Senior Housing Finance Activity: Capital One, Walker & Dunlop

Walker & Dunlop Arranges $11M Loan for Fla. Independent Living Facility 

Walker & Dunlop, Inc. (NYSE: WD) provided an $11,000,000 acquisition bridge loan for Campo Felice Riverfront Housing, located in downtown Fort Myers, Fla.

The MacFarlane Group, LLC will use the loan for the conversion of the currently vacant Ambassador Hotel to an independent living facility that will include 323 units.

“The development plan for the property is fully approved, and the borrower has obtained significant government incentives, demonstrating the support of the local community for the project,” Walker & Dunlop says in a statement.

Daniel Lisser, New York-based senior vice president, led the Walker & Dunlop team that structured the one-year bridge loan, which includes full-term interest only payments.

ACRES Capital, a bridge lender, provided the financing after the original lender dropped out of the deal.

Walker & Dunlop educated ACRES Capital on the property and the nuances of the transaction and was able to maintain the initial closing timeframe.

“This transaction reflects the current high demand for bridge loans to reposition properties located in thriving market areas,” Lisser says. “ACRES Capital quickly took advantage of the opportunity to expand its new portfolio with Campo Felice, a strong asset that will enhance the Fort Myers community.”

Ziegler Closes $66M Financing for N.C. CCRC

Ziegler, a specialty investment bank, closed a $66,135,000 non-rated, tax-exempt, fixed-rate Series 2015 bond issue for Pennybyrn at Maryfield, a Ziegler client since 2005.

Maryfield, Inc. is a North Carolina not-for-profit corporation incorporated in 1947 by the Congregation of the Poor Servants of the Mother of God, an order of the Roman Catholic Church.

The corporation owns and operates a continuing care retirement community (CCRC) known as Pennybyrn at Maryfield (Pennybyrn) located on 68 acres in High Point, North Carolina. Pennybyrn currently consists of 180 independent living units (131 apartments and 49 cottages); 48 assisted living units (24 standard care and 24 memory  support); and 125 skilled nursing beds.

Proceeds of the Series 2015 Bonds will be used, together with other available funds, to advance refund all the outstanding Series 2005A Fixed Rate Bonds and Series 2005B EXTRASSM, currently refund all of the outstanding Series 2010 Bonds (direct bank private placement), fund a debt service reserve fund for the bonds and pay certain fees and expenses incurred in connection with the sale and issuance of the Series 2015 Bonds.

“Pennybyrn at Maryfield is the epitome of our not-for-profit senior living clientele: they operate a beautiful, resident-directed, efficiently-run and missioned-oriented organization,” says Tad Melton, director in Ziegler’s senior living practice, in a statement. “We were proud to be associated with their repositioning in 2005 and were equally honored to help facilitate this refinancing, which will yield meaningful savings as a result of the current market interest rates and Pennybyrn’s stabilized credit.”

Capital One Closes $11M FHA Loan to Refinance Ill. SNF

Capital One Multifamily Finance provided a $10.9 million fixed-rate, HUD 232/223(f) loan to refinance a 133-bed skilled nursing facility in Northern Illinois.

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

“The borrowers have again turned to the 232/223 (f) program because they see it as an extremely effective way to lock in current low interest rates for the long term,” Rosen says in a statement, adding that the program is also attractive to skilled nursing operators because eligible loans are nonrecourse and fully assumable.

The property was built in 1962, with an addition in 1985 and substantial renovations and improvements between 2005 and 2012. The current owners acquired the property in 2012, and have upgraded resident rooms and bathrooms.

Capital One also structured a HUD-approved master accounts receivable line.

Capital One Bank’s Commercial Real Estate Group offers a an array of financing solutions for property owners and developers nationwide, including balance sheet and agency lending.

Lancaster Pollard Completes Financing for Texas Affordable Seniors Housing Community 

Located in La Porte, Texas, Happy Harbor Apartments is a 51-unit affordable seniors housing community with a Sec. 8 Housing Assistance Payment (HAP) contract on all 51 units.

Originally constructed in 1983, the site is owned and managed by Methodist Retirement Community (MRC) and is part of its Healthy Living Communities.

Working with Lancaster Pollard, MRC completed a refinance in 2006 using the FHA Sec. 223(f) program that prepaid the original FHA Sec. 202 loan.

“Since that time, the foundation of the site shifted substantially which in turn caused cracking and plumbing fixture displacement,” says Lancaster Pollard in a statement. “With interest rates currently lower than they were in 2006, ownership sought to complete another refinance with Lancaster Pollard that would not only lower its debt service but also provide funds for repairs.”

MRC obtained a $500,000 affordable housing preservation grant from the Federal Home Loan Bank in Dallas to be used as part of the funding structure. Additionally, Lancaster Pollard sought to underwrite a
structure that borrowed funds from two related MRC properties to help finance the repairs needed at Happy Harbor.

To mitigate any adverse effects on the two related properties, Lancaster Pollard processed interest rate reduction requests for both properties that would increase cash flow and replacement reserve deposits, ensuring they will be able to address any unanticipated repairs.

The final piece of the funding structure was a $2.2 million loan insured by the FHA Sec. 223(f) program. Lancaster Pollard orchestrated the FHA loan closing as well as the borrowing of funds from the related MRC properties.

The transaction provided for nearly $930,000 in repairs for the foundation, plumbing fixtures, drywall repair, painting and other related damage.

“The repairs will greatly improve the facility and ensure that the residents live in a safe and comfortable environment for years to come,” says Lancaster Pollard.

Scott Blount, based out of Lancaster Pollard’s Austin, Tex. office, led the transaction.

Washington State Housing Finance Commission Approves Financing for Seniors Apartments 

Developers and nonprofit organizations will create or renovate 457 affordable homes across the state, thanks to almost $67 million in financing approved last Friday by the Washington State Housing Finance Commission.

One of the projects will renovate 141 apartments for seniors in Yakima.

“We are very pleased to be a part of creating and renovating these affordable homes, which will not only help individual households but also create jobs and enhance communities across the state,” says Karen Miller, chair of the Housing Finance Commission, in a statement.

This project was funded after successfully competing for Low-Income Housing Tax Credit allocations in the 2015 round. The Low-Income Housing Tax Credit helps affordable-housing developers raise capital for new buildings and renovations by selling the credits to investors.

Carmel Senior Housing Inc. is receiving a $12.5 million estimated tax-credit equity. The dollar amount is the estimated tax credit equity over 10 years.

“These 141 apartments for seniors will be both renovated and preserved as affordable housing for several more decades thanks to this financing,” says the Washington State Housing Finance Commission in a statement. “Sun Tower is one of very few affordable housing projects in the state that offer both independent and assisted-living apartments in the same building.”

HHC Finance Closes Over $210M in HUD Loan Modifications in March, April

HHC Finance closed over $210 million in HUD loan modifications for skilled nursing facilities through March and April.

The properties are located in 14 different states, and the owners range from single property owners to a publicly-traded real estate investment trust (REIT).

The 26 loan modifications resulted in interest rate reductions on their HUD loans.

“HHC Finance was prepared to act quickly on the modifications when interest rates started to drop again in January,” says HHC Finance in a statement.

HUD introduced the loan modification program as a streamlined way for its borrowers in good standing to reduce their interest rates without extending their loan terms or getting additional loan proceeds.

Written by Cassandra Dowell