Senior Housing Finance Activity: Ziegler Closes $73M for New CCRC

Ziegler Closes $73 Million Financing for Ill. CCRC Development

Ziegler recently closed issuance on $73,465,000 of Series 2014 tax-exempt, fixed-rate bond financing for the development of MRC The Crossings in League City, Texas, sponsored by Methodist Retirement Communities, a not-for-profit corporation.

In December of 2012, MRC purchased approximately 19 acres and began funding the pre-development and marketing costs of a startup continuing care retirement community (CCRC) with the proceeds of a Bond Anticipation Note offering in the amount of $7,645,000. Proceeds of the Series 2014 Bonds will be used to redeem the outstanding Bond Anticipation Notes and finance the development and construction of the community, along with fund 21 months of interest.

Proceeds will also be used to fund separate accounts of the debt service reserve fund; and pay the cost of issuing the bonds. MRC is funding a $2 million Liquidity Support Agreement as additional support for the Series 2014 Bonds.

The community is a planned entrance-fee based CCRC to consist of 116 independent living units, 36 assisted living units, 24 memory support assisted living units and 48 nursing beds consisting of a 24-bed rehabilitation wing and a 24-bed skilled nursing wing.

Greystone serves as development consultant for the project. Currently, 80% of the IL units have been pre-sold as evidenced by the receipt of a 10% deposit. The final bond structure included a total of $13 million in temporary debt to be redeemed with the proceeds of initial entrance fees after establishing defined levels of working capital and operating reserves.

Grandbridge Gets Financing for Brookdale Portfolio Acquisition

Grandbridge Real Estate Capital’s Seniors Housing and Healthcare Finance Team recently facilitated the acquisition, financing, and loan assumption of a portfolio of seven properties on behalf of Brookdale Senior Living. The properties are located in Alabama, Arizona, Georgia, Louisiana, and Oklahoma and have a total of 552 units. The transaction involved approximately $52 million of debt.

Ziegler Closes $69M Financing for SantaFe Senior Living CCRC 

Ziegler recently announced the successful closing of the $68,950,000 tax-exempt, fixed-rate bonds for East Ridge Retirement Village, a Florida not-for-profit corporation that owns and operates a life care, entrance-fee based continuing care retirement community on a 76-acre campus in Cutler Bay, Florida called East Ridge at Cutler Bay.

The CCRC was built in 1965 and has 221 independent living units, 57 assisted living units, and 60 skilled nursing beds.

In 2008, East Ridge Retirement Village came under the control of SantaFe Senior Living, Inc., a not-for-profit corporation that’s an affiliate of SantaFe Healthcare, Inc. SFSL owns and operates three CCRCs in Florida, including North Florida Retirement Village dba The Village in Gainesville, and Bonita Springs Retirement Village, dba The Terraces at Bonita Springs.

East Ridge initiated planning activities in 2007 to define a plan for the repositioning of the Cutler Bay CCRC consisting of two phases. The first phase consists of the construction and equipping of 90 new assisted living units, 31 new memory support units, and 74 new skilled nursing beds to replace the existing assisted living and skilled nursing units.

Greystone serves as development consultant for the project, which will be constructed on approximately 20 acres on the campus where 27 vacant ILUs are currently located. Proceeds of the Series 2014 Bonds will be used to fund the project, reimburse East Ridge for prior capital expenditures, reimburse SFSL for predevelopment related expenses, provide 25 months of capitalized interest, establish a debt service reserve fund and pay the costs of issuance. Fitch Ratings has assigned a rating of “BB Stable” to the Series 2014 Bonds.

Omega Communities Gets Financing for $30M First Project

Omega Communities recently announced the successful financing for the development of its first senior housing project under its new faith- based/affinity group model. The $30 million project was financed with  $5.5 million of equity provided by Omega Communities and $24,500,000 of Series 2014 Section 142(d) Revenue Bonds underwritten by HJ Sims for The Springs at South Biscayne, providing funds to construct and furnish a new, rental assisted living and memory care community in North Port, Fla.

The new community will offer 95 assisted living apartments and 38 memory care units and is owned by Omega Communities, which will also develop the project.

The financing structure included the issuance of $21.8 million of tax-exempt, senior draw-down bonds along with $2.7 million of tax-exempt, subordinate bonds. The draw-down feature reduced the required capitalized interest funding by more than $1.5 million when compared to a traditional bond financing. All of the $21.8 million in tax-exempt bonds were purchased by a single investor, Orix.

