Senior Housing Finance Activity: Cain Brothers, CapitalSource

Cain Brothers Funding Arranges $14M Financing for Calif. Assisted Living Facility 

Cain Brothers Funding, LLC, the mortgage banking affiliate of Cain Brothers, arranged a $13,677,500 mortgage loan insured under the FHA Section 232-223(f) program for Eskaton Lodge Granite Bay, a 105-unit non-profit assisted living facility located in Northern California.

The proceeds of the new loan were used to retire existing bank debt and an interest rate swap, said Cain Brothers Funding in a release. As a result of the refinancing, Eskaton was able to eliminate the risks associated with the bank debt/swap structure and replace it with a 35-year fully amortizing loan with a fixed mortgage noteinterest rate of 3.07%.

Eskaton provides residences, community services, and healthcare to support the independenceand quality of living for more than 14,000 older adults annually throughout northern California.

Cain Brothers Funding Arranges $18M Financing for N.Y. Skilled Nursing Center

Cain Brothers Funding, LLC, the mortgage banking affiliate of Cain Brothers, arranged a $17,800,000 mortgage loan on behalf of Saints Joachim and Anne Nursing & Rehabilitation Center, a 200-bed skilled nursing center, located in Brooklyn N.Y, and owned by Catholic Charities of Brooklyn and Queens.

The purpose of the loan was to refinance existing commercial bank and tax-exempt bond indebtedness to a lower rate while maintaining flexibility for the borrower to repay the mortgage after one year.

“Being located in Coney Island presented additional environmental underwriting challenges as the facility was directly affected by super storm Sandy,” Cain Brothers Funding said in a release.

Utilizing the FHA 232-223(f) FHA mortgage insurance program Cain Brothers Funding was able to obtain, on behalf of SS Joachim & Anne Nursing & Rehabilitation Center, a commitment for insurance that enabled the center to obtain substantial operational relief as a result of the annual cashflow relief of over $440,000.

The loan was structured to allow SS Joachim and Anne Nursing & Rehabilitation Center the ability to prepay the loan after one year.

CapitalSource Provides $56M Credit Facility to Welcov Healthcare

CapitalSource, a nationally recognized commercial lender to small and mid-sized businesses, provided a $56.1 million credit facility to Welcov Healthcare to refinance existing debt and provide growth capital to Welcov.

The credit facility includes a senior term loan, cash flow term loan and a revolving credit facility.

Founded in 1997, Welcov Healthcare serves thousands of clients in its over 60 long-term care, short-term care and assisted living facilities, and home health agencies located throughout Minnesota, South Dakota, Montana, Iowa, Nebraska and Wyoming.

Welcov will use the proceeds from the credit facility to access additional liquidity to fuel opportunistic acquisition growth.

“We worked closely with Welcov to better understand their wants and needs and developed a flexible and creative mortgage, cash flow and asset based solution,” said Don Kelly, senior director at CapitalSource, in a release. “Each piece of the credit facility offers significant future draw capabilities for acquisitions and other corporate growth needs to address Welcov’s capital objectives.”

The deal was brought to CapitalSource’s Healthcare Finance Group by Aaron Osmundson of Quadriga Partners.

“Both CapitalSource and Welcov have a long track record of success in the healthcare sector and proven industry expertise” said Osmundson.

Cambridge Arranges $8M HUD Lean Loan to Refinance Kan. Assisted Living Community

Cambridge Realty Capital Companies arranged a $7,710,000 HUD Lean loan to refinance Lamar Court Assisted Living Community, a skilled care nursing facility located in Overland Park, Kan.

Jeffrey A. Davis, Cambridge chairman, said the fully-amortized, 32-year loan was arranged for the owner, a Missouri limited liability company, using the HUD Section 232 pursuant to Section 223(f) funding program, in a release.

Underwriting the transaction was Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUD loans.

Lamar Court Assisted Living Community is an 86-bed facility specializing in assisted living services. It offers a variety of health care services and non-medical services including on-site meals, activities and day trips.

CapitalSource Provides $28.5M Acquisition Financing for Calif. Assisted Living, Memory Care Facility

CapitalSource, a division of Pacific Western Bank and a nationally recognized commercial lender to small and mid-sized businesses, provided a $28.5 million senior term loan to facilitate the acquisition of an assisted living facility by WESTliving.

