Senior Housing Finance Activity: Capital One, Greystone

Capital One Bank Closes $5.7M FHA Loan to Refinance Ill. SNF      

Capital One Multifamily Finance provided a $5.7 million fixed-rate, HUD 232/223(f) loan to refinance a 144-bed skilled nursing facility in northern Illinois.

The property was built in 1972, with additions in 1988 and 1993.

The key principals are owners and operators of skilled care facilities who pursued HUD financing because they saw an opportunity to lock in current low interest rates for the 35-year term of the loan, executives said.

“Thanks to the 232/223 (f) loan program, investors can nail down today’s historic rates all the way to mid-century,” said Senior Vice President Joshua Rosen, in a statement, adding that the 232/223 (f) program is “attractive to skilled nursing operators” since eligible loans are nonrecourse and fully assumable.

Capital One closed the deal in 100 days.

Rosen originated the transaction. Rosen leads Capital One’s agency healthcare lending from the company’s Chicago office.

Greystone Expands Freddie Mac Loan Offering in Northeast 

Greystone, a national provider of multifamily and healthcare mortgage loans, earned Program Plus(R) status from Freddie Mac (OTCQB:FMCC) Multifamily. The new designation enables Greystone to offer loans of all sizes for multifamily properties in New York, New Jersey and Connecticut.

Greystone has been a Freddie Mac Multifamily Targeted Affordable Housing Seller / Servicer, providing financing for affordable housing since 2011. Greystone began offering Freddie Mac seniors housing and assisted living loan products in 2013, and the Agency’s Small Balance Loan product earlier this year, which enables acquisition and refinancing for properties between $1 million and $5 million.

The new Program Plus(R) license completes a full spectrum of multifamily property financing options available from Greystone with Freddie Mac.

“Adding to our existing agency lending offerings, we are pleased we can now offer a full spectrum of complete GSE financing products for multifamily property owners and acquirers,” said Joe Mosley, executive managing director of Freddie Mac and Fannie Mae lending at Greystone, in a statement.

CBRE Capital Markets Arranges $350M Financing for Senior Housing Portfolio 

Aron Will, senior vice president of CBRE’s Senior Housing Debt & Structured Finance team in partnership with CBRE’s Mitchell Kiffe and Matthew Whitlock, has arranged a refinancing on behalf of a joint venture between Formation Capital and NorthStar Realty Finance Corporation and its affiliate healthcare REIT, NorthStar Healthcare Income for  the Ranger Portfolio.

The portfolio includes 36 senior housing communities with a combination of independent living, assisted living and memory care located across 10 states including Arizona, Alabama, California, Colorado, North Carolina, Tennessee, Texas, Oregon, South Carolina and Washington.

CBRE secured a 10-year fixed rate CME loan from Freddie Mac of about $350 million, which includes 60 months of interest only.

The portfolio will continue to be operated by Frontier Management who operates 20 communities, Milestone Retirement Communities who operates one community, and Senior Lifestyle Corporation who operates 15 communities.

In May of 2014, NorthStar and Formation affiliates entered in to a joint venture partnership for the acquisition of a $1.1 billon healthcare real estate portfolio that is comprised of senior living communities and skilled nursing facilities controlled by Formation that included the Ranger Portfolio.

“We believe this will help maintain long-term stability in our seniors housing portfolio for both our investment and for our operating partners, Frontier Management, Senior Lifestyle and Milestone,” said Kelly Sheehy, managing director at Formation Capital, in a statement.

MassDevelopment Provides $17M Financing for 20 Mass. Group Homes 

Nonprofit CIL Realty of Massachusetts will use $16.95 million borrowed through The Massachusetts Development Finance Agency (MassDevelopment) tax-exempt bond to build or renovate and then equip and furnish 20 group homes for the disabled in cities and towns around the state.

Locations include Amherst, Brockton, Danvers, Easton, Edgartown, Granby, Hadley, Leicester, Leominster, Montague, Orange, Pittsfield, Plympton, Randolph, Rockland, Sandwich, South Hadley and Walpole.

Of the 20, 14 are completed, five are still under construction and one has not yet been started, said Kent Schwendy, president and CEO of the Corporation for Independent Living, in a statement.

The parent organization is located in Hartford, Conn.

All told, the homes will create 183 new jobs for staff members at the residences and 39 temporary construction jobs.

