New Senior Rapidly Secures $670 Million Freddie Mac Financing

A deal to secure $670 million in Freddie Mac financing for New Senior Investment Group Inc. (NYSE: SNR), announced earlier this week, was the largest in company history for Walker & Dunlop, the commercial real estate finance company that facilitated the financing.

The company said Tuesday it was the largest financing in the company’s 77-year history, in providing details about the transaction to Senior Housing News, and was completed in relatively short time—41 days from engagement.

The quick turnaround stemmed from the fact that there was a closing timeline on the Hawthorn acquisition, and New Senior also wanted to combine that deal with the refinancing of its existing assets, Willy Walker, chairman and CEO of Walker & Dunlop, told SHN.

“The deal not only was large because of simultaneously underwriting 52 assets, but we rate-locked and turned around closed the deal three days later,” Walker said.

The loans are seven-year adjustable rate mortgages through the Freddie Mac Seller/Servicer Program, and they are secured by a 52-property portfolio owned by New Senior, a real estate investment trust (REIT) managed by an affiliate of Fortress Investment Group LLC that the company took public last year.

The financing is in the form of 52 discrete loans, Walker & Dunlop confirmed to SHN. The proceeds will go in part toward SNR’s previously announced acquisition of 17 properties from affiliates of Hawthorn Retirement Group for $435 million. The portfolio consists of 2,082 private pay units in 10 states. Holiday Retirement will be the operator.

Some proceeds of the new loans will go toward refinancing existing floating rate debt, New Senior has said. The 35 existing properties that will be refinanced include assisted living, senior living and memory care.

The labor involved was a major challenge, but New Senior and Freddie Mac proved “fantastic partners” in getting the financing done on such a tight timeline, Walker added.

Freddie Mac and Fannie Mae have a “large appetite” for this type of senior housing product, Walker noted to SHN.

Written by Tim Mullaney