Senior Housing Finance Activity: Capital One, Grandbridge, RED CAPITAL

Capital One Closes $19.5 Million Loan for Revera Health Systems

Capital One Bank announced on Monday it had provided a three-year, $19.5 million secured term loan to Revera Health Systems, Inc., a long-term care and rehabilitation provider with multiple skilled nursing centers across the U.S.

Proceeds of the loan were used to refinance existing senior debt on eight of the health system’s skilled nursing facilities in Maryland, New Hampshire, New Jersey, and Vermont. Revera Health Systems also expanded its relationship with Capital One Bank to include despots and treasury management services. 

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RED CAPITAL GROUP Closes Acquisition Financing for Ariz. Senior Care Community
 
RED CAPITAL GROUP, LLC recently closed a bridge-to-FHA financing solution for the acquisition of Prescott Nursing and Rehabilitation Center and Boulder Gardens Assisted Living, a 109-bed skilled nursing and assisted living community in Prescott, Ariz.
 
The property, formerly known as Meadow Park Care Center and Peppertree Square, was purchased by an affiliate of Pioneer Health Group, an Arizona-based long-term care community owner and operator.
 
Red Capital Partners, LLC, RED’s proprietary lending arm, closed a $5.96 million bridge loan to finance the acquisition, which closed in December 2012, to accommodate the seller’s closing deadline.
 
At the same time of the bridge financing, Red Mortgage Capital, LLC, RED’s mortgage banking arm, processed a $6.88 million FHA Section 232/223(f) loan, which closed in February 2013, to refinance RED’s bridge loan, fund capital improvements, and provide low fixed-rate, non-recourse permanent financing for the buyer. 
 
Lee S. Delaveris, director of Red Mortgage Capital, LLC, was the lead banker on the transaction. 
 
Cain Brothers Structures $35.5 Million Bond Issue for N.Y. ALF Project
 
Cain Brothers recently structured and closed a $35,515,000 tax-exempt fixed-rate bond issuance for The Hamlet at Wallkill, a 200-bed new construction assisted living community project in Wallkill, N.Y.
 
The FilBen Group, a for-profit developer, owner, and operator of assisted living and skilled nursing facilities, hired Cain Brothers to serve as sole underwriter on the unrated financing for the development and construction of a start-up assisted living community. 
 
The Hamlet at Wallkill will provide high-quality assisted living services to private pay and Medicaid-eligible seniors, in addition to memory care. 
 
Cain Brothers and FilBen used private activity bonds, which are subject to volume cap restrictions, in order to obtain tax-exempt financing at attractive rates. 
 
“Volume cap allotments are awarded on an annual basis; therefore any private activity bonds subject to volume cap requirements must be issued by December 31 of the allotment year,” said Cain Brothers. “Because the necessary volume cap was secured too late in 2012 to market the bonds on a permanent basis before year end, Cain Brothers implemented a strategy that employed a short-term financing mechanism with a three-month mandatory tender. This financing structure preserved the allotted volume cap and allowed long-term capital providers ample time to analyze the project, conduct site visits, and meet with the FilBen management team.”
 
The bonds were remarketed in February 2013, and Cain Brothers was able to secure long-term financing at an attractive cost. Construction is slated to begin in April 2013, with full stabilization expected to occur in Summer 2016.
 
Lancaster Pollard Closes $7.5 Million Loan for Ohio Memory Care Center
 
Lancaster Pollard recently closed two loans totaling $7.5 million to refinance Alois Alzheimer Center in Cincinnati, Ohio.
 
The Health Care Management Group owns and operates the memory care community, which opened in 1987. Lancaster Pollard refinanced the center’s two existing FHA-insured loans with HUD’s non-recourse Section 232/223(a)(7) mortgage insurance program, helping The Health Care Management Group realize more than $103,000 in annual debt service savings.
 
Kass Matt, senior vice president and regional manager at the Ohio-based firm, was the lead banker on the transaction. 

