Senior Housing Finance Activity: Berkadia, RED Capital, HHC Finance

Berkadia Secures $44 Million for N.Y. Skilled Nursing Facilities

Berkadia Commercial Mortgage LLC recently arranged $43.9 million of financing for two skilled nursing facilities located in Nassau County and Dutchess County, N.Y. Vice President Jay Healy of Berkadia’s Seniors Housing and Healthcare group worked with the owner of both properties to secure the fixed-rate financing.

Healy secured a 12-year term extension and closed a 29-year, 6-month loan through the HUD Section 232/223(a)(7) program for a 280-bed facility in Nassau County, N.Y. He also facilitated a note modification through HUD for a five-story building in Dutchess County, N.Y. with 160 beds. The two transactions resulted in combined debt service savings of over $1.7 million for the borrower and were structured in such a way that a master lease was not required by HUD.

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HHC Finance Closes $67M of HUD Senior Care Loans

HHC Finance has closed on seven HUD Section 232/223(f) loans totaling $67,040,000. All the loans were originated in April to refinance the existing conventional debt on the properties.

Two of the loans were for Pennsylvania properties: a $12.8 million loan for a 130-bed skilled nursing facility and a $13.1 million loan for a 145-bed SNF.

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HHC Finance also originated loans for two Florida skilled nursing facilities, both with 120 beds, one for $7.5 million and the other for $12.7 million.

Another $11.6 million loan was for a 278-bed skilled nursing facility in Montana. The last two loans were for two 60-unit supportive living facilities in Illinois, a nearly $5 million loan and a $4.3 million loan.

RED Capital Group Provides $11M of Senior Housing Capital

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Red Capital Group recently provided more than $10.8 million of financing for two different senior care organizations.

RED’s Seniors Housing Group provided a $5,355,000 balance sheet loan through RED Capital Partners, LLC to Clearview Lantern Suites in Warren, Ohio.

A $5.45 million mortgage loan was obtained by RED Mortgage Capital, LLC for the Samaritan Health Care Center in Medina, Ohio via the FHA Section 232/223(a)(7) program.

Marcus & Millichap Brokers $33.5 Million Pennsylvania Nursing Home Sale

Marcus & Millichap represented Beaver County, Pennsylvania in the sale of its 605-bed nursing home for $33.5 million. The transaction, which closed this year on February 28, closed for 50% above the minimum bid price of $25 million.

A “consortium” of owners and operators from New York and New Jersey were the purchasers of the county-owned Friendship Ridge facility, said Joshua Jandris of Marcus & Millichap to SHN. Collectively, the purchasers—who were not named—have experience of more than 50 years in long-term care.

Prior to the transaction, the county-owned Friendship Ridge facility was losing approximately $16,000 per day, Jandris said.

After marketing the property for 60 days, Marcus & Millichap noted that 65 inquiries were received, nine tours were held and five purchase proposals were collected—all in excess of the $25 million minimum bid price.

The unit mix at Friendship Ridge consists of 589 long-term care beds and 16 long-term structured residences, for people “that need help by can come and go as they please and are not necessarily geriatric,” Jandris said. The layout of the property also includes 99 four-bed wards.

The property is located less than a quarter mile from the 361-bed Heritage Valley Hospital.—JO

Cambridge Realty Closes $14M Refinance for Chicago Senior Care Center

Cambridge Realty Capital Companies has closed on a $14 million loan to refinance Alden Northmoor Rehabilitation and Health Care Center, a 198-bed skilled care nursing home in Chicago.

The fully-amortized, 32-year term loan was arranged for the owner using the HUD Section 232/223(f) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUD loans.

Lancaster Pollard Arranges $63M of Senior Housing Financing

Lancaster Pollard recently arranged $63.2 million of financing for senior housing organizations in several different transactions.

National Church Residences

Lancaster Pollard recently assisted National Church Residences with two financings totaling $30.5 million that involved an obligated group with outstanding tax-exempt bonds. In the first transaction, the firm helped National Church Residences refinance Traditions of Chillicothe, a 117-unit continuing care retirement community located in Central Ohio, out of their Healthcare OG. Lancaster Pollard helped National Church Residences remove Traditions from the OG by defeasing one bond series and partially redeeming another. The firm then orchestrated a $17.3 million refinance using the FHA Sec. 232/223(f) program that provides a low, fixed-rate and a large deposit to the replacement reserve account.

Concurrently, Lancaster Pollard underwrote a new OG tax-exempt bond issue to refund existing publically offered variable-rate demand bonds. Lancaster Pollard structured a $13.2 million financing that resulted in a new variable-rate structure that was privately placed with a bank. Kass Matt, managing director and Great Lakes East Regional Manager, led both transactions for Lancaster Pollard.

Sterling Senior Communities

Lancaster Pollard recently helped Sterling Senior Communities with the refinance of Tanner Springs, a 101-unit assisted living and memory care facility in West Linn, Ore., near the outskirts of Portland. The firm used the FHA Sec. 232/223(f) program for the successful transaction, which refinanced $9.9 million in debt at a significantly lower interest rate with a 35-year term and funded a sizeable deposit to the replacement reserve account. Jason Dopoulos led the transaction for Lancaster Pollard.

Mission Park Housing, Inc. 

Lancaster Pollard recently assisted Mission Park Housing, Inc. with the refinance of Bellewood Courts/South, an 84-unit affordable seniors Sec. 202 property located in Bellevue, Neb. Using the FHA Sec. 223(a)(7) program, the firm refinanced $2.5 million in debt with a fixed-rate, taxable loan at a 35-year term. The successful transaction will fund minor repairs and produce over $35,000 in annual debt service savings, which will be contributed to the replacement reserve account and used to maintain and improve the physical condition of the facility for years to come. Quintin Harris, health care banker representing Neb., Iowa and Minn., led the transaction for Lancaster Pollard.

Eskaton

Lancaster Pollard recently worked with Eskaton to rehabilitate a portfolio of seven of its affordable seniors housing properties in Northern California through a debt recapitalization without the use of tax credits. Financing was obtained through the FHA Sec. 223(f) program to refinance the portfolio.

During the application process, HUD/FHA issued a notice announcing significant changes to how developer fees are calculated. Previously, borrowers were able to extract a developer fee that was 15% of the project’s repairs. Under the new guidance, borrowers could obtain a developer fee that was 15% of the total project cost, typically a much larger figure. Lancaster Pollard was one of the first firms to utilize this new guidance and as a result obtained substantial developer fees for Eskaton.

With a total loan amount of $20.3 million, the refinance resulted in over $212,000 in total annual debt service savings, over $4.8 million in total fund repairs, and nearly $2.7 million in developer fees. The successful transaction will allow for extensive owner-elected repairs and substantial renovations that will extend the economic and physical lives of the properties. In addition, the refinance adjusts the annual deposit to the replacement reserve so that there are sufficient funds to meet all future needs of the communities. Jason Dopoulos led the transaction for Lancaster Pollard.

Cal-Mortgage Approves ECS Bond Issuance for New CCRC

Episcopal Communities & Services (ECS), the parent organization and developer of the MonteCedro CCRC, announced recently that it has received approval from Cal-Mortgage, a division of the Office of Statewide Health Planning and Development (OSHPD), to participate in its Health Facility Construction Loan Insurance Program. By securing this financial milestone, MonteCedro will be able to issue bonds at a lower interest rate, similar to the rates received by the State of California, and be backed by the “full faith and credit” of the State of California.

Cal-Mortgage’s Health Facility Construction Loan Program is modeled after federal home mortgage insurance programs, and provides financial support for non-profit healthcare facilities to develop or expand services throughout California at no cost to tax payers. To qualify for assistance, health organizations must be owned and operated by private, nonprofit public benefit corporations or political subdivisions. The program also guarantees payment of the loan principal and interest.

Currently, MonteCedro has achieved approximately 80% of reserved residences. The senior living community also received all of the approvals needed from Los Angeles County and building permits to move forward with construction. MonteCedro is being built by DPR Construction of Pasadena, Calif.

Oak Grove Capital Originates $49M of Senior Housing Loans

Oak Grove Capital recently announced senior housing loan originations of $48.9 million in three transactions for senior housing properties in Minnesota, New Mexico, and Washington.

The loans are: an $8.9 million loan through the HUD Section 232/223(f) program for Southview Senior Living in West St. Paul, Minn.; a $21.5 million Freddie Mac loan for Fairwinds Rio Rancho in Rio Rancho, N.M.; and an $18.5 million Freddie Mac loan for Van Mall Retirement in Vancouver, Wash.

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