Senior Housing Finance Activity: Prudential, Ziegler, Berkadia, & More

SQLC Completes $119 Million Financing for Ind. CCRC

Senior Quality Lifestyles Corporation and its affiliate Mayflower Communities, working in partnership with St. Vincent Health, announced last week they had completed financing for The Barrington of Carmel, a 501(c)3 nonprofit continuing care retirement community (CCRC). 

Financing was completed through the sale of $119,020,000 in Series 2012 revenue bonds, with B.C. Ziegler and Company serving as bond underwriter for the transaction. Proceeds of the tax-exempt bonds will be used to pay for certain costs of acquiring, constructing, developing, and equipping the Barrington; fund a debt service reserve fund; pay interest for a period of approximately 20 months; and pay certain costs relating to the issuance of the bonds.

“We are pleased to complete the successful financing of The Barrington and excited to have construction of the new community already underway,” said Brewer. 

Prudential Provides $42.3 Million Loan for Calif. Assisted Living Community

Prudential Huntoon Paige, the FHA-insured lending business of Prudential Mortgage Capital Company, the commercial mortgage lending business of Prudential Financial, Inc. (NYSE:PRU), recently announced that it closed a $42.3 million blended rate loan to both refinance and construct a new addition on Palo Alto Commons in Palo Alto, Calif.

The loan for the 117-unit assisted living community was closed with a 457-month fully-amortizing term and a fixed interest rate of 3.28%. The loan refinances an existing FHA-insured loan and also finances the construction of an additional 44 assisted living units. 

Upon completion, the development will be a 161-unit, 185-bed facility licensed for an additional 90 beds in a new wing. 

The existing building will not be structurally affected by the new addition; rather, the new construction will be connected via walkways to the existing structure and remain a standalone building. 

“The growing demand for high quality senior housing in this region along with the ongoing success of this property makes Palo Alto Commons an attractive transaction for Prudential Mortgage Capital Company,” said Martin Herz, a principal with Prudential Huntoon Paige. “We are pleased to have been able to provide the borrower with the unique blended rate financing needed to make this project a reality.”

Ziegler Closes $150 Million Financing for Covenant Retirement Communities

Specialty investment bank Ziegler recently closed a $150,170,000 Series 2012 financing for Covenant Retirement Communities, a multi-site system with 12 continuing care retirement communities located across eight states.

Proceeds of the Series 2012 Bonds will be used to refund, on a current basis, seven series of outstanding bonds (1998-Ill., 1999-Minn., 2001-Ill., 2011A&B-Ill., 2002A&B-Colo.); provide approximately $20 million for general campus improvements throughout the system,; fund a debt service reserve fund; and pay the costs of issuance. 

The bonds have been rating BBB+ for FitchRatings and BBB= from Standard & Poors. 

“This financing completes CRC’s refundings and debt restructurings initiated in 2011,” said Don Carlson, senior managing director and vice chairman at Ziegler. “These 2012 Bonds will improve the System’s cash flow from taking advantage of record low interest rates and reimburse themselves from prior capital expenditures with new money. This transaction completes the restructuring of their aggregate debt that was begun in 2011, providing CRC with a very conservative capital structure.”

Love Funding Secures $5.14 Million Refinancing for Calif. Memory Care Community

Love Funding recently announced the closing of a $5.14 million loan refinancing for Autumn Years at Newport Mesa, a 40-bed memory care community in Costa Mesa, Calif. 

Artin Anvar, a director out of Love Funding’s Washington office, obtained the financing through the Department of Housing and Urban Development’s Section 232/223(a)(7) LEAN loan program, enabling the borrower to reduce the interest rate and extend the loan term by five years, which saved approximately $135,000 in annual debt service costs.

Autumn Years was built in 1999 and specializes in memory care services delivered in a “home-like” environment. 

Berkadia Originates $35 Million Loan for Two Senior Housing Properties

Berkadia Commercial Mortgage recently originated a total of $34.9 million in loans for two senior housing properties, one located in Virginia and the other in Ohio. 

Heidi Brunet, a vice president and member of Berkadia’s Senior Housing Group, worked with borrower Smith/Packett to originate $25 million in financing for The Crossing at Falls Run, a 173-unit senior housing community in Fredericksburg, Va. The loan has an 18-month term with a floating interest rate an was made through the Berkadia-BBVA Compass Joint Bridge Loan program in order to refinance an existing construction loan. 

The Crossing at Falls Run is located on 22.7 acres and has 115 independent living units, 42 assisted living units, 16 memory care units, and is approximately 60% occupied. Smith/Packett developed and built the property, which opened in November 2011.

Berkadia also originated a $9.9 million financing through Fannie May for a senior living community in Pickerington, Ohio. The loan has a 20-year, fixed-rate term and was used to refinance an existing mortgage on Amber Park Assisted Living, an 86-unit community that is currently 100% occupied. 

Lisa Lautner, a senior vice president who is also part of Berkadia’s Senior Housing Group, worked alongside Brunet with borrower Hawthorne Retirement Group to originate the loan, which has a 65% loan-to-value ratio and 20-year amortization.