Senior Housing Finance Activity: Ensign, Sabra, Beech Street & More

Lancaster Pollard Closes $63.4 Million Refinance for Trilogy Health Services

Lancaster Pollard recently closed on a $63.4 million portfolio refinance for Trilogy Health Services, LLC, which operates multiple senior care communities throughout Kentucky, Illinois, Indiana, Ohio, and Michigan. 

The transaction refinanced eight of Trilogy’s facilities, comprising a total of 568 skilled nursing beds and 340 assisted living units. 


Lancaster Pollard first obtained bridge financing for Trilogy to purchase the real estate associated with the eight leased properties as part of the refinancing structure. The firm then recommended using the FHA Section 232/223(f) program to refinance the bridge debt to take advantage of the federal program’s low fixed rates and achieve significant cash flow savings compared to their former lease payments. 

The firm was able to originate eight non-recourse FHA Section 232/223(f) mortgages with matching term/amortizations of 35 years. The transaction also bolstered Trilogy’s long-term maintenance needs by establishing a well-funded replacement reserve escrow account. 

Sabra Expands New Dawn Relationship With $12.8 MIllion Loan Origination


Sabra Health Care REIT, Inc. (NASDAQ:SBRA) announced on Monday it had entered a $12.8 million mortgage loan agreement with an affiliate of New Dawn Holding COmpany, secured by a first trust dead on a 48-unit memory care facility in Sun City west, Ariz. 

The loan has a 5-year term and bears interest at a fixed rate of 9.0% a year. The loan cannot be prepaid during the first three years of the loan term.

Beginning April 2014, Sabra has an option to purchase the facility that secures the Sun City West mortgage loan for a price equal to the greater of (a) the annualized EBITDAR for the trailing three months prior to option exercise, divided by an EBITDAR coverage ratio of 1.3 and further divided by an implied lease rate of 8.25% (subject to adjustment up to 9.00%), and (b) $16 million.

If Sabra does exercise the purchase option, the REIT would expect to enter a long-term lease with New Dawn affiliates with an initial cash yield consistent with the lease rate used to determine the option exercise price.

The memory care facility was built in 2012 and is operated by affiliates of New Dawn. Sabra funded the loan with available cash. 

Beech Street Capital Closes $6.1 Million in Loans for Two Senior Care Facilities

Beech Street Capital, LLC recently announced the closing of $6.1 million in loans used to refinance a portfolio of two assisted living communities, one in Wheeling, Ill. and the other in Northville, Mich.

The portfolio has a total of 88 units and exclusively care for residents with memory impairments. 

Joshua Rosen, executive vice president of Beech Street, origination the transaction out of the firm’s Chicago office. 

“We were able to achieve significant debt service savings for the borrower on both properties, which will allow them an opportunity to deploy excess capital into other opportunities that may arise,” said Rosen.

Beech Street was also able to extend the term of the Harbor House loan.  

HFF Gets National Seniors Housing Designation from Freddie Mac

HFF announced Tuesday that it had been approved for a National Seniors Housing Designation effective February 1st from Freddie Mac.  HFF is now authorized to sell and service conventional loans secured by multifamily seniors housing properties nationwide.

Cain Brothers Advises Riverside for $75 Million Bond Placement

Cain Brothers served as financial advisor to Riverside Health System in connection with a private placement of $75 million revenue bonds, which closed on Dec. 20, 2012. 

Newport News, Va.-headquartered Riverside is an integrated health system that includes acute care hospitals, senior housing communities, and nearly 500 employed physicians and advance practice providers.

The borrowing proceeds were used to fund capital improvements at Riverside’s flagship hospital, Riverside Regional Medical Center.

Cain Brothers negotiated a 10-year fixed rate direct bank placement with PNC Bank and was able to secure an attractive cost of capital without any adjustments to Riverside’s existing security package, the investment banking firm announced. 

Ensign Doubles Revolving Credit Facility to $150 Million

The Ensign Group, Inc. (NASDAQ:ENSG) announced on Wednesday that the company and its operating subsidiaries had increased its revolving credit facility from a six-bank lending consortium arranged by SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC by $75 million to an aggregate of $150 million, $20 million of which was drawn as of Feb. 1, 2013. 

The proceeds of the credit facility will be used to fund acquisitions, renovate and upgrade existing and future facilities, cover working capital needs, and for other corporate purposes.  Ensign’s current net-debt-to-EBIDTAR ratio is 2.34x. 

Ziegler Closes $71.25 Million Financing for ABHOW & The Terraces at Los Altos

Ziegler recently announced the closing of the $71.25 million fixed-rate, Series 2013 Bond issue for American Baptist Homes of the West’s (ABHOW) Obligated Group.

Proceeds will fund a major redevelopment of The Terraces at Los Altos, ABHOW’s first community, which opened in 1949 on about 6.3 acres in Los Altos, Calif. The Series 2013 Bond proceeds will be used to pay retain costs of the redevelopment, expansion, and operation of the community (other ABHOW funds were used for project costs up to the date of issuance of the Series 2013 Bonds), fund debt service reserve funds for each series, pay a portion of the interest on the Series 2013 Bonds during construction of the approximately 36-month project, and pay certain costs relating to the issuance of the Series 2013 Bonds.

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