The Devonshire at PGA National, a continuing care retirement community (CCRC) in Palm Beach Gardens, Fla., along with its Chatsworth assisted living and skilled nursing facility subsidiaries, has been served with a $158.4 million foreclosure lawsuit, reports the South Florida Business Journal.
To date, it’s the largest foreclosure action of the year in South Florida, and it comes following a legal proceeding filed in May by the Florida Department of Financial Services to place the CCRC into state receivership for financial insolvency after the community defaulted on its $158 million mortgage loan.
While the court awarded the state with a receivership order on July 26, the Devonshire was able to stay the order by appealing to a higher court.
The Business Journal reports:
Devonshire and Chatsworth are owned by Tampa-based SHP Senior Living Services. Neither officials with the company nor its attorney, Harley Riedel from Tampa, could be reached for comment.
This in the second South Florida assisted living facility to face financial trouble in recent weeks, as the owner of the Lenox on the Lake complex in Tamarac filed Chapter 11 bankruptcy on Aug. 10.
On Aug. 8, Trimont Real Estate Advisors, representing a group of lenders, filed a foreclosure lawsuit against Devonshire at PGA National, Chatsworth PGA Properties, SHP Healthcare Services and guarantor Craig E. Anderson, the CEO of SHP. It concerns a mortgage made for $161.6 million in 2007, the same year the facilities were bought for $76.9 million.
West Palm Beach attorney Gary Dunkel, who represents Trimont in the lawsuit, said the loan matured on April 30 with $158.4 million in principal outstanding, though the borrower did not default on monthly payments. The foreclosure targets not only the real estate but all the assets and contracts of the business, he added.
Property records show that Devonshire owns 328 senior housing units on 19.2 acres at 100 Devonshire Way, which is within the PGA National community and golf course. Amenities include a dining hall, a 65,000-square-foot clubhouse activity center featuring dancing, games, a performing arts stage and a fitness center. The complex includes nurses, housekeeping and valets.
Chatsworth PGA Properties owns the 124-unit assisted living, skilled nursing and dementia care center of 64,444 square feet on 347 Hiatt Dr., which is just off Northlake Boulevard. It also specializes in rehabilitation.
Court documents show that GE Business Financial Services served a notice of default to the Devonshire on May 7 demanding immediate payment of the entire principal balance of the loan.
GE Business Financial Services ended up with the community’s term loan after acquiring most of the assets of the former Merrill Lynch Healthcare Finance, which had previously provided $181.2 million in financing for SHP Senior Living Investments subsidiary Devonshire at PGA National LLC, formed in 2006 to buy the Devonshire in a $165 million acquisition.
Written by Alyssa Gerace