With the efficiencies we have achieved during this difficult economic period, we expect future occupancy gains to result in solid incremental margins and meaningful cash flow growth. Sequentially average occupancies for our same store communities excluding three communities with conversions declined 30 basis points from the fourth quarter of 2009.Move-ins, deposits, leads and tours improved in March and April. I am cautiously optimistic that this trend will continue as it is typical the case for the balance of the year. Despite the harsh weather experienced in January and February, we ended the first quarter with 40 more net move-ins and 35 more deposits than during the first quarter of 2009. The last week of April was our best week of the year with 27 net move-ins and our deposits unless that move-out notices indicate a 70 basis point improvement in our least two occupancy. Our attrition rate of the first quarter was 38.5% as compared to 38.3% in the first quarter of 2009. Our disciplined approach to reducing expenses at both the corporate and property level while increasing average multi-rents continues to generate positive results, at communities under management excluding three communities with conversions to higher levels of care. Same store revenue increased 2.3% versus the first quarter of 2009 as a result of a 2.6% increase in average multi-rent. Independent living average multi-rents increased 2% and an assisted living average multi-rents increased 3%. Same community expenses increased 1.9% and net income increased 2.8% from the comparable quarter of the prior year. 58 of our communities were stabilized during the fourth quarter with an average physical occupancy rate of 86%. Operating margins before property taxes, insurance and management fees were 48% in stabilized independent and assisted living communities the same as in the first quarter, 2009. We are able to increase free cash flow generate very attractive returns and offer more care to residents as age in place by converting independent living units to higher levels of care.
During the quarter we started construction on a 45 unit conversion of assisted living at one of our independent living communities and expect to receive permit this month to the conversion of 20 independent living units to assisted living and another independent living community.We expect this conversion to be completed during the First quarter of 2010. These conversions are expected to cost approximately $3 million and find stabilization is expected to generate approximately $2.4 million of revenues with 60% operating margins. We are seeking approvals for conversions at four more communities and is feasible, these conversions will also begin in 2010. As we execute our strategy business plan, we expect to grow our business with expanded care to residence by maximizing our competitive strengths and lower our cost of capital Our strategy is focused on generating attractive returns, maximizing free cash flow and enhancing shareholder value. As evidenced by the two accretive transactions completed this month with healthcare REIT we are increasing our geographic concentration and maximizing our strengths within our markets. We will now consolidated eight high quality assisted living communities that we manage for two joint ventures in which we held minority interests. We received proceeds from the sale of our interests of approximately $4.5 million and realized the gain of approximately $1.1 million. The eight communities have approximately 600 units of assisted living and memory care units and are strategic located in the mid-west portion of the country, were nearly 50% of our operations are located. These communities ended the first quarter with the combined occupancy of approximately 91% and are expected to generate over $22.8 million of annual revenue, $9.7 million EBITDAR and $1.5 million of annual cash flow net of rent expense. Read the rest of this transcript for free on seekingalpha.com