Senior Housing Finance Activity: Love Funding, Ziegler, CBRE

Capital One Bank Refinances $36M for S.C. Senior Living Community

Capital One Bank provided a $36.3 million secured term loan to affiliates of Dominion Partners, LLC. to refinance the original construction loan on Somerby of Mt. Pleasant, a senior living community outside Charleston, S. C. 

Headquartered in Birmingham, Ala., Dominion Partners has developed a number of multifamily and senior housing properties since the economic downturn.

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Its management company, Somerby Senior Living Services, LLC has 1,123 senior living units under ownership and management. 

“The flexible deal structure, in combination with Capital One’s certainty of execution, simplified our decision to work with them, says Brian Parker, Principal and CFO of Dominion Partners, in a written statement.  

Located northeast of Charleston, Somerby of Mt. Pleasant was developed in 2008.

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The community offers a fitness facility, restaurant-style fine dining, scheduled transportation, on-duty nurse, indoor heated aerobic exercise pool, and separate guest suite for visiting friends and family, among other amenities. It comprises a total of 248 units, which includes 159 independent living units (apartments and villas) and 89 assisted living units (51 apartments and 38 memory care apartments). 

Love Funding Refinances $6M for Ohio SNF

Love Funding, a provider of FHA multifamily, affordable and healthcare financing, closed a $6.16 million loan refinancing for Briarfield at Ashley Circle, a 98-bed skilled nursing facility in Austintown, Ohio.
 
Senior Director Robert Smallwood of Love Funding’s Cleveland office secured a 35-year loan term, lowered the interest rate, and increased debt service savings for the property’s owners through the U.S. Department of Housing and Urban Development’s 232/223(f) program.
 
Briarfield at Ashley Circle was built in 1980 and is owned by Ed and Diane Reese. Ed Reese is chief executive officer of EDM Management Inc., which manages the facility. Diane Reese is the company’s president. The couple manages four other projects in Ohio: The Inn at Ironwood, The Inn at Glenellen, The Inn at Christine Valley and Briarfield Manor Skilled Nursing Facility.

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The refinancing will enable the Reeses to utilize new local conventional debt for acquisitions and/or new construction financing.

Love Funding Secures $5M Loan to Expand Ohio ALF 

Love Funding, a provider of FHA multifamily, affordable and healthcare financing, closed a $5.32 million loan for Governor’s Village, a Cleveland area assisted living facility that will use the funds to nearly double its capacity and help meet growing demand. 

Senior Director Robert Smallwood of Love Funding’s Cleveland office secured the loan through the U.S. Department of Housing and Urban Development’s 232/241(a) loan insurance program that backs supplemental loans to fund repairs, additions and improvements at existing FHA-insured health care facilities. 

Using the program enabled Randall Residence, the majority owner and operator of the property, to lock in a low, fixed interest rate for the remaining 29 years of the existing insured mortgage.

Love Funding has assisted the family-owned business since 2003, helping the company expand its services to more than 250 seniors in Ohio, Michigan and Illinois. 

Randall Residence built the facility in Mayfield Village in 2001. It currently has 24 traditional, assisted living units and 24 memory care units. Once completed, the addition will add another 38 assisted living units while subtracting one memory care unit, bringing the total capacity at the facility to 85 units.

The ownership group has submitted an application to the State of Ohio to increase its overall license from 62 beds to 99 beds. The addition will be built by The Douglas Company based on plans created by architecture firm C.C. Hodgson. 

Love Funding Secures $10M Acquisition Loan for Section 8 N.J. Senior Housing

Love Funding, a provider of FHA multifamily, affordable and healthcare financing, closed a $10.3 million loan for the acquisition of Cedar Grove Senior Citizens Housing, a 150-unit, age-restricted Section 8 apartment building in Cedar Grove, New Jersey.
 
Cedar Grove was built in 1983 and is restricted to tenants aged 62 and older. Its ownership is being transferred from Cedar Grove Senior Citizens Housing Inc. to 100 Cedar Ridge Drive Urban Renewal LP.

The property will continue to be managed by Raymond P. Marzulli Co. Building Blocks Non-Profit Housing Corp., a nonprofit corporation based in Michigan, will be a minority owner.

Since its founding in 1994, Building Blocks has helped preserve more than 1,900 units of affordable housing.

Love Funding Midwest Regional Director Bruce Gerhart secured the loan through the U.S. Department of Housing and Urban Development’s 223(f) loan insurance program for the purchase or refinancing of existing multifamily rental housing.

Using the program enabled the borrower to obtain low, fixed rate, non-recourse financing for a 35-year term.

Capital One Bank Closes $24M Revenue Bond for Revera Inc.

Capital One Bank served as placement agent and purchaser of a $24 million private placement taxable revenue bond to affiliates of Revera Inc., a provider of housing, care and services for seniors across the United States and Canada.

The revenue bonds are secured by mortgages on seven assisted living facilities and one independent living campus in Oregon, and proceeds will be used to refinance the borrowers’ outstanding revenue bonds, finance new money capital improvement projects, repay intercompany capital improvement loans, and fund a debt service reserve. 

The borrowers are owned through various holding companies of Revera Inc., which operates over 500 retirement communities, long-term care homes, skilled nursing facilities, and home health branches in the United States and Canada.

“Capital One provided competitive fixed-rate pricing with numerous maturity and amortization options to fit the unique structure of the bond,” says Glen Chow, vice president of Treasury and Risk Management for Revera, Inc, in a written statement.

The fixed-rate loan has a five-year term, with a 20-year amortization schedule. 

Grandbridge Closes $30M Mortgage Loan for N.C. Senior Housing Community

The Atlanta-based Seniors Housing and Healthcare Finance team of Grandbridge Real Estate Capital recently closed a $30,000,000 first mortgage loan secured by Woodland Terrace of Cary. 

Located in Cary, N.C., in the Raleigh/Durham metropolitan statistical area, the 176-unit/184-bed care seniors housing community is comprised of a four-story independent living building, a one-story Alzheimer’s/memory care building and five IL duplex cottages built in 1999 and six additional IL duplex cottages built in 2008.

Funding for the refinance was arranged through Freddie Mac’s securitization execution and Fast Track Early Rate-Lock (ERL) option.

The five-year, interest-only loan was structured with a 30-year amortization.

Senior Vice President Richard Thomas originated the transaction.

“The rate was locked within two business days of signing the application and the loan closed quickly,” Thomas says in a written statement. “A win/win for the borrower and lender.”

The property was 98% occupied at closing.

Amenities to the property’s common areas include a large entry lobby, main dining room, private dining room, craft/exercise room, library, small guest apartment, card room, billiards area, chapel, TV room, beauty and barber ship, and six laundry rooms. Most units have balconies or patios.  

Capital One Bank Refinances $22.6M for Three Midwest SNFs

Capital One Multifamily Finance provided $22.6 million in fixed-rate, HUD 232/223(f) loans to refinance three skilled nursing facilities (SNFs) in the Midwest.

The transactions include an $8.7 million loan for a 208-bed facility in Chicago; a $4.6 million loan for a 143-bed facility in Oak Lawn, Ill.; and a $9.3 million loan for a 111-bed facility in Saint Cloud, Minn. All three transactions were closed the last week in September. 

The transactions were originated by Joshua Rosen, senior vice president of originations, who leads Capital One’s agency healthcare lending from the company’s Chicago office.  

The borrower has closed several deals with Capital One Multifamily Finance during the last year and has assembled an extensive portfolio of skilled nursing facilities in the Midwest over the last decade. 

“These deals highlight the advantages for borrowers of building a consistent relationship with their lenders,” Rosen says in a written statement. “After having gone through the HUD application process several times with this borrower, we have learned to work together very efficiently. In this case, we were able to complete three HUD transactions simultaneously.” 

Currently, one of the prime advantages for the health care borrower of the 232/223 (f) program is the opportunity to lock in an attractive rate for a long term, Rosen says. In this case, the three loans have terms of between 30 and 35 years.

“The 232/223 (f) program is a great deal in the current environment,” Rosen says, adding that the loans are nonrecourse and fully assumable. 

Capital One Bank Provides $8.6M FHA Loan for Ga. Affordable Seniors Housing

Capital One Multifamily Finance provided an $8.6 million HUD 221(d)(4) fixed-rate loan for construction and long term financing of Providence at Parkway Village.  

This 150-unit, affordable, age-restricted rental community is located in Union City, Georgia, part of the Atlanta MSA.

The developer is The Benoit Group, a real estate development and advisory company specializing in affordable mixed-income housing, market-rate workforce housing, independent senior living, higher education student lodging, and mixed-use development.  

The transaction was originated by Senior Vice President of Originations Carolyn Whatley, who specializes in multifamily and seniors housing and leads the firm’s efforts to build its FHA presence nationwide. John Rucker and his team at Merchant Capital was the bond underwriter. 

Providence at Parkway Village represents the third phase of the master-planned Parkway Village development, a HOPE VI Program endeavor involving the Housing Authority of Fulton County.  

The initial two phases of the HOPE VI development were a 292-unit, mixed-income, multifamily rental property that opened in April 2009 and a 150-unit, rent-subsidized, age-restricted rental property that opened April 2011.  

“The 221(d)(4) program has proven its significance over the years as a key source of financing for both affordable and market-rate rental housing,” Whatley says in a written statement. “In addition to the construction period, the program provides a 40-year fully amortizing loan. It’s an exceptional product for delivering new rental housing units.”   

In addition to the HUD 221(d)(4) loan, financing for the property includes tax-exempt bonds, a tax credit equity investment facilitated by Raymond James and the Low Income Housing Tax Credit, a HOME loan from the Georgia Department of Community Affairs, and a loan from the Housing Authority of Fulton County. 

Situated on more than nine acres, Providence at Parkway Village will consist of two three- and four-story buildings. Residency in the 150 one- and two-bedroom units will be restricted to individuals who are at least 62 years of age and earn 60% or less of the area’s median income. Rental income will be supplemented by Project Based Rental Assistance made available through a HAP Contract with the Housing Authority of Fulton County, and an Annual Contributions Contract (ACC) administered by the Housing Authority of Fulton County. 

The fixed-rate loan has a construction period of 16 months and the permanent loan carries a 40-year fully amortizing term. Capital One Bank’s Commercial Real Estate Group provides financing in markets nationwide, offering a comprehensive array of solutions for property owners and developers, including balance sheet and agency lending, financing, underwriting, and treasury management. 

Ziegler Closes $21.9M Financing for Tenn. CCRC

Ziegler, a specialty investment bank, closed $21,940,000 non-rated, tax-exempt, fixed-rate The Village at Germantown’s Series 2014 Bonds. The Village at Germantown, Inc. is a Tennessee not-for-profit corporation organized in 2000 and owns and operates a CCRC in Germantown, Tennessee known as the Village at Germantown.

The Village is located on about 27.5 acres in the heart of Germantown, an affluent suburb 17 miles from downtown Memphis.

The community consists of one, two and three-story interconnected buildings and is comprised of 198 independent living units including 170 apartments and 28 patio homes; 13 assisted living units; eight memory support units; and 30 skilled nursing beds.                 

Proceeds of the Series 2014 Bonds will be used to finance a renovation and expansion project at the community; fund future routine capital expenditures; fund a debt service reserve fund; fund interest on the bonds for 22 months; and pay a portion of the cost of issuing the bonds.

The renovation and expansion project includes constructing a new assisted living/memory support care building; renovating the existing healthcare center; expanding the existing kitchen; building a commercial laundry facility; and adding a new rehabilitation therapy clinic.

The expansion will add 19 assisted living units, eight memory support units and 20 skilled nursing beds.   

Brandon Powell, director in Ziegler’s Senior Living practice, said in a written statement: “This project represents an important strategic initiative for the Village to serve the Village residents and the larger community.” 

CBRE Capital Markets Originates $25.6M Loan for Calif. IL

Aron Will, senior vice president of CBRE’s Senior Housing Debt & Structured Finance team in Houston, Texas arranged acquisition financing on behalf of The Carlyle Group for The Patrician, a 136-unit independent living community located in La Jolla, Calif. 

CBRE secured a $25.62 million non-recourse floating rate loan which includes a five-year term with 24 months interest only and an all-in interest rate today of approximately 2.9%. The loan was procured from a regional bank.

The property will be operated by Merrill Gardens (MG).

Carlyle plans to renovate/upgrade the property’s common areas and units. Additionally, MG will provide significant operational upgrades.

Headquartered in Washington D.C., Carlyle (NASDAQ: CG) is a global alternative asset manager with $203 billion of assets under management across 126 funds and 139 fund of funds vehicles as of June 30, 2014.

Carlyle has deployed over $340 million of equity into senior housing assets totaling 5,340 units across 38 properties throughout the U.S. They currently own 17 senior housing assets across the nation totaling 2,765 units. 

Merrill Gardens was founded in 1993 and is a privately held family owned company based in Seattle with 26 communities in four states offering independent living, assisted living and memory care.

Ziegler Closes $18.5M Financing for Texas Senior Living Community  

Ziegler, a specialty investment bank, closed a $18,575,000 non-rated, tax-exempt, fixed-rate Buckingham Senior Living Community, Inc. Series 2014 Bond issue.

Senior Quality Lifestyles Corporation (SQLC), a Texas not-for-profit organization, serves as the sole corporate member of Buckingham Senior Living Community, Inc. (the Obligor).

The Buckingham is located on an about 17-acre site in Houston. The site is located in the Memorial/Tanglewood areas of Houston, an affluent area of the city just west of the Houston Galleria.

The Buckingham currently consists of 204 residential independent living apartments, an assisted living center, including 43 assisted living units and 16 memory support assisted living suites and a health center comprised of 60 nursing beds. 

The Series 2014 Bonds will be used to provide funds for acquiring about six acres of land adjacent to the community, demolishing certain existing facilities on the acquired land, funding certain predevelopment costs of a future expansion project,  funding certain future capital expenditures of the community, funding a debt service reserve fund and paying a portion of the cost of issuance of the Series 2014 Bonds.

The issuance of the Series 2014 Bonds represents the third time that Ziegler has served as the underwriter for the Obligor and the ninth time for a SQLC sponsored community. 

“As Buckingham has stabilized subsequent to opening in 2005, SQLC has recognized that the community needs adapt to maintain it’s market position and provide the next generation of residents with the services they will require,” says Rich Scanlon, senior managing director in Ziegler’s Senior Living practice, in a written statement. “The Series 2014 Bonds allow SQLC the first steps in this exciting repositioning expected to commence in the second half of 2015.”

CBRE Capital Markets Arranges Acquisition Financing for Greenfield Senior Living Portfolio

CBRE Capital Markets arranged acquisition financing on behalf of a joint venture between Care Investment Trust & Greenfield Senior Living for the Greenfield Senior Living Portfolio, a portfolio of three senior housing communities with a combination of independent living, assisted living and memory care totaling 360 units in Arlington, Texas, Oak Ridge, Tenn. and Richmond, Va.

Aron Will, senior vice president of CBRE’s Senior Housing Debt & Structured Finance team in Houston, Texas, arranged the acquisition financing.

CBRE secured a $23.1 million, five-year loan from a regional bank at 70% LTC which includes 36 months of interest only and a $2 million earn out feature. Additionally, CBRE secured non-recourse quotes from five other lending sources.

The portfolio will be cross-collateralized, cross-defaulted and consists of two communities that are turnarounds and one stabilized community contributed to the venture by Greenfield. 

The communities will be managed by Greenfield.

Care and Greenfield plan to enhance the resident experience by implementing an extensive capital improvement program and by adding programming at the communities to cater to higher acuity residents, CBRE says in a written statement. 

Care is a wholly-owned subsidiary of Tiptree Financial Inc. (NASDAQ: TIPT), a diversified holding company engaged through its consolidated subsidiaries in a number of businesses and is an active acquirer of new businesses.

Virginia-based, Greenfield is a regional owner/operator of independent living, assisted living and memory care communities specializing in creating value through acquiring, repositioning and managing distressed senior housing communities back to profitability.

Greenfield currently operates 14 communities comprising 1,150 units all located in the Mid-Atlantic and South regions. 

In 2012 and 2013, CBRE Capital Markets, through its two senior housing debt producers, originated $816 million in senior housing financings across 50 assets nationwide. 

Written by Cassandra Dowell

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