Senior Housing Finance Activity: Walker & Dunlop, CBRE

Walker & Dunlop Arranges $39.7 Million Loan in Honolulu, Hawaii, $5 Million Construction Loan in Murfreesboro, Tennessee

Walker & Dunlop, Inc. (NYSE: WD), a commercial real estate finance company providing financing and investment sales to owners of multifamily and commercial properties, announced it arranged a $39.69 million loan for Plaza at Pearl City in Honolulu, Hawaii, for MW Group, LTD, a commercial real estate developer. Walker & Dunlop also structured a $4.97 construction/permanent loan for Creekside Villas, a memory care community in Murfreesboro, Tennessee, for TDK Companies, a construction firm.

The mortgage for MW Group was structured as a 40-year, non-recourse, fixed rate, permanent loan by the U.S. Department of Housing and Urban Development (HUD)’s Section 232 Insurance Upon Completion loan program, a variation of the HUD 232 New Construction program for health care facilities.

“This transaction enabled MW Group to take advantage of the lower conventional rates during construction while ensuring a long-term, fixed rate, permanent loan boast-construction,” Walker & Dunlop Vice President Russell Dey said in a prepared statement. “HUD’s Insurance Upon Completion program afforded immediate access to post-construction financing without the typical HUD three-year operational requisite. This loan demonstrates Walker & Dunlop’s ability to find creative capital solutions for our clients.”

Plaza at Pearl City is a 158-bed independent living, assisted living, memory care and short-term respite care community overlooking Pearl Harbor.

The mortgage for TDK Companies was structured as a 40-year, non-recourse, fixed rate construction and permanent loan by using HUD’s Section 232 program. The loan amount represents 90% of the replacement cost of the property.

Creekside Villas is the second phase to the current and adjacent Creekside at Three Rivers, a 79-bed independent living, assisted living, memory care and respite care facility. It will feature a single-family cottage style environment.

“Creekside at Three Rivers is very well positioned for ongoing success…Securing a 40-year fixed cost debt in the 3% range will further solidify Creekside Villa’s long-term viability,” Walker & Dunlop Managing Director Keith Melton said in a prepared statement.

CBRE Completes 2 Loans Totaling $42.4 Million for Illinois Communities

CBRE Capital Markets, a senior housing originator, announced it financed two loans totaling $42.4 million for seniors housing properties operated by Pathway Senior Living in Westmont, Illinois, and Lake Zurich, Illinois.

A $24.1 million, four-year floating rate construction loan with three years of interest only was placed through a regional bank for the development of Aspired Living of Westmont. It will consist of 75 assisted living units and 34 memory care units situated on a 3.58-acre property. The financing comes on behalf of a joint venture between Pathway and real estate private equity sponsor Virtus Real Estate Capital, which will be an institutional equity partner.

The construction of the second property, Azpira Place of Lake Zurich, will be funded through an $18.31 million, four-year floating rate construction loan with three years of interest only placed through a regional bank. Azpira Place will consist of 120 assisted living units situated on a 5.82 acre parcel of land. Again, the financing was arranged on behalf of a joint venture between Pathway and Virtus.

Pathway is a privately held, Chicago-based senior housing company that operates 20 communities and has developed 22 communities from the ground up.

Grandbridge Closes $19 Million Loan for Brightview Fallsgrove in Rockville, Maryland

The Atlanta senior housing and health care finance team of Grandbridge Real Estate Capital, a North Carolina-based full-service commercial and multifamily loan provider, announced it recently closed on a $19 million first mortgage loan for Brightview Fallsgrove in Rockville, Maryland.

Funding for the refinance was arranged through an agency lender, according to a news release. Brightview consists of 70 assisted living apartments and 24 memory care units.

The transaction was coordinated by Richard Thomas and Meredith Davis, Grandbridge senior vice president and vice president, respectively. Grandbridge’s senior housing and health care finance team provides construction, non recourse acquisition/bridge and permanent financing options to senior housing owners across the country.

Cain Brothers Finances $32.9 Million in Fixed Rate Bonds for California-Nevada Methodist Homes

Cain Brothers, a health care investment company, announced its underwriting of $32.92 million in California Health Facilities Financing Authority Insured Revenue Bonds Series 2015 for California-Nevada Methodist Homes, a non-profit company operating two continuing care retirement communities (CCRCs) in Northern California.

Cain Brothers achieved a 3.61% yield on the 30-year maturity, a low net true interest cost of 4.35% and an estimated spread to the 30 year AA GO benchmark of about 57 basis points on the financing.

The 2015 bonds were used to refinance California-Nevada Methodist Home’s 2006 bonds and fund approximately $6 million in capital improvements on both campuses in an effort to boost their marketability, according to a news release.

Capital One Closes on Loan for Partners Pharmacy Services

Capital One announced that it has provided a secured term loan and revolving line of credit to Partners Pharmacy Services, a pharmaceutical services provider that works with long-term care institutions including skilled nursing facilities and assisted living communities. A dollar amount on the deal could not be disclosed.

Partners will use the proceeds from the credit facility to refinance its existing line of credit, pay off shareholder notes, finance future acquisitions and fund ongoing working capital requirements as the company builds capacity and executes growth plans.

“We designed a tailored structure for this transaction to best support Partners’ anticipated growth,” Steve Anderson, senior vice president of Capital One Commercial Banking, said in a prepared statement. “We were pleased to establish a lending and banking relationship that enables Partners to execute on its ambitious expansion strategy.”

Partners’ 13 pharmacy locations offer services to more than 65,000 beds in 10 states.

Contemporary Healthcare Capital Closes on 2 Loans Totaling $8.5 Million

Contemporary Healthcare Capital, an agency specializing in financing for small and mid-sized health care providers, announced it recently closed on two loans totaling $8.5 million.

The first, a $1.5 million senior mortgage loan, went to a Colorado-based seniors housing and long-term care operator for the acquisition of a 103-bed skilled nursing and assisted living facility in Elkhart, Kansas. Contemporary also provided a $7 million mezzanine loan to a New York-based long-term care operator to acquire a 302-bed skilled nursing facility in Flushing, Queens.

Both financings aided in funding the acquisitions and closing costs, along with working capital for the facilities.

Written by Kourtney Liepelt