Senior Housing Finance Activity: Red Capital, Love Funding, Beech Street

Red Capital Partners Closes $20.6 Million Senior Housing Construction Loan

Red Capital Partners, LLC, the proprietary banking arm of RED CAPITAL GROUP, LLC, announced recently the closing of a $20.6 million seniors housing balance sheet construction loan for Kensington of Sierra Madre in California. 

Kensington of Sierra Madre will be a two-story assisted living and memory care community with 90 beds in 75 units. This will be the first purpose-built assisted living facility constructed in the close-knit and highly desirable Los Angeles-area community in approximately 10 years. The property will be developed, owned and operated by affiliates of Kensington Senior Living, LLC.

The non-recourse construction loan will finance the completion and stabilization of the project over an initial five year term. Following successful lease-up, RED CAPITAL GROUP, LLC anticipates providing a permanent loan refinance through Red Mortgage Capital, LLC, its mortgage banking arm. 

“Senior housing debt deals remain difficult to source and RED’s solution orientation combined with exceptional terms provided the ideal capital for us,” said Dan Gorham, Finance Partner at Kensington Senior Living. 

Ziegler YTD Transactions Total More Than $3 Billion

Ziegler’s Senior Living Finance Practice recently announced that it has closed more than 50 senior living financing transactions from November 2012 to date totaling more than $3 billon.

Ziegler Closes $17.6 Million Financing for Fleet Landing

Ziegler recently announced the closing of the $17.6 million tax-exempt fixed-rate Fleet Landing Series 2013B Bond issue for Naval Continuing Care Retirement Foundation, a type-A life care, entrance fee CCRC in Atlantic Beach, Fla.

Proceeds of the Series 2013B Bonds, together with other sources of funds, will be used to fund the construction of 24 assisted living/memory support units and an extensive renovation of the Health Center. The Series 2013B Bonds are tax-exempt, fixed-rate bonds with deferred amortization to wrap-around the Series 2013A Bonds. The Series 2013A Bonds were issued earlier in the year to refund prior indebtedness.

Fitch Ratings have assigned a rating of BBB with a stable outlook to the issue. 

Love Funding Finances $5 Million Senior Living Acquisition 

Love Funding recently announced the closing of a $4.92 million loan for the acquisition of Graceland at Garden Ridge, a 46-bed assisted living and memory care center in Garden Ridge, Texas.

Love Funding Senior Director Leonard A. Lucas of the Boston office secured the loan for the buyer, Cara Graceland LLC, through the HUD Section 232/223(f) LEAN loan program for healthcare facilities.

During the processing of the loan application, HUD exhausted its loan commitment authority from Congress, a development that prevented the agency from issuing a firm commitment, which would allow the borrower to proceed to closing. Love Funding was able to offer the borrower bridge financing against its own balance sheet to keep the acquisition on track and prevent the original purchase and sale agreement from expiring.

“Had the purchase and sale agreement expired, the borrower would have lost his deposit and all costs associated with the transaction,” said Lucas, who has closed more than $200 million in HUD financing multifamily and healthcare transactions year-to-date. “We were in a position to step up and prevent that from happening, and the borrower was extremely appreciative of our support.”

Between the apparent exhaustion of HUD’s commitment authority in July and the funding of the bridge loan last month, the agency recouped some of its previously used commitment authority and was able to issue a firm commitment, allowing the closing of the loan. The HUD insured closing date was set prior to the government shutdown, which allowed the closing to take place during the shutdown itself.

Cain Brothers Structures $19M Bond Transaction for Eskaton

Cain Brothers served as investment banking advisor in connection with a $19.2 million direct bank purchase bond structure transaction for Eskaton Properties, Incorporated. 

Eskaton used the direct bank purchase to convert all of its Series 2008A Bonds to an index mode. Cain Brothers worked with the bank to secure a seven-year capital commitment. Cain Brothers successfully managed and expedited the financing process with closing occurring approximately 60 days after receipt of the final term sheet. The seven-year commitment resulted in a cost of capital below 2% based on interest rates as of the date of transaction closing.

Cambridge Arranges $18M in Loans for Mo. Senior Care Centers

Cambridge Realty Capital Companies recently arranged $14,992,000 loan to refinance the Crystal Creek Health and Rehabilitation Center, a 158-bed skilled nursing facility located in Florissant, Mo.

The fully-amortized, 30-year loan was arranged for the owner, an Ohio limited liability company, using HUD’s Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUD loans.

Crystal Creek Health and Rehabilitation Center is a 158-bed skilled nursing facility. It provides short and long-term care, physical, occupational and speech therapy, Alzheimer’s and dementia care and respite care. Non-medical services include food/dining services, activities, entertainment and religious services.

