Senior Housing Finance Activity: NorthMarq, Cain Brothers, Ziegler

NorthMarq Capital Refinances $7M for Iowa Senior Housing

NorthMarq Capital’s Omaha-based regional office secured a $7.366 million refinance for Woodlands Creek.

Jason Kinnison, senior vice president of NorthMarq Capital’s regional office, secured the refinance for the 70 unit senior housing facility, located at 12605 Woodlands Parkway in Clive, Iowa.

The transaction was structured with a 35-year term and 35-year amortization schedule. NorthMarq arranged this 
HUD loan for the borrower, Dial-Clive Assisted Living, L.P., through its affiliate AmeriSphere Finance, LLC. 

NorthMarq Capital has a long track record of multi-family financing as a Freddie Mac Program PlusTM Seller-Servicer, and through its affiliation with Fannie Mae DUS lender AmeriSphere Multifamily Finance.

Cain Brothers Facilitates $144M Fixed Rate Bond for Calif. Nonprofit Senior Housing Community 

Cain Brothers served as sole underwriter and placement agent in connection with the issuance of $144,105,000 Series 2014 Bonds, for the Los Angeles Jewish Home for the Aging (LAJHA), or the Home.

The Home is a nonprofit, multi-service senior health and housing provider comprised of skilled nursing, assisted living, PACE, home health facilities, and a continuing care retirement community (CCRC), in greater Los Angeles, Calif. The Series 2014 Bonds will fund construction of the Home’s Fountainview at Gonda Westside Project.

Fountainview at Gonda Westside will be LAJHA’s second CCRC. FVG is being developed on a 2.5-acre site within Playa Vista, an environmentally-innovative mixed use neighborhood in West Los Angeles. FVG will consist of a 460,000 square foot, six-story building including 175 independent living apartments and 24 assisted living/memory care apartments.

The project will be the first entrance fee CCRC on the west side of Los Angeles. Presales began in June 2013, and, as of the date of the financing in August 2014, 88% of the project was presold with 10% reservation deposits in place.

The Series 2014 Bonds were issued in four tranches. The Series 2014A, 2014B, and 2014C Bonds were issued as insured obligations under the Cal-Mortgage bond insurance program. The Series 2014D Bonds were issued as uninsured, subordinate obligations of the Home. 

In order to achieve a low cost of borrowing, a portion of the insured Series 2014 Bonds (Series 2014B and Series 2014C Bonds) were issued as short-term entrance fee bonds with an average yield of 1.54%. The Series 2014A Bonds were issued as long-term 30-year fixed rate bonds with an average yield of 3.60%, just 62 basis points off the MMD curve. 

The uninsured, deeply subordinate Series 2014D Bonds were also structured as short-term entrance fee bonds with an average yield of 4.75%. The security for the Series 2014D Bonds consists solely of a subordinate lien on the real assets of FVG and a claim to the initial entrance fee proceeds of the Project. The Series 2014D Bonds do not have an interest in the LAJHA revenues and assets.

Grandbridge Refinances $5.5M for Minn. Assisted Living, Memory Care Community 

Grandbridge Real Estate Capital’s Atlanta-based Seniors Housing and Healthcare Finance team and Grandbridge’s Minneapolis-based office closed a $5,526,700 first mortgage loan secured by Keystone of Faribault in Faribault, Minn.

Funding for the refinance was provided through FHA’s 232/223(a)(7) loan program and featured a fully amortized 40-year term.

Located in Faribault, Minn., the 62-unit seniors housing community offers assisted and memory care living options.

The property features one-and two-bedroom apartments that have the conveniences of full kitchens, spacious closets and in-unit washers/dryers. Seniors also have access to the library, craft room, activity room with large-screen television, an outdoor patio area and Jacuzzi tub, walking paths, a beauty/barber shop, and full dining room services.

Grandbridge has nearly 60 years of combined seniors housing experience and has closed more than $5 billion in seniors housing loan, sales and advisory transactions in the past 10 years.

