Senior Housing Finance Activity: Grandbridge, Northmarq

Grandbridge Closes $17M Mortgage Loan for Wash. Senior Housing Community

Grandbridge Real Estate Capital’s Atlanta-based Seniors Housing and Healthcare Finance team recently closed a $16,875,000 first mortgage loan secured by Courtyard Village, a 127-unit seniors housing community in Vancouver, Wash.

Funding for the acquisition was provided through Grandbridge’s exclusive BB&T Real Estate Funding Structured loan product.

Senior Vice President Richard Thomas and Vice President Meredith Davis originated the transaction.

Courtyard Village offers independent living in a variety of floor plans: studio or one- and two-bedroom apartments. Courtyard’s main building features common areas including a craft/multi-purpose room, large screen TV lounge, library, beauty shop, exercise room, large dining area, a fully equipped commercial kitchen, and laundry facilities.

The duplex style cottages offer two-bedroom/two-bathroom units and provide high-end finishes, washer/dryers, fireplaces and garages. The community also has carports for residents of the main village.

“Although Courtyard is nearly 100% occupied today, our intent is to implement a variety of value-enhancing strategies, which Grandbridge quickly understood and efficiently communicated to the market,” said Curt Schaller, principal of Focus Healthcare Partners, in a statement. “Grandbridge secured an attractive financing option from BB&T Real Estate Funding, which closed as expected without issue.”

Ziegler Refinances $8M for Mo. Senior Affordable Housing Communities 

Ziegler, a specialty investment bank, closed a $7,710,800 refinancing of three Section 202 affordable housing properties, by Ziegler’s Financing Corporation (ZFC), the FHA-insured mortgage lending arm of Ziegler.

The three senior affordable housing properties, all located in the Kansas City area, are owned by Catholic Charities of Kansas City-St. Joseph (Catholic Charities) and are managed by Yarco Company, Inc.

The three projects consisted of: Cathedral Square Towers (156 units), Marlborough Manor (31 units), and Columbus Park Plaza (56 units).

This transaction utilized HUD’s Section 202 refinancing program under Section 207/223(f).

ZFC was able to secure a $4,495,000 mortgage loan for Cathedral Square, $1,447,700 mortgage loan for Marlborough Manor, and a $1,768,100 mortgage loan for Columbus Park Plaza.

ZFC utilizing HUD’s 202 refinancing policy created value for the borrower by refinancing $4,786,000 of Section 202 Direct Loans and secondary financing; capitalizing planned repairs at the properties; generating “cash-out” proceeds to complete additional repairs at Marlborough Manor and fund other expenses; providing for a developer’s fee; and lowering the annual debt service costs.

“This allows us to make improvements that make them more comfortable and encourage social interaction and activity,” said Deacon Dan Powers, CEO of Catholic Charities of Kansas City-St. Joseph.

Catholic Charities offers affordable housing that creates and preserves residential communities promoting wellness and encouraging active and healthy lifestyle choices. This refinancing provided capital for improvements that can only be accomplished with these additional resources and provide a developer’s fee that will allow Catholic Charities to further its mission in the community, said ZFC.

“This refinancing represents another significant step in ZFC’s utilization of the HUD Section 202 refinancing program to aid Sponsors in providing capital to upgrade their projects and generate a developer’s fee as part of the transaction.” said Bill Mulligan, president of ZFC.

BB&T Capital Markets Closes Multi-Million Dollar Bonds for Fla. CCRC

BB&T Capital Markets closed a $63,425,000 Series 2015A Fitchand S&P ”A+” Rated Fixed Rate Bond issue, $23,550,000 Series 2015B Tax-Exempt Bank Loan, and $47,450,000 Series 2015C Tax-Exempt Bank Loan for The Moorings, Incorporated.

The total proceeds will be used to retire The Moorings’ existing Series 2000, 2005 and 2008 Variable Rate Demand Bonds and its Series 2010 Tax-Exempt Fixed Rate Bank Loan, and to fund a portion of the construction of the Moorings Park at Grey Oaks expansion project.

The Moorings opened in 1981 and is a non-profit continuing care retirement community (CCRC) on an 83-acre site in Naples, Fla.

The community consists of a single campus made up of 384 independent living units, 73 assisted living units,and a 106-bed health center.

In addition to the existing campus, The Moorings began planning the Grey Oaks expansion project in 2013 to meet the market demand in Naples, Fla., for modern independent living apartments in a continuing care retirement community setting, said BB&T Capital Markets in a statement.

The Grey Oaks project sits on 15.6 acres, approximately four miles from the existing facility in the Grey Oaks planned development. Upon completion, the Grey Oaks campus will consist of 109 independent living units and 38 assisted living units, 14 of which will be memory care.

The Moorings held all bank debt (approximately $94 million) on their balance sheet with 48% variable, 27% synthetically fixed and 25% fixed.

“The key objectives of the 2015 financing are to create a more stable and flexible capital structure, to blend a more conservative mix of fixed and variable rate debt, and to provide current and future access to capital,” said BB&T Capital Markets said. “To accomplish this, BB&T strategized with the management team to reorganize the Obligated Group and secure The Moorings’ Fitch and S&P “A+” ratings, while taking into consideration the additional debt for the Grey Oaks expansion.”

