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      8K HRT Financing March 2007
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      </div>U.S. SECURITIES AND EXCHANGE COMMISSION</div>
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      D.C. 20549</strong></font></div>
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      8-K</strong></font></div>
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      REPORT</strong></font></div>
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      to Section 13 or 15(d) of</strong></font></div>
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      Securities Exchange Act of 1934</strong></font></div>
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      of
      report (Date of earliest event reported):</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
      March 15, 2007</strong></font></div>
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      CORPORATION</strong></font></div>
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      Elliott Avenue, Suite 500</font></div>
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      Washington 98121</font></div>
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      298-2909</font></div>
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      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
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      Written
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      Soliciting material pursuant to Rule&#160;14a-12 under the Exchange Act (17 CFR
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    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;1.02</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Termination
      of a Material Definitive Agreement.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      13, 2007, Emeritus Corporation (the &#8220;Company&#8221;) filed a current report under Form
      8-K, Item 1.01 announcing the Company&#8217;s entry into a Purchase and Sale Agreement
      dated March 7, 2006, for the purchase of 12 communities consisting of 786 units
      located in five states. Pursuant to the leases described below, the Company
      operated these facilities as assisted living and dementia care communities
      for
      seniors. On March 15, 2007, the Company completed the transaction. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      a
      result of this acquisition, four Lease Agreements with HR Acquisition of San
      Antonio, Ltd covering four communities were terminated effective March 15,
      2007.
      The Lease Agreements each were dated December 31, 1996 and were assumed by
      the
      Company under Assignment and Assumption agreements dated May 9, 2002. Each
      lease
      had an initial term of 18 years with three additional 5-year renewal options.
      The leases included an option to acquire the communities and a right of first
      option to purchase the properties upon written notice of the owner&#8217;s intent to
      sell. The annual base rent under the four Lease Agreements was approximately
      $3.2 million as of the closing date and provided for annual rent adjustments
      based on the lesser of 3% or three times the change in the consumer price index.
      These leases were accounted for as capital leases by the Company. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, on March 15, 2007 we also terminated a Lease Agreement with HR
      Acquisition I Corporation dated May 1, 2003 covering eight communities. The
      Lease Agreement had an initial term of 10 years with three 5-year renewal
      options and included an option to acquire the communities and a right of first
      option to purchase any of the properties upon written notice of the owner&#8217;s
      intent to sell. The annual base rent under the Lease Agreement was approximately
      $4.0 million as of the closing date and provided for annual rent adjustments
      based on the change in the consumer price index, with a maximum increase of
      3.5%. These leases were accounted for as operating leases by the Company.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      purchase agreement, the purchase price for the 12 communities is incorporated
      in
      this Item 1.02 by reference to Item 2.03 below.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;2.03</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
      Arrangement of a Registrant.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      Purchase and Sale Agreement referred to in Item 1.02 above, the purchase price
      for 12 communities was approximately $101.0 million, including closing
      costs.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capmark
      Finance, Inc. ("Capmark") provided fixed rate mortgage financing of
      $88.0&#160;million and variable rate mortgage financing of $13.6 million,
      pursuant to a Loan Agreement dated March 15, 2007, by and between Emeritus
      Corporation and Capmark (the "Capmark Loan Facility"). Under the Capmark Loan
      Facility, the fixed rate loan has a term of five years and bears interest at
      6.515% per annum (with a 1% exit fee payable when the debt is repaid, unless
      refinanced by Capmark), with monthly interest-only payments for three years
      and,
      thereafter, monthly payments of principal and interest based on a 25-year
      amortization. The balance is due in full in April 2012. The variable rate loan
      has a term of two years with interest at LIBOR plus 325 basis points with the
      same exit fee terms and payment schedule as the fixed component. The interest
      rate on the variable rate mortgage financing was 8.625% on the closing date.
      The
      indebtedness outstanding under the Capmark Loan Facility may be accelerated
      under customary circumstances, including payment defaults and is secured by
      the
      all real, personal and intangible assets used in the operation of the 12
      communities. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company had approximately $11.4 million in loans outstanding with Healthcare
      Realty Trust (&#8220;HRT&#8221;), which loans are secured by the leases on the 12
      communities discussed in Item 1.02 above. As part of this transaction, a $10.8
      million loan was acquired by Columbia Pacific Opportunity Fund, LP, an entity
      in
      which the Company&#8217;s CEO and chairman of the board has a financial interest, on
      similar terms and conditions as the original note. The remaining $600,000 term
      loan required interest-only monthly payments and accrued interest at 10% per
      annum. The term loan was paid off at closing. The $10.8 million loan accrues
      interest at 10% per annum, is payable in monthly installments of interest-only,
      and is due in full in June 2008. The Company provided a cash security deposit
      of
      $1.0 </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">million
      at the closing of the loan transaction in June 2005. The loan is further secured
      by a mortgage on the 12 properties that is subordinate to the Capmark financing.