“Grandbridge has been very strategic and supportive in guiding us through HUD refinancing for our assisted living community,” said Mike Lewis, managing partner of Keystone Communities, in a written statement.

Senior Vice President Richard Thomas of Grandbridge Real Estate Capital’s Atlanta-based Seniors Housing and Healthcare Finance team and Grandbridge’s Minneapolis-based Vice President Matt Halberg closed the mortgage loan.

Ziegler Closes $30M Financing for Kansas Senior Living

Ziegler, a specialty investment bank, closed $30,800,000 Series 2014 Bond financing for Presbyterian Manors, Inc., a long-standing Ziegler client.

Presbyterian Manors, Inc. (PMI) was established in 1948, as United Presbyterian Foundation of Kansas (UPFK) as a nonprofit corporation.

The Series 2014 Bonds were issued for the benefit of an obligated group consisting of PMI and Aberdeen Village, Inc. (AVI), a senior living community located in Olathe, Kansas. 

PMI and its parent, Presbyterian Manors of Mid-America, Inc. (PMMA) are headquartered in Wichita, Kansas.

PMI and AVI own a total of 17 senior living communities throughout Kansas and Missouri, comprised of 939 nursing beds, 514 assisted living units, and 596 independent living units, all of which are managed by PMMA. In addition, PMI is affiliated with Aberdeen Heights, a new senior living campus located in St. Louis County.

Aberdeen Heights and PMMA are not members of the PMI Obligated Group with respect to the Series 2014 Bonds.  

The 2014 Bonds totaling $30,800,000 consist of $17,400,000 of fixed-rate Series 2014A Bonds, $5,550,000 of TEMPS-80 Series 2014B-1 Bonds, $4,600,000 of TEMPS-50 Series 2014B-2 Bonds, and $3,250,000 of taxable Series 2014C Bonds.

The Series 2014A Bonds were issued as permanent debt, i.e., debt that will be amortized on a level debt service basis during 2019-2049, with a 35-year final maturity.

The TEMPS-50, TEMPS-80 and taxable bonds we issued as temporary debt – the debt that will be repaid using entrance fees during the initial fill-up period of the new project described below. The temporary debt was sized so that it can be fully repaid from initial entrance fees once the project reaches 80% occupancy.

The taxable bonds were needed for a variety of items including a portion of the project costs, certain issuance costs, and a portion of the funded interest. 

The Series 2014 Bonds are being issued to: finance the development of the Phase II addition of 90 independent living units; purchase a new corporate office building and provide for certain renovations and FF&E; fund a Debt Service Reserve Fund for each series of bonds; fund interest on the Phase II project for a period of 19.5 months; fund interest on the Corporate Office Building for a period of 12 months; and pay certain costs of issuance related to the Series 2014 Bonds.   

The 2014 Project includes the second phase of the redevelopment of PMI’s Wichita community, as well as the acquisition and renovation of a new corporate office building.

The Phase II Project includes the demolition of the former assisted living center and health center and the construction of a building which is expected to include 90 new independent living apartments on the site of the former assisted living center and health center.

There will be several models of the new independent living apartments. Over 75% of the independent living units were pre-sold at the time the financing closed.

Greystone is serving as co-developer with PMI with respect to the Phase I and Phase II projects.

Financing for the first phase of redevelopment at the Wichita campus occurred in 2013 and upon completion the project will reposition the assisted living and nursing service lines while adding memory care units. Construction on these projects is anticipated to be completed in November 2014. 

“This financing will help PMI complete the transformation and repositioning of their Wichita campus and continue their market leadership in central Kansas,” said Will Carney, managing director in Ziegler’s senior living finance practice, in a written statement.

Prudential Mortgage Capital Provides $14M in Loans for Tenn. Senior Living Acquisitions 

Prudential Mortgage Capital Company, the commercial mortgage lending business of Prudential Financial, Inc. (NYSE: PRU), closed three FHA 232/223(f) loans totaling $14 million. The proceeds were used by the borrower, an affiliate of Gryphon Senior Living Group, to acquire three assisted living facilities.

The facilities, all located in the greater Knoxville, Tenn. area, total 166 units of assisted living, memory care and independent living. 

The financing was originated and underwritten by Prudential’s FHA Lending team, which provides FHA-insured loans for apartment communities, affordable housing properties, nursing homes, assisted living facilities and hospitals.  

Ziegler Closes $30M for Texas Nonprofit Retirement Communities 

Ziegler, a specialty investment bank, $30,770,000 tax-exempt, fixed-rate Christian Care Centers, Inc. Series 2014 Bonds.

Christian Care Centers, Inc. (CCC), a Ziegler client since 1990, is a Texas nonprofit organization formed in 1947. 

Since its inception, the CCC has been associated with the Church of Christ through affiliations with individual Church of Christ congregations throughout Texas and adjoining states. CCC ranked 88th on the 2013 LeadingAge Ziegler 100, a ranking of the largest not for profit multi-site senior living organizations. 

CCC currently operates two retirement communities: Christian Care Center in Mesquite (the Mesquite Campus) and Lakewood Village Retirement Community in Fort Worth (the Fort Worth Campus).

The Mesquite Campus is located on about 24 acres and includes 80 entrance fee independent living apartments; 149 rental independent living apartments; 105 assisted living units; and 175 nursing beds including 32 memory support care nursing beds. The Fort Worth Campus is located on approximately 50 acres and includes 157 independent living apartments; 34 assisted living units; and 48 nursing beds. 

The Series 2014 Bonds, the sixth financing with Ziegler, will be used to provide amounts to fund the construction and development of the Allen Community; refund the outstanding Series 2000B and Series 2000C Bonds; (iii) fund a debt service reserve fund; fund interest on a portion of the bonds for 18 months; and pay a portion of the cost of issuing the bonds. 

The Allen Community is to be located on approximately 5 acres adjacent to, and donated by, the Greenville Oaks Church of Christ and is planned to consist of 22 rental independent living cottages contained in 11 duplex-style structures; 32 assisted living apartments; and 36 memory care assisted living suites; and associated common areas. 

The Series 2014 Bonds are rated BBB- by Fitch and consist of tax-exempt, fixed-rate bonds with a final maturity of 2042. The yield to maturity of the issue is 5.01%. The Series 2014 Bonds are being issued on a parity basis with the Series 2005 Bonds currently outstanding in the amount $30,065,000. 

“After the closure of their original facility in Gunter Texas, CCC began examining growth opportunities in the 
metropolitan Dallas-Fort Worth market place,” said Rich Scanlon, senior managing director in Ziegler’s Senior Living practice, in a written statement. “A Church of Christ in Allen, Texas had land upon which they wanted to see a senior living community constructed and CCC saw tremendous opportunity in this primary market area (PMA). CCC worked with their architects to develop an efficient design that would be cost-effective to prospective residents. The hope is that this model can be rolled out to other areas within the DFW market to allow CCC to further expand their mission.” 

Wells Fargo Capital Provides $32.5M for Ill. Long-Term Care Provider
Wells Fargo Capital Finance, part of Wells Fargo & Company (NYSE: WFC), acted as administrative agent on a $32.5 million senior secured facility for Petersen Health Network (Petersen), a leading provider of long-term care services in Illinois as well as other areas of the Midwest.

Petersen, based in Peoria, Ill., was founded in 1974 by brothers James D. and Robert L. Petersen. Today, ownership remains in the Petersen family under the leadership of Roberts’ son Mark B. Petersen. 

Over the years, the Petersen Health Network has grown to over 91 long-term care facilities comprised of skilled nursing facilities, assisted and independent living facilities, along with homes for the developmentally disabled.

“With this loan facility, Wells Fargo’s support was important in Petersen’s effort to continue to operate and grow in Illinois and to do what we do best which is caring for those in need,” said Mark Petersen, president and owner of Petersen Health Network, in a written statement.

Written by Cassandra Dowell