Senior Housing Finance Activity: Red Capital, Five Star Quality Care, Berkadia

RED CAPITAL Closes $125.8 Million of Seniors Housing Loans in March

RED CAPITAL GROUP, LLC’s Seniors Housing Group completed 15 seniors housing transactions for a total of more than $125.8 million in closed loan proceeds in the month of March. Loan types ranged from Ginnie Mae/FHA new construction, refinances, and acquisition/refinances, to Fannie Mae MBS/DUS refinances provided by mortgage banking arm Red Mortgage Capital, LLC and Red Interim loan financing by principal lending arm Red Capital Partners, LLC.

Five Star Quality Care Enters $150 Million Credit Facility


Five Star Quality Care, Inc. (NYSE:FVE) recently entered into a new $150 million secured revolving credit facility. This comes in addition to the senior living owner/operator’s existing $35 million secured revolving credit facility that has a maturity date of March 18, 2013 with the option of extending the facility up to April 13, 2017.

Drawings under the new credit facility will bear interest at LIBOR plus a spread of 250 basis points. The facility is secured by 15 senior living communities owned by Five Star that have a total assessed value of approximately $230 million. The owner/operator also owns an additional 12 senior living communities unencumbered by debt.

Citigroup and RBC Capital Markets were the joint lead arrangers and bookrunners for the new facility, with participating banks including administrative agent Citibank, N.A.; syndication agent Royal Bank of Canada; co-documentation agents CIT Bank, Compass Bank, PNC Bank: National Association, and The Huntington National Bank; and lenders Comerica Bank, RBS Citizens, N.A., and UBS Loan Finance LLC.


Housing Investment Trust Provides $6.6 Million for Low-Income Senior Housing Projects

The AFL-CIO Housing Investment Trust is providing $6.6 million in financing for two existing low-income senior housing projects in Shrewsbury, Missouri, according to the St. Louis Business Journal.

The money will go toward renovation the St. Joseph and Holy Infant apartments in Shrewsbury, and will also allow the properties to refinance their existing debt.

The investment trust says that the investment of union pension capital in the combined $13 million projects will provide the two properties with capital to continue operations for another 20 years. St. Joseph and Holy Infant provide a combined 157 units of housing for low-income seniors. The rehab work that HIT is financing will convert most of the existing efficiency apartments into one-bedroom units and will also go toward renovating kitchens and bathrooms to make them more accessible, and expanding community spaces.

Cardinal Ritter Senior Services own and manage both properties.

Berkadia Originates $46 Million for Two LeisureCare Senior Housing Properties

Berkadia Commercial Mortgage LLC recently closed a $46.4 million loan for two LeisureCare-operated seniors housing properties in Portland, Ore.

Russellville Park East and West are two senior housing properties located next to each other and operated as one combined campus. The East property was built in 2004 and has 154 independent living units. By 2008, the property was stabilized at 99% occupancy, at which point construction began on the West property, located on an adjacent parcel of land. Russellville West opened in 2009 and has 27 independent living, 95 assisted living, and 16 memory care units.

The Russellville community also features three restaurants, a bar, a coffee shop, a salon, a spa, and a gym.

The loan, originated by Berkadia’s Heidi Brunet, vice president in the company’s Senior Housing Group, was funded through Berkadia’s bridge loan program along with BBVA Compass and was used to refinance existing mortgages on these two properties.

Cambridge Realty Capital Arranges $13.3 Million Refinance for Nevada SNF/ALF

Cambridge Realty Capital Companies recently closed a $13.3 million refinancing using HUD’s Lean program for Highland Manor of Elko, a senior care facility located in Elko, Nevada.

The 147-bed skilled nursing and assisted living facility was able to refinance to a fully-amortized, 35-year term mortgage using HUD’s Section 232/223(f) program. Cambridge Realty Capital Ltd. of Illinois underwrote the transaction for the facility’s owner, a Nevada limited liability company. The loan’s interest rate was not disclosed. 

Love Funding Closes $5.02 Million Refinancing for Ohio SNF

Love Funding recently announced the closing of a $5.02 million loan refinancing for a Minster, Ohio senior care facility. Heritage Manor Skilled Nursing and Rehabilitation Center, built in 1977, is operated by a subsidiary of Vrable Healthcare Inc. and has 109 beds in 61 units.

Robert Smallwood, a senior director in Love Funding’s Cleveland office, secured the loan through HUD’s Section 232/223(f) program, and was able to lock in a low fixed interest rate over a 33-year term. This will generate approximately $215,000 of additional cash flow each year, plus $215,000 for repairs and replacement reserves. 

Last September, Smallwood secured financing for two loans for a total of $12.3 million to help Vrable, based in Columbus, Ohio, to acquire two in-state skilled nursing facilities. 

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