Senior Housing Finance Activity: CareTrust, Ziegler

CareTrust REIT, Inc. Announces Launch of Public Offering of Common Stock

CareTrust REIT, Inc. (Nasdaq: CTRE) announced that, subject to market and other conditions, it plans to offer to sell 7.5 million shares of its common stock in an underwritten public offering. The company also expects to grant the underwriters a 30-day option to buy up to an additional 1.125 million shares of common stock. If exercised, all extra shares will be offered at the public offering price per share of common stock in the offering, the company said.

CareTrust REIT plans to contribute the net proceeds to its operating partnership, CTR Partnership, L.P., which intends to fund pending acquisitions and might, in the interim, repay borrowings outstanding on the company’s revolving credit facility.

Wells Fargo Securities, KeyBanc Capital Markets and BMO Capital Markets are acting as joint book-running managers for the offering.

Oxford Finance Provides $27 Million Credit Facility to Cascade Capital Group

Oxford Finance LLC, a specialty finance firm based in Alexandria, Virginia that provides senior debt to life sciences and health care services companies, announced the closing of a $27 million term loan to Cascade Capital Group, LLC. These funds were utilized to buy three skilled nursing facilities (SNFs) in Utah and Colorado.

Cascade Capital is a recently established private equity firm that invests in long-term care facilities. Its facilities are managed by Legacy Healthcare, which is based in Skokie, Illinois and operates 21 facilities in the Chicago region, in addition to the three SNFs recently bought by Cascade Capital.

“We are pleased to work with Cascade Capital and provide financing for the acquisition of three state-of-the-art facilities,” Tracy S. Maziek, managing director at Oxford Finance, said in a statement. “The principals of Cascade Capital are successful veterans in the long term care market, and its management company, Legacy Healthcare, continues to take great pride in providing a high standard of service for its residents.”

“We feel these newly acquired facilities are great opportunities for us in the western United States,” said Chaim Rajchenbach, a principal with Cascade Capital Group.

Planners Seek $60 Million in Tax-Exempt Bonds from City to Finance Senior Living Facility

Planners for a new senior housing development in Chattanooga, Tennessee, are expected to ask for $60 million in tax-exempt bonds from a city panel on March 23 to finance the project.

Atlanta-based nonprofit Samaritan Housing Foundation II plans to oversee the construction of the 104-unit senior living facility. The company has partnered with Texas-based development group WholeLife Cos. and is scheduled to go before the Chattanooga Health, Educational and Housing Facility Board on March 23, according to Stan Brading, president of Samaritan Housing.

The revenue bonds are meant to finance acquisition, construction, installation and equipping of the units, which will be for rent. 

Construction is planned to start later this year, with an opening scheduled for fall 2017.

Cushman & Wakefield Senior Housing Arranges $16.3 Million in Construction Financing for LCB Senior Living, LLC

Cushman & Wakefield Senior Housing Capital Markets, in its exclusive representation of LCB Senior Living, LLC, has arranged $16.3 million in construction financing and joint venture equity for its eleventh senior housing development since it established its development program in 2013. LCB Senior Living is led by the founders of the former Newton Senior Living, which used to be the 16th largest senior housing owner/operator in the country prior to selling its portfolio in 2005.

The Residence at Orchard Grove in Shrewsbury, Massachusetts, will be an 80-apartment/82-resident independent living, assisted living and memory care community. M&T Bank provided $16.3 million in construction financing for the joint venture between LCB and Blue Moon Capital Partners. The project is scheduled to break ground in March 2016 and is anticipated to open by mid-2017.

The Cushman & Wakefield team involved in the transactions included Managing Director Jay Wagner, Executive Managing Director Rick Swartz, Senior Director Aaron Rosenzweig, and Director James Dooley with Associate Caryn Miller.

Love Funding Secures $15.3 Million Loan for the Refinance of Christian Care Home in Ferguson, Missouri

Washington, D.C.-based Love Funding, one of the country’s leading providers of FHA multifamily, affordable and healthcare financing, announced the closing of a $15.3 million loan for the refinancing of Christian Care Home, an assisted living and skilled nursing facility in Ferguson, Missouri.

Christian Care Home, which has 178 beds in 92 units, is one of just two nursing homes in the region that provides on-site dialysis services to its residents. The building is owned by Christian Woman’s Benevolent Association, a non-profit, Missouri-based corporation that was established in 1911 to care for impoverished mothers and their children.

Love Funding Senior Director Robyn Cunningham and Director Adrian Hartman of the St. Louis office secured the financing via the U.S. Department of Housing and Urban Development’s 232/223(a)(7) LEAN loan insurance program. This is the second time in under three years that Love Funding has refinanced the property’s debt, the most recent transaction occurring in 2013. Love originally financed the construction of the facility in June 2009 under the Section 232 program.

