the health-care REIT said in a
statement.
Earlier in June, HCP terminated management agreements on 15
Sunrise communities for "failure to achieve certain performance
thresholds."
Sunrise said in a statement Monday that the "litigation is
without merit." Sunrise Chief Executive Mark Ordan said HCP
purchased the communities under long-term management agreements
with many years remaining. He said the communities have "steadily
improved their performance yet HCP has continuously expressed their
desire to terminate their agreements."
In addition, Sunrise said it "plans to enforce its rights
vigorously on behalf of all Sunrise stakeholders."
Sunrise said the majority of its management agreements with HCP
have expiration dates ranging from 2028 to 2038 and include
extension options held by Sunrise.
Sunrise shares were down 20.8% to $1.70 Tuesday while HCP shares
were up 0.28% to $21.14.
-By Veronica Dagher, Dow Jones Newswires; 212-416-2261;
veronica.dagher@dowjones.com