Furthermore, management and BB&T worked to replace the existing bank debt with a combination of direct bank loans and fixed rate bonds and establishing a level debt structure.

BB&T Capital Markets defined a hybrid financing structure with $63,425,000 Fitch and S&P “A+” rated tax-exempt fixed rate bonds combined with two series of tax-exempt bank placed debt totaling $71,000,000.

A portion of the bank debt and all of the fixed rate bonds would recapitalize the existing debt, while the remaining bank debt would fund a portion of the new project.

The inclusion of the bank loan in the financing structure reduced negative arbitrage, minimized fees, and reduced the overall cost of capital.

“BB&T Capital Markets led the bank loan solicitation process by contacting 15 banks and negotiating terms and covenants to best suit The Moorings’long-term goals,” BB&T Capital Markets said.

Bank of America offered the winning proposal, which included reasonable variable rate pricing and was structured with covenants that mirrored the Master Trust Indenture.

Once the bank component was in place, BB&T marketed the fixed rate component to retail and institutional investors.

BB&T coordinated a “Friends of Moorings Park” retail investor presentation and pursued institutions to describe the project’s highlights and long-term strategy.

More than 40 institutional accounts placed orders.

The result of the marketing and pricing period was “superior pricing of the Series 2015A Bonds as compared to similarly rated health care transactions in the market during the same time period,” the company said.

The Series 2015A fixed rate bonds were issued with a final maturity of 2045 with yields ranging from 0.50% to 4.15%; resulting in a true interest cost of 4.11%.

BB&T Capital Markets leveraged its distribution capabilities with The Moorings’ credit profile to lock in a low cost of capital on the fixed rate bonds that make up approximately 50% of its debt profile, as well as a “very attractive rate and structure” on the combined bank debt, the company said.

NorthMarq Capital Refinances $10M for Wash. Retirement Community 

NorthMarq Capital’s Seattle office arranged a $10 million refinance of Garden Court Retirement Community in Everett, Wash.

Stuart Oswald, senior vice president/managing director of NorthMarq Capital’s Seattle-based regional office, arranged the $10 million refinance of the community, a 148 unit senior housing property.

The transaction was structured with a fully amortized 15-year term. NorthMarq arranged financing for the borrower through its relationship with a life insurance company.

“We also arranged financing for this property 10 years ago and are pleased to have had another opportunity to work with this client,” Oswald said.

This assisted living and independent living community is an owner operated facility that opened in 2004.

Capital One Closes $34M Credit Facility for Calif. Senior Care Owner

Capital One Commercial Bank provided a $34 million credit facility to Rollins-Nelson, an owner and operator of skilled nursing facilities, assisted living facilities and acute hospitals in California.

The financing package consisted of a $30 million senior secured term loan and a $4 million revolving line of credit.

Founded in 1998, Rollins-Nelson has grown rapidly over the last 10 years.

To support this growth, the company has accessed a wide array of capital sources over the years.

“Our team helped them consolidate their complex capital structure at competitive interest rates and provided the banking service solutions they needed to support their growing business,” said Shane Passarelli, senior vice president of Capital One Commercial Bank.

The proceeds from the term loan were used to refinance Glendora Grand, a 342-bed skilled nursing facility located in Glendora, Calif., and Palmcrest, which consists of Pacific Villa, with 99 skilled nursing beds, and Palmcrest House, with 262 residential care facilities for the elderly (RCFE) beds. Palmcrest and Palmcrest House are located in Long Beach, Calif.

The revolving line of credit was allocated between two skilled nursing facilities and used to refinance existing debt and support ongoing operations.

“Capital One Bank provided substantial cost savings by consolidating much of our debt at very favorable terms,” said William Nelson, president of Rollins-Nelson. “With our new, more efficient, comprehensive treasury platform in place, our management will be able to devote more resources to our core mission.”

Capital One’s healthcare team created “a structure with the flexibility to address the company’s needs now while anticipating future requirements,” Nelson said.

Rollins-Nelson will have access to additional liquidity during the term of the loan based on performance objectives.

MS Topeka Receives OK for $17M in Bonds for Kan. Assisted Living Center 

The Shawnee County Commission recently passed a resolution issuing $17 million in bonds for an assisted living center in the River Hill subdivision in Kansas, local media report.

The industrial revenue bonds will cover the cost of constructing, equipping and maintaining a transitional care facility of about 69,500 square feet containing more than 90 beds in southwest Topeka.

The facility is planned for a 10-acre property.

“MS Topeka, LLC filed for approval of the bonds on March 19 and a public hearing on the matter was held on April 16,” writes The Topeka Capital-Journal, adding that the county wouldn’t be liable for the payment of any costs linked to issuing the bonds, and MS Topeka would be responsible for paying off the bonds.

The bonds would be payable solely from rents and revenues due from MS Topeka or anyone else who leases the property.

MS Topeka, LLC, is a subsidiary of Carmel, Ind.-based Mainstreet Property Group, LLC.

A starting date for construction has not yet been set.

Written by Cassandra Dowell