Kindred Healthcare in Acquisition of the Assets of Commonwealth Communities Holdings

February 28, 2006

Cleary Gottlieb, together with Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., represented longtime client Kindred Healthcare, Inc. in its acquisition of the assets of Commonwealth Communities Holdings LLC and certain of its affiliates for a total purchase price of $125 million.

The Cleary team assisted with the real estate aspects of the acquisition, which included the negotiation of two complex master leases with Health Care REIT, Inc. to lease four freestanding long-term acute care hospitals and nine skilled nursing facilities located in Massachusetts, and the negotiation of a master lease with Healthcare Property Investors, Inc. to lease two freestanding assisted living facilities located in Maine. These facilities currently generate annualized revenues of approximately $225 million. The Cleary team also assisted with the subsequent subleasing of these facilities to various Kindred affiliates. The transaction was structured as a 1031 tax-free exchange and the Cleary team assisted with various tax aspects of the acquisition.