Senior Housing Finance Activity: Emeritus, Cambridge, Prudential, More

| March 14, 2013

Prudential Mortgage Capital Closes Two Senior Housing Loans Totaling 19.8 Million

Prudential Mortgage Capital Company recently closed two senior housing loans totaling nearly $20 million.

The first was a $2.8 million, 20-year, fixed-rate loan to refinance Camino Retirement Apartments, a 98-bed assisted living and independent living community in Albuquerque, N.M.

The second was a $17 million, 28-year, fixed-rate loan to refinance San Clemente Villas by the Sea, a 150-bed assisted living and dementia care community in San Clemente, Calif.

Martin Hertz of Prudential Huntoon Paige, Prudential Mortgage Capital Company’s FHA lending business, was the lead on both transactions.

Cambridge Closes $4.1 Million Loan for Calif. Skilled Care Facility

Cambridge Realty Capital Companies has closed on a $4.1 million loan to refinance Foothills Health & Rehabilitation, a 204-bed skilled nursing facility in Sylmar, Calif., using the HUD Section 232/223(a)(7) funding program. The fully-amortized, 18-year term loan was arranged for the owner in a transaction coordinated by National Originations Manager Hymie Barber, who is also the managing director of Catalyst/Cambridge Health Care Finance in Los Angeles. 

Cambridge Realty Capital Ltd. of Illinois underwrote the loan. 

Grandbridge Closes $194 Million Freddie Mac Seniors Assumption

Grandbridge’s Seniors Housing team closed a Freddie Mac CME Seniors Housing Assumption for five senior living communities in Long Island, N.Y. with a total of 768 units.

The five communities are part of the Bristal portfolio, which Canadian REIT Chartwell had purchased a few years ago with a mortgage through Freddie Mac. Chartwell sold the properties recently to Harrison Street, who assumed the existing loans in a transaction facilitated by Grandbridge. 

Richard Thomas and Tim Hudgins lead the team, which has closed approximately $5 billion in seniors housing loans, sales, and advisory transactions in the past 10 years.

Grandbridge is a subsidiary of Branch Banking and Trust Company (NYSE:BBT).  

Grandbridge Facilitates $6 Million Bridge Financing for Acquisition

Grandbridge’s Seniors Housing team facilitated the bridge financing for Artemis Focus Investments, LLC, for the acquisition and minor renovations of the 125-unit Forsgate Residence in Jamestown, N.J. The loan was around $6 million. 

The Charlotte, N.C.-based firm facilitated the non recourse bridge financing through its proprietary lending platform, BB&T Real Estate Funding LLC.

National Capital Advisors LLC Secures $11 Million Loan for Calif. Senior Community

National Capital Advisors, LLC announced last week it had originated  an $11.25 million loan first-trust refinance for Cedar Creek Senior Living, in Madera, Calif.

Woodset Partners, LLC owns the community, which is operated by Integral Senior Living. The loan is expected to be refinanced by Cedar Creek’s FHA Lender, Lancaster Pollard, within 24 months. 

Cambridge Provides $90.5 Million Financing for Ill. SNF Portfolio 

Cambridge Realty Capital Companies recently announced it provided a total of $90.5 million in financing for a portfolio of 10 individually refinanced skilled nursing facilities located in Illinois. 

The loans were arranged for JLM Financial Investments, an Austin, Tex.-based private equity group that specializes in the development of commercial real estate and senior housing. 

The fully-amortized loans were refinanced using the HUD Section 232/223a(7) funding program. Hymie Barber, Cambridge’s National Originations Manager and managing director for Catalyst/Cambridge Heatlhcare Finance in Los Angeles, represented the company in the transaction. 

Among the properties refinanced were Southview Manor, a 95-bed skilled care nursing home in Chicago with a $13.6 million loan; Crestwood Terrace, a 126-bed skilled nursing home in Crestwood with a $7.1 million loan; Kankakee Terrace, a 146-bed skilled care nursing home in Bourbonnais with a $13.9 million loan; The Terrace, a 115-bed skilled nursing home in Waukegan with a $5.05 million loan; and Sycamore Terrace, a 205-bed skilled care facility in Quincy with a $3.1 million loan.

Other funded properties include Community Care Center, a 204-bed skilled care nursing home in Chicago with a $14.8 million loan; Frankfort Terrace, a 120-bed skilled care facility in Frankfort with a $7.01 million loan; Bourbonnais Terrace, a 197-bed facility in Bourbonnais with a $14.6 million loan; West Chicago Terrace, a 120-bed skilled nursing home in West Chicago with a $5.2 million loan; and Joliet Terrace, a 120-bed skilled care facility in Joliet with a $5.9 million loan.

Grandbridge Closes Financing for Wash. Senior Living Community

Grandbridge’s Seniors Housing team, Richard Thomas and Tim Hudgins, recently announced the closing of a 10-year fixed rate $5.3 million Fannie Mae loan to refinance Highgate Senior Living Wenatchee in Wenatchee, Wash.

