Senior Housing Finance Activity: Mainstreet, Capital One

Mainstreet Health Investments Inc. Completes Canadian Public Offering

Carmel, Indiana-based Mainstreet, the largest developer of transitional care properties in the United States, announced that its affiliated publicly traded Canadian real estate company, Mainstreet Health Investments Inc. (TSXV: HLP.U), completed its offer and sale of 9.5 million common shares for $95 million in gross proceeds.

“We are energized about this public offering and the ability to acquire high-quality health care properties in North America,” Mainstreet Health Investments President Scott White said in a statement. “Our goal is to create long-term shareholder value while continuing to transform lives and transform health care. This acquisition is the first step in serving the health care consumer and will provide our shareholders with an investment opportunity that makes a difference.”

Most of the net proceeds will be utilized by Mainstreet Health Investments to acquire 13 seniors housing and care properties throughout the United States. These 13 properties include five assisted living and two skilled nursing facilities in and around Scranton, Pennsylvania, which are leased to one operator under a triple net master lease; two Mainstreet-developed transitional care properties located in Chesterton, Indiana, and Mooresville, Indiana, each of which is leased to a third-party operator under a triple net lease; one transitional care property in Topeka, Kansas, which is currently under development by Mainstreet and leased to an operator under a triple net lease; and two independent/assisted living properties and one memory care property in and around Syracuse, New York, which will be leased to one operator under three separate triple net leases.

Any remaining net proceeds will go toward financing repayments on one of the Mainstreet Health Investments’ existing properties, lend mezzanine financing, fund capital improvement projects, and working capital.

Cambridge Arranges $11.8 Million HUD Loan to Refinance Skilled Nursing Facility in Illinois

Cambridge Realty Capital Companies provided an $11.8 million HUD-Insured loan to refinance Alden Town Manor, a 249-bed skilled nursing facility in Cicero, Illinois.

A fully-amortizing, 30-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.

Cambridge is a senior housing and health care debt and equity capital provider that has closed over 450 closed senior housing transactions totaling more than $4.5 billion since the early 1990’s, when the company began its specialization in providing senior housing capital.

Capital One Provides $11 Million Refinancing for Assisted Living Community in Florida

Capital One (NYSE: COF) has provided an $11 million, fixed-rate Fannie Mae loan to refinance a 72-unit assisted living community in Homosassa, Florida. The community, Sunflower Springs Assisted Living Community, was constructed in 2009.

Capital One’s Allison Holland originated the 12-year loan on behalf of an undisclosed borrower.

Capital Funding Group Announces Closing of Several Loans

Baltimore, Maryland-based Capital Funding Group, a full-service provider of comprehensive financing solutions for health care facilities across the country, announced the closing of several loans, including an $8.7 million bridge-to-HUD loan for the acquisition of two MidMichigan Health skilled nursing facilities, a $13.7 million cash flow term loan for the CommuniCare Family of Companies and two working capital loans for facilities in Illinois and Michigan.

The CommuniCare Family of Companies operates more than 40 skilled nursing facilities, hospitals, and assisted living communities in four states. Capital Funding, LLC provided a $13.7 million loan for general corporate purposes secured by the cash flow of seven CommuniCare Family of Companies-operated skilled nursing facilities. The seven properties have 974 beds in total. Capital Funding is offering this corporate financing vehicle to help companies strategically position themselves for future opportunities. The loan, which closed on April 18, was originated by Craig Casagrande.

MidMichigan Health, meanwhile, is a non-profit health system affiliated with the University of Michigan Health System. The MidMichigan Health portfolio has two skilled nursing facilities in central Michigan with 210 beds total. Capital Funding Group provided two-part financing for the acquisition of the facilities by Affiliates of The Peplinski Group. Capital Funding, LLC arranged for a bridge-to-HUD loan. Capital Finance, LLC also provided a $3 million working capital loan to the related operator to finance the operations. The deals were originated by Patrick McGovern and closed on April 29. Capital Funding Group served as senior leader and agent.

Additionally, Capital Finance, LLC closed a $7 million revolving line of credit for an Illinois operator to provide working capital for a HUD-insured portfolio of skilled nursing facilities. Capital Finance, LLC Executive Managing Director Jeffrey Stein originated the deal.

Written by Mary Kate Nelson