Senior Housing Finance Activity: NHI, Capital Funding

NHI Announces $14 Million Construction Mezzanine Loan

National Health Investors, Inc. (NYSE: NHI), a real estate investment trust (REIT) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments, has entered into a construction mezzanine loan commitment with its tenant, Senior Living Communities, LLC (SLC), for the development of a senior housing facility in Daniel Island, South Carolina.

The total commitment is $14 million at a yearly interest rate of 10%, with maturity in 5 years. The loan will be funded monthly, with completion by the end of 2016. Construction will start immediately and is anticipated to be finished by the end of 2017. Upon completion, the property, Wellmore of Daniel Island, will have 234 beds across 186 units, consisting of 48 memory care units, 90 assisted living units and 48 skilled nursing units. NHI will have a purchase option on the property upon the operations meeting certain occupancy and pro forma lease coverage thresholds.

Advertisement

NHI currently leases eight senior housing communities to SLC that include 1,033 independent living units, 228 skilled nursing beds and 410 assisted living/memory care units.

“This entry into a mezzanine loan with Senior Living Communities allows us to expand our existing relationship and provides a path to adding more high-quality senior housing to our portfolio,” NHI CEO and President Eric Mendelsohn said.

Capital Funding Group Closes Two Bridge-To-HUD Transactions

Capital Funding Group announced the closing of two bridge-to-HUD transactions.

Kaaterskill Care Nursing and Rehabilitation is a 120-bed skilled nursing facility on a 3.21 acre property in Catskill, New York. Capital Funding, LLC provided a $7.37 million bridge-to-HUD loan to finance the acquisition of the community for $6.6 million. Craig Casagrande, director of real estate finance, originated the loan, which closed on Dec. 7, 2015. Capital Funding served as sole lender in the deal, which has a one year maturity and no extension options.

Capital Funding also provided a $3 million bridge-to-HUD loan to assist with the acquisition of Maison Jardin Senior Living, a 59-bed assisted living facility in Morgan City, Louisiana. Director of Real Estate Finance Gary Sever originated the loan, which closed on Dec. 15, 2015. Capital Funding served as only lender in the deal.

Walker & Dunlop Provide Bridge Loan for $14 Million Acquisition 

Bethesda, Maryland-based Walker & Dunlop, Inc. (NYSE: WD) provided a $14,125,000 bridge loan for Autumn House (East and West), senior living communities in York, Pennsylvania that feature assisted living, independent living and memory care.

Walker & Dunlop structured the loan utilizing its interim loan program, thus providing time for the borrower to further stabilize operations and enhance value before conversion to a permanent U.S. Housing and Urban Development (HUD) loan (Healthcare Section 232/223f Refinance).

Ken Buchanan, director of FHA underwriting at Walker & Dunlop, led the team that structured the loan. 

Grandbridge Facilitated $51.92 Million in Seniors Housing Financing

Grandbridge Real Estate Capital’s Seniors Housing and Healthcare Finance team’s Vice President Meredith Davis and Senior Vice President Richard Thomas recently closed three seniors housing transactions totaling $51,922,000.

The first transaction was a $19,400,000 first mortgage loan secured by Aegis of Issaquah, a 99-unit seniors housing community in Issaquah, Washington. Funding for the refinance was provided through Freddie Mac’s Capital Markets Execution (CME) Multifamily loan product. Aegis of Issaquah offers memory care, assisted living and specialized short-term care.

The Seniors Housing and Healthcare Finance team closed a $30,250,000, permanent, floating-rate loan for Brightview North Andover, a 133-unit assisted and independent living facility with a memory care component located in North Andover, Massachusetts.

Funding for the refinance was arranged via Fannie Mae’s DUS® SARM (Structured Adjustable Rate Mortgage) loan product.

Grandbridge’s team also closed a $2,272,000 supplemental loan secured by Highgate Senior Living –Vancouver in Vancouver, Washington. Funding for the permanent, fixed-rate loan was arranged via Fannie Mae’s DUS loan program.

Located in Portland, Oregon, Highgate Senior Living-Vancouver has 58 units of independent and assisted living, as well as memory care.

Ziegler Announces Closing of Series 2016 Bonds for Christian Care Centers, Inc.

Chicago-based Ziegler, a specialty investment bank, announced the closing of the $26,205,000, tax-exempt, fixed-rate, Series 2016 Bonds for Texas-based not-for-profit Christian Care Centers, Inc.

Christian Care Centers currently operates two retirement communities: Christian Care Senior Living Community—Mesquite in Mesquite, Texas; and Lakewood Village Senior Living Community in Fort Worth, Texas. The Mesquite Campus is located on about 47 acres and includes 80 entrance-fee independent living apartments; 149 rental independent living apartments; 105 assisted living units; and 175 nursing beds. The Fort Worth Campus is located on about 50 acres and has 156 rental independent living apartments; 34 assisted living units; and 48 nursing beds.

Christian Care Centers is currently finishing the construction of a rental community in Allen, Texas, called Christian Care Senior Living Community-Allen. The campus is scheduled to open in May 2016. The Allen Campus will be located on five acres and have 22 independent living units, 32 assisted living units and 36 memory support units.

The Series 2016 Bonds are rated BBB- by Fitch Ratings. Proceeds will be utilized to currently refund the outstanding Series 2005 Bonds. Net present value savings amount to $3.95 million or 13.9%. The yield to maturity of the issue is 3.77%. The Series 2016 Bonds are being issued on a parity basis with the Series 2014 Bonds.

