Hunt 'hits a wall' and Southern is the beneficiary.

With long term care providers laboring a capital crunch the likes of which the industry has not seen in many years (See "Woe Street," page 30), observers have for months been predicting a consolidation wave as well-capitalized companies pickup facilities from the providers whose growth plans have been dashed because of a lack of funding.

That's just what occurred in February when Abingdon, Va.-based Hunt Assisted Living announced that it was selling 28 of its communities -- half of its 59 elderly housing properties -- to Southern Assisted Living of Chapel Hill, N.C.

"To continue to grow a company of our size, you need to go the public markets unless you had some very deep pockets and that doesn't look like a reality now or in the foreseeable future," says Bill Hunt, vice president, community management. "And we believe Southern Assisted Living has the pockets to take what we started and to grow it further,"

The communities, which total 1,295 units, sold for $121.378 million, or about $93,728 per unit. Here's the breakout: six are in lease-up, four are under construction, and 18 have stabilized occupancies of 96.7 percent.

The acquired ownership interests (limited partnership interests and LLC memberships), were paid for with about 70 percent cash and 30 percent secured seller financing, net of debt assumption of $66.448 million.

Hunt says his company will use proceeds from the sale to "retire debt, pay out long term investors, and send the rest to stockholders in proportion to what they own."

Hunt continues to own and manage 31 elderly housing properties in four states and is developing new assisted living communities in North and South Carolina.

The acquisition gives Southern 43 communities in North Carolina and moves it one giant step closer to realizing its goal of becoming a "dominant regional provider," says Chris Hollister, president and CEO. Southern was recently named the fourth-fastest growing business in North Carolina's Triangle (Raleigh, Durham, and Chapel Hill). The facilities it picked up from Hunt are in the the state's Triad (Winston Salem, Greensboro, and High Point).

"It was like putting two pieces of a puzzle together," says Hollister. "It gives us a tremendous statewide presence."

With this purchase under its belt, Southern is turning its attention to "operations and melding the two groups of facilities. We're also keeping and eye out for complementary acquisitions, developing at more modest pace than in past, and staying focused on the Southeast," Hollister says.

Southern is keeping the names of the acquired facilities, but adding its corporate name on all signage marketing Southern Assisted Living as the brand.