Senior Housing Finance Activity: Capital One, Cambridge

Capital One Closes $11.5M Line of Credit for Long-Term Care Provider  

Capital One Commercial Bank announced today that it has provided a $11.5 million revolving line of credit and a standby letter of credit to Carespring Healthcare Management. The company is a repeat customer of the healthcare team at Capital One Bank.

The line of credit will be used to refinance the company’s existing facilities and provide increased capacity to accommodate growth with the opening of a new skilled nursing facility in their portfolio, said Capital One in a statement. Carespring is a privately held, owner and operator of long term care facilities in Ohio and Kentucky, and operates 11 skilled nursing facilities and one assisted living facility.

Their services include a continuum of care from assisted living, rehabilitation, nursing and hospice care including physical, occupational and speech therapy.  

Capital One closed the transaction while negotiating multiple inter-creditor agreements and managing the movement of several credit facilities to the bank, the company said.  

“The Capital One team’s in-depth knowledge of the skilled nursing model, ability to navigate the multiple parties involved, and detailed understanding of our financing goals were all critical in meeting our needs,” said David Eppers, CFO of Carespring. 

Cambridge Refinances $6M for Calif. Assisted Living Home

Cambridge Realty Capital Companies arranged a $5,941,500 HUD Lean loan to refinance the Olivenhain Guest Home located in Encinitas, Calif.

The fully-amortized, 30-year loan was arranged for the owner, a California limited liability company, using the HUD Section 232 pursuant to Section 223(f) funding program, said Cambridge Chairman Jeffrey A. Davis, in a statement.

Underwriting the transaction was Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUD loans.  

Olivenhain Guest Home is a 42-bed assisted living home. It provides Alzheimer’s and memory care and assisted living services. Non-medical services include activity programs, nutritious meals, grooming and laundry.

Ziegler Closes $135M for Covenant Retirement Communities

Ziegler, a specialty investment bank, closed two financings totaling $135,145,000 in par amount for Covenant Retirement Communities (CRC), a Ziegler client for over 30 years. These include $112,805,000 of Series 2015A fixed-rate refunding bonds and $22,340,000 of Series 2015B variable rate refunding bonds sold directly to a bank.

CRC is an Illinois not-for-profit corporation organized for the purpose of owning and operating continuing care retirement communities (CCRCs) in several locations throughout the United States. The Obligated Group consists of 14 communities in eight states (four in California, four in Illinois, one in Colorado, one in Connecticut, one in Florida, one in Michigan, one in Minnesota, and one in Washington).

As of December 31, 2014, the Obligated Group had a total unit count of 4,769, comprised of 3,065 independent living units, 755 assisted living units, and 949 skilled nursing beds. CRC is a Type B CCRC system and offers six different types of contracts to residents.

Proceeds of the Series 2015A Revenue Refunding Bonds (the Series 2015A Bonds), together with trustee held funds, were used to “advance refund CRC’s outstanding Series 2005 bonds in the amount of $118,110,000, fund a debt service reserve fund, and pay certain costs of issuance,” said Ziegler in a statement.

The Series 2015A Bonds closed concurrently with a direct bank placement in the amount of $22,340,000 (the Series 2015B Bonds).

“The purpose of the bank placement was to refund CRC’s Series 1992 and 1995 variable rate demand bonds and its Series 1998 fixed-rate Bonds,” Ziegler said, adding that the Series 2015B Bonds were placed with Bank of America, and allowed CRC to achieve more attractive pricing (vs. the Series 1992 and Series 1995 Letter of Credit financings) and an eight-year commitment period was initiated.

In addition, the financing allows CRC to maintain its variable rate exposure of approximately 20%. In connection with the financings, CRC’s rating of “BBB+”, stable outlook, was affirmed by Fitch.

“The savings achieved through the refinancing transactions were significant and will benefit residents for years to come as well as opening up opportunities for new projects within our communities,” said Beth Buikema, senior vice president and chief financial officer of Covenant Retirement Communities.

CBRE Secures $22M Loan for Calif. CCRC 

CBRE National Senior Housing (CBRE) arranged construction financing on behalf of a joint venture between Shamrock Holdings, LLC and Artēgan Senior Living for The Commons at Prairie City.

Aron Will, executive vice president of CBRE, arranged the transaction.

The property is a to-be-built, class “A”, 130 unit rental continuing care retirement community (CCRC) located in Folsom, Calif. (Sacramento MSA). The community will be managed by Artēgan Senior Living. Thomas Bahrman of Bahrman Law LLC represented Shamrock in the transaction.