Capital Corp. Seeks to Invest in Luxury CCRC Project

Capital Corp Merchant Banking has proposed a $39 million investment in a luxury CCRC being planned in Georgia. The funding structure Capital Corp is proposing consists of providing its clients tin $5.5 million in equity funding, and the remaining $33.6 million in debt.

Fannie Mae Names Oak Grove Capital #2 Senior Housing Lender

Oak Grove Capital, a national provider of real estate financial services, has been named a top seniors housing lender by Fannie Mae. The Agency ranked Oak Grove No. 2 on its 2013 list of Top DUS Producers for Seniors Housing.

The ranking was determined by 2013 production volume. Oak Grove’s seniors housing production volume saw a significant increase in 2013, growing by 17% from the previous year. Oak Grove has long been a prominent player in seniors housing finance, consistently ranking among Fannie Mae’s top seniors lenders. The firm also received the Fannie Mae Seniors Housing Award in 2012.

HHC Finance Closes $137 Million of Senior Housing Finance in Q1

Housing & Healthcare Finance reports closing more than $137 million of HUD loans in the first quarter of 2014.

In January, HHC Finance closed more than $57.8 million of HUD loans, all of which were through the Section 232/223(f) program to acquire or refinance skilled nursing facilities. Five of the loans were for Sabra Health Care REIT for skilled nursing facilities located in Montana, Colorado, New Mexico, California, and Ohio, totaling $46.1 million.

February loans totaled more than $17 million for two loans, both through the HUD Section 232/223(f) program, to refinance two skilled nursing facilities located in Pennsylvania and New Jersey.

In March, two loans were made in each of the following states: Illinois, Texas, New Jersey, and New York, all for skilled nursing facilities. Another two loans were made for assisted living communities in New Hampshire. The 10 loans totaled more than $87.4 million, with a majority ($74.8 million) for conventional-into-HUD financing and the remainder refinances of existing HUD loans.

NHI Eyes Growth With $700 Million Credit Facility

National Health Investors, Inc. (NYSE: NHI) announced recently it has entered into amended $700 million senior unsecured credit facilities that include a new $450 million revolving credit facility, a new $130 million term loan and existing $120 million term loans. The facilities can be expanded, subject to certain conditions, up to an additional $130 million. At closing, the new facilities replaced smaller credit facilities that originated on June 30, 2013 and provided for $370 million of total commitments.

The amended credit facilities provide for a $450 million unsecured, revolving credit facility that matures in March 2019 (inclusive of an embedded 1-year extension option) with interest at 150 basis points over LIBOR; a $130 million unsecured term loan that matures in June 2020 with interest at 175 basis points over LIBOR of which interest of 3.91% is fixed with an interest rate swap agreement; and two existing term loans which remain in place totaling $120 million, maturing in June 2020 and bearing interest at 175 basis points over LIBOR, a notional amount of $40 million being fixed at 3.29% until 2019 and $80 million being fixed at 3.86% until 2020.

“With the closing of these credit facilities and the recent $200 million convertible senior note offering, NHI has successfully fixed a majority of its interest rate expense, extended maturities and expanded its borrowing capacity to support additional growth,” said Justin Hutchens, NHI’s CEO and President.

Wells Fargo Securities, LLC, BMO Capital Markets and KeyBank National Association were joint lead arrangers for the facilities and arranged a syndicate that included 11 banks. J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated were joint lead arrangers and joint bookrunners for the revolving credit facility. Capital One, National Association was joint lead arranger and joint bookrunner for the term loan. Other banks in the credit facilities are Regions Bank, Pinnacle National Bank, United Community Bank, Stifel Bank & Trust and UMB Bank.

Berkadia Arranges $86 Million Financing for Senior Housing Portfolio

Berkadia Commercial Mortgage LLC recently originated $85.9 million for a portfolio of 15 seniors housing communities located throughout North Carolina. Vice President Christopher Fenton of Berkadia’s Seniors Housing and Healthcare group worked with subsidiaries of Chevalier Group to secure the 35-year, fixed-rate financing through HUD’s Section 232/223(f) program.

The loans will be used to refinance prior debt on the properties, which Berkadia originated in conjunction with GE Capital Healthcare Financial Services in December 2012. The new loans are fully amortizing, and feature a 4.03% interest rate. The 15 communities, operated by Meridian Senior Living, consist of 1,136 beds and are approximately 90% occupied.