Senior Housing Finance Activity: Health Care REIT, Prudential, Beech Street, More

Health Care REIT to Offer 22 Million Shares of Common Stock

Health Care REIT (NYSE:HCN) is offering 22 million shares of its common stock along with granting underwriters a 30-day option to purchase up to an additional 3.3 million shares.

The REIT will use the net proceeds from the offering to repay advances under its unsecured lines of credit, repay other outstanding indebtedness, and for general corporate purposes, including investing in health care and seniors housing properties.

Bank of America Merrill Lynch, J.P. Morgan, and Morgan Stanley will act as joint book-running managers for the offering. 

KBS Strategic Opportunity REIT Originates $35.8 Million Mortgage for Calif. CCRC

Newport Beach, Calif.-based KBS Strategic Opportunity REIT Inc. recently originated a $35.75 million first mortgage loan secured by Ponte Palmero, a 239-unit continuing care retirement community in Cameron Park, Calif. 

The borrower is not affiliated with the REIT or its affiliates. Loan terms include a floating interest rate with an initial rate of no less than 11%, increasing annually to a floating rate of no less than 18% during the third year of its term. The loan will mature on Oct. 1, 2015.

Ponte Palmero is located 33 miles east of Sacramento on a 26 acre complex. It was developed in 2008 and has 100 assisted living, 104 independent living, and 35 memory care suites.

Prudential Closes $7.38 Million Refinance for Calif. Senior Care Community

Prudential Mortgage Capital Company, the commercial mortgage lending business of Prudential Financial, Inc. (NYSE:PRU) recently closed a $7.38 million refinancing for San Bernardino Villa LP.

The loan is for a 97-unit senior care facility located in San Bernadino, Calif. that is currently configured for 85 beds. It has 58 studio apartments and six one-bedroom assisted living apartments, along with seven semi-private and seven studio apartments designated for memory care residents. 

Martin Herz, a principal with Prudential Huntoon Paige, was the lead on the loan transaction, which features a 35-year term. 

Beech Street Provides $6.4 Million Loan for a N.Y. ALF

Beech Street Capital, LLC recently provided a $6.4 million to refinance Keepsake Village at Greenpoint, a 54-bed assisted living community in Liverpool, New York.

Joshua Rosen, executive vice president of Beech Street, originated the transaction using HUD’s Section 232/223(a)(7) loan program out of the firm’s Chicago office.

The existing mortgage had about 30 years remaining, and Beech Street was able to increase the loan term back to the original term of 35 years, allowing the broker to reduce annual mortgage payments and increase its debt service coverage. The property’s estimated remaining economic life, at 50 years, along with its quality condition helped support the increased loan term.

The financing will transfer the existing replacement reserve balance and continue the annual deposit to the replacement reserves, giving the property adequate funds for future realty and non-realty replacement.  

Oak Grove Capital Closes $4.2 Million Loan for Mass. Senior Housing Community

Oak Grove Capital recently closed a $4.2 million Fannie Mae MBS loan for Keystone Woods Supplemental, a senior housing community located in Springfield, Mass.