Cambridge also recently arranged a $3,145,000 loan to refinance the Willow Care Rehabilitation and Health Care Center, a 111-bed skilled nursing facility located in Hannibal, Mo.

The fully-amortized, 30-year loan was arranged for the owner, a Missouri limited liability company, using HUD’s Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

Cambridge Closes $13.5 Million Loan for ALF Portfolio

Cambridge Realty Capital Companies recently closed $13.5 million in loans to refinance three assisted living facilities owned by a California limited liability company.
The fully-amortized loans were arranged for the owner using HUD’s Section 232/223(f) program and were underwritten by Cambridge Realty Capital Ltd. of Illinois.

The properties and loan amounts are Glen Park West Retirement Community, a 98-bed assisted living facility in Glendale for $5.2 million; Glen Park East Retirement Community, a 97-bed assisted living and memory care facility in Glendale for $4.4 million; and Laurel Canyon Retirement Community, a 68-bed assisted living facility in North Hollywood for $3.9 million. 

Cambridge Arranges $3.6 Million Loan for Ill. SNF

Cambridge Realty Capital Companies reports arranging a $3.7 million loan to refinance the Mattoon Healthcare and Rehabilitation Center, a 123-bed skilled nursing facility located in Mattoon, Illinois.

The fully-amortized, 33-year loan was arranged for the owner, a Missouri limited liability company, using HUD’s Section 232/223(f) funding program and underwritten by Cambridge Realty Capital Ltd. of Illinois.

Cambridge Closes a $6.4 Million Loan for Ind. Senior Care Center

Cambridge Realty Capital Companies reports arranging a $6.5 million loan to refinance the East Lake Rehabilitation Center, a 152-bed skilled nursing facility located in Elkhart, Ind.

The fully amortized, 23-year loan was arranged for the owner, an Indiana limited liability company, using HUD’s Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois. 

Beech Street Closes $27.8M Loan for SNF Portfolio 

Beech Street Capital, LLC announced recently that it closed $27.8 million in loans to refinance a 415-bed portfolio of two skilled nursing facilities in Chicago and Momence, Illinois.

The borrower looked to lower the interest rate and create debt service savings to Central Nursing & Rehab Center and Momence Nursing & Rehab Center using FHA’s Section 232/223(a)(7) loan program. The fixed-rate loans have a 30-year term. 

Senior Apartment Complex Gets AHP Grant for Renovation

A $287,000 Affordable Housing Program (AHP) grant to Goodwill Industries of Acadiana Housing Corp. will allow the nonprofit to rehabilitate Maison De Goodwill Apartments, a senior living apartment complex in central Lafayette, La.

The Federal Home Loan Bank of Dallas and IBERIABANK awarded Goodwill Industries the AHP grant. 

Besides providing for a new roof for Acadiana Housing’s Maison De Goodwill Apartments, the grant will fund the replacement of a privacy fence, repairs to the parking lot, and rehabilitation of exterior siding. In addition, some of the units will also receive new energy efficient appliances and insulating doors.

Lancaster Pollard Refinances Five Senior Living Properties 

Lancaster Pollard recently refinanced five senior living properties in Illinois, Kentucky and Ohio.

In Illinois, Lancaster Pollard closed an $8.7 million loan to refinance Heritage Woods of Huntley, a 72-unit assisted living facility, located in Huntley. The transaction funded a $40,000 deposit to the replacement reserve and will generate over $210,000 in annual debt service savings. 

In Kentucky, the firm refinanced two BHI Properties for $9.1 million, Springhurst Health and Rehab, an 82-bed skilled nursing facility, and Parr’s at Springhurst, an 84-bed assisted living facility, using the FHA Sec. 232/223(a)(7) program. Located in Lexington, Ky., BHI is owned and operated by Baptist Homes, Inc., a nonprofit organization.  Baptist Homes was able to save nearly $28,000 annually in debt service. 

Lancaster Pollard also was engaged by the owner of Normandy Manor of Rocky River, a 150-bed skilled nursing facility in Ohio, to refinance an existing HUD-insured loan via the FHA Sec. 232/223(f) program. The refinance was used to fund an expansion of the therapy and memory care space and a renovation of the facility’s common areas while generating annual debt service savings of nearly $125,000.

The firm refinanced tax-exempt bonds for Lutheran Social Services of Central Ohio, a nonprofit organization based in Worthington, Ohio, on its 130-bed skilled nursing facility, Good Shepherd Rehabilitation and Healthcare Campus, in Ashland, Ohio. Using the HUD/FHA Sec. 232/223(f) program, Lancaster Pollard obtained 30-year, nonrecourse debt at a lower interest rate on the $4.6 million loan for the organization. In addition, Good Shepherd was able to perform more than $700,000 in repairs and improvements to the facility and deposit more than $1.2 million into its replacement reserve account to fund future upkeep.