Senior Housing Finance Activity: HFF, Ventas, Oak Grove Capital, & More

Everest Real Estate Advisors Closes $12 Million Loan for Minn. Senior Housing Community

Everest Real Estate Advisors, headquartered in Minneapolis, Minn., recently closed on a $12 million refinancing loan for Select Senior Living, a 90-bed senior housing facility in Coon Rapids, Minn., reports Real estate Journals.

The advisory firm provided the refinancing through HUD’s Section 232/223(f) loan program for the borrower, Coon Rapids Select Properties, LLC, through commercial real estate finance company Walker and Dunlop (NYSE:WD). The loan features a 3.25% interest rate with a 35-year term and a 35-year amortization schedule.


NCR Uses Two HUD Program Grants to Renovate Community, Make “Green” Upgrades

National Church Residences has used two Department of Housing and Urban Development grants totaling nearly $8 million to make upgrades to and renovate Hopetown Village, which recently held a grand reopening event showcasing 41 newly-remodeled assisted living rooms and new “green” amenities, reports the Chillicothe Gazette.

The community is expected to save 10-20% on energy costs after using a $1.7 million HUD grant used to upgrade lighting, windows, faucets, and appliances in its assisted living apartments.


HUD’s field office director said his agency is trying to encourage facility upgrades to save on operating costs.

NCR used a $6.1 million grant through HUD’s Assisted Living Conversion Program to renovate its 41 assisted living rooms; among its 41 residents, 22 were taken out of nursing care facilities, and the organization hopes to create a model of care that can keep seniors out of nursing facilities.

Oak Grove Capital Provides $10 Million Bridge Loan for Mass. Assisted Living Community

Oak Grove Capital recently originated a $10 million bridge loan to refinance Bayberry at Emerald Court, a 90-unit assisted living and memory care community located in Tewksbury, Mass.

An Oak Grove Capital affiliate provided an 18-month, interest-only loan to a limited liability company sponsored by The Northbridge Companies and Fundamental Advisors LP. Northbridge, a senior community owner and operator based in Boston, manages the Bayberry.

“The bridge loan enabled the borrowers to lower the interest rate on expensive debt they had obtained prior to turning the property around,” said Bill Kauffman, managing director of seniors housing at Oak Grove Capital. “The primary term, along with a six-month extension, will provide the borrowers sufficient time to grow revenue in advance of refinancing with an Agency permanent loan.”

Oak Grove was able to close the financing two days before Northbridge’s 30 day deadline.

HFF Secures a $17.4 Million Freddie Mac Refinancing for Calif. Senior Housing Community

HFF (Holliday Fenoglio Fowler, LP), owned by HHF, Inc. (NYSE:HF) recently arranged a $17.4 million refinancing for Nantucket Creek, a 172-unit senior housing community located in Chatsworth, Calif.

The commercial real estate services provider worked on behalf of Universe Holdings Development Company to secure the 10-year, 3.88% fixed-rate loan through Freddie Mac to replace the community’s senior note, originated in 2004 when Universe Holdings original acquired the property from its developer. The loan will be securitized through Freddie Mac’s CME Program, and HFF will service it through its Freddie Mac Program Plus Seller/Service program.

In a separate transaction, Universe Holdings paid off an existing mezzanine participating debt, and now owns the property outright.

Nantucket Creek, located in the northwest San Fernando Valley, is 98.5% leased and is situated on 13.53 acres of land. Along with its one-bedroom, one-bathroom units, the community features amenities such as a recreation room, clubhouse, library, fitness center, swimming pool, billiards room, shuffle board court, and tennis courts.

Charles Halladay, director of HFF, led the team on the financing transaction.

“We are very pleased with the positive outcome and the timing of this transaction. Our investors managed to improve their equity and cash flow position by participating in an orchestrated effort that concluded the complicated transaction on the day both loans were due,” said Henry Manoucheri, chairman and CEO of Universe Holdings, in a statement.

Ventas Renews Lease with Kindred Healthcare for 10 LTACs

Chicago-based real estate investment trust Ventas, Inc. (NYSE:VTR) recently entered into a new lease with Kindred Healthcare, Inc. (NYSE:KND) for ten long-term acute care hospitals owned by Ventas for an initial rent of $28 million annually, beginning on May 1, 2013.

The lease covers the ten LTACs whose lease was scheduled to expire on April 30, 2013, and has an initial term of ten years with annual CPI-based escalations ranging from 0 to 4%. Rent for the ten LTACs between May 1, 2012 and April 30, 2013 is $22 million.

“We are very pleased to have reached a mutually beneficial new lease agreement with Kindred, who is the best care provider for these ten LTACs, at a significant rent increase,” Ventas Chairman and CEO Debra A. Cafaro said in a statement. “We are excited to launch our re-leasing effort for 54 skilled nursing facilities and expect to successfully lease those licensed assets to suitable care providers.”

Regarding the 89 healthcare facilities Ventas currently leases to Kindred, whose lease terms were set to expire on April 30, 2013, Kindred will remain the tenant for 35 assets for a total annual rent (beginning May 1, 2013) of approximately $76 million.

Ventas is also working on a plan to re-lease 54 skilled nursing facilities whose terms are set to expire on April 30, 2013.

Cambridge Celebrates Record 2011 Financing Transactions

Cambridge Realty Capital Companies is celebrating a record-setting 2011, as it closed 36 separate HUD Section 232 loan transactions totaling more than $331.9 million

In 2011, the company closed FHA-insured HUD LEAN loans in seven states—21 of them in Illinois, with the rest in California, Kansas, Michigan, Nevada, Ohio and Texas.

The year’s funding transactions came in a range of sizes, from the smallest—a $2.8 million for a 78-bed skilled nursing home in South Beloit, Ill.—to the largest,  a $20.8 million FHA-insured HUD LEAN loan.

Cambridge expects HUD’s Section 232 lending program, in terms of timeframes for processing, to keep improving in 2012.

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