Senior Housing Finance Activity: Lancaster Pollard, Preston Hollow

Lancaster Pollard Arranges $9.5 Million in Financing for Sunshine Village in Phoenix, Arizona

Originally constructed in 1999 and renovated in 2013, Sunshine Village is an 84-bed, 49-unit cottage-style memory care residence in Phoenix, Arizona.

Ownership at Sunshine Village sought to refinance its existing debt while at the same time funding capital improvements and an initial deposit to its replacement reserves. Lancaster Pollard processed the firm’s application and closed the transaction at a low cost of capital and in an efficient manner. Additionally, the firm articulated management’s successful turnaround of operations in order to support a market valuation that allowed the borrower to refinance all outstanding indebtedness and be reimbursed for capital expenditures incurred during the turnaround.

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The $9.5 million FHA Sec. 232/223(f)-insured, nonrecourse loan involves a 35-year term and low fixed interest rate. The successful transaction provides Sunshine Village with substantial annual debt service savings in addition to more than $335,000 in funds for capital improvements. In addition, the loan funds a considerable deposit to the replacement reserve, consequently guaranteeing the capital needs of the facility are adequately addressed over the life of the loan. 

Jason Dopoulos led the transaction for Lancaster Pollard.

Preston Hollow Capital Finances Renovation of Assisted Living Community in Hoover, Alabama

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Preston Hollow Capital, an independent specialty finance firm, announced that it has completed a $14 million bond financing with the Medical Clinic Board of the City of Hoover, Alabama, to facilitate Omega Communities’ purchase and renovation of the Riverchase Village Senior Living Community in Hoover, Alabama. The project, to be called River Highlands, will result in a 120-unit facility comprising around 90,000 square feet.

Birmingham, Alabama-based principals with Greenbrier Senior Management are set to manage the project.

“River Highlands marks our third community that will operate under an affinity agreement with a large and dynamic community impacting church, and we believe this relationship will be a true benefit to the community’s residents,” said Omega Communities Chairman and CEO Pat Trammell, Jr. “Preston Hollow Capital was a great financial partner for us in this deal. Their experienced team understands senior living communities, and they’re enthusiastic about and believe in our business model, which is based upon partnerships with large, local faith-based organizations.”

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Started in January 2014 by former executives of ORIX USA Corporation, Preston Hollow Capital is an independent specialty finance firm that serves as a solution provider in municipal finance.

CalHFA Plays Key Role in the Financing for Ocean View Senior Apartments Acquisition and Rehabilitation

The anticipated renovation of Ocean View Senior Apartments in Pacifica, California, is made possible in part through the efforts of the California Housing Finance Agency, the state’s affordable housing bank. CalHFA’s involvement in the complex transaction included bond financing of more than $18 million, a subordinate gap loan of almost $2 million, in addition to other financial considerations helping the sellers and buyers make the deal financially viable and working with federal regulators to secure necessary waivers for affordability.

Ocean View Senior Apartments has provided affordable housing for seniors in Pacifica since 1973. In 2000, National Church Residences bought the property with financing from CalHFA, the City of Pacifica and the County of San Mateo, consequently maintaining its affordability. BRIDGE Housing, a California-based nonprofit developer, bought the property this past October, and will oversee renovations and manage the property.

CalHFA offered flexible financing solutions while guaranteeing long-term affordability for residents. CalHFA provided the project with an 18-month acquisition/rehabilitation loan over $18 million, a 40-year permanent loan of $9.35 million and a $1.96 million subordinate loan to finance the acquisition and renovation of the property. Additionally, CalHFA worked with the U.S. Department of Housing and Urban Development to secure waivers required to obtain rental assistance and guarantee that all current residents could maintain their occupancy.

BRIDGE Housing, which creates, manages and owns a variety of affordable homes for seniors and families, is expected to start renovations to modernize and update the 100-unit property. In addition to the CalHFA financing, the County of San Mateo restructured two existing loans and provided new rental subsidies for 31 of the units. BRIDGE Housing also accessed low-income housing tax-credit program to provide additional equity.

The renovations will include switching to more efficient and better-performing systems, upgrades to residential units and replacement of aging building elements.

The recapitalization also provides funding to improve on-site services. Residents will have access to free programs such as wellness and nutrition classes, and referral services.

PGC Granada Assisted Living Memory Care Community Announces $4.71 Million Equity Financing

Texas-based PGC Granada Assisted Living Memory Care Community released form D announcing $4.71 million in equity financing.

PGC Granada President Brian Sullivan submitted the D form.

TL Management Acquires Spring Creek Rehabilitation & Health Care Center in Harrisburg, Pennsylvania

TL Management announced the acquisition of Spring Creek Rehabilitation and Health Care Center in Central Pennsylvania with the assistance of a $48 million credit facility arranged by First Niagara Bank. Spring Creek, which has been in greater Harrisburg, Pennsylvania, for more than 100 years, is a 404-bed rehabilitation and health care center that includes both long-term care and short-term rehabilitation facilities.

Based in Brooklyn, New York, TL Management owns over 100 skilled nursing facilities with more than 12,500 total beds around the United States. Working with the Healthcare and Capital Markets groups at First Niagara, TL Management received $48 million in financing to finish the acquisition, with First Niagara serving as the lead arranger and providing $24 million.

First Niagara Senior Vice President of Healthcare Solutions Matthew Huber managed the transaction.

Congressional Bank Closes Financing for Skilled Nursing Facility in Massachusetts

Congressional Bank’s Healthcare Lending group has closed a $3 million bridge-to-HUD loan and a $1.5 million revolving line of credit for the renovation and acquisition of a skilled nursing facility in New Bedford, Massachusetts.

The revolving line of credit is expected to finance the ongoing working capital needs of the 107-bed facility.

Congressional Bank is scheduled to close its merger with American Bank on Jan. 1, 2016, and the company’s lending capacity will exceed $10 million, permitting it to expand its lending platform.

Written by Mary Kate Nelson

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