8-K

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) January 31, 2006

Capital Senior Living Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

	1-13445		75-2678809
(Commission File Number)		(IRS Employer Identification No.)

14160 Dallas Parkway

Suite 300

Dallas Texas 75254

(Address of Principal Executive Offices) (Zip Code)

(972) 770-5600

(Registrant’s Telephone Number, Including Area Code)

(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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On February 1, 2006, Capital Senior Living Corporation (the “Company”) announced that it entered into an agreement with an affiliate of Ventas, Inc. for a sale/leaseback transaction for the Towne Centre community in Merrillville, Indiana.

On January 31, 2006, the Company’s directorsresponded to the letter from Mercury Real Estate Advisors, LLC (“Mercury”), dated December 21, 2005, described in the Company’s Form 8-K filed with the Securities and Exchange Commission on December 23, 2005. The response of the directors to Mercury is filed as Exhibit 99.2 to this current report on Form 8-K.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The exhibitscontain and may implicate, forward-looking statements regarding the Company and include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

Item 9.01 Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(c) Exhibits.

No. Exhibit Name

The following exhibits to this current report on Form 8-K are not being filed but are being furnished pursuant to Item 9.01:

99.1 Press Release dated February 1, 2006

99.2 Letter, dated January 31, 2006, from the Company’s directors to Mercury Real Estate Advisors, LLC

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.

Date: February 2, 2006 Capital Senior Living Corporation

By: /s/ Ralph A. Beattie

Name: Ralph A. Beattie

Title:	Executive Vice President and
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No. Exhibit Name

The following exhibits to this current report on Form 8-K are not being filed but are being furnished pursuant to Item 9.01:

99.1 Press Release dated February 1, 2006

99.2	Letter, dated January 31, 2006, from the Company’s directors to Mercury Real
	Estate Advisors, LLC

EX-99

EXHIBIT 99.1

Capital Senior Living Corporation  

For Immediate Release	Contact:	Ralph A. Beattie
			972/770-5600

CAPITAL SENIOR LIVING CORPORATION

ANNOUNCES $29 MILLION SALE/LEASEBACK

WITH VENTAS, INC.

Results in $14.5 million Gain and Facilitates Further Reduction in Debt

DALLAS – (BUSINESS WIRE) – February 1, 2006 – Capital Senior Living Corporation (NYSE:CSU) (the “Company”), one of the country’s largest operators of senior living communities, today announced that it has entered into an agreement with an affiliate of Ventas, Inc. (NYSE:VTR) (“Ventas”) for a single community sale/leaseback transaction valued at approximately $29 million.

The Towne Centre community in Merrillville, IN is the largest in the Company’s portfolio and offers a full continuum of care. The community has 327 units with capacity for 165 independent living residents, 60 assisted living residents and 120 nursing residents for a total resident capacity of 345 seniors. Towne Centre has been operated by the Company since 1991.

“We are pleased to further our mutually beneficial relationship with Ventas,” stated James A. Stroud, Chairman of the Company. “Ventas has purchased communities from one of our joint ventures, from a third party and now will purchase a community from the Company itself. We look forward to exploring additional opportunities together.”

The Company will record a gain of approximately $14.5 million on the sale of Towne Centre, which will be recognized equally over the initial lease term. Towne Centre will be added to the Company’s existing master lease with Ventas. The triple net operating lease between the Company and Ventas has an initial term of ten years, with two 5-year renewal options. The initial lease rate is 8% and is subject to conditional annual escalation provisions. The transaction is expected to close during the first quarter of 2006, pending approvals and other customary closing conditions.

As a result of this sale/leaseback transaction, the Company will retire approximately $16.2 million of variable rate debt with an interest rate of LIBOR plus 350 basis points. This will effectively reduce interest expense by approximately $1.3 million per year. Net proceeds to the Company, after retirement of debt, are expected to be approximately $12.4 million, net of transaction costs.

MORE

CAPITAL/Page 2

“This sale/leaseback transaction is representative of our 2006 business plan which is focused on providing significant income and asset growth potential, strengthening our balance sheet and maximizing our return on invested capital,” commented Lawrence A. Cohen, Chief Executive Officer. “This transaction will have an immediate positive impact on profitability that will extend for the initial ten year lease term, while decreasing interest costs through retiring variable rate debt, and providing cash for additional debt repayment and/or future investment opportunities. This structure enables us to convert equity in our communities to cash, while retaining the management and net operating income from the property. We expect to announce additional transactions in the near future.”