      The $1.0 million cash security deposit will also continue to be collateral
      security for the note. </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      8.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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      Company issued a press release on March 15, 2007, announcing the purchase of
      12
      communities. A copy of the press release is being furnished as Exhibit 99.1
      to
      this Current Report on Form 8-K.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
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      Exhibits.</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibits</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Exhibit
      No.</u></strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Description</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release dated March 15, 2007, EMERITUS ANNOUNCES PURCHASE OF 12
      COMMUNITIES.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[The
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURE</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned, hereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="bottom" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                21, 2007</font></div>
            </td>
            <td align="left" valign="bottom" width="17%">&#160;</td>
            <td valign="bottom" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EMERITUS
                CORPORATION</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="38%">&#160;</td>
            <td align="left" valign="bottom" width="17%">&#160;</td>
            <td align="left" valign="bottom" width="39%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="38%">&#160;</td>
            <td align="right" valign="bottom" width="17%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font></div>
            </td>
            <td align="left" valign="bottom" width="39%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                  </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Raymond
                  R. Brandstrom</font></div>
              </div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="38%">&#160;</td>
            <td align="left" valign="bottom" width="17%">&#160;</td>
            <td align="left" valign="bottom" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Raymond
                R. Brandstrom</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="38%">&#160;</td>
            <td align="left" valign="bottom" width="17%">&#160;</td>
            <td align="left" valign="bottom" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
                President of Finance, Chief Financial Officer</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="38%">&#160;</td>
            <td align="left" valign="bottom" width="17%">&#160;</td>
            <td align="left" valign="bottom" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
                Secretary</font></div>
            </td>
          </tr>

      </table>
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    <div>&#160;</div><br>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INDEX
      TO EXHIBITS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Exhibit
      No.</u></strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Description</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="ex991pressreleasehrtmar07.htm"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release dated March 15, 2007, EMERITUS ANNOUNCES PURCHASE OF 12
      COMMUNITIES.</font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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{"company-data": {"conformed-name": "EMERITUS CORP\\WA\\", "cik": "0001001604", "assigned-sic": "8050", "irs-number": "911605464", "state-of-incorporation": "WA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-14012", "film-number": "07708483"}, "business-address": {"street1": "3131 ELLIOTT AVENUE", "street2": "SUITE 500", "city": "SEATTLE", "state": "WA", "zip": "98121", "phone": "2062982909"}, "mail-address": {"street1": "3131 ELLIOTT AVE STE 500", "city": "SEATTLE", "state": "WA", "zip": "98121"}}
8K HRT Financing March 2007
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
____________
FORM
      8-K
CURRENT
      REPORT
Pursuant
      to Section 13 or 15(d) of
the
      Securities Exchange Act of 1934
Date
      of
      report (Date of earliest event reported):
March 15, 2007
EMERITUS
      CORPORATION
(Exact
      name of registrant as specified in charter)
Washington
1-14012
91-1605464
(State
                or other jurisdiction of incorporation)
(Commission
                File Number)
(IRS
                Employer Identification No.)
3131
      Elliott Avenue, Suite 500
Seattle,
      Washington 98121
(Address
      of principal executive offices) (Zip Code)
(206)
      298-2909
(Registrant's
      telephone number, including area code)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))
Item 1.02
Termination
      of a Material Definitive Agreement.
On
      March
      13, 2007, Emeritus Corporation (the "Company") filed a current report under Form
      8-K, Item 1.01 announcing the Company's entry into a Purchase and Sale Agreement
      dated March 7, 2006, for the purchase of 12 communities consisting of 786 units
      located in five states. Pursuant to the leases described below, the Company
      operated these facilities as assisted living and dementia care communities
      for
      seniors. On March 15, 2007, the Company completed the transaction.
As
      a
      result of this acquisition, four Lease Agreements with HR Acquisition of San
      Antonio, Ltd covering four communities were terminated effective March 15,
      2007.
      The Lease Agreements each were dated December 31, 1996 and were assumed by
      the
      Company under Assignment and Assumption agreements dated May 9, 2002. Each
      lease
      had an initial term of 18 years with three additional 5-year renewal options.
