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SECURITIES AND EXCHANGE COMMISSION</font></div>
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8-K</font></div>
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REPORT</font></div>
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to Section 13 or 15(d) of</font></div>
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Securities Exchange Act of 1934</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: center">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">Date of report (Date of earliest event
reported):</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;&#160;October 16,
2008</font></font></div>
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CORPORATION</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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appropriate box below if the Form 8-K filing is intended to simultaneously
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provisions:</font></div>
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Written communications pursuant to Rule&#160;425 under the Securities Act (17
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Soliciting material pursuant to Rule&#160;14a-12 under the Exchange Act (17 CFR
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Pre-commencement communications pursuant to Rule&#160;14d-2(b) under the
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pursuant to Rule&#160;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</font></font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;1.01</font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Entry
      into a Material Definitive
Agreement.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On June
11, 2008, Emeritus Corporation (the Company) filed a current report under Form
8-K, Item 1.01, disclosing that it had entered into an asset purchase agreement
dated June 06, 2008, with Health Care REIT, Inc. (HCN), and its affiliated
entities, to purchase 29 communities consisting of 2,257 units located
throughout the United States.&#160;&#160;On July 3, 2008, the Company filed a
current report under Form 8-K, Items 1.01, 1.02 and 2.03, disclosing that the
Company had completed the first phase of the acquisition (Tranche 1) to purchase
19 of the 29 communities consisting of 1,564 units for a purchase price of
$222.7 million, excluding closing costs and financing fees.&#160;&#160;On
October 17, 2008, the Company completed the final phase of the acquisition
(Tranche 2) for the purchase of 10 communities with a capacity of 693 units for
a purchase price of $77.2 million, excluding closing costs and financing
fees.&#160;&#160;The Company operated these 10 communities pursuant to the
leases described in Item 1.02 below. In connection with the closing, the Company
entered into certain credit facilities described in Item 2.03
below.&#160;&#160;The information set forth in Item 2.03 is incorporated by
reference into this Item 1.01.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eight of
the Tranche 2 communities are currently subject to a cash flow sharing agreement
with an entity controlled by Mr. Dan Baty, the Company&#8217;s Chairman and Co-Chief
Executive Officer.&#160;&#160;As part of this purchase, these communities will
be held in a 50/50 joint venture (Batus, LLC) owned by the Company and a
Baty-related entity, which provides for similar economic terms and conditions as
the existing cash flow sharing agreement.&#160;&#160;The joint venture will be
included in the consolidated Emeritus portfolio.&#160;&#160;The Baty-related
entity made an equity contribution to the joint venture of approximately $6.8
million to fund its 50% of the purchase price of the eight
communities.</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;1.02</font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Termination
      of a Material Definitive Agreement.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As a
result of the Tranche 2 acquisition described in Item 1.01 above, the master
lease agreements dated September 30, 2003 (2003 Lease) and September 30, 2004
(2004 Lease) between HCN and the Company have been amended to remove one
community from the 2003 Lease and eight communities from the 2004 Lease,
effective as of the acquisition date.&#160;&#160;In addition, an individual
community lease dated February 26, 1996, between HCN and the Company was
terminated.&#160;&#160;These leases had initial terms of 15 years.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company accounted for nine of the properties as capital leases and one as an
operating lease.&#160;&#160;Upon termination of the leases, the difference
between the carrying amount of the capital lease assets and the capital lease
obligations will be recorded as an adjustment to the carrying amount of the
purchased communities, in addition to adjustments for straight-line rent
accruals and deferred gains from earlier sale-leaseback transactions involving
these communities.&#160;&#160;The total reduction in the cost basis of the
Tranche 2 assets is estimated to be approximately $8.0 million as of the closing
date.&#160;&#160;The current annual lease payment for these 10 communities is
approximately $4.6 million, of which approximately $2.0 million was recorded as
capital lease interest expense, $1.7 million as principal payments on capital
lease obligations, and $900,000 as facility lease expense for the one community
accounted for as an operating lease.</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item&#160;2.03</font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance
      Sheet Arrangement of a Registrant.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
connection with the purchase of 10 communities referred to in Item 1.01 above,
the Company borrowed a total of $56.4 million, of which $29.0 million represents
mortgage financing for five properties pursuant to loan agreements dated as of
October 16, 2008, between (i) KeyCorp Real Estate Capital Markets, Inc., a
subsidiary of KeyBank, N.A. as lender, (ii) each of five of the Company&#8217;s single
purpose limited liability company subsidiaries (the Borrowers) and (iii)
Summerville Senior Living, Inc. and Batus LLC, as managing members of the
Borrowers.&#160;&#160;Pursuant to these loan agreements, the Borrowers issued
10-year notes (the Fixed Rate Notes), of which four bear interest at a fixed
rate of 6.49% and one bears interest at a fixed rate of 7.17% with a weighted
average rate of 6.654%.&#160;&#160;The Fixed Rate Notes are secured by the five
of the 10 properties purchased.&#160;&#160;The Fixed Rate Notes require monthly
payments of interest only in the first two years, with payments of principal and
interest based on a 30-year amortization period thereafter until maturity, at
which time all outstanding principal and accrued but unpaid</font></div><br>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">interest
