Senior Housing Finance Activity: OnShift, NorthPoint

KeyBank Provides $202.1 Million Loan for Texas-Based Independent Living Portfolio

KeyBank Real Estate Capital provided $202.1 million in Freddie Mac financing to a joint venture between Discovery Senior Living and Kayne Anderson Real Estate Advisors for their Conservatory Senior Living portfolio, an independent living portfolio consisting of five properties in Texas.

The Class A seniors housing communities were all constructed between 2005 and 2007 and house between 188-237 units each, adding up to 1,053 units in total. Carolyn Nazdin and Charlie Shoop of KeyBank’s Healthcare Mortgage Group worked alongside Paul DiVito of KeyBank’s Healthcare Real Estate Group to arrange the 10-year, non-recourse, adjustable-rate financing, which was utilized to refinance an existing loan.

OnShift Raises $18 Million in Series D Financing

Cleveland, Ohio-based OnShift, which delivers cloud-based human capital management software and proactive services to solve everyday workforce challenges in health care, announced that it has closed $18 million in Series D financing. Health Velocity Capital led the round, which also involved participation from OnShift’s existing institutional investors: Early Stage Partners, Draper Triangle Ventures, Fifth Third Capital, North Coast Venture Fund, HLM Venture Partners and West Capital Advisors.

“We believe this capital will allow OnShift to accelerate market penetration and rapidly scale the development of new and innovative SaaS products in human capital management,” Marty Felsenthal, managing member of Health Velocity Capital, said in a prepared statement.

The Series D investment is expected to be utilized to expand OnShift’s product development and accelerate sales and marketing plans.

“Workforce issues in long-term care and senior living are more critical today than ever before,” OnShift CEO Mark Woodka said. “This investment reinforces our commitment to alleviate the burdens of staffing and labor management while accelerating our plans to expand in the senior care market. Our customers’ success means the most to us, and we are looking forward to continuing to grow in partnership to address their needs.”

NorthPoint Arranges $7 Million Refinancing for 134-Unit Seniors Housing Community in Michigan

NorthPoint Capital Funding has arranged the $7 million refinancing of The Whitcomb Senior Living Community, a 134-unit community in St. Joseph, Michigan.

The property, which was originally built as a hotel in 1928,  was converted to seniors housing in 1973. NorthPoint Capital Funding is a subsidiary of Chicago-based lender NorthPoint Capital Group.

Love Funding Provides $17.8 Million Construction Loan for Assisted Living Community in Florida

Washington, D.C.-based lender Love Funding has provided a $17.8 million construction loan to construct Heritage Oaks Assisted Living and Memory Care, a 118-unit seniors housing community in Englewood, Florida.

Love Funding’s Tammy Tate secured the 40-year, non-recourse financing via the HUD 232 program. Heritage Oaks will have 32 memory care units and 86 assisted living units in a two-story building operated by Beacon Communities. The initial 10-acre site will be part of a bigger 60-acre campus, and the second phase of development will add independent living to the community.

Georgia-based CDH Partners is serving as the design architect for the project, which Florida-based Core Construction Services is slated to construct. 

Cain Brothers Structures $51.77 Million Series 2016 Issue for Kingswood Senior Living Community

Cain Brothers underwrote $51.77 million of The Industrial Development Authority of the City of Kansas City, Missouri Senior Living Facilities Revenue Bonds Series 2016 for the Kingswood Senior Living Community, a fully licensed continuing care retirement community (CCRC) operated by Life Care Services in Kansas City, Missouri. The Series 2016 Bonds were structured as non-rated, long-term, fixed-rate bonds, and proceeds were utilized to recapitalize Kingswood’s balance sheet, refinance prior indebtedness and finance a campus repositioning program.

Kingswood has dealt with persistent systematic financial and operating challenges that resulted in years of underfunding capital improvements to its campus. With about 40% of their independent living apartments obsolete and difficult to market, a lack of memory care on campus, just 14 units of assisted living and generally poor campus curb appeal, Kingswood also had trouble filling its 82-bed skilled nursing facility, Cain Brothers said.