“Being a not-for-profit who predominantly serves Medicaid patients, cash flow is critical to us being able to continue our mission to serve the needs of the community,” said Viola Weible, president of Christian Woman’s Benevolent Association. “This is the third time we have worked with Love Funding, and each refinancing has helped improve our ability to meet these needs. We keep going back to them because they understand our operation and work with us to get through the process as efficiently as possible.”

Cushman & Wakefield Senior Housing Capital Markets Arranges Recapitalization of Entrance Fee CCRC in Mystic, Connecticut

As advisor to a venture between Des Moines, Iowa-based LCS and Lake Forest, Illinois-based Westminster Capital, Cushman & Wakefield Senior Housing Capital Markets has arranged the recapitalization of StoneRidge, a class A, 267-unit, entrance-fee life plan community, formerly known as a continuing care retirement community (CCRC), located in Mystic, Connecticut. ROC Seniors, a private equity real estate fund manager, is set to replace Westminster Capital in the joint venture with LCS. Life Care Services, the management arm of LCS, will keep managing the community.

StoneRidge was constructed in three phases starting in 2004 and was the first in a series of communities jointly owned with Westminster Capital and developed by LCS Development, An LCS Company. The facility has 267 independent living apartment units, 12 memory care units and 40 skilled nursing beds.

Additionally, Cushman & Wakefield acted as the exclusive debt placement agent to the acquisition group and arranged the financing with Bank of America Merrill Lynch.

The Cushman & Wakefield team involved in this transaction included Executive Managing Director Richard Swartz, Senior Director Aaron Rosenzweig, Managing Director Jay Wagner, and Associates Caryn Miller and Stuart Kim.

“The market was very responsive to StoneRidge’s dominant market position and recognized that this was highly likely to continue given the high barriers to entry inherent with the development of high-quality, multi-phased entry fee CCRCs,” Swartz said. “Furthermore, the transaction offered ROC Seniors a great opportunity to expand their relationship with LCS.” 

Ziegler Closes $44.19 Million Financing for Sunny Vista Living Center

Ziegler, a specialty investment bank based in Chicago, announced the successful closing of the $44,185,000, unrated, fixed-rate Series 2015 Bond issue for Sunny Vista Living Center in Colorado Springs, Colorado.

Sunny Vista Living Center (SVLC) has a total of 110 skilled nursing beds and 50 one-bedroom independent living apartments for seniors and disabled adults with Section 8 subsidies through the U.S. Department of Housing and Urban Development (HUD).

The 2015 project included a plan to develop 38 assisted living units and 28 memory care units with 32 beds located on an approximately 4.78 acre site. The “New Assisted Living Facility” is expected to comprise about 55,500 square feet and include a multi-purpose lounge with fireplace and attached outdoor deck, a family room with connected outdoor patio, a life enrichment room, a life skills lounge, a private dining room and more.

Parallel to the Series 2015 transaction, the Villa at Sunny Vista (the Villa) and SVLC merged at the time of closing, with Sunny Vista Living Center surviving the two entities. Prior to the merger, SVLC and the Villa, owner of the 50-unit HUD facility, maintained an affiliated relationship and interconnected operations. Today, SVLC’s CEO is also the CEO of the Villa; and specific employees of SVLC, under the supervision of the Villa’s chief executive officer, maintain the independent living facility plant.

Because of the merger, the Villa and SVLC will present its facilities as a single, consolidated campus. The addition of the new assisted living units will permit SVLC to have a CCRC on its campus. As a nursing facility provider, SVLC is currently subject to a provider fee. With the merger of SVLC and the Villa, which enables the two entities to operate as one entity under which all three levels of care are offered, SVLC will qualify for the provider fee exemption, which frees up more than $402,000 in its stabilized year of 2019.

The 2015 financing is comprised of $42,260,000 of Series 2015A Tax-Exempt Fixed Rate Bonds and $1,925,000 of Series 2015B Taxable Fixed Rate Bonds. Series 2015A Bonds include $2,370,000 Term Bond maturing in 2025, $3,850,000 Term Bond maturing in 2030, $5,060,000 Term Bond maturing in 2035, $15,810,000 Term Bond maturing in 2045 and $15,170,000 Term Bond maturing in 2050. Series 2015B Bonds include $1,290,000 Term Bond maturing in 2019 and $635,000 Term Bond maturing in 2021.

The Serial and Term Bonds are being issued to: a) refund the Series 2004A US Bank Loan; (b) refund the Series 2010 BBVA Compass Loan; (c) finance the construction and equipping of a new 70-bed facility, comprised of 38 Assisted Living units and 32 Memory Support beds; (d) fund a working capital fund for the benefit of the owners of the Series 2015 Bonds; (e) fund a debt service reserve fund for the payment of principal and interest on the Series 2015 Bonds; (f) finance a funded interest fund for the payment of interest on the Series 2015 Bonds; (g) finance the swap termination fee relating to the Series 2010 Bonds; and (h) finance certain costs incurred to issue the Series 2015 Bonds.

Written by Mary Kate Nelson