“Ziegler has enjoyed its role as a strategic partner to Christian Care since the early 1990’s. We were fortunate that a low point in the interest rate cycle coincided with the first call date on CCC’s Series 2005 Bonds which had previously been advance refunded. The working group worked efficiently to complete a current refunding of the Series 2005 Bonds which will generate annual debt service savings of over $300,000 through 2035,” said Rich Scanlon, managing director in Ziegler’s Senior Living Finance practice.

HJ Sims Announces Financing of Volterra at ChampionsGate

Fairfield, Connecticut-based HJ Sims, a privately held investment bank and brokerage firm, announced the financing of Volterra at ChampionsGate, a Tuscan Isle Community and a new senior living community to be located in the mixed-use development “ChampionsGate” located in Four Corners, Florida.

The community is expected to have 56 assisted living units, 131 independent living apartments and 36 memory care suites, and will encompass about 220,000 square feet. Volterra at ChampionsGate will also be a sister campus of Volterra at Solivita Marketplace, formerly known as Tuscan Isle, which is being developed in Kissimmee, Florida.

The Series 2016 Bonds were issued through the Florida Development Finance Corporation and consist of $48,240,000 in tax-exempt bond proceeds, in addition to $2,930,000 in taxable bond proceeds. Sims also raised $6,800,000 of corporate bonds through a private placement to its extensive accredited investor base, which, collectively with the Series 2016 Bonds, was utilized to fund the Project, Debt Service Reserve, Operating and Capitalized Interest Funds, and pay specific costs of issuance.

The site of the project is part of ChampionsGate, a master-planned, mixed-use development spanning about 2,300 acres. ChampionsGate consists of various residential home units, a luxury four-diamond Omni Resort, a Del Webb active adult community, the ChampionsGate Golf Club and a retail center called “ChampionsGate Village” that includes a Publix grocery store, casual and fine dining, banks, a pharmacy and and a gas station.

The members of the owner of Volterra at ChampionsGate include: an affiliate of Vieste , a program management and development services company from Chicago IL; an affiliate of HJ Sims Investments, an established investor in senior living communities; an affiliate of Life Care Services, one of the largest owner/operators of senior housing in the US; an affiliate of Core Construction Services of Florida, the design builder and a Florida-based construction company with extensive experience in designing and building senior communities, and Windermere Strategic Partners, a senior living consulting group.

The operator has engaged Life Care Services, LLC, an Iowa limited liability company, as the manager of the project. The development team includes Baker Barrios Architects from Orlando, Florida, as well as Solutions Advisors, LLC for marketing consultant services. The Master Developer is Vieste Social Infrastructure, LLC, an Indiana limited liability company.

Love Funding’s $15 Million Bridge Loan for Senior Center in Arizona Caps Formative First Year for New FHA Bridge Loan Platform

Washington, D.C.-based Love Funding, a provider of FHA multifamily, affordable and health care financing, announced the closing of a $15 million FHA bridge loan for the construction and mini-perm financing of Agua Fria Senior Living, a proposed senior care facility in Peoria, Arizona.

Once built, the new private-pay facility will have 90 units, with 32 units dedicated for assisted living and 58 for memory care. Utilizing the FHA bridge loan allowed the development team, Agua Fria Senior Living LLC, to break ground quickly, and will pave the way for them to obtain a permanent non-recourse loan at a low, fixed long-term rate after construction is finished and the project is stabilized. The loan was originated by Love Funding Senior Director Robyn Cunningham and Director Adrian Hartman, with funding provided by Midland States Bank, the parent company of Love Funding.

The closing of the Agua Fria bridge loan caps a formative first year for the program, with almost $60 million in bridge loans already financed and over $220 million in loans in the pipeline.

“Multifamily and healthcare owners often face timing and other constraints that don’t align with HUD’s application process,” said Jonathan Camps, senior vice president of business development and head of the bridge loan platform. “The bridge loan platform buys them the time they need to get shovels in the ground, address expiring debt or purchase contracts, and otherwise stay ahead of the market.”

Love Funding’s program offers bridge financing of up to three years for qualified borrowers seeking long-term HUD financing. Suitable multifamily projects include market-rate, affordable and age-restricted housing, while health care projects include assisted living, skilled nursing and memory care facilities. The program offers terms ranging from six months to three years, amortizations up to 25 years, and competitive pricing. Loan-to-value requirements vary by property type.

Lancaster Pollard Arranges Loans for Assisted Living Facilities in New York, Michigan

Lancaster Pollard arranged $9.2 million in refinancing insured by the FHA Sec. 232/2223(f) program for Ingersoll Place Assisted Living, a 57-unit senior living facility in Niskayuna, New York. Proceeds of the financing paid off a tax-exempt bond obligation and terminated an interest rate swap liability.

Additionally, the new FHA-insured loan generated more than $100,000 in yearly cash flow savings for the assisted living provider. Lancaster Pollard’s Tom Grywalski secured the financing for the undisclosed borrower.

Lancaster Pollard also recently assisted Vista Springs Northview in Grand Rapids, Michigan, with an $11 million refinance utilizing the FHA Sec. 232/223(f) program. Vista Springs Northview is a 88-unit assisted living facility that was expanded in 2014. The FHA-insured loan refinanced the first mortgage, which was a variable-rate loan, in addition to other subordinate debt utilized to expand the facility. The financing also provided funds for about $730,000 in repairs. Brendan Healy led this transaction for Lancaster Pollard.

Written by Mary Kate Nelson

Companies featured in this article:

, , , , , , , , , , , , , , ,