Grandbridge Seniors Housing Closes $5.3 Million Loan for Wash. Community

Grandbridge Real Estate Capital’s Seniors Housing Group recently closed a $5.3 million loan to refinance Highgate Senior Living, a 48-unit assisted living community in Yakima, Wash. Grandbridge facilitated the long-term, fixed-rate loan through Fannie Mae. 

Grandbridge Closes $12 Million Loan for Senior Living Community

Grandbridge’s Seniors Housing Group also recently closed a $12.25 million short-term loan for the acquisition and renovation of Quail Park, a 49-unit assisted living and memory care community in Eugene, Ore.

The loan was through BB&T Bank to allow the community, managed by Living Care, to be repositioned for permanent financing. 

Brookdale Modifies Corporate Line of Credit

Brookdale Senior Living (NYSE:BKD) announced on Wednesday it had modified its existing revolving credit facility with GE Capital, Healthcare Financial Services.

The modification extended the maturity date of the facility to March 31, 2018 and decreased certain costs associated with the facility, along with providing options to increase the committed amount initially from $230 million to $250 million, and then from $250 million up to $350 million. 

The interest rate payable on advances has been decreased through the modification, reducing the LIBOR floor by 1.5% and the spread by 1.25% and reducing the fee payable on the unused portion of the facility from 1.0% to 0.5% per year.

Brookdale secures the revolving credit facility by first priority mortgages on some of its communities. Availability under the revolving credit facility will vary from time to time as it is based on borrowing base calculations related to the appraised value and performance of the communities securing the facility. 

RED Completes 60 Seniors Housing Transactions Worth $460 Million in 2012

RED CAPITAL GROUP, LLC announced last Friday that its banking arm, Red Mortgage Capital, LLC was the top originator for FHA/Ginnie Mae loans in 2012, providing 231 FHA loans totaling $2.176 billion.

During the year, the firm completed 330 transactions totaling more than $3.3 billion in capital to the multifamily, affordable, student, and seniors housing and healthcare industries, representing a 40% increase compared to the previous year’s total number of transactions, and a 13% increase in volume. 

Of the 330 total transactions, 60 were for seniors housing and healthcare deals in 2012, amounting to $460 million.

NorthStar Realty Originates $11.25 Million Loan for Calif. Senior Housing Campus

NorthStar Realty Healthcare recently announced it had originated an $11.25 million senior loan for a senior housing campus in Madera, Calif. The community, built in 2006 and operated by Integral Senior Living, has 112 units offering independent living, assisted living, and memory care. The loan has a 3-year term with an 8% interest rate.

Health Care REIT Announces Conversion Option for 3.00% Notes

On Tuesday, Health Care REIT, Inc. (NYSE:HCN) notified holders of the $494.4 million outstanding principal amount of its 3.00% convertible senior notes due 2029 that they are entitled to convert all or a portion of their Notes into cash and, if applicable, shares of the company’s common stock.

Holders’ right to convert begins on April 9, 2013 and ends at the close of business on July 9, 2013. The notes are convertible because the closing price of shares of the company’s common stock, for at least 20 trading days during the 30 consecutive trading-day period ending on March 31, 2013, was greater than 120% of the conversion price in effect on March 31, 2013.

Love Funding Closes $4.71 Million Loan for Senior Apartment Complex

Love Funding announced on Thursday the closing of a $4.71 million loan refinancing for Porthaven Manor, a 102-unit, age-restricted apartment community in Port Huron, Mich.

Bruce Gerhart, Love Funding’s Midwest regional director, secured the financing through the Department of Housing and Urban Development’s Section 232/223(f) loan insurance program. 

Porthaven Manor, built in 1989 with low-income housing tax credits administered by the Michigan State Housing Development Authority, is restricted for adults aged 62 and older and is required to set aside 20% of its units for income-qualified residents that pay below-market rents. 

The refinancing allows the property’s owners to pay off Boston Financial Institutional Tax Credits, which financed the tax credits. 

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