Senior Housing Finance Activity: Welltower’s $3.7 Billion Credit Facility

Welltower Announces Closing of Expanded $3.7 Billion Unsecured Credit Facility

Toledo, Ohio-based real estate investment trust (REIT) Welltower Inc. (NYSE: HCN) announced it has closed an approximate $3.7 billion unsecured credit facility, consisting of a $500 million term loan, a $3 billion revolving line of credit and a CAD 250 million term loan ($193.5 million at exchange rates as of May 13, 2016). The facility replaces the company’s existing credit facility of about $3.2 billion.

The revolving facility matures May 13, 2020, and can be extended at the company’s option for two successive terms of six months each. Based on Welltower’s current credit ratings, the revolver bears interest at LIBOR plus 90 basis points and has a yearly facility fee of 15 basis points. The term loans mature May 13, 2021 and bear interest at LIBOR and CDOR for the USD and CAD loans, respectively, plus 95 basis points. Welltower has an option to upsize the revolving facility and the USD loan by up to an extra $1 billion, in the aggregate, and the CAD loan by up to an extra CAD 250 million, allowing for a total credit facility of as much as $5 billion. Additionally, the facility allows Welltower to borrow as much as $1 billion in alternate currencies.

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“This transaction demonstrates our continued focus on capital allocation and liquidity while highlighting the extraordinary support from our capital partners. We appreciate the significant commitment offered by the 29 participating financial institutions which totaled approximately $5 billion in the aggregate,” Welltower’s CFO Scott Estes said in a statement. “The reduction in pricing, expanded capacity and new extended term enhances our financial flexibility and exemplifies Welltower’s unparalleled balance sheet strength and access to capital.”

The credit facility was arranged by Merrill Lynch, Pierce, Fenner & Smith Incorporated and JPMorgan Chase Bank, N.A. as the Joint Book Runners. JPMorgan Chase Bank, N.A. and Bank of America, N.A. were the Co-Syndication Agents. Pierce, Fenner & Smith Incorporated, Merrill Lynch, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and Deutsche Bank Securities Inc. were the U.S. Joint Lead Arrangers. Pierce, Fenner & Smith Incorporated, Merrill Lynch, JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital Markets were the Canadian Joint Lead Arrangers. Deutsche Bank Securities Inc. served as the Documentation Agent. KeyBank National Association was the Administrative Agent.

Omega Communities Completes Financing For Cypress Point Senior Living In Fort Myers, Florida

Birmingham, Alabama-based Omega Communities completed financing for the development and construction of a 140-bed assisted living and memory care community in Fort Myers, Florida. Privately held investment bank and broker-dealer HJ Sims provided the senior financing, as well as a portion of the equity for the community, which is called Cypress Point Senior Living.

Construction is underway, and completion is slated for the summer of 2017.

Omega opened two additional communities in the last several months in Sarasota, Florida, and North Port, Florida. Omega will have a total of almost 400 beds across the three communities in southwest Florida once the Cypress Point development is completed, and more than 500 beds in total.

Omega Communities is a faith-based, for-profit senior living developer that partners with local faith-based groups through affinity agreements that provide an enhanced level of community between the residents of its communities and the membership of the faith-based organization.

NorthMarq Arranges Construction Financing for Seniors Housing Property in Metro Atlanta

NorthMarq Capital arranged a credit enhancement and joint venture sponsor to finance the construction of The Arbor Terrace at Burnt Hickory, a 92-unit seniors housing community in Marietta, Georgia. Specific terms were not disclosed.  

Operator and developer The Arbor Company is developing the community, and Choate Construction, the general contractor, anticipates to deliver the property by March 2017. Will James of NorthMarq’s Atlanta office secured the financing for the landowner, Hollander Properties.

Capital One Closes $11 Million Fannie Mae Loan to Refinance Florida Assisted Living Facility

Capital One (NYSE: COF) announced it has provided an $11 million fixed-rate Fannie Mae loan to refinance the 72-unit Sunflower Springs Assisted Living Community in Homosassa, Florida. The transaction was originated by Senior Vice President Allison Holland, who heads Capital One Multifamily Finance’s Fannie Mae and Freddie Mac production effort.

“We were able to secure a 12-year fixed-rate loan for the borrowers instead of the more typical seven- or 10-year financing,” Holland said. “This gives them an extra few years to benefit from historically low interest rates. Capital One also closed the transaction in 40 business days. As is often the case, timeliness and certainty of execution were very important to our customers.”

Hunt Mortgage Group Places a Fannie Mae Small Balance Loan to Refinance California Retirement Property

New York City-based Hunt Mortgage Group, which finances commercial real estate throughout the United States, announced it has provided a $2.1 million Fannie Mae small balance loan to refinance a multifamily retirement property in Lancaster, California.

The borrower, 43321 Sierra Highway, L.P., is an experienced multifamily investor that maintains an active role in overseeing both the maintenance and management of its properties. The loan term is seven years with six and a half years yield maintenance, and a 30-year amortization schedule. 

Sierra Retirement Village, which is currently 96% occupied, is a 97-unit multifamily property with six buildings, including four, two-story walk-ups, one, a one-story apartment building, and a one-story recreation building. Sierra Retirement Village has all low-income units and caters to residents who are 55-years-old and older.

Commercial real estate finance company Crefcoa partnered with Hunt Mortgage Group on the deal.

Written by Mary Kate Nelson

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