There’s a new senior housing lender in town: an existing real estate mortgage services provider recently announced an expansion from its affordable and conventional multifamily housing finance platforms into healthcare.
Centerline Capital Group has launched a new national healthcare lending platform that will fund loans for the acquisition, new construction, and sub-rehabilitation of community-based residential care communities, assisted living and memory care communities, nursing homes, and special-use healthcare properties.
The new business line is fueled by a capital infusion from the Hunt Companies through a recent merger.
In 2013, Centerline Holding Company (OTC:CLNH) merged with Hunt Capital Partners, LLC, the affordable housing division and an affiliate of Hunt Companies, Inc. Through the merger, the Hunt affiliate acquired the remaining outstanding common shares of Centerline that it did not already own, bringing Hunt’s real estate assets under management to $24.8 billion.
“The entire healthcare industry is booming, and the Hunt Companies is very much in growth mode,” said Jim Boris, director of FHA Loan Production at Centerline. “They recognized the need and growth opportunities in the healthcare industry, and the infusion of Hunt’s capital is enabling us to [grow].”
The new finance platform is being formed under Centerline’s existing FHA Group, led by senior managing director Philip Melton, while Boris will head up new originations for the senior housing division.
“Our new healthcare lending program will enable us to extend our services to customers that are active in multiple disciplines in the healthcare arena and expand the financing capabilities of Centerline,” said Melton.
Centerline’s senior housing division will include three loan structures: Centerline Bridge Loans, HUD Section 232/223f for Acquisition and Refinance Loans, and HUD Section 232 New Construction and Sub Rehab Loans.
“The program will benefit the sector by providing low fixed rate, construction, acquisition, or refinancing alternatives for long-term fully amortizing, non-recourse financing,” said Boris. “This will be coupled with shorter term proprietary bridge options for developers seeking flexibility prior to locking in long term financing.”
Centerline is exploring a couple growth strategies, including by hiring experienced lenders, although the group already has loan processing staff in place along with other lenders with experience in the healthcare industry.
“We’ve been interviewing and are prepared to make offers to a number of experienced HUD-approved LEAN program underwriters,” said Boris, who in addition to extensive HUD lending experience also developed, owned, and managed three assisted living and memory care campuses.
Business plans also include Fannie and Freddie lending in 2015, although the focus right now is on agency lending, as Centerline has already obtained HUD approval for healthcare underwriting and servicing.
While affordable multifamily housing will continue to comprise the bulk of Centerline’s business, the group has existing clients in the healthcare space and is aiming to close a “couple hundred million” dollars of healthcare loans this year, said Boris.
“The backbone of Centerline has always been affordable housing, and we have a good piece of business in market rate Class A/B multifamily apartments as well,” he says. “Healthcare is a new platform for us; it’s going to be a smaller piece of the puzzle, but we expect to get a reasonable share of the market and continue to grow substantially in the next couple years.”
Written by Alyssa Gerace