Beech Street Closes $20.6 Million Loan for N.J. Senior Care Center

Beech Street Capital, LLC announced last week the closing of a $20.6 million FHA 232/223(f) loan to refinance Leisure Chateau Care & Rehabilitation Center, a 242-bed skilled nursing facility in Lakewood, N.J.

The transaction was originated by Joshua Rosen, executive vice president of Beech Street Capital, working out of the firm’s Chicago office. 

Constructed three years ago, Leisure Chateau is located in the largest township in Ocean County, N.J. The fixed-rate loan has a 35-year term.

Sabra Completes Two Preferred Equity Investments with Meridian

Sabra Health Care REIT, Inc. (Nasdaq:SBRA) completed two preferred equity investments on March 5 to provide up to $7.2 million of preferred equity funding to an affiliate of Meridian Realty Advisors, L.P. for the construction of a 141-bed skilled nursing facility and 52-unit memory care facility in Austin, Tex.

Sabra funded $4.3 million at closing.

Additionally, Sabra received an option to purchase the skilled nursing facility on or after the earlier to occur, of the facility achieving and maintaining 90% occupancy for three consecutive months, or three years after receiving the certificate of occupancy for the facility. Sabra also received an option to purchase the memory care facility that is not expected to be exercised, as it is subordinate to a purchase option given to the manager of the memory care facility.

Upon exercise of the purchase option on the skilled nursing facility, Sabra would expect to lease the facility to Meridian under a long-term, triple net lease. 

Sabra’s preferred equity investment with respect to the skilled nursing facility provides for an annual 15% preferred rate of return, which will accrue on a quarterly compounding basis with payment of the preferred return deferred until the earlier of the closing under the purchase option, or 18 months after receiving a certificate of occupancy for the facility.

“We’re pleased to do yet another deal with the Meridian team and are currently working on a longer term pipeline agreement with them,” said Rick Matros, CEO and chairman of Sabra, in a statement. “Although we do not expect to be able to exercise our purchase option on the memory care facility, the preferred return on this facility investment [15%, accruing on a quarterly compounding basis] made it compelling to provide capital for that development while benefitting the long term relationship we have developed with the Meridian team.”

Emeritus Launches 8 Million Share Secondary Public Offering

Emeritus Corporation (NYSE:ESC) announced on Monday that it has launched a secondary public offering of common shares pursuant to a shelf registration statement on Form S-3 filed with the Securities and Exchange Commission on behalf of certain selling shareholders for the offering of 7,973,600 common shares.

Shares are being sold by AREA Property Partners on behalf of funds they manage; by CEO and president Granger Cobb; by funds associated with Directors Daniel Baty and Stan Baty; and by Ray Brandstrom.

Emeritus will grant underwriters a 30-day option to purchase up to an additional 1,196,040 common shares. Any proceeds from the exercise of the underwriter’s option will be used for general corporate purposes, which may include repayment of outstanding debt.

Goldman, Sachs & Co. will act as sole manager for the offering. 

Cain Brothers Underwrites $15.7 Million Bond Financing for Riverview Retirement Community

Cain Brothers underwrote $15,695,000 Washington State Housing Finance Commission Nonprofit Housing Revenue and Refunding Revenue Bonds Series 2012 for Riverview Retirement Community, a CCRC in Spokane, Wash. that is owned and operated by three Washington nonprofit corporations.

Riverview Terrace owns and operates a 136-unit independent and assisted living community, while Riverview Care Center owns and operates a 75-bed skilled nursing facility and Riverview Village owns and operates a 164-unit apartment and cottage-style, entrance fee-model independent living community. 

RRC will use proceeds from the bond issuance to help finance a number of capital projects it is working on, including an aquatic/fitness center. Cain Brothers worked with RRC’s management and board to evaluate both variable rate and fixed rate options for funding about $11.4 million in campus capital improvements and refinancing the organization’s existing indebtedness. 

The investment banking firm secured a fixed rate structure for the bonds and coordinated the redemption of existing debt to minimize additional costs. 

Despite the issuer’s policy of limited distributions to qualified institutional buyers and minimum denominations of $100,000, Cain Brothers was able to achieve a low average yield below 5% and a 35-year final maturity. 

Chicago City Council Approves Financing for LGBT-Friendly Senior Housing

The Chicago City Council passed legislation on Wednesday to provide a land transfer and city funding for an LGBT-friendly senior housing project in Chicago’s Lake View neighborhood. 

“The assistance is designed to provide important housing options for Lake View seniors as well as preserve one of the community’s most prominent and iconic buildings,” Mayor Rahm Emanuel said.

The 79-unit, affordable housing senior building will be developed on the corner of Halsted and Addison streets, and includes the historic 23rd District Town Hall police station. Today’s legislation authorizes the City to transfer ownership to Heartland Housing and Center on Halsted, the property’s developers. It also authorizes the City to lend up to $5,000,000 in HOME dollars to the project. Complete City financing will also include allocations of Low-Income Housing Tax Credits and Illinois Affordable Housing Tax Credits.


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Category: Finance and Development, REIT, Senior Housing

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