is payable in full.&#160;&#160;The Fixed Rate Notes were purchased by Freddie
Mac and may be prepaid subject to a prepayment penalty based on a formula
defined in the loan agreements.&#160;&#160;The Fixed Rate Notes are cross
collateralized and contain customary events of default, including those related
to non-payment and the sale or transfer of collateral.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, the Company borrowed a total of $27.4 million for five of the
properties pursuant to two loan agreements dated as of October 17, 2008, between
(i) KeyBank N.A. as lender, (ii) each of five of the Company&#8217;s single purpose
limited liability company subsidiaries (the Borrowers) and (iii) Summerville
Senior Living, Inc. and Batus LLC, as managing members of the
Borrowers.&#160;&#160;Pursuant to these loan agreements, the borrowers issued
variable rate notes (the Variable Rate Notes) that are secured by the remaining
five communities.&#160;&#160;The Variable Rate Notes have terms of three years
and interest rates based on the one-month LIBOR rate plus 3.0%.&#160;&#160;The
Variable Rate Notes require monthly payments of interest only for the three-year
term.&#160;&#160;The Variable Rate Notes may be prepaid at any time without
penalty.&#160;&#160;The Variable Rate Notes are cross collateralized and contain
various events of default, including non-payment and the maintenance of
specified debt service coverage ratios.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company is a guarantor of the Variable Rate Notes and as such, agrees (a) to
maintain minimum liquid assets (as defined) of $20.0 million; (b) maintain
specified fixed charge coverage ratios; (c) not to permit its recourse
indebtedness to exceed $500.0 million; and (d) to permit no change of control,
as defined, without the prior written consent of lender.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
9.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
Statement <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">and</font>
Exhibits.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exhibits</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
No.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
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      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
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              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">Press Release dated October 20,
      2008, EMERITUS COMPLETES PURCHASE OF 10
  COMMUNITIES.</font></font></div>
              </td>
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        </table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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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; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">October
      20, 2008</font></div>
              </td>
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      </font></td>
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      CORPORATION</font></div>
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      </font></td>
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      </font></td>
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      </font></td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font></div>
              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
      Raymond R. Brandstrom</font></div>
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      </font></td>
              <td valign="bottom" width="17%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Raymond
      R. Brandstrom</font></div>
              </td>
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              <td valign="bottom" width="38%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
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      </font></td>
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      Vice President-Finance, Chief&#160;&#160;Financial Officer and
      Secretary</font></div>
              </td>
            </tr>
            <tr>
              <td valign="bottom" width="38%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 36pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INDEX
TO EXHIBITS</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
No.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;99.1</font></font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">Press Release dated October 20,
      2008, EMERITUS COMPLETES PURCHASE OF 10
  COMMUNITIES.</font></font></div>
              </td>
            </tr>
        </table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div><br><br></div>
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hcreittranche28koct08.htm
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):
October 16,
2008
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 1.01
Entry
      into a Material Definitive
Agreement.
On June
11, 2008, Emeritus Corporation (the Company) filed a current report under Form
8-K, Item 1.01, disclosing that it had entered into an asset purchase agreement
dated June 06, 2008, with Health Care REIT, Inc. (HCN), and its affiliated
entities, to purchase 29 communities consisting of 2,257 units located
throughout the United States.  On July 3, 2008, the Company filed a
current report under Form 8-K, Items 1.01, 1.02 and 2.03, disclosing that the
Company had completed the first phase of the acquisition (Tranche 1) to purchase
19 of the 29 communities consisting of 1,564 units for a purchase price of
$222.7 million, excluding closing costs and financing fees.  On
October 17, 2008, the Company completed the final phase of the acquisition
(Tranche 2) for the purchase of 10 communities with a capacity of 693 units for
a purchase price of $77.2 million, excluding closing costs and financing
fees.  The Company operated these 10 communities pursuant to the
leases described in Item 1.02 below. In connection with the closing, the Company
entered into certain credit facilities described in Item 2.03
below.  The information set forth in Item 2.03 is incorporated by
reference into this Item 1.01.
Eight of
the Tranche 2 communities are currently subject to a cash flow sharing agreement
with an entity controlled by Mr. Dan Baty, the Company's Chairman and Co-Chief
Executive Officer.  As part of this purchase, these communities will
be held in a 50/50 joint venture (Batus, LLC) owned by the Company and a
Baty-related entity, which provides for similar economic terms and conditions as
the existing cash flow sharing agreement.  The joint venture will be
included in the consolidated Emeritus portfolio.  The Baty-related
entity made an equity contribution to the joint venture of approximately $6.8
million to fund its 50% of the purchase price of the eight
communities.
