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Loan Receivable
 3 Months Ended
Mar. 31, 2012
Loan Receivable  
Loan Receivable

Note 5.  Loan Receivable

 

In May 2011, we and Five Star entered into a loan agreement, or the Bridge Loan, under which we lent Five Star $80,000 to fund Five Star’s purchase of six senior living communities that Five Star had agreed to acquire for total purchase prices of approximately $122,800.  By September 30, 2011, Five Star had completed its acquisition of these six communities and had borrowed all $80,000 of this Bridge Loan and had repaid $42,000 of those borrowings by December 31, 2011.  As of March 31, 2012, $38,000 was outstanding under the Bridge Loan.  In April 2012, Five Star repaid us $38,000 in aggregate principal amount, resulting in the termination of this Bridge Loan.  The Bridge Loan was secured by mortgages on three of the senior living communities that Five Star acquired and on four other senior living communities owned by Five Star.  The Bridge Loan bore interest at a rate equal to the annual rates of interest applicable to our borrowings under our revolving credit facility, plus 1%; as of March 31, 2012, the interest rate was 2.8% under the Bridge Loan.  We recognized interest income from this Bridge Loan of $275 for the three months ended March 31, 2012, which is included in interest and other income in our condensed consolidated statements of income and comprehensive income.