Senior Housing Finance Activity: Sabra, Prudential, Lancaster Pollard (6/28/2012)

Prudential Closes $13.7 Million Construction Take-Out Loan for Ohio Community

Prudential Mortgage Capital Company, the commercial mortgage lending business of Prudential Financial, Inc. (NYSE:PRU), recently closed a $13.7 million construction take-out loan for an Ohio senior living community. Parker Place is a three-story, 124-unit independent living complex located in Mentor, Ohio. The loan term is for 20 years; the community opened in 2009 and is close to fully occupied. Karen McGinnity, a director with Prudential Mortgage Capital Company, was the lead on this transaction.

Sabra Originates $11 Million Mortgage Loan with Purchase Option for Meridian Equity Investors-Owned SNF

Sabra Health Care REIT, Inc. (NYSE:SBRA) announced on Tuesday if had originated an $11 million mortgage loan, following an $11 million mortgage loan agreement it entered on June 22 with with affiliates of Median Equity Investors, L.P., secured by a first trust deed on a 125-bed skilled nursing facility in Texas.

The loan has a five-year term with an fixed interest rate of 8.5% a year, and cannot be prepaid during the first three years of the loan term.

Sabra also has the option to purchase, and the borrowers have the right to sell, the Texas skilled nursing facility securing the loan between July 1, 2013 and the time the loan is repaid, for between $12.5 million and $14.5 million, depending on the annualized EBITDAR of the facility for the three months leading up to the exercise option date.

Meridian Equity Investors can’t require Sabra to purchase the property, however, if the three-month annualized EBITDAR is below $1.7 million.

The skilled nursing facility was built in 2010 and is operated by Senior Care Centers.

“The Onion Creek Mortgage Loan is yet another example of repeat business with a relationship we have developed in the last year,” said Rick Matros, CEO and Chairman of Sabra. “Like our previous deal with Meridian, this is an investment that should generate an attractive yield for our shareholders while providing us with the flexibility to purchase the property and add to our increasing list of operator relationships. We are excited to continue growing our relationship with the Meridian and SCC teams.”

Recent Lancaster Pollard Financing Transactions (For-Profit & Non-Profit):

Lancaster Pollard Closes $8.1 Million in Loans for Two Ohio Nursing Homes

Lancaster Pollard recently announced the closing of two loans totaling $8.1 million for Suburban Nursing Homes in Cincinnati, Ohio. Kass Matt, senior vice president located at the firm’s headquarters in Columbus, was the lead banker on the transaction. The loans were insured through HUD’s Section 232/223(f) program and resulted in low fixed-interest rates over the loans 35-year terms and produced significant debt service savings for the borrower. The loans refinanced two of Suburban’s skilled nursing facilities: The Residences at Huntington Court and Home at Taylor’s Pointe.

Lancaster Pollard Obtains $7.7 Million Loan to Refinance Ohio SNF’s Term Notes

Lancaster Pollard recently closed a $7.7 million loan with mortgage insurance through the FHA Section 232/223(f) program for Cardinal Woods Skilled Nursing and Rehabilitation Center, located in Madison, Ohio. The loan will refinance three separate term notes the borrower had with a major bank. The refinancing resulted in a low interest rate with a 35-year term and will generate significant debt service savings and fund a sizable replacement reserve for future capital needs. Kass Matt, senior vice president located at the firm’s headquarters in Columbus, Ohio, was the lead banker on the deal.

Lancaster Pollard Refinances Two Ohio Senior Care Properties With $11.2 Million Loan

Lancaster Pollard recently refinanced two properties operated by Health Care Management Group: Clovernook Health Care Pavilion and Loveland Health Care Nursing & Rehab Center, both located in the greater Cincinnati, Ohio area. The firm, led by Kass Matt out of the home office in Columbus, Ohio, utilized the FHA Section 223(a)(7) program for both transactions. The total loan amount was $11.2 million and the borrower will achieve nearly $200,000 in annual debt service savings.

Lancaster Pollard Helps Kansas Senior Care Facility Refinance Debt With $3.8 Million Loan

Lancaster Pollard recently assisted Hillside Village of De Soto, located in De Soto, Kan., with refinancing its existing debt using the FHA Sec. 232/223(f) program. The site was originally built as a skilled nursing facility in 1976. In 2003, the skilled nursing facility was completely renovated and 38 assisted living units were added. Facing a balloon payment in December 2012, Lancaster Pollard, led by Bill Wilson out of the firm’s Lawrence, Kan., office, worked with the ownership team to secure a non-recourse funding structure, while locking in a 35-year term loan of $3.8 million with a low interest rate.

