Loan Receivable

9 Months Ended

Sep. 30, 2011

Loan Receivable

Loan Receivable

Note 5.  Loan Receivable

In May 2011, we and Five Star entered into a loan agreement under which we agreed to lend Five Star up to $80,000, or the Bridge Loan, to fund Five Star’s purchase of six senior living communities that Five Star had agreed to acquire for an aggregate purchase price of approximately $122,800.  Since June 2011, Five Star has completed its acquisition of these six communities and had borrowed all $80,000 of this Bridge Loan (including $39,000 borrowed during the quarter ended September 30, 2011) and has repaid $32,000.  As of September 30, 2011, $48,000 in aggregate principal amount was outstanding and no additional borrowings were available under this Bridge Loan.  The Bridge Loan is secured by mortgages on three of these senior living communities that Five Star acquired and on four other senior living communities owned by Five Star.  The Bridge Loan matures on July 1, 2012 and bears interest at a rate equal to the annual rates of interest applicable to our borrowings under our revolving credit facility, plus 1%; as of September 30, 2011, the interest rate was 2.8% under the Bridge Loan.  We recognized interest income from this Bridge Loan of $187 and $245 in the three and nine months ended September 30, 2011, respectively, which is included in interest and other income in our condensed consolidated statements of income.