ABOUT THE COMPANY

Capital Senior Living Corporation is one of the nation’s largest operators of residential communities for senior adults. The Company’s operating philosophy emphasizes a continuum of care, which integrates independent living, assisted living and home care services, to provide residents the opportunity to age in place.

The Company currently operates 55 senior living communities in 20 states with an aggregate capacity of approximately 8,900 residents, including 33 senior living communities which the Company owns or in which the Company has an ownership interest, 7 leased communities and 15 communities it manages for third parties. In the communities operated by the company, 85 percent of residents live independently and 15 percent of residents require assistance with activities of daily living.

The forward-looking statements in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company’s ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations among others, and other risks and factors identified from time to time in our reports filed with the Securities and Exchange Commission.

Contact Ralph A. Beattie, Chief Financial Officer, at 972-770-5600 or Matt Hayden, Hayden Communications, Inc. at 858-704-5065 for more information.

#####

EX-99

EXHIBIT 99.2

Capital Senior Living Corporation  

January 31, 2006

Mr. David R. Jarvis,

Chief Executive Officer

Mr. Malcolm F. MacLean IV,

President

Mercury Real Estate Advisors

100 Field Point Road

Greenwich, CT 06830

Dear Messrs. Jarvis and MacLean:

This letter is being sent at the direction of the independent members of the Board of Directors of Capital Senior Living Corporation, and on behalf of the entire Board, in response to your letter dated December 21, 2005. Many of the concerns raised in your letter are addressed by the Company’s 2006 Business Plan, which was reviewed and approved by the Board last Fall but which had not been publicly summarized until after you sent your letter.

After carefully considering your letter, the Board of Directors once again reviewed the 2006 Business Plan and unanimously reaffirmed it as the basis for the Company’s strategic direction. The Board of Directors unanimously believes, and we hope you will agree, that in light of the strategic initiatives included in the 2006 Business Plan, a sale of the Company is not the best way to create shareholder value and is not in the best interests of our shareholders.

The 2006 Business Plan is summarized in the Company’s January 10, 2006 Form 8-K and includes the joint venture with G.E. Healthcare Financial Services that we announced on January 13. A number of other projects contemplated by the Business Plan are underway but are not yet ready to be announced. The Board of Directors believes that these initiatives – which focus on providing significant income and asset growth potential, maximizing our return on invested capital, and strengthening our balance sheet – will position Capital Senior Living for significant and profitable growth and provide a strategy for value creation that is superior to a sale of the Company.

14160 DALLAS PARKWAY • SUITE 300 • DALLAS, TEXAS 75254

PHONE 972 770 5600 • FAX 972 770 5666 • WWW.CAPITALSENIOR.COM

Mr. David R. Jarvis

Mr. Malcolm F. MacLean IV

January 31, 2006

Page 2

We would be pleased to meet with you to discuss the details of our 2006 Business Plan and to address the advantages of this strategic direction. In order to do so, however, we would have to ask that you sign an appropriate confidentiality agreement. Many of the details of the Business Plan involve specific transactions being negotiated or that will be negotiated, and they also involve confidentiality undertakings to our strategic partners.

Should you determine that a meeting with us would be productive, please contact either of us at your convenience. If you do not believe that a meeting would be helpful, we encourage you to watch for additional announcements in the coming months as we execute on our 2006 Business Plan.

On behalf of the Board of Directors,

/s/ James A. Stroud	/s/ Lawrence A. Cohen
James A. Stroud	Lawrence A. Cohen
Chairman of the Board	Vice Chairman of the Board

JAS:bm

The forward-looking statements in this letter are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company’s ability to find suitable acquisition properties at favorable terms, to negotiate sale/leasebacks and joint ventures on favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations among others, and other risks and factors identified from time to time in our reports filed with the Securities and Exchange Commission.

14160 DALLAS PARKWAY • SUITE 300 • DALLAS, TEXAS 75254

PHONE 972 770 5600 • FAX 972 770 5666 • WWW.CAPITALSENIOR.COM