Senior Housing Finance Activity: Greystone, Health Care REIT, NorthStar Healthcare Income

Greystone & Co. Affiliate Closes $33 Million Affordable Housing Transaction in N.C.

Greystone & Co., Inc. affiliate Greystone Affordable Housing Initiatives LLC (GAHI), a provider of affordable housing recapitalization and rehabilitation transaction management services, announced on Monday that it had closed a $33 million multifamily housing rehabilitation transaction in North Carolina that includes senior housing units. 

The aged USDA Rural Development portfolio, originally built by the owners of HBREM, LLC more than three decades ago, has 12 family and elderly designated properties with a total of 368 units. The properties are located within nine counties throughout the state; rehabilitation is expected to be completed within five months without resident displacement. 

“The recent economic environment has been the driving force behind the need to develop innovative financing structures to help our clients recapitalize and rehabilitate their RD portfolios,” said Tanya Eastwood, managing director for GAHI, in a statement. 

The financing plan combined both public and private funding and included

• The issuance of $13.9 million in multi-fmaily private activity tax-exempt bonds issued by North Carolina Housing Finance Agency (NCHFA) as a public offering facilitated by Merchant Capital and credit-enhanced by USDA and Ginnie Mae;
• The assumption and subordination of $11.5 million of original USDA RD Section 515 debt and 255 units of Section 521 Rental Assistance provided by USDA Rural Housing Service;
• The purchase of 4% federal low-income housing tax credits by Community AFfordable Housing Equity Corporation, generating more than $7 million in capital contributions;
• Other funding sources contributing $447,000 in financial support. 

The HBREM, LLC rehabilitation plan includes upgrading most of the 368 units with new heating and air systems, energy-efficient appliances and hot water heaters, all new flooring, kitchen cabinets and countertops, plumbing fixtures, light fixtures, insulated double-pane windows, new doors, and freshly-painted interiors. Exterior improvement plans include new roofing and vinyl of hardiplank siding, with community upgrades for outdoor picnic areas, updated landscaping, and new children’s playground equipment. 

Ross Deckard Architects, P.A. is the project architect, with Arnold Construction Corporation as general contractor and WWJ, LLC as management consultant.

Greystone Servicing Corporation, Inc. is the permanent lender; its counsel is Ballard Spahr LLP. Greystone Affordable Housing Initiatives, LLC is the transaction manager/developer consultant. 

Merchant Capital, LLC underwrote the financing. 

Health Care REIT Prices 12 Million Shares for Public Offering of Common Stock

On Tuesday, Aug. 7, Health Care REIT (NYSE:HCN) priced its underwritten public offering of 12 million shares of common stock at $58.75 per share, an increase from the original offering of 11 million shares. Additionally, underwriters have the option of purchasing up to an additional 1.8 million shares in the next 30 days.

The REIT expects the gross proceeds of this offering to be approximately $705 million, or approximately $811 million if the underwriters’ option is exercised in full. 

HCN will use the net proceeds from the offering to repay advances under its unsecured line of credit, to repay other outstanding indebtedness, and for general corporate purposes, including investing in healthcare and seniors housing properties. 

BofA Merrill Lynch, Morgan Stanley, UBS Investment Bank, Barclays Capital, J.P. Morgan, and Wells Fargo Securities acted as joint book-running managers for the offering. 

SEC Declares NorthStar Healthcare’s $1.1 Billion Public Offering Effective

The U.S. Securities and Exchange Commission (SEC) has declared NorthStar Healthcare Income, Inc.’s registration statement related to its initial public offering of $1.1 billion of its common stock to be effective. 

NorthStar Healthcare, a public, non-traded real estate investment trust, was formed to originate, acquire, and asset manage a diversified portfolio of debt and equity investments in the healthcare real estate sector.

The REIT plans to use the proceeds of the offering to build a diverse investment portfolio with a focus on the mid-acuity senior housing sector, including assisted living, memory care, skilled nursing, and independent living facilities, with an emphasis on private-pay residents. 

NorthStar Healthcare is offering 100 million shares of its common stock at $10.00 per share and an additional 10 million shares of common stock for issuance under its distribution reinvestment plan at $9.50 per share. 

Mass. Tax Credits Support $20 Mn. Renovation and Expansion of Non-Profit Senior Home

Dorfman Capital has completed a Massachusetts historic tax credit sale  for a $20 million renovation and expansion project to Boston’s Mount Pleasant Home, a nonprofit senior care organization. 

Mount Pleasant has been providing housing for low-income seniors since 1901, but has faced difficulty obtaining financing for a necessary facility expansion due to the economic downturn. 

Dorfman Capital arranged a forward commitment to purchase the ultimate sale of Massachusetts’ historic tax credits to an institutional investor. Without the tax credits, the renovation and addition project wouldn’t be able to happen, said the organization’s executive director.