Item 1.02
Termination
      of a Material Definitive Agreement.
As a
result of the Tranche 2 acquisition described in Item 1.01 above, the master
lease agreements dated September 30, 2003 (2003 Lease) and September 30, 2004
(2004 Lease) between HCN and the Company have been amended to remove one
community from the 2003 Lease and eight communities from the 2004 Lease,
effective as of the acquisition date.  In addition, an individual
community lease dated February 26, 1996, between HCN and the Company was
terminated.  These leases had initial terms of 15 years.
The
Company accounted for nine of the properties as capital leases and one as an
operating lease.  Upon termination of the leases, the difference
between the carrying amount of the capital lease assets and the capital lease
obligations will be recorded as an adjustment to the carrying amount of the
purchased communities, in addition to adjustments for straight-line rent
accruals and deferred gains from earlier sale-leaseback transactions involving
these communities.  The total reduction in the cost basis of the
Tranche 2 assets is estimated to be approximately $8.0 million as of the closing
date.  The current annual lease payment for these 10 communities is
approximately $4.6 million, of which approximately $2.0 million was recorded as
capital lease interest expense, $1.7 million as principal payments on capital
lease obligations, and $900,000 as facility lease expense for the one community
accounted for as an operating lease.
Item 2.03
Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance
      Sheet Arrangement of a Registrant.
In
connection with the purchase of 10 communities referred to in Item 1.01 above,
the Company borrowed a total of $56.4 million, of which $29.0 million represents
mortgage financing for five properties pursuant to loan agreements dated as of
October 16, 2008, between (i) KeyCorp Real Estate Capital Markets, Inc., a
subsidiary of KeyBank, N.A. as lender, (ii) each of five of the Company's single
purpose limited liability company subsidiaries (the Borrowers) and (iii)
Summerville Senior Living, Inc. and Batus LLC, as managing members of the
Borrowers.  Pursuant to these loan agreements, the Borrowers issued
10-year notes (the Fixed Rate Notes), of which four bear interest at a fixed
rate of 6.49% and one bears interest at a fixed rate of 7.17% with a weighted
average rate of 6.654%.  The Fixed Rate Notes are secured by the five
of the 10 properties purchased.  The Fixed Rate Notes require monthly
payments of interest only in the first two years, with payments of principal and
interest based on a 30-year amortization period thereafter until maturity, at
which time all outstanding principal and accrued but unpaid
interest
is payable in full.  The Fixed Rate Notes were purchased by Freddie
Mac and may be prepaid subject to a prepayment penalty based on a formula
defined in the loan agreements.  The Fixed Rate Notes are cross
collateralized and contain customary events of default, including those related
to non-payment and the sale or transfer of collateral.
In
addition, the Company borrowed a total of $27.4 million for five of the
properties pursuant to two loan agreements dated as of October 17, 2008, between
(i) KeyBank N.A. as lender, (ii) each of five of the Company's single purpose
limited liability company subsidiaries (the Borrowers) and (iii) Summerville
Senior Living, Inc. and Batus LLC, as managing members of the
Borrowers.  Pursuant to these loan agreements, the borrowers issued
variable rate notes (the Variable Rate Notes) that are secured by the remaining
five communities.  The Variable Rate Notes have terms of three years
and interest rates based on the one-month LIBOR rate plus 3.0%.  The
Variable Rate Notes require monthly payments of interest only for the three-year
term.  The Variable Rate Notes may be prepaid at any time without
penalty.  The Variable Rate Notes are cross collateralized and contain
various events of default, including non-payment and the maintenance of
specified debt service coverage ratios.
The
Company is a guarantor of the Variable Rate Notes and as such, agrees (a) to
maintain minimum liquid assets (as defined) of $20.0 million; (b) maintain
specified fixed charge coverage ratios; (c) not to permit its recourse
indebtedness to exceed $500.0 million; and (d) to permit no change of control,
as defined, without the prior written consent of lender.
Item
9.01                      Financial
Statement
and
Exhibits.
(d)
Exhibits
Exhibit
No.
Description
99.1
Press Release dated October 20,
      2008, EMERITUS COMPLETES PURCHASE OF 10
  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.
October
      20, 2008
EMERITUS
      CORPORATION
By:
/s/
      Raymond R. Brandstrom
Raymond
      R. Brandstrom
Executive
      Vice President-Finance, Chief  Financial Officer and
      Secretary
INDEX
TO EXHIBITS
Exhibit
No.
Description
99.1
Press Release dated October 20,
      2008, EMERITUS COMPLETES PURCHASE OF 10
  COMMUNITIES.