Senior Housing Finance Activity: Mainstreet Health Investments, Capital One

Mainstreet Health Investments to Seek $95 Million in Canadian Share Offering

Toronto-based Mainstreet Health Investments Inc. is planning to raise $95 million by listing on the Toronto Stock Exchange and selling shares in Canada.

Mainstreet Health Investments, which owns 11 seniors housing and care properties in Illinois, is controlled by Carmel, Indiana-based real estate developer Mainstreet Property Group.

The company is planning to sell shares for between $10 and $11 each, and it is hoping for a yearly dividend yield of 7% to 7.4%, Mainstreet Health Investments said in a filing with regulators. The sale is being led by Canadian Imperial Bank of Commerce, Bank of Montreal and National Bank of Canada.

Mainstreet Health Investments intends to use the proceeds of the sale to purchase 13 new properties in New York, Pennsylvania, Indiana and Kansas, according to the filing.

Mainstreet Health Investments was established via a $302-million reverse takeover of Kingsway Arms Retirement Residences Inc., which owned 10 Chicago-area senior housing and care communities. The reverse takeover was announced Nov. 6, 2015 and finished April 4, 2016.

Walker & Dunlop Provides $14 Million Bridge Loan to Senior Living Communities in Pennsylvania

Walker & Dunlop, Inc. (NYSE: WD) provided a $14.125 million bridge loan to Autumn House (East and West) senior living communities in York, Pennsylvania. The communities offer independent living, assisted living and memory care.

The company structured the loan utilizing its interim loan program, thereby 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).

Walker & Dunlop Director of FHA Underwriting Ken Buchanan led the loan team. 

“The borrower brought in an experienced management team and identified key areas for improvement, such as lower management fees, replaced the food service provider and reduced overtime,” Buchanan said.

Capital One Bank Closes $110.5 Million Loan for Acquisition of Spectrum Professional Services

Capital One Healthcare acted as lead bookrunner and administrative agent for a $110.5 million senior secured credit facility to support the purchase of Spectrum Professional Services by an investor group led by Beecken Petty O’Keefe and Company.
 
Spectrum Professional Services is a provider of rehabilitative therapy management and consulting services, with more than 500 customers across the United States. They include a wide variety of post-acute care providers, including independent living facilities, assisted living facilities, skilled nursing facilities, continuing care retirement communities (CCRCs), home health agencies and outpatient rehab centers. 

Current Spectrum management is expected to retain significant ownership and will continue to lead the company through its next growth phase.

Beecken Petty O’Keefe & Company invests in the health care industry. The firm has invested in several provider, outsourcing, manufacturing, distribution, and information technology companies through management buyouts, growth equity and leveraged recapitalizations.

“We believe that the terms of this acquisition position Spectrum to meet the surge in demand for rehabilitative therapy services over the next decade,” said John Heller, Spectrum Professional Services President and CEO. “The Capital One Healthcare team knows both parties well, so when it was time to execute the debt financing, they were able to move quickly and implement a successful syndication.”

CBRE Secures $38.9 Million Bridge Loan for Arbor Terrace Portfolio in Atlanta

CBRE National Senior Housing Executive Vice President Aron Will arranged portfolio acquisition financing on behalf of an institutional client for The Arbor Terrace Portfolio, which includes Arbor Terrace at Hamilton Mill and Arbor Terrace of Johns Creek, both 101-unit assisted living/memory care communities managed by The Arbor Company in the Atlanta MSA.

CBRE secured a 5-year, $38.9 million bridge loan with 36 months of interest and a sub 200 bps spread over 30-day LIBOR. The loan was procured via a national bank.

Atlanta-based The Arbor Company currently operates 28 properties with a total of 2,781 units in Georgia, Illinois, Florida, Maryland, Pennsylvania, New Jersey, North Carolina, South Carolina, Tennessee, Virginia and Texas. 

Senior Housing Properties Trust Closes Sale-Leaseback Transaction with Nanotherapeutics

Nanotherapeutics, an integrated biopharmaceutical firm that concentrates on advanced development and manufacturing, closed a sale-leaseback transaction with Senior Housing Properties Trust (NYSE: SNH) for the company’s new Advanced Development and Manufacturing Facility in Alachua, Florida.

The transaction, through which Nanotherapeutics sold the property for $45 million and entered into a 15-year lease, provides the company with long-term financing for the 183,000-square-foot Biosafety Level-3 capable facility.

Cambridge Arranges $24.6 Million Loan To Refinance Rainbow Beach Nursing Center

Cambridge Realty Capital Companies provided RainbowBeach with a $24,631,000, HUD-Insured loan to refinance Rainbow Beach Nursing Center, a 211-bed intermediate care nursing facility in Chicago.

A fully-amortizing, 29-1/2 year term loan was issued to the owner, an Illinois limited liability company, according to Cambridge Chairman Jeffrey A. Davis.

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

Harborview Capital Partners Arranges $8 Million Refinancing for Skilled Nursing Facility in Illinois

New York-based finance firm Harborview Capital Partners arranged an $8 million refinancing for The Springs at Crystal Lake, a 97-bed skilled nursing facility in Crystal Lake, Illinois. The non-recourse loan was refinanced via HUD’s 232/223(f) program at a fixed interest rate for 35 years. 

The borrower was Mark Weldler, an operator based in the Midwest. This transaction represents the third loan Harborview has closed for Weldler in the past 12 months.

Harborview Managing Director and Principal Jonathan Kutner originated the transaction.

Written by Mary Kate Nelson