CBRE secured a $22 million, four-year floating rate construction loan which includes 48 months of interest only and an “all-in” interest rate today of approximately 2.43%. The loan was procured from a regional bank.

Founded by Brigid Flanigan, Shamrock develops high-quality retirement communities for middle-income seniors who desire a continuum of care. Shamrock, in partnership with CB|Two Architecture and Construction (CB|Two), has designed and built a regional network of facilities in northern California, located in Modesto, Stockton, Antioch, Manteca, Elk Grove and Folsom. To date, Shamrock has developed five facilities in northern California and two facilities in the Portland, Oregon area. Shamrock partners with Artēgan to market and manage the communities it develops and owns.

Headquartered in Vancouver, Wash., Artēgan is a regional seniors housing management company that manages communities along the West Coast. Artēgan currently operates a total of 11 communities totaling 987 units in Washington, Oregon and California with an overall portfolio occupancy of 91%.

CBRE Arranges $24M Financing for Calif. Assisted Living, Memory Care Community 

CBRE National Senior Housing (CBRE) arranged financing on behalf of a joint venture between Capitol Seniors Housing (CSH) & Welbrook Senior Living (Welbrook) for Welbrook South Bay, a recently completed 70 unit, class “A” assisted living and memory care community (Phase I) located in Torrance, Calif.

Aron Will, executive vice president of CBRE, arranged the transaction.

Phase I was completed in late 2014, began taking residents in January 2015 and is currently 58% leased. Additionally, CBRE arranged construction financing for the development of an adjacent stand-alone memory care community (Phase II) totaling 39 units located on the same campus. Both Phase I & II are managed by Integral Senior Living (ISL).

CBRE secured a combined $24.07 million, non-recourse loan for both Phase I & II of the Welbrook South Bay campus. The $16.46 million floating rate mortgage for Phase I includes a three year initial term with two, two-year extension options, 36 months of interest only and an “all in” interest rate of approximately 2.93%.

The $7.61 million floating rate construction loan for Phase II, includes a three year initial term with two, two-year extension options, 36 months of interest only, and has an “all in” interest rate of approximately 2.93%.

Both phases were developed by Welbrook Senior Living, a full service healthcare real estate development company in Southern California.

California-based, ISL will continue to manage Phase I and will manage Phase II upon completion. Of the 56 communities ISL manages, 35 are located in the states of California.  

Pennsylvania Housing Finance Agency Awards $12M for Affordable Senior Housing

The former St. John Neumann Catholic High School in South Philadelphia will soon feature affordable housing, thanks to a $12 million tax credit allocation. 

The Pennsylvania Housing Finance Agency (PHFA) gave the credits and its Innovation in Design award to the Archdiocese of Philadelphia on May 14 to develop St. John Neumann Place II.

“The project represents the second phase of St. John Neumann Place’s 75 units of senior housing within the extensively renovated former archdiocesan high school, a project completed in 2008,” reported CatholicPhilly.com. “The new $14.7 million project will create 52 affordable apartment units and a Wellness Center on a parcel of land adjacent to St. John Neumann Place.”

The archdiocesan Office for Community Development and archdiocesan Catholic Health Care Services are collaborating on the project to add to their portfolio of independent living residences and community-based services for seniors, CatholicPhilly.com said.

Construction is expected to begin next winter with occupancy targeted for early spring 2017.

Pennsylvania Housing Finance Agency Awards $1M for Affordable Senior Housing 

The Pennsylvania Housing Finance Agency awarded Pennrose Properties $1.14 million in low-income housing tax credits for the proposed Sacred Heart Residences in Allentown, Penn. The project is located on the Sacred Heart Hospital campus. 

“Pennrose proposes razing about a dozen properties to make room for 61 affordable senior housing apartments,” local media report, adding that they would be built atop about 6,000 square feet of commercial space housing medical services.

The one- and two-bedroom apartments will be age-restricted to tenants ages 62 and older.

“Sacred Heart has already committed to leasing about 4,000 square feet of the building’s first floor to provide services like physical therapy, geriatric services and a lab for blood work,” reports local media. “Companies will essentially purchase the tax credits from Pennrose that the developer will then put toward construction costs. The tax credits lower the amount of financing the developer needs to secure, keeping the rents affordable for tenants.”

Written by Cassandra Dowell