Consequently, Kingswood was in violation of multiple financial covenants, had limited liquidity and little new debt capacity for capital access, Cain Brothers explained. Despite this, over a multi-year period, Cain Brothers’ helped Kingswood create a development team that included LCS Development to create a campus repositioning and financial turnaround and recapitalization plan to guarantee long-term sustainability. Most of the space occupied by the 80 unmarketable apartments was repurposed and converted into 23 new memory care units and 30 new assisted living units. Additionally, a significant number of improvements were made throughout the campus to the common areas, including a new entry way, a new bistro, a new multi-purpose room and numerous infrastructure improvements.

Cain Brothers successfully secured the $2 million of mezzanine capital required to advance the development plan, as well as fund entry-fee refund obligations and capital expenditures. Cain Brothers then delivered $51.7 million of permanent financing that consisted of 35-year, non-rated fixed rate bonds that were sold at a rate of 6%, despite the issuer’s marketing limitation that the bonds be sold exclusively to Qualified Institutional Buyers. The financing permitted Kingswood to bolster its credit metrics, fund its repositioning plan and position itself for the future, Cain Brothers said.

Grandbridge Real Estate Capital Closes $30.25 Million Loan

The Atlanta-based Seniors Housing and Healthcare Finance Team of Grandbridge Real Estate Capital recently closed a $30.25 million permanent, floating rate, first mortgage loan secured by Brightview North Andover, a 133-unit seniors housing community in North Andover, Massachusetts. Funding for the refinance was arranged through Fannie Mae’s DUS Structured Adjustable Rate Mortgage (SARM) loan product.

Brightview North Andover offers assisted and independent living, in addition to memory care. The transaction was originated by Senior Vice President Richard Thomas. 

Lancaster Pollard Helps Jennings Obtain $28.3 Million

Lancaster Pollard recently helped Jennings, a not-for-profit organization sponsored by the Sisters of the Holy Spirit, obtain $28.3 million to finance a new construction project and refinance existing debt.

Jennings’ campus in Garfield Heights, Ohio, has 54 assisted living suites, 10 independent living villas, 174 private skilled nursing suites, adult day services, child and infant day care, a wellness center, transportation services and community programs. Additionally, Jennings serves more than 200 individuals in four independent apartment complexes.

Leaders at Jennings were looking to refinance the existing debt for its Garfield Heights campus, held in the form of Series 2009 bonds. In addition, Jennings was hoping to secure funds to build a new 74-suite assisted living community in Brecksville, Ohio.

Jennings, working with Lancaster Pollard, opted for a two-stage approach to achieve its goals. First, it would refinance its Series 2009 bonds with a HUD/FHA loan, taking advantage of the program’s low interest rate, long-term and amortization and non recourse feature, Lancaster Pollard said. With the Brecksville new development anticipated, the FHA refinance would place the campus’s permanent debt in the name of a new real estate holding firm. That would enable the separate borrower and operator of the Garfield Heights campus to make distributions of excess cash flow to the Brecksville project with no restrictions. The second stage would then finance the new construction project through the utilization of tax-exempt, privately placed bonds.

Lancaster Pollard first refinanced Jennings’s Series 2009 bonds using a $12.6 million loan through the FHA Sec. 232/223(f) program. The refinance clears Jennings’s balance sheet and permits excess cash flow from the Garfield Heights campus to the Brecksville project. Nine months after the FHA Sec. 232/223(f) loan closed, Lancaster Pollard assisted Jennings with the placement of $15.7 million in Series 2015 tax-exempt bonds with a national bank to finance the new Jennings at Brecksville development.

The new development is slated to have 74 assisted living suites. Kass Matt of Lancaster Pollard led the transaction.

Written by Mary Kate Nelson