Senior Housing Investments & Transactions: Walker & Dunlop Closes $3.8 Billion Servicing Portfolio

Walker & Dunlop Closes Acquisition of $3.8 Billion Portfolio

Walker & Dunlop, Inc. (NYSE: WD) completed the purchase of a $3.8 billion commercial mortgage servicing portfolio from a subsidiary of Oppenheimer Holdings Inc. (NYSE: OPY) for a final closing price of $44.6 million. The previously announced acquisition makes Walker & Dunlop, a major financing for for the senior housing industry, the largest servicer for U.S. Department of Housing and Urban Development (HUD) multifamily and health care loans in the country. 

The acquired portfolio consists of 480 permanent loans insured by HUD and has a weighted average servicing fee of 17 basis points. Annual servicing revenue is projected to be approximately $6.4 million. The loans have a weighted average note rate of 3.99% and an average of 44 months. The average remaining life of the loans is 31 years.

Of the 480 loans, 361 are secured by multifamily properties and have an unpaid principal balance of $2.7 billion. The remaining 119 loans are secured by seniors housing and health care properties and have an unpaid principal balance of $1.1 billion. The loans span 43 states, the District of Columbia and the U.S. Virgin Islands.

Given the low average note rate and remaining maturity of the portfolio, Walker & Dunlop expects limited prepayments of loans over the coming years, according to the firm. Walker & Dunlop will immediately begin interacting with new customers in the process of servicing their loans and meeting future financing needs.

The portfolio comes with $230 million in escrow balances and no loss-sharing risk to Walker & Dunlop. The firm’s HUD portfolio is projected to exceed $9.3 billion at the end of the second quarter of 2016, making it the largest servicer of HUD multi family and health care loans in the country.

IPA Brokers Sale of Seniors Housing Community in Chicago Area

Institutional Property Advisors (IPA), a division of Marcus & Millichap and provider of institutional investment services, arranged the sale of a 188-unit seniors housing community in Crest Hill, Illinois, approximately 40 miles southwest of Chicago.

The community, Willow Falls Senior Living, was purchased by Dial Retirement Communities for an undisclosed price in a joint venture with a private equity fund. The seller is a pair of entities controlled by Greg and Renne Wolf, who have owned the property since 1994.

Dial will operate the community, which consists of 112 assisted living and memory care unites and 76 independent living units.

Mark Myers, Joshua Jandris and Matthew Andriano of Marcus & Millichap arranged the sale.

Green Courte Partners Acquires Pennsylvania Independent Living Community

A fund sponsored by Green Courte Partners, a real estate private equity firm, purchased a 276-unit independent living community located roughly 35 miles north of downtown Philadelphia.

A $39.9 million fixed-rate loan with a 10-year term and 72 months of interest-only payments through Freddie Mac’s seller servicer direct lending program was secured by Aron Will of CBRE.

The first phase of the community—151 units—was built in 2006. The remaining 125 units were added in 2014. The community will continue to be operated by Heritage Senior Living. 

MacIntosh Management Continues Nursing Home Growth

MacIntosh Management Company LLC, a Central Ohio owner-operator of five nursing homes that also runs a home health service, recently acquired another nursing home and is underway with another in development.

The company acquired a 100-bed property, Columbus West Park Nursing and Rehabilitation Center in Columbus’ Westgate neighborhood. The purchase price for the real estate was $3.4 million, though the company also acquired other business assets for an undisclosed amount. MacIntosh took on the 115 employees and renamed the property West Park Rehabilitation Center, Skilled Nursing and Memory Care. The acquisition was financed through a bank loan.

The new nursing home will be located in Canal Winchester, Ohio, and construction is expected to start by late summer. The $15 million facility will have 75 skilled nursing beds and 35 assisted living apartments over 7.5 acres. The 87,000-square-foot facility is expected to open mid-2017 and create roughly 110 jobs. The construction is financed with Columbus investment banking firm Lancaster Pollard.

The development project shifts 75 state bed licenses from the company’s Whetstone Rehabilitation Center across the street from OhioHealth Riverside Methodist Hospital. The facility was originally licensed for 200 beds in semiprivate beds, but is converting some rooms to private and had excess licenses.

Written by Amy Baxter