HCP Files Complaint Against Sunrise Senior Living

Real estate investment trust HCP Inc. (HCP) filed complaints against senior-housing operator Sunrise Senior Living Inc. (SRZ) on Monday, and is looking to terminate agreements on 64 properties.

HCP is alleging breach of contract and said Sunrise is operating the properties in its own interest and its affiliates "at the expense of HCP and its tenant," the health-care REIT said in a statement.

Earlier in June, HCP terminated management agreements on 15 Sunrise communities for "failure to achieve certain performance thresholds."

Sunrise said in a statement Monday that the "litigation is without merit." Sunrise Chief Executive Mark Ordan said HCP purchased the communities under long-term management agreements with many years remaining. He said the communities have "steadily improved their performance yet HCP has continuously expressed their desire to terminate their agreements."

In addition, Sunrise said it "plans to enforce its rights vigorously on behalf of all Sunrise stakeholders."

Sunrise said the majority of its management agreements with HCP have expiration dates ranging from 2028 to 2038 and include extension options held by Sunrise.

Sunrise shares were down 20.8% to $1.70 Tuesday while HCP shares were up 0.28% to $21.14.

-By Veronica Dagher, Dow Jones Newswires; 212-416-2261; [e-mail]