Senior Housing Finance Activity: Oak Grove Capital, Lancaster Pollard, HCN, NHI

Lancaster Pollard Closes $107.4 Million of Loans in November

Lancaster Pollard closed 16 senior living transactions for a total loan amount of $107.4 million. The 16 facilities, all located in the Midwest, contained a total of 1,239 skilled nursing beds and 416 assisted living units. All the financings used the FHA Sec. 232/223(f) to refinance existing debt and substantially lower the cost of capital. 

Health Care REIT Announces Pricing of $1.2 Billion of Senior Notes


Health Care REIT, Inc. (NYSE:HCN) announced on Tuesday it had priced $1.2 billion in aggregate principal amount of senior unsecured notes issued in the following tranches:

  • $450 million of 2.25% notes due March 15, 2018 priced to yield 2.35%
  • $500 million of 3.75% notes due March 15, 2023 priced to yield 3.792%
  • $250 million of 5.125% notes due March 15, 2043, priced to yield 5.184%

HCN plans to use the net proceeds from the offering to repay certain secured indebtedness to be assumed in connection with the previously announced acquisition of Sunrise Senior Living, Inc. (NYSE:SRZ). If this acquisition isn’t completed or if proceeds remain following the repayment of this secured indebtedness, HCN intends to use the proceeds for general corporate purposes, including investing in healthcare and senior housing properties. 

Pending such use, the net proceeds may be invested in short-term, investment grade, interest-bearing securities, certificates of deposit, or indirect or guaranteed obligations of the United States.

BofA Merrill Lynch, Deutsche Bank Securities, UBS Investment Bank, Citigroup, and Credit Agricole CIB acted as joint book-running managers for the offering.

The offering is expected to close on Dec. 6, 2012. 

NHI Advances $10 Million to Capital Funding Group

National Health Investors, Inc. (NYSE:NHI) announced on Thursday it has funded an additional $10 million to Capital FUnding Group, Inc. for its healthcare loan investments. The total credit facility of $15 million has now been fully funded by NHI and will mature in April 2015. 

The CFG family of companies represents comprehensive financing solutions for healthcare facilities, including bridge loans and FHA-insured mortgages for the long-term care, assisted living, and hospital sectors. 

Cambridge Provides Loans for 6 Chicago-Area Properties

Cambridge Reality Capital Companies recently provided FHA-insured funding totaling $72.1 million for six properties owned by Alden Health Care & Senior Living in the Chicago metro area.

The properties were refinanced using HUD’s Section 232/223(a)(7) program with fully-amortizing, 35- or 40-year term mortgages underwritten by Cambridge Realty Capital Ltd. of Illinois, Cambridge’s business that specializes in HUD funding programs. 

The largest of the six loans was $18.7 million and was used to refinance Alden Des Plaines, a 152-bed skilled nursing and assisted living center in Des Plaines. On the other end of the scale was a $3.6 million loan to refinance Alden Bloomingdale, a 48-bed intermediate care facility in Bloomingdale. 

Cambridge Finances 10-Property Portfolio of Ill. Nursing Homes

Cambridge Realty Capital Companies recently provided $90.5 million of FHA-insured financing for a portfolio of 10 individually refinanced skilled nursing facilities in Illinois. 

The loans were arranged for JLM Financial Investments, a private equity group headquartered in Austin, Tex. that specializes in developing commercial real estate and senior housing. 

The fully-amortized loans were refinanced using HUD’s Section 232/223(a)(7) program and were underwritten by Cambridge Realty Capital Ltd. of Illinois. 

The Ensign Group to Renew Stock Repurchase Program

The Ensign Group, Inc. (NASDAQ:ENSG) announced on Wednesday that its board of directors has authorized the company to renew its stock repurchase plan, allowing the company to purchase up to $10 million of its common stock over the next 12 months. 

“This program reaffirms our continued confidence in the Company’s near and long-term financial and operating performance, and our commitment to enhancing shareholder value,” said Christopher Christensen, Ensign’s President and CEO.

Ensign expects to continue paying quarterly dividends and growing and diversifying its business. Christensen says the company’s “strong balance sheet, significant credit relationships, and untapped equity in its real estate portfolio” enable the “flexibility to opportunistically repurchase” Ensign shares while continuing to acquire both well-performing and struggling long-term care skilled nursing properties, assisted living communities, and start-up or early-stage hospice and home health agencies. 

Under the stock repurchase program, Ensign is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws, including Rule 10-b18 under the Securities Exchange Act of 1934 as amended.

The number of shares Ensign repurchases will depend entirely on the level of available cash, the attractiveness of alternate investment and business opportunities either at hand or on the horizon, and management’s perception of value relative to market price, as well as other legal, regulatory, and contractual requirements. 

Oak Grove Capital Originates $19.13 Million of Senior Housing Loans

Oak Grove Capital recently originated two senior housing loans through Fannie Mae totaling $19.13 million.

For Heathers Manor in Crystal, Minn., Oak Grove originated a $10.4 million loan for the property’s acquisition. LCS recently acquired an equity stake in Harrison Street Real Estate Capital’s portfolio of senior living properties, which includes Heathers Manor, replacing Lang Nelson’s equity interest in the property. 

Maples of Towson in Towson, Md. got an $8.73 million loan to refinance the property. 

Cambridge Closes $8.6 Million Loan for Wisc. ALF

Cambridge realty Capital Companies recently closed an $8.6 million loan to refinance Appleton Retirement Community, a 104-bed assisted living community in Appleton, Wisc. The fully-amortized, 35-year term loan was refinanced for the borrower using HUD’s Section 232/223(f) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois. 

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