Lancaster Pollard Closes Over $136M Senior Housing Transactions in May
In May, Lancaster Pollard closed 21 seniors housing transactions totaling over $136 million.
One of the transactions was a $23.5 million FHA Sec. 232 new construction loan for an assisted living/Alzheimer’s care facility in Virginia.
Two of the transactions were FHA Sec. 232/241(a) expansion projects for skilled nursing facilities in the Midwest and four of the transactions were FHA Sec. 232/223(f) refinances for skilled nursing facilities in Georgia and Florida.
In addition, Lancaster Pollard served as an merger and acquisition sell-side advisor on a $27.5 million acquisition of a Sec. 202 seniors housing property in California and facilitated a term loan placement of $7.4 million for the construction of a skilled nursing facility in Michigan.
Modifications of existing FHA loans accounted for five of the transactions and six of the transactions provided funding for either substantial rehabilitation or refinance of Sec. 202 affordable seniors housing properties.
Affordable Housing Program Provides $500,000 Grant for Texas Senior Living Community
The final phase of a senior living community recently opened Dallas, Texas with help from a $500,000 Affordable Housing Program (AHP) grant from Amegy Bank and the Federal Home Loan Bank of Dallas (FHLB Dallas).
With the completion of this third and final phase, Lakewest Assisted Living, a continuum-of-care senior-living community in the Dallas Lake West area, now has an additional 130 assisted-living units designated for low-income seniors on its 39-acre Lake West campus.
The new Lakewest Assisted Living apartments provide permanent, long-term supportive services and care for residents in need of daily assistance with everyday tasks – such as walking, bathing, and taking medications. It offers onsite meal plans through its dining program, along with laundry services, a recreation center, and daily activities. Residents pay for their housing with vouchers provided by the City of Dallas.
The project was spearheaded by the Dallas Housing Authority and StoneGate Senior Living, a Lewisville, Texas-based, senior living and care management company.
The first two phases consisted of the Village at Lake West and Lakewest Rehabilitation and Skilled Care.
The Village at Lake West is an independent living community consisting of four towers and 360 units for senior citizens age 55 and older. The village was constructed to meet the area’s demand for high-quality, affordable senior living, and it reached 100% occupancy within its first year of operation.
Lakewest Rehabilitation and Skilled Care is located adjacent to The Village at Lake West. It offers post-acute health care services, including occupational, physical, and speech therapy, and extensive clinical care. The center has the capacity to care for up to 118 patients and is comprised of 20 private suites and 49 shared suites.
The project could not have been completed without the aid of the AHP grant, which was applied toward construction costs, said Tom Langdon, president of the managing member of Lakewest, in a statement.
“The grant was absolutely essential because the individuals who come to live at Lakewest require housing and health care that, in the marketplace, would cost $4,000 a month,” Langdon said. “We are able to provide housing and care to individuals who have an income as low as $700 a month. Reducing the amount of market-rate capital required to build the facility helped us lower the overall capital costs, and the home loan bank grant was instrumental in allowing us to do that by reducing the cost for the facility.”
The AHP grant was funded through FHLB Dallas member, Amegy Bank.
“This development fills a need in Dallas for affordable senior care,” said Brian Stoker, senior vice president of Community Lending at Amegy Bank. “Through our partnership with FHLB Dallas and the Affordable Housing Program, we were able to provide a grant that ultimately lowered the costs for senior residents to live at Lakewest.”
AHP grants are available through FHLB Dallas member institutions such as Amegy Bank. 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. In 2015, FHLB Dallas is offering $7.6 million in AHP grants.
Capital One Completes $24M Refinance for Ill. Skilled Nursing Facility
Capital One provided a $23.7 million fixed-rate, HUD 232/223(f) loan to refinance a 400-bed skilled nursing facility in northern Illinois.
Senior Vice President Joshua Rosen originated the transaction. Rosen leads Capital One’s agency healthcare lending from the company’s Chicago office.
“The key principals are experienced owners and operators of skilled care facilities and have refinanced a number of properties with Capital One using HUD’s 232/223(f) program,” Capital One said in a statement.
Capital One streamlined the application process and delivery of 232/223(f) financing.
“For investors in skilled nursing properties, the 232/223(f) program is a valuable tool,” Rosen said.
Advantages of the program include low, fixed, interest rates and amortization up to 40 years and a loan-to-value ratio of up to 85% in certain instances, Capital One explained. In addition, the loans are fully assumable for qualified buyers.
The property, built in 1972, is located in a community with a diversified economic base and a stable short- and long-term outlook. Multiple updates and improvements to modernize the property have improved improve its marketability.
CBRE Arranges $50M Construction Financing for Texas Senior Housing Community
CBRE Capital Markets’ Debt & Structured Finance team secured $49.7 million in construction financing for The Village of River Oaks, a 195-unit, Class A senior housing community located in Houston, Texas.
CBRE secured a six-year floating-rate loan, which includes interest-only for four years at an all-in-rate of 2.33 percent. Financing was provided by a regional bank.
Aron Will and Austin Sacco of CBRE’s Houston, Texas office arranged the financing on behalf of the borrower, a joint venture between Bridgewood Property Company and Harrison Street Real Estate Capital.
Located at 1015 South Shepherd Drive, the senior housing community will include a combination of independent living, assisted living and memory care. The community will be operated by an affiliate of Bridgewood.
Construction of the development is scheduled to begin in the third quarter of 2015.
Walker & Dunlop Closes $3M HUD Loan for Wash. Affordable Senior Living
Walker & Dunlop, Inc. closed a $3,389,300 loan in Vancouver, Wash. for Arbor Ridge Assisted Living with the Vancouver Housing Authority.
This is the first Rental Assistance Demonstration (RAD) transaction the company and HUD’s Lean 232 program has completed for healthcare facilities.
The RAD program is HUD’s major effort to recapitalize public affordable housing, explains Walker & Dunlop in a statement.
“The financing of Arbor Ridge was a groundbreaking application of the program to support an affordable assisted living community,” Walker & Dunlop said.
RAD focuses on conserving affordable rental housing, meeting the needs of residents and constructing lasting communities along with supporting future property improvements.
The Arbor Ridge Assisted Living transaction was structured with a 35-year term and a 35-year amortization schedule. Additionally, the loan was written to a 78.5% loan-to-value and 1.45 debt service coverage ratio.
“This deal was unique as the transaction refinanced an assisted living facility originally financed with low income housing tax credits and tax exempt bonds,” Walker & Dunlop said.
In order to complete the refinance, the Vancouver Housing Authority transferred rental subsidies for thirty units under HUD’s RAD program.
“Combining the RAD subsidy with the tenants’ affordable rental payments is a ground-breaking approach to using HUD’s 232 Seniors Housing program to finance an affordable assisted living facility,” said Michael Vaughn, senior vice president, who led the Walker & Dunlop team.
Built in 2000, and located in close proximity to Vancouver’s Mass Transit System, Arbor Ridge Assisted Living provides affordable housing for seniors who cannot afford private facilities within the local market.
The target population of this property is seniors aged 75+ who need assistance with daily living tasks. The facility offers apartment homes with different levels of personal services including housekeeping and linen services, scheduled transportation, 24-hour staffing with a registered nurse on call after hours and organized social events.
Written by Cassandra Dowell