Senior Housing Finance Activity: Ensign, Senior Housing Properties Trust

Senior Housing Properties Trust Announces $620 Million Mortgage Financing on Boston Seaport Buildings

Real estate investment trust (REIT) Senior Housing Properties Trust (Nasdaq: SNH) announced that it has closed on a $620 million, 10-year, non-amortizing mortgage loan that matures in August 2026. The loan is secured by two Class A, 15 story life-science buildings, which include 1.65 million gross square feet of lab space, corporate office space, street level retail and structured parking in Boston’s Seaport District.

Senior Housing Properties Trust acquired the buildings, which are 96% leased to Vertex Pharmaceuticals, Inc. through 2028, in May 2014 for $1.125 billion.


The loan has a fixed interest rate of 3.53% per year. Senior Housing Properties Trust plans to use the loan’s proceeds to repay part of the outstanding borrowings under the company’s $1 billion unsecured revolving credit facility and for general business purposes, the company said in a press release.

After the repayment, about $900 million will be available under Senior Housing Properties Trust’s unsecured revolving credit facility.

“We are pleased to take advantage of the current low interest rate environment to term out the majority of the outstanding balance on our unsecured revolving credit facility and to extend the average maturity of our debt to 8.9 years,” Senior Housing Properties Trust President and Chief Operating Officer David Hegarty said. “We believe that this transaction also highlights the value and quality of our medical office and life-science portfolio.”


Citi and Morgan Stanley provided the loan financing. Eastdil Secured advised Senior Housing Properties Trust and Skadden, Arps, Meagher & Flom LLP provided legal counsel to Senior Housing Properties Trust in this deal.

Senior Housing Properties Trust is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management firm that is based in Newton, Massachusetts.

Invest Atlanta Finances Assisted Living Project

The economic development arm of the city of Atlanta is collaborating with a private developer to build a mixed-use project that will include 118 assisted living apartments for seniors—24 of which will be designated as affordable housing.

Invest Atlanta board members, meeting as the Urban Residential Finance Authority, unanimously approved an inducement resolution outlining their plan to issue as much as $40 million in revenue bonds to finance the assisted living part of the project, the Atlanta Business Chronicle reported.

The remainder of the project, including retail and medical office space, will be done by Richmond Honan Development and Acquisitions LLC, which is headquartered in Alpharetta, Georgia.

The approximately 160,000-square-foot building will have seven stories and three floors of below-ground parking. The assisted living apartments will take up 90,000 square feet of the building.

CFG Announces $25.1 Million in Loan Closings

Capital Funding Group announced the closing of a $19.1 million bridge-to-HUD loan for the 167-bed Hudson Pointe Nursing and Rehabilitation skilled nursing facility in New York, and a $3 million working capital loan to finance Hudson Pointe’s operations. 

Specifically, Capital Funding, LLC provided a $19.1 million bridge-to-HUD loan for the acquisition of Hudson Pointe for $20.87 million.

Capital Funding, LLC served as senior lender and agent in the deal, which was originated by Craig Casagrande and closed on June 3, 2016. The loan was financed through a combination of mezzanine and senior debt, which also included a turnaround component in which the loan amount was based on expected improvements to the facility’s performance.

Additionally, Capital Finance, LLC provided a $3 million working capital loan to finance Hudson Pointe’s operations, which was originated by Chip Woelper. 

Capital Funding Group also announced that it closed a $6 million bridge loan to enable borrowers to recapture equity for two skilled nursing facilities in South Carolina and Georgia. Together, the two facilities have 256 beds. The loan, which closed on June 23, 2016, was originated by Gary Sever. Capital Funding, LLC acted as the only lender.

The Ensign Group Announces New $450 Million Credit Facility

The Ensign Group, Inc. (Nasdaq: ENSG) said that Ensign and its operating subsidiaries have boosted their credit facility by $200 million to an aggregate of $450 million. The borrowings are supported by a lending consortium arranged by Wells Fargo Securities, LLC and SunTrust Robinson Humphrey, Inc., according to a press release.

The new facility, which matures on February 5, 2021, includes a $300 million revolving line of credit and a new $150 million term loan component, which will be immediately deployed to pay down previously drawn amounts on Ensign’s revolver. The credit facility also includes, among other things, a $150 million expansion option.

“These new borrowings further strengthen our long-term capital structure and, together with our strong operating performance, provide excellent flexibility in an ever-changing healthcare environment,” Ensign Chief Financial Officer Suzanne Snapper said. “We appreciate the continued support of our banking partners and we look forward to working with them further as we continue our strategy of disciplined growth.”

The proceeds of the credit facility will be utilized to fund acquisitions, upgrade and renovate future and existing facilities, cover working capital needs and for additional business purposes, Snapper said.

The Ensign Group, Inc.’s independent operating subsidiaries provide a broad range of assisted living and skilled nursing services; home health and hospice services; occupational, physical and speech therapies; urgent care services and other rehabilitative and health care services in Arizona, Texas, California, Washington, Utah, Colorado, Nevada, Idaho, Iowa, Nebraska, Oregon, Kansas, Wisconsin, and South Carolina. 

Written by Mary Kate Nelson

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