Recent Senior Housing & Care Finance Activity: Lancaster Pollard & Cambridge (2/16/2012)

Lancaster Pollard Structures Financings for Four Ohio Senior Living Communities

Lancaster Pollard recently facilitated $36 million of financing for four Ohio nonprofit senior living communities, led by senior vice president Kass Matt out of the firm’s Columbus, Ohio office.

“We were successful in providing historically low interest rates while utilizing flexible and efficient financing vehicles for their capital projects and refinancing needs,” said Matt.

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The firm structured a $7.7 million, 25-year, tax-exempt, bank-qualified bond issue that was privately placed with a local bank at a 10-year fixed rate for Mennonite Home Communities of Ohio in Blufton. The financing will be used to fund renovations of the Mennonite Memorial Home, refund existing indebtedness of about $2 million, and build two 10-unit, “Green House” model facilities.

Another transaction was for Methodist Eldercare Services, which Lancaster Pollard helped fund $9 million in bank-qualified variable-rate bonds to construct a new community center featuring a 19-unit, 25-bed skilled nursing facility, at its Wesley Ridge location in Reynoldsburg. Along with the new bonds, the senior living provider also financed a $500,000 acquisition of new land for future expansion of the community.

Lancaster Pollard assisted Mason Christian Village, located in Mason, in refinancing two first mortgages through the FHA’s Section 223(a)(7) program for $11 million. This refinancing will save the property $41,691 in annual debt service, for $837,289 during the remaining term of the loan, and will also fund $537,307 in repairs.

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The last financing transaction was for Quaker Heights Care Community, in Waynesville, which refinanced the property’s outstanding FHA/GNMA bonds for $8.2 million through the FHA’s Section 223(a)(7) program. This produced more than $90,000 in annual debt-service savings, and the community also financed about $47,000 for roof repairs.

Cambridge Realty Provides $7.2 Million Refinancing Loan to Kansas ALF

Cambridge Realty Capital Companies provided a $7.2 million HUD Lean loan to refinance Rose Estates, an 80-bed Kansas assisted living facility located in Overland Park. The transaction was a fully-amortized, 35-year term loan arranged by Cambridge Realty Capital Ltd. of Illinois for the facility’s owner, a limited liability company based in Kansas. The property was refinanced through HUD’s Section 232 program, pursuant to the Section 223(f) funding program, with an undisclosed interest rate.

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Lancaster Pollard Arranges More than $22 Million of Financing for Non-Profit Facilities

  • The firm refinanced Heartland Christian Village’s outstanding FHA-insured bonds for $4 million through the FHA Section 223(a)(7) program, reducing the interest rate by nearly 200 basis points and producing about $50,000 in annual debt-service savings. The loan was for a senior living community located in Neoga, Ill. which is comprised of a 71-bed skilled nursing facility and eight independent living units.
  • For Plaza Apartments, a New Jersey Section 8 multifamily apartment building for seniors, Lancaster Pollard obtained a $4.5 million refinance insured by the FHA Section 223(f) program, which will save the property nearly $57,000 in annual debt service, fund necessary $1.3 million repairs, and provide about $44,000 in reserves.
  • Lancaster Pollard helped Cheney Care Community, a CCRC located in Cheney, Wash., to refinance the property’s outstanding FHA-insured bonds through the FHA 223(a)(7) program, which reduced the interest rate and generated more than $67,000 in annual debt-service savings. Cheney Care Center Association, a non-profit community organization, owns and operates the community and was able to complete more than $30,300 in repairs and improvements.
  • Aston Park Healthcare Center, located in Asheville, N.C., obtained capital to renovate and expand its lobby and therapy spaces with an assist by Lancaster Pollard, who structured a transaction that used a taxable 30-year fully-amortizing, fixed-rate note insured by the FHA Section 232/223(f) program to replace a variable-rate bond issue, enhanced by a short-term bank letter-of-credit. The transaction helped the 143-bed senior living facility to fund a $1.7 million renovation and added $289,601 to its replacement reserves.
  • Lancaster Pollard closed an FHA-insured financing through the Section 232 LEAN program for Lakeview Lutheran Manor, a 163-bed skilled nursing facility located in Cadillac, Mich. The transaction will allow the facility, which is operated by Lutheran Social Services of Michigan, to undergo a $3.9 million renovation that will demolish two wings and completely renovate two wings while updating another two wings with minor renovations. Lancaster Pollard assisted in negotiating the release of the property as collateral from a letter-of-credit related to a 2007 bond issue, and then secured HUD mortgage insurance at a long-term rate, which will save the operator $3,000 a month over its budget. The planned renovations will allow Lakeview to operate at 133 beds, with an expected improved payor mix and occupancy rate.

Lancaster Pollard Obtains $24.5 Million of Loan Refinancing for Two Ohio Senior Living Facilities

Lancaster Pollard recently arranged $24.5 million of loan refinancing for two Ohio senior living facilities using the FHA’s Section 232/223(f) program. Both facilities are owned and operated by Sprenger Health Care Systems, which worked with Lancaster Pollard to develop a strategy to refinance several facilities using the FHA 232 LEAN program to free up capital from the operator’s existing bank group syndicate.

The outcome of the first transaction, a $8.9 million refinance for Heather Knoll Retirement Village, a 115-bed skilled nursing facility, was a loan with an interest rate below 4% for 30 years and a large deposit into the operator’s replacement reserve. The second refinance, for $15.6 million for the Towne Center Community, a 130-bed skilled nursing and assisted living facility, resulted in a below-4% interest rate for 30 years and another “significant” deposit into the replacement reserve.

“Working with such a high-quality operator with first-class facilities really made this a smooth transaction,” said Kass Matt, who led the refinancings out of Lancaster Pollard’s Columbus, Ohio headquarters.

Cambridge Secures $4.5 Million HUD Refinancing Loan for Illinois SNF

Cambridge Realty Capital recently closed on a $4.5 million HUD Lean loan for Bethany Healthcare and Rehabilitation Center, a 90-bed skilled nursing home facility in DeKalb, Ill. Cambridge Realty Capital Ltd. of Illinois underwrote the loan, which was arranged using HUD’s Section 232/223(a)(7) program.

Cambridge Arranges $11.3 Million Refinance for Illinois Nursing & Rehab Center

Cambridge Realty Capital recently closed on a $11.3 million HUD Lean loan to refinancing Columbus Park Nursing and Rehabilitation Center, a 216-bed skilled nursing home located in Chicago, Ill. The facility is owned by an Illinois limited liability company, which was able to obtain a fully-amortized, 30-year term loan with an undisclosed interest rate, underwritten by Cambridge Realty Capital Ltd. of Illinois.

Companies featured in this article:

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