Lancaster Pollard Obtains $19.2 Million Refinancing Loan for Mo. CCRC

Lancaster Pollard recently assisted with the refinance of The Groves, a 447-bed continuing care retirement community located in Independence, Mo. The borrower acquired the facility in 2010 and substantially improved its operations and financial viability. The borrower then sought to refinance an existing seller note and bank debt associated with the acquisition. Using the FHA Sec. 232/223(f) mortgage insurance program, Lancaster Pollard was able to obtain a long term and low rate for a $19.2 million loan. In addition to substantial debt service savings, the loan will fund nearly $600,000 in improvements to the community without an equity requirement from the borrower. Steve Kennedy, out of the firm’s headquarters in Columbus, Ohio, was the lead banker on the deal.

Lancaster Pollard Provides $19.7 Million in Financing Through Bond Placement for NCR

National Church Residences (NCR), one of the nation’s largest nonprofit providers of senior housing, recently closed a series 2012 bond issue for its Traditions Healthcare Obligated Group. Lancaster Pollard competitively bid the direct placement of $19.7 million in Series 2012 tax-exempt, variable-rate bonds.

Formed in 2005, the obligated group originally consisted of five health-care campuses throughout the state of Ohio. As part of the financing, NCR and Lancaster Pollard added two new health-care entities to the group, Legacy Village and Heritage Day Health Centers. The bond proceeds refunded the bridge note related to the acquisition of Legacy Village and the Series 2002 and 2007 Heritage Day Health Centers bonds. Further, the bonds will fund several projects, including the expansion and renovation of the Mill Run campus, a new rehabilitation-only skilled nursing facility on the Legacy Village Campus and the expansion of the Chillicothe campus. Ultimately, the Series 2012 bonds also serve NCR’s long-term goal of maintaining an appropriate balance of variable-rate and fixed-rate exposure for its obligated group. Lancaster Pollard was represented by Kass Matt and Brendan Healy from its Columbus office.

Lancaster Pollard Closes $5.9 Million Refinancing Loan for Georgia ALF

The Gardens at Calvary, a 78-unit assisted living facility in Columbus, Ga., is owned by Calvary Baptist Church and managed by Friendswood, Tex.-headquartered TrinityCare. The nonprofit organization wanted a long-term, fixed-rate financing structure to refund its existing tax-exempt bonds, release funds trapped in trustee-held escrows and obtain capital funding for repairs. Lancaster Pollard structured and closed a $5.9-million loan issued by the FHA Sec. 232/223(f) program. The refinancing will generate more than $ 1.7 million in debt-service savings and fund a sizable replacement reserve for future capital needs. Lancaster Pollard’s team was led by Jim Neil and Scott Blount from the firm’s Austin, Tex., office.

Affordable Housing Program Grant Allows Dallas CCRC to Move into Final Construction Phase

A $500,000 Affordable Housing Program grant awarded by Amegy Bank of Texas and the Federal Home Loan Bank of Dallas (FHLB Dallas) will allow the construction of a Dallas-area senior living community to move forward into its third and final phase.

The last leg of a new senior housing development is expected to break ground in July 2012. The project, Lake West Assisted Living, will consist of 130 assisted living units designated for low-income seniors, and will expand the senior living community’s services to include a full continuum of care.

The Dallas Housing Authority and StoneGate Senior Living, a Lewisville, Tex.-based senior living and care management company are leading the project, which has already completed its first two phases. The Village at Lake West and the Lakewest Rehabilitation and Skilled Care center are already in full operation, opening in November 2009 and April 2011, respectively.

The Village, an affordable independent living community, has 360 units for 55+ adults and reached 100% occupancy within one year of opening. The rehabilitation center offers post-acute healthcare services and has capacity to care for up to 118 patients.

The AHP grant will help StoneGate with related construction costs for the final phase of development. The new assisted living apartment complex will give its residents access to long-term supportive services and will offer onsite meal plans through its dining program, along with laundry services, a recreation center, and daily activities.