The facility is comprised of 180 units. Launched in 2009, WESTliving is a Carlsbad, Calif.-based owner/operator of senior housing.

Its signature “WESTclass” service expresses a world-class standard in hospitality and services for older adults.

“We sought out a finance partner that has a solid knowledge base and long track record of success in the healthcare sector that could provide a timely execution of the financing, given the strict acquisition timeline we were under,” said John Rimbach, CEO of WESTliving, in a release. “Having worked with Don Kelly on a number of transactions over the years, I had every confidence that he and CapitalSource were the right lending partner to get our deal to the finish line.”

CapitalSource provided the structure, flexibility and execution that WESTliving needed to secure this acquisition with the “urgency and speed necessary for success,” the company said.

Lancaster Pollard Provides $7M Financing for Acquisition of Ore. Assisted Living, Alzheimer’s Facility 

Lancaster Pollard Finance Co. provided $6.7 million of balance sheet financing to fund Benicia Senior Living’s acquisition and rehabilitation of River Grove. River Grove is a 60-unit assisted living and Alzheimer’s care facility located in Eugene, Ore.

The project consists of four resident buildings, each containing 15 units, and an administrative building.

The financing structure, which included senior and mezzanine loans, allowed for the borrower to avoid raising substantial amounts of equity otherwise required for conventional financing. The financing carries five-year terms.

The funding will be used to renovate three of the four buildings and build a commercial kitchen to serve the campus. Once all the renovations are complete, the entire campus will be dedicated to providing care to residents with Alzheimer’s disease and related disorders, said Lancaster Pollard in a release.

The financing was led by Doug Korey, president of Lancaster Pollard Finance Co.

Lancaster Pollard Arranges $5M HUD Loan to Assist Ky. CCRC With Expansion 

Springhurst Pines is structured like a continuing care retirement community (CCRC) and is operated by Baptist Homes, Inc. (BHI), a nonprofit corporation dedicated to providing quality care to all.

Located in Louisville, Ky., Springhurst Pines consists of three facilities on a spacious 20-acre campus.

In 1979, BHI opened what is now Springhurst Health and Rehabilitation, a skilled nursing facility (SNF) that offers both short-term therapy and rehabilitation services as well as longer term complete nursing care.

In 2004, Parr’s at Springhurst opened, which offers personal care with assisted living amenities. Along the way, Cornell Trace was developed, which is a 58-unit patio home independent living community.

To ensure the skilled nursing component kept up with what is becoming an increasingly competitive  market in Louisville, BHI sought to convert 35% of its semi-private Medicaid skilled nursing units to  Medicare/private. Concurrently, BHI sought funding to construct a new 40-unit wing that would be 100% dedicated to Medicare residents and would feature a new therapy space.

Because the SNF and personal care facilities at Springhurst were already encumbered by U.S. Department of Housing and Urban Development (HUD)/Federal Housing Administration (FHA) loans, Lancaster Pollard recommended funding the expansion project using the FHA Sec. 232/241(a) supplemental loan program.

Due to its knowledge of FHA LEAN financing, and the financial strength of the Springhurst campus, the firm was able to obtain HUD approval on a $5.4 million loan with minimal operating deficit escrows.

As a result of the transaction, BHI was able to fund its expansion project at a low cost of capital with a 25-year term and no recourse. In addition, no additional collateral was required from BHI and the financing features a drawdown construction loan, further lowering the cost of capital. The new wing will  consist of 40 private rooms, nurse stations, medical rooms and offices, three activity/dining areas, a rehab gym, salon and a conference room.

Chris Blanda led the transaction for Lancaster Pollard.

Lancaster Pollard Assists Skilled Nursing Operator With $29.5M Financing

Lancaster Pollard recently advised Real Properties Health Facilities Corp. (RPHF) as its placement agent for a $29.5 million financing.

RPHF, headquartered in Las Vegas, Nevada, operates 12 skilled nursing and assisted living facilities with approximately 1,000 available beds in Indiana, Kansas, Montana and Wisconsin.

The financing will be used to consolidate existing real estate debt and for working capital purposes.

Grant Goodman, vice president, led the transaction for Lancaster Pollard.

Written by Cassandra Dowell