Senior Housing Finance Activity: Sunrise, Love Funding, Capital One, Centerline

Sunrise Refinances Assisted Living Section of Troubled Maryland Senior Complex

Sunrise Senior Living (NYSE:SRZ) announced last Thursday that its Fox Hill assisted living venture has refinanced the existing mortgage financing on the assisted living section of the Bethesda, Md. Fox Hill senior living community.

The new mortgage financing was provided by Eagle Bank, says Sunrise, and the new loan has a principal amount of $26 million with a floor interest rate of 5.5% and a three-year term.

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As a result of the refinancing, Sunrise has been released from its obligation to the prior mortgage lender to fund operating deficits, the company said in a statement.

In connection with the refinancing, Sunrise also funded approximately $6 million on behalf of the venture, leading to a modification joint venture terms. “Return of Sunrise’s new funding will have priority over existing equity and the venture partner’s total return will be capped at its capital contribution of $6.5 million,” the statement says.

“We are pleased to be working with our venture partner and Eagle Bank to put our Fox Hill assisted living community on sound footing,” said Mark Ordan, CEO of Sunrise, in the statement.

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The refinancing may be related to the cancellation of a foreclosure auction for The Fox Hill Club & Residences in Bethesda, Md., which was supposed to occur on Friday, June 8. The auction, a substitute trustee’s sale, was for 165 units (consolidated into 161) of “senior living condo units” along with various other aspects of the complex. After the cancellation, the substitute trustee had declined to comment as to why the auction didn’t take place.

Capital One Closes $29 Million Loan to Refinance Three Michigan Skilled Nursing Facilities

Capital One Bank announced on Monday that it had closed a five-year, $29 million secured term loan for Ciena Healthcare, a Southfield, Mich.-headquartered skilled nursing and rehabilitation services provider with facilities in Michigan and Connecticut.

The loan will be used to refinance three skilled nursing facilities in Michigan that were built in 2005.

“Capital One Bank has been an excellent partner, particularly because of the group’s deep industry expertise and willingness to act quickly to provide a re-financing solution to meet our immediate needs,” said Anis Khan, Chief Financial Officer of Ciena Healthcare, in a statement. “This new relationship will allow us to maintain high-quality care and amenities to patients at three of our Michigan facilities.”

Ciena Healthcare provides long-term care and short-term rehabilitative services in its 32 skilled nursing communities in Michigan and four Connecticut facilities.

Centerline Closes $35.9 Million Refinance for Calif. Senior Housing Property

Centerline Capital Group, a real estate financial and asset management service provider and a subsidiary of Centerline Holding Company (OTC:CLNH), announced on Tuesday it had structured a $35.9 million Freddie Mac Capital Markets Execution loan facility to refinance a senior housing property located in Stanton, Calif.

Park Place Seniors Apartments is an age-restricted, Class B affordable complex built in 1996 using low-income housing tax credits. The 15-year tax credit compliance period expired, and the property’s sponsor was able to take out the current debt with conventional financing at very attractive terms. The 10-year, non-recourse loan was used to buy out the partnership, upgrade the asset, and return capital to the sponsor.

The borrower is a large local developer working in conjunction with a local non-profit corporation.

“This was a complex deal with many unusual aspects to consider,” said Peter Clasquin, Senior Vice President at Centerline Capital Group, in a statement.  “We had to balance a number of affordable components—age and income restrictions, a real estate tax abatement, Section 8 tenancy, and a long-term regulatory agreement—with Freddie Mac’s large-loan CME requirements. Our deal team worked closely with the borrower, non-profit partner, regulators, and Freddie Mac’s legal team to create a structure that worked for all parties.  We were thrilled to see the deal come together.”

Love Funding Closes $11.7 Million Refinancing for Wash. Assisted Living Community

Washington, D.C.-headquartered Love Funding recently closed a $11.7 million loan to refinance the Chateau at Bothell Landing, an assisted living community in Bothell, Wash. that’s owned and operated by Chateau Retirement Communities.

Love Funding’s Joshua Hausfeld and Artin Anvar, both directors out of the firm’s D.C. office, secured the financing through the Department of Housing and Urban Development’s Section 232/223(a)(7) loan program. Using this program allowed the property’s owner to lock in a low, fixed interest rate over the remainder of the original 35-year term, which will produce more than $106,000 in annual debt service savings.

The refinancing will also help the community fund more than $415,000 in repairs to convert 14 units into a dedicated, secure memory care wing. It currently has 77 assisted living units and 11 independent units, along with two separate independent living buildings on-campus.

Chateau Retirement Communities also owns and operates Chateau Pacific Living in Lynnwood, Wash., and Chateau at Valley Center Senior Living in Renton, Wash.

“We’ve witnessed firsthand the demand for non-nursing home, residential-model memory care units increase,” said James Godfrey, owner of Chateau Retirement Communities. “We are pleased that with the help and support of Love Funding, we will soon be able to offer this much needed service at Chateau at Bothell Landing, just as we do currently at our other Chateau communities.”

Written by Alyssa Gerace

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