Capital Senior Living leases five senior living communities from Health Care REIT

Capital Senior Living Corporation (the "Company") (NYSE:CSU), one of the country's largest operators of senior living communities, today announced that Midwest Portfolio Holdings, LP ("Midwest I"), a joint venture in which the Company held an 11 percent partnership interest, has sold five senior living communities to Health Care REIT, Inc. (NYSE: HCN). Upon closing the sale, the Company leased the communities from HCN. The Company previously managed the five communities in the joint venture under long-term management agreements.

“This transaction adds significant top-line growth to the Company, as well as solid cash flow and earnings”

"This transaction adds significant top-line growth to the Company, as well as solid cash flow and earnings," commented Lawrence A. Cohen, Chief Executive Officer of the Company. "We can now consolidate the results of operations and benefit fully from further improvement in occupancies, margins and rental rates. These five high quality assets establish an excellent foundation for our new relationship with Health Care REIT, a leading healthcare REIT that invests across the full spectrum of senior housing and health care real estate."

The properties being leased in this transaction have approximately 295 units and a combined resident capacity of nearly 390 residents. The portfolio includes four assisted living communities in Nebraska and one assisted living community in Iowa.

The Company received proceeds from Midwest I of approximately $3.2 million and will recognize a gain of approximately $0.8 million. The Company may receive additional proceeds after the joint venture settles its customary post-closing costs.

Annualizing fourth quarter 2009 results of operations for the five communities, with financial occupancy of 92 percent, yields approximately $11.1 million of revenue and $5.5 million of EBITDAR. The initial lease expense is approximately $4.0 million and is subject to conditional annual escalation provisions. The triple net operating lease which the Company executed with HCN has an initial term of 15 years, with one 15-year renewal option. The Company will begin consolidating the revenues and expenses of the five communities on its income statement, along with the lease expense, in the second quarter of 2010.