      The leases included an option to acquire the communities and a right of first
      option to purchase the properties upon written notice of the owner's intent to
      sell. The annual base rent under the four Lease Agreements was approximately
      $3.2 million as of the closing date and provided for annual rent adjustments
      based on the lesser of 3% or three times the change in the consumer price index.
      These leases were accounted for as capital leases by the Company.
In
      addition, on March 15, 2007 we also terminated a Lease Agreement with HR
      Acquisition I Corporation dated May 1, 2003 covering eight communities. The
      Lease Agreement had an initial term of 10 years with three 5-year renewal
      options and included an option to acquire the communities and a right of first
      option to purchase any of the properties upon written notice of the owner's
      intent to sell. The annual base rent under the Lease Agreement was approximately
      $4.0 million as of the closing date and provided for annual rent adjustments
      based on the change in the consumer price index, with a maximum increase of
      3.5%. These leases were accounted for as operating leases by the Company.
Under
      the
      purchase agreement, the purchase price for the 12 communities is incorporated
      in
      this Item 1.02 by reference to Item 2.03 below.
Item 2.03
Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
      Arrangement of a Registrant.
Under
      the
      Purchase and Sale Agreement referred to in Item 1.02 above, the purchase price
      for 12 communities was approximately $101.0 million, including closing
      costs.
Capmark
      Finance, Inc. ("Capmark") provided fixed rate mortgage financing of
      $88.0 million and variable rate mortgage financing of $13.6 million,
      pursuant to a Loan Agreement dated March 15, 2007, by and between Emeritus
      Corporation and Capmark (the "Capmark Loan Facility"). Under the Capmark Loan
      Facility, the fixed rate loan has a term of five years and bears interest at
      6.515% per annum (with a 1% exit fee payable when the debt is repaid, unless
      refinanced by Capmark), with monthly interest-only payments for three years
      and,
      thereafter, monthly payments of principal and interest based on a 25-year
      amortization. The balance is due in full in April 2012. The variable rate loan
      has a term of two years with interest at LIBOR plus 325 basis points with the
      same exit fee terms and payment schedule as the fixed component. The interest
      rate on the variable rate mortgage financing was 8.625% on the closing date.
      The
      indebtedness outstanding under the Capmark Loan Facility may be accelerated
      under customary circumstances, including payment defaults and is secured by
      the
      all real, personal and intangible assets used in the operation of the 12
      communities.
The
      Company had approximately $11.4 million in loans outstanding with Healthcare
      Realty Trust ("HRT"), which loans are secured by the leases on the 12
      communities discussed in Item 1.02 above. As part of this transaction, a $10.8
      million loan was acquired by Columbia Pacific Opportunity Fund, LP, an entity
      in
      which the Company's CEO and chairman of the board has a financial interest, on
      similar terms and conditions as the original note. The remaining $600,000 term
      loan required interest-only monthly payments and accrued interest at 10% per
      annum. The term loan was paid off at closing. The $10.8 million loan accrues
      interest at 10% per annum, is payable in monthly installments of interest-only,
      and is due in full in June 2008. The Company provided a cash security deposit
      of
      $1.0
million
      at the closing of the loan transaction in June 2005. The loan is further secured
      by a mortgage on the 12 properties that is subordinate to the Capmark financing.
      The $1.0 million cash security deposit will also continue to be collateral
      security for the note.
Item
      8.01
Other
      Events
The
      Company issued a press release on March 15, 2007, announcing the purchase of
      12
      communities. A copy of the press release is being furnished as Exhibit 99.1
      to
      this Current Report on Form 8-K.
Item
      9.01
Financial
      Statement
and
Exhibits.
(d)
Exhibits
Exhibit
      No.
Description
99.1
Press
      Release dated March 15, 2007, EMERITUS ANNOUNCES PURCHASE OF 12
      COMMUNITIES.
[The
      rest
      of this page is intentionally left blank]
SIGNATURE
Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned, hereunto duly authorized.
March
                21, 2007
EMERITUS
                CORPORATION
By:
/s/
Raymond
                  R. Brandstrom
Raymond
                R. Brandstrom
Vice
                President of Finance, Chief Financial Officer
and
                Secretary
INDEX
      TO EXHIBITS
Exhibit
      No.
Description
99.1
Press
      Release dated March 15, 2007, EMERITUS ANNOUNCES PURCHASE OF 12
      COMMUNITIES.