Residents in the homes are all living with various levels of disability. Many of them are living with the after effects of a traumatic brain injury or other brain damage, Schwendy said.

The Corporation for Independent Living works with agencies in towns around the state that are responsible for the care and housing of people with disabilities.

“Their expertise is caring for people, not building homes,” Schwendy said.

Schwendy and his staff identify sites for group homes and then build the home to government specifications for access and safety.

The work is financed through a revolving line of credit until the projects can be bundled and the financing converted to a bond sold through MassDevelopment. Because MassDevelopement is a state agency, the bond is then tax free for investors.

The organization rarely uses an existing home because existing homes that can comply with handicapped accessibility rules are very rare, Schwendy said

But the Corporation for Independent Living homes fit in with their surroundings, he said.

“For the most part you would not be able to tell the difference between this or any other single-family large ranch home,” he said. “We try and spread them out so there is not an enclave, or a neighborhood, dominated by these types of homes.”

The Corporation for Independent Living then leases the home to the local agency to recoup its cost. Once the cost is recouped and the lease ends, the Corporation for independent Living donates the house back to the agency that had been running it.

CBRE Capital Markets Provides Acquisition Financing for Va. Memory Care Community 

Aron Will, senior vice president of CBRE’s Senior Housing Debt & Structured Finance team in Houston, Texas has arranged acquisition financing on behalf of a joint venture between JF Capital Senior Living and Meridian Senior Living (MSL) for Windsor Senior Living.

Windsor Senior Living is a  60 licensed bed memory care community located in Richmond, Va.

The loan was originated through CBRE’s Freddie Mac Seller Servicer direct lending program and marks Freddie Mac’s first ever Senior Housing Delaware Statutory Trust structured transaction.

CBRE secured a 10 year fixed-rate mortgage. The community will be operated by MSL.

Ziegler Closes Calif. Shea Family Post-Acute Care Platform to Ensign Group 

Ziegler, a specialty investment bank, closed the Shea Family’s sale of its integrated post-acute care platform in southern California to The Ensign Group, Inc.

Ziegler’s investment banking team served as exclusive advisor to the Shea Family, a provider of a complete continuum of post-acute healthcare services in the San Diego market. Shea entered into an agreement to sell its nine skilled nursing and assisted living facilities (732 licensed beds), a home health agency and a private home care business to Ensign.

Ensign will purchase and retain the real estate in two of the nine operations and will assume long-term leases on the remaining facilities, two of which will include an option to purchase the real estate.

Today, the Shea Family platform includes a full spectrum of services across the entire post-acute care continuum. As a result of this transaction, Shea will no longer have post-acute care operations in the San Diego marketplace.

Ziegler’s corporate finance team worked with the Shea Family ownership and senior management team to determine probable value, market the business to logical and qualified operators, coordinate management presentations and due diligence, provide transaction guidance, and assist in definitive agreement negotiations to accomplish a successful closing, Ziegler said in a statement.

Sheppard Mullin served as legal advisor for the transaction.

Cushman & Wakefield Arranges $49.6M In Construction Financing for LCB Senior Living

In its exclusive representation of LCB Senior Living, Cushman & Wakefield Senior Housing Capital Markets arranged $49.6 million in construction financing and joint venture equity for two senior housing developments in New England.

The Residence at Salem Woods in Salem will be an 84-apartment/88-bed independent, assisted and memory care community situated in a three-story building on a seven-acre site. Wells Fargo provided $15.6 million in construction financing while the joint venture equity was provided by an institutional investor.

The project broke ground in November 2014 and is expected to open in early 2016.

The Residence at Quarry Hill in South Burlington, Vermont will be a 102-apartment/104-bed independent, assisted and memory care community developed on a 2.7 acre site just outside of downtown Burlington. The land site was acquired as part of a larger portfolio acquisition that occurred earlier in 2014 which included two premier senior housing properties in Vermont.

PNC Bank provided $18.4 million in construction financing while Virtus Real Estate Capital provided $8.5 million in joint venture equity. Construction will commence this month with a planned Summer 2016 opening.

The Cushman & Wakefield team involved in the transactions included executive Managing Director Rick Swartz, Managing Director Jay Wagner, Director Aaron Rosenzweig and associate Stuart Kim.

Written by Cassandra Dowell