Senior Housing Finance Activity: Love Funding, Capital One Bank

Love Funding Refinances $11.6M for Mich. AL

Love Funding, a provider of FHA multifamily, affordable and healthcare financing, closed a $11.6 million refinancing for Grand Pines Assisted Living Center, a 104-bed assisted living facility in Grand Haven, Mich.
 
Love Funding Midwest Regional Director Bruce Gerhart secured the loan through the U.S. Department of Housing and Urban Development’s LEAN 232/223(f) loan insurance program. Financing the transaction through the program enabled the borrower to lock in a low, fixed interest rate over a 35-year term and pay off debt related to the installation of an electronic call system.
 
Grand Pines was built in two phases between 2009 and 2011, and is comprised of two secure memory care wings and two general assisted living wings. The property is principally owned by Reenders Inc., a longstanding Grand Haven-based client of Gerhart and Love Funding. 

Cain Brothers Assists with Issuance of $33.8M for Ore. CCRC

Cain Brothers served as an investment banking advisor in connection with the issuance of $33,842,000 The Hospital Facilities Authority of the City of Medford, Ore., Revenue Bonds, Series 2014 for Cascade Manor.

Cascade Manor has been serving the seniors of the Eugene-Springfield area for nearly 40 years and is the first and only continuing care retirement community (CCRC) in Eugene, Ore.

Cascade is located on a five-acre site and currently has 132 units consisting of independent living, residential care, and Health Care Center. Cascade Manor is an affiliate of Pacific Retirement Services, a not-for-profit sponsoring organization based in Medford, Ore.

Capital One Bank Closes a $60M Loan, $6 Million Revolver for Acquisition of Midwest Skilled Nursing Portfolio                 

Capital One Bank provided a $60 million secured term loan to be used to acquire a portfolio of 19 skilled nursing facilities in Indiana and Iowa. The bank has also provided a $6 million revolving line of credit to fund ongoing working capital at the facilities.

This portfolio of properties has 1,163 licensed beds. 

 “This was a complex transaction with many moving parts, but we were able to offer competitive pricing as well as a creative structure,” said Scott Rossbach, investment officer with Commercial and Specialty Finance at Capital One Bank, in a statement. 

The floating-rate loan has a five-year term and is structured as a bridge to permanent HUD financing, noted Joshua Rosen, senior vice president of originations.

AdCare Health Systems Secures Financing for Ga. Nursing Home

AdCare Health Systems, Inc. (NYSE MKT: ADK), (NYSE MKT: ADK.PRA), a long-term care provider, as part of its ongoing strategic plan to transition from an owner and operator of healthcare facilities to a healthcare property holding and leasing company, closed credit facility agreements securing long-term financing for Mt. Kenn Property Holdings, LLC, (Autumn Breeze Healthcare Center) a 108-bed nursing home facility located in Marietta, Ga.

As a result of the transaction, AdCare received cash proceeds of approximately $1.4 million, net of fees.

“The completion of the refinancing is another step in the company’s strategic plan to actively look to refinance existing facilities to lower interest rates and maximize shareholder returns on investment,” said Bill McBride, AdCare’s CEO and president, in a statement. “We believe there are other opportunities among the remaining facilities to achieve similar results, and we are actively pursuing these opportunities.”

Under the terms of the Autumn Breeze agreement, the lender provided a principal amount of $7.6 million for a 30-year, secured credit facility with an annual interest rate of 3.65%, with all amounts secured by the United States Housing and Urban Development Department (HUD). The loan, under HUD rules, is subject to an annual insurance cost of .65 %.

Regarding the company’s transition, it has entered into agreements to lease or sublease 14 of its 37 healthcare facilities. Of these 14 health care facilities, eight of them are completed transactions. Six of the 14 healthcare facilities are expected to close during the first quarter of 2015 when financing approval of five of the healthcare facilities is obtained from HUD.

Management currently expects substantially all of the remaining 23 facilities to be leased or subleased, subject to approval from landlord, lenders, regulators, and/or HUD, by the end of the first quarter of 2015, the company said.

CBRE Arranges Acquisition Financing of $40M for Texas CCRC

CBRE Capital Markets’ Senior Housing Debt & Structured Finance group in Houston arranged acquisition financing on behalf of a joint venture between Franklin Development Properties and Harrison Street Real Estate Capital for Franklin Park Stone Oak, a Class A assisted living and memory care community in San Antonio, Texas

CBRE negotiated an $18.2 million, five-year, 36-month interest-only, floating rate mortgage loan at 70% loan-to-value ratio for Phase I (assisted living/memory care), which Franklin Development built in 2011. Phase I of the project features 99 units.

CBRE also negotiated a $22.1 million, five-year, 48-month interest-only, floating rate construction loan at 70% loan-to-cost ratio to develop Phase II (independent living), which will be adjacent to the existing campus.

Once complete, the rental CCRC will consist of 162 independent living units, 66 assisted living units and 33 memory care units. 

”The financing satisfied the borrower’s objective to secure an attractive floating rate loan to recapitalize Phase I in addition to procuring a construction loan simultaneously for Phase II with the same lender,” said Aron Will, senior vice president with CBRE, in a statement. “Given the community will function as one contiguous campus upon completion, having one lending partner made the most sense for the borrower.” 

Franklin Park Stone Oak is located in Far North Central San Antonio on Encino Commons with direct access to Highway 281. The property is located near shopping, hospitals, entertainment, education and medical centers. 

Aron Will and Austin Sacco, with CBRE’s Senior Housing Debt and Structured Finance group, secured the financing for the loan. 

GE Capital Arranges $500M Credit Facility for Brookdale Senior Living 

GE Capital’s Healthcare Financial Services (HFS) business agented a $500 million credit facility for Brookdale Senior Living (NYSE: BKD). HFS is administrative agent and GE Capital Markets is sole lead arranger on the transaction.

The funds may be used to finance acquisitions, to fund working capital and capital expenditures, and for other general corporate purposes.

Brookdale is the largest operator of senior living communities throughout the U.S. It currently operates nearly 1,150 independent living, assisted living, dementia care and continuing care retirement centers in 46 states.

Through its ancillary services programs, Brookdale also offers a range of outpatient therapy, home health, personalized living and hospice services.

“We’ve been working with HFS for over a decade, and we continue to find them flexible, creative and easy to work with,” said Andy Smith, CEO of Brookdale, in a statement.

This is the companies’ largest transaction together thus far, said James Seymour, senior managing director of GE Capital, Healthcare Financial Services’ real estate financing team, in a statement.

“We’re excited to help provide a vehicle for Brookdale’s continued growth,” Seymour said. “The considerable number of lenders involved in this transaction attests to the support that Brookdale has in the marketplace.”

Greystone Provides $43.5M HUD Loan to Acquire N.Y. S.N.F.

Greystone, a national provider of multifamily and health care mortgage loans, provided a $43,545,000 HUD loan for the acquisition of a 360-bed skilled nursing facility in Brooklyn, NY. The transaction was originated by Fred Levine, a senior mortgage originator at the firm.

The FHA financing was provided for Shorefront Center for Rehabilitation and Nursing Care, a nursing home and rehabilitation center located onthe storied Coney Island boardwalk of Brooklyn’s ocean waterfront. The terms of the non-recourse loan include a fixed low interest rate for 35 years. The facility now becomes part of the growing SentosaCare Network in New York.

“I’m thrilled to add this quality facility to our portfolio of healthcare facilities,” said Ben Philipson, president of SentosaCare, in a statement. “By going straight to HUD forthe acquisition, I was able to avoid the additional step and associated costs of securing a bridge loan first.”

“While a skilled nursing facility acquisition with HUD can often be challenging due to extended timelines, we were able to work closely with SentosaCare and the seller to close in a timely fashion and realize the benefits of long-term, low rate FHA financing,” said Betsy Vartanian, head of Greystone’s FHA healthcare lending team at Greystone.

Written by Cassandra Dowell