Senior Housing Finance Activity: Lancaster Pollard, Red Mortgage Capital, Love Funding (5/3/12)

Lancaster Pollard Has Record Month in April, Closes $166.2 Million in Transactions

Lancaster Pollard closed 25 transactions in April totaling $166.2 million, marking the firm’s most prolific month to date since going into business in 1988. Out of the 25 deals, 23 were for senior housing and care providers; the other two were in the affordable housing sector.

The deals were spread across 11 states, with eight in Ohio, four in Mississippi, four in Alabama, two in Virginia, and one each in Illinois, Kansas, Kentucky, North Carolina, North Dakota, Pennsylvania, and Oklahoma.

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“April has been a fairly remarkable month for the firm with transactions closing on a near continuous basis,” said President and Founder T. Brian Pollard.  “All closings, regardless of size, require considerable effort and coordination between our respective team members.  Although April is notable from the sheer volume of activity, it only reminds me how important all of our work is in delivering such favorable outcomes for our clients throughout the year.”

Lancaster Pollard Closes $11 Million Refinancing for N.C. Senior Living Community’s SNF

One of Lancaster Pollard’s financing deals mentioned above was an $11 million refinancing loan for Westchester Manor Health and Rehabilitation Center, a 127-bed skilled nursing facility that’s part of a senior living retirement community located in High Point, N.C.

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The refinancing was done using HUD’s Section 223(a)(7) program and generated nearly $200,000 in annual debt-service savings for Westchester Manor. John Randolph, out of Lancaster Pollard’s Atlanta office, led the team for the financing transaction.

NHI Enters $320 Million Unsecured Credit Facility

National Health Investors, Inc. (NYSE:NHI) announced on May 1 it had entered into an amended $320 million unsecured credit facility that includes $120 million of combined 5-year and 7-year term loans that were drawn immediately at closing to pay down revolving credit borrowings, and for other corporate purposes.

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The credit facility also includes an uncommitted incremental facility feature that allows for an additional $130 million of total borrowings.

Wells Fargo Securities, LLC was sole bookrunner for the $200 million revolving line of redit, while BMO Capital Markets was sole bookrunner for the $120 million 7- and 5-year term loan facility. Other banks in the credit facility are KeyBank, Bank of America, and Pinnacle National Bank.

This facility replaces a smaller credit facility scheduled to mature in 2015. It provides for unsecured, revolving borrowings of up to $200 million with interest at 140 basis points over LIBOR and a maturity of five years (inclusive of an embedded 1 year extension option); an $80 million unsecured, 5-year term loan with interest at 140 bp over LIBOR; and a $40 million unsecured, 7-year term loan with interest at 150 bp over LIBOR.

“This credit facility expands NHI’s borrowing capacity lowers our cost of capital and extends the loan maturities,” said Justin Hutchens, NHI’s CEO and president, in a statement. “NHI is well-positioned for further growth with the support of this very strong bank group.”

Healthcare real estate investment trust NHI specializes in financing healthcare real estate by purchase and leaseback transactions and by mortgage loans; investments involve skilled nursing facilities, assisted living facilities, and independent living facilities, among others.

Red Mortgage Capital Funds Nearly $54 Million in New Construction and Refinances

Red Mortgage Capital, LLC recently processed and funded more than $29 million of non-recourse FHA healthcare financing for two assisted living communities, and nearly $24.7 million of Fannie Mae MBS/DUS seniors financing for two other senior living facilities.

Spring Creek Retirement & Assisted Living Community in Bellingham, Wash. received an $18.6 million GNMA/FHA Section 232/223(f) loan to refinance its existing 166-unit facility. Red Mortgage Capital also processed a $10.5 million GNMA/FHA Section 232 loan for construction and permanent financing for Parker Assisted Living, a 64-unit facility located in Denver, Colo.

The lender also recently funded a $12.8 million Fannie Mae MBS/DUS loan for Pelican Pointe Assisted Living and Memory Care, a 112-unit facility in Klamath Falls, Ore., and a $11.9 million Fannie Mae MBS/DUS loan for Eaglecrest Retirement Community, a 102-unit retirement community located in Salina, Kan., offering both independent and assisted living units.

Love Funding Secures $9.22 Million in Refinancing for Nursing & Rehab Center

Love Funding recently announced the closing of a $9.22 million loan refinancing for Allegany Health Nursing and Rehabilitation Center, located in Cumberland Maryland.

Laura Saull-Smith, a senior director at Love Funding out of the Washington 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 35-year term.

The property, built in 1979, is owned by Allegany Healthcare Group LLC and operated by Mid-Atlantic of Cumberland LLC, a subsidiary of Mid-Atlantic Healthcare LLC. It has 146 beds in 78 units, and is licensed for 153 beds.

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