Senior Housing Finance Activity: Lancaster Pollard, RED Capital

Lancaster Pollard Helps Two California-Based Senior Living Providers Refinance Communities 

Lancaster Pollard recently helped two California-based clients refinance their senior housing properties using the Fannie Mae Seniors Housing program.

First, Lancaster Pollard assisted Sterling Senior Communities in completing a $19 million refinance of Tanner Springs, a 115-bed assisted living and memory care community in Oregon. The move refinanced an existing $10.5 million HUD loan and included a reimbursement of $8.2 million for previously incurred cap expenditures. Jason Dopoulos led the transaction for Lancaster Pollard, the company said in a press release.


In the second transaction, Lancaster Pollard helped Cornerstone Assisted Living Communities with a $14.5 million refinance with the Fannie Mae Seniors Housing program. The 110-bed assisted living community, located in northern California, successfully refinanced $9.6 million of existing debt and included a reimbursement of $4 million for cap expenditures that were previously incurred, with the remaining loan amount used to pay transaction expenses. Grant Goodman led the transaction for Lancaster Pollard.

Casey Moore and Doug Harper, managing directors of agency finance at Lancaster Pollard, helped both Goodman and Dopoulos with the transactions.

The Fannie Mae Seniors Housing program provides intermediate and long-term variable or fixed-rate non-recourse loans in a timely and cost efficient manner for the acquisition or refinance of stabilized properties.


iBorrow Provides $13.5 Million Loan to Azure Leisure Living

A Los Angeles-based private direct lender for commercial real estate, iBorrow, provided a $13.5 million loan to Azure Leisure Living for La Palma Royale, an assisted living community in Anaheim, California.

The 199-bed, 73,641-square-foot building was constructed in 1974, and has been remodeled two times since then.

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Azure Leisure Living, the borrower, intends to utilize the funds, along with an additional $8 million in equity, to buy the community. Azure began co-managing the community earlier in 2016 and has boosted the occupancy rate up to the national average, iBorrow noted.

The fact that Azure Leisure Living invested $8 million of new equity in connection with the acquisition, with little debt in any of their other properties, helped iBorrow make the decision to loan the $13.5 million, iBorrow CEO Brian Good said in a press release.

“Also, the facility qualifies for the federally funded Assisted Living Waiver program—which provides additional income to the operator,” Good added. “Most lenders were afraid to underwrite the property due to its special use, but we created a loan structure that leaves us confident that the property will perform to its full potential and that investors are well protected.”

RED Continues Strong Relationship with National Church Residences with a MAP and Lean Closing for Ohio Independent and Assisted Living Facility

The mortgage banking arm of RED Capital Group, LLC, RED Mortgage Capital, recently coordinated a MAP and Lean closing with National Church Residences for a refinance and renovation of Portage Trail Village, a property in Cuyahoga Falls, Ohio.

Portage Trail is a 13-story, 183-unit HUD Section 202 apartment community with occupancy limited to heads of household who are 62 years and older or handicapped. The property, which National Church Residences purchased in 1991, is 100% Section 8 subsidized.

As part of the Assisted Living Conversion Program (ALCP) through HUD, National Church Residences renovated Portage Trail in 2009 to convert the first six floors of the building to assisted living units. The remaining floors at Portage Trail are still independent living units.

The $3.1 million FHA MAP financing, together with $1.06 million in FHA Lean financing, is set to cover the rehabilitation of Portage Trail, according to RED Capital. The process required the building to be divided into two distinct condominium facilities. The independent living units were funded under the MAP program, and the rehab for the assisted living units was funded via the Lean program.

Additionally, National Church Residences was able to leverage more equity from Low Income Housing Tax Credits (LIHTC), as well as a $1 million subordinate loan from the Ohio Housing Finance Agency.

Capital Funding Group Announces $25 Million in Loan Closings

Capital Funding Group (CFG) recently announced several loan closings, including a $2.5 million working capital line of credit for La Brea Rehabilitation Center; a $17.6 million HUD 232 loan to finance the new construction of an assisted living community in Cary, North Carolina; and a $5 million cash flow loan for a Texas skilled nursing facility operator. Together, these loan closings total about $25 million.

Once finished, the new assisted living community in Cary, North Carolina will have 40 assisted living units and 40 memory care units. The community is scheduled to open in May 2017. The loan, which closed on Sept. 29, was originated by CFG Director of Real Estate Finance Gary Sever. Capital Funding, LLC acted as only lender.

CFG Director Chip Woelper, meanwhile, originated the $2.5 million working capital line of credit for The Rehabilitation Center on La Brea in Los Angeles, California. The loan closed in October.

Jeffrey Stein, an executive managing director at CFG, originated the $5 million cash flow loan for the Texas skilled nursing facility operator. The loan also closed in October.

Lancaster Pollard Closes Deals Using New HUD Debt Eligibility Guidance

Lancaster Pollard recently announced the successful closings of 10 different transactions for three different clients utilizing the updated HUD debt eligibility guidance.

Six of the transactions were for a portfolio of properties owned and operated by The Brook Retirement Communities, a senior housing provider with communities in central and northern Michigan. Lancaster Pollard helped Brook Retirement Communities recapitalize six of its communities with the FHA Sec. 232/223(f) program for a total loan amount of $26.9 million.

Using the new debt eligibility guidance, Lancaster Pollard obtained the waiver required to start the process right away, enabling the borrower to benefit from permanent financing at a low interest rate. Brandon Healy led the transactions for Lancaster Pollard, the company said.

Lancaster Pollard also helped Agemark Corporation bypass the two-year seasoning period and refinance two of its memory care communities in Nebraska with the FHA Sec. 232/223(f) program. The total loan amount was $11.1 million, according to Lancaster Pollard. Grant Goodman led these transactions for Lancaster Pollard.

The last two transactions were for a senior housing operator in the Midwest that was interested in buying out its partners and refinancing the communities’ existing debt.

“We utilized our internal bridge loan platform to structure the partