CBRE Capital Markets Arranges $8M Acquisition Financing for Wash. IL, AL Community
CBRE’s Senior Housing Debt & Structured Finance team in Houston, TX arranged acquisition financing on behalf of Auctus Capital Partners for Crossroads Retirement Center.
Crossroads Retirement Center is a 103-unit independent living and assisted living community located in Bellevue, Wash.
CBRE secured an $8 million floating rate loan which includes a three-year term with 36 months interest only. The loan was procured from a regional bank.
Auctus acquired the property from the seller who initially bought the note on the underperforming asset. Auctus has retained Seattle-based Leisure Care to third party manage.
Auctus plans to spend a substantial amount of capex renovating and upgrading the property’s interior and exterior in order to meet resident expectations within the affluent marketplace. Auctus will also convert a portion of the asssisted living units to memory care to provide the full continuum of care to their resident population.
Chris Rosenstock recently founded Auctus to acquire, turnaround, and asset manage senior housing communities in the western U.S. Prior to founding Auctus, Rosenstock was a managing director at DiNapoli Capital Partners where he proposed the entrance into the sector and lead the acquisition efforts/business plan implementation of their senior housing communities located in Los Angeles and Seattle.
Before DiNapoli Capital Partners, Rosenstock was a managing director at Pacifica Companies.
Aron Will, senior vice president of CBRE’s Senior Housing Debt & Structured Finance team in Houston, lead the acquisition financing.
Wells Fargo, FHLB Dallas Award $259,000 Grant for Texas Low Income Senior Apartments
Prairie Village Apartments, a 38-unit complex serving low-income elderly in El Campo, Texas, was awarded a $259,000 Affordable Housing Program (AHP) grant from Wells Fargo and the Federal Home Loan Bank of Dallas (FHLB Dallas).
The funds will be used to offset construction costs related to the rehabilitation.
Prairie Village is owned and operated by National Church Residences (NCR), a Columbus, Ohio-based, not-for-profit organization specializing in senior housing.
“Even though Prairie Village remains at a high occupancy level, the buildings are tired and very energy inefficient with the old heating/cooling systems and windows,” said Eric Walker, NCR senior project leader, in a written statement. “Prairie Village was developed in the ’80s and is in significant need of renovation.”
AHP grants are available through FHLB Dallas member institutions, such as Wells Fargo.
The annual grants assist in the development of affordable, owner-occupied and rental housing for very low- to moderate-income households located across FHLB Dallas’ five-state District of Arkansas, Louisiana, Mississippi, New Mexico, and Texas. In 2014, FHLB Dallas awarded $9.8 million in AHP grants to 33 projects that will result 1,586 new or renovated housing units.
“Wells Fargo was honored to support National Church Residences’ AHP application for its Prairie Village community,” said Brandon Weber, relationship manager for Wells Fargo Community Lending & Investment. “We value their mission of providing high-quality housing in communities of need and look forward to additional opportunities to partner with them in the future.”
The $4.8 million renovation, which includes nine efficiency units, 28 one-bedroom units, and one manager’s unit, will provide Prairie Village residents with a repaired entrance gate, fencing system, and parking lot, as well as upgraded lighting and landscaping.
In addition, the renovation will include new appliances; flooring; cabinetry; water heaters; energy-efficient windows; HVAC units; bathtubs; doors; and paint inside and out.
The apartment complex, built in 1989, is scheduled to reopen in May 2015. NCR owns and manages more than 340 properties in 28 states and Puerto Rico. It was founded in 1961 by Reverend John R. Glenn and four Ohio Presbyterian churches out of a Christian commitment to serving older adults’ housing, social, and human needs.
The AHP award in El Campo is one of eight such projects Texas to receive funding in 2014. Since the program’s inception in 1990, FHLB Dallas has awarded $206.7 million in AHP competitive grants. Competitive refers to the 100-point scoring scale, on which each application is considered. The cutoff score is the point at which funds are fully allocated for a given year.
“Multifamily rental housing is in great demand across our state and the entire district,” said Bre Chapman, FHLB Dallas senior vice president and chief administrative officer.
Grandbridge Funds $7M Mortgage Loan for Ga. Seniors Housing Community
The Atlanta-based Seniors Housing and Healthcare Finance team of Grandbridge Real Estate Capital recently closed a $7,064,700 first mortgage loan secured by Presbyterian Home and Retirement Community of Quitman.
The transaction was referred to Grandbridge by BB&T bank. Funding for the full amortizing 35-year refinance was provided through FHA’s 232/223(a)(7).
Located in Quitman, Ga., the 204-bed seniors housing community features a mix of living options that includes residential, supportive, skilled nursing care and memory support levels.
Senior Vice President Richard Thomas originated the transaction.
Lancaster Pollard Assists With $2.5M Refinance for Vt. CCRC
Lancaster Pollard assisted the Cedar Hill Health Corporation to refinance its previous HUD-insured loan for the Health Care Center at Cedar Hill, a 39-bed skilled nursing facility, and 15-unit residential care facility, both a part of Cedar Hill Continuing Care Community in Windsor, Vt.
The firm recommended using the FHA Sec. 232/223(a)(7) program and, as a result, the borrower extended its mortgage maturity term to 30 years and lowered its interest rate by 130 basis points. This resulted in an annual debt service savings of $20,000.
In addition, more than $240,000 in proceeds from the $2.5 million loan was used on improvements, including renovated flooring and major repairs to the HVAC system of both facilities.
Aaron Becker, based out of Lancaster Pollard’s Philadelphia office, led the transaction.
Lancaster Pollard Refinances $2.3M for Mich. AL
Lancaster Pollard helped complete a $2.3 million refinancing of a 20-unit assisted living community in western Michigan.
The community, constructed in 2007, was originally financed with a combination of bank debt and Small Business Association loan proceeds.
By refinancing through the FHA Sec. 232/223(f) program, the borrower has created flexibility for future growth.
The interest rate for the loan was below 4% and fixed for 35 years. The borrower was also able to finance several repairs to the facility.
The transaction was led by Brendan Healy, a health care banker representing Michigan and Wisconsin.
Lancaster Pollard Provides $8M Acquisition Financing for N.Y. SNF
Lancaster Pollard recently financed the acquisition of Morningstar Residential Care Center, a 120-bed long-term and sub-acute skilled nursing facility located near Syracuse, New York.
The $8 million transaction was led by Tom Grywalski, a vice president for Lancaster Pollard based out of the firm’s Philadelphia office.
The unique transaction was a phased-acquisition of the nursing home’s operations followed by the real estate, occurring between multigenerational family members.
Due to the specifics of the purchase option, Lancaster Pollard was able to bridge and then finance the acquisition with a FHA Sec. 232/223(f)-insured loan, funding 100% of the purchase price and mortgage reserves.
Now that the nursing home has permanent non-recourse debt with an all-in interest rate near 4%, fixed for 30 years, the owner’s financial flexibility has improved.
This is enabling him to renovate a building and open a new Medicaid-waiver assisted living facility in the
Lancaster Pollard Restructures Financing for for Ore. IL, AL Communtiy
Located 10 miles west of downtown Portland, Ore., Laurel Parc at Bethany Village offers both independent living and assisted living.
The facility was originally constructed in 2009 using a separate loan type for each acuity; an HUD/FHA Sec. 221(d)(4) loan financed the IL units and an FHA Sec. 232 loan financed the AL units.
In its early years, during the height of an economic downturn, the facility experienced a longer lease-up timeframe than originally anticipated. As such, ownership structured two operating loss loans with HUD to help the facility minimize losses until stabilization.
By 2013, Laurel Parc was performing well and had waiting lists for both its IL and AL units. That success led the ownership group to pursue a new construction project that would add a total of 69 units. The expansion would fund the construction of additional IL and AL space as well as the addition of memory care units which were not previously available at the facility.
As Laurel Parc already had an outstanding FHA Sec. 232 loan, Lancaster Pollard’s original plan was to finance the expansion using the FHA Sec. 232/241(a) program. Upon further examination, however, the firm worked with HUD to pursue an alternative structure that would use the FHA Sec. 232 program to consolidate the four outstanding loans while simultaneously financing the new construction project.
By prepaying Laurel Parc’s existing loans and working with HUD to obtain certain waivers, the firm was able to use the new HUD LEAN underwriting guidelines to structure a financing solution using a blended rate financing via the FHA Sec. 232 program.
In addition, Lancaster Pollard worked with HUD to facilitate an early start on construction. That allowed Laurel Parc to keep its favorable construction pricing and stay ahead of the notoriously wet Oregon fall weather as they were able to begin construction during the application process.
The successful blended rate financing via the FHA Sec. 232 program resulted in a $50 million loan−$14 million for the new construction project and a refinance of $36 million that consolidated Laurel Parc’s four outstanding HUD loans.
“The result is a much simpler and more cost-effective permanent financing structure that allows Laurel Parc to not only lower its interest rate but alleviate much of the accounting and administrative burden cause by holding multiple loans,” Lancaster Pollard said in a written statement. “With its much improved financial outlook, Laurel Parc can now focus on its mission of being a retirement community where seniors enjoy life to the fullest.”
Matt Lindsay, health care banker for Lancaster Pollard representing the northwest, led the transaction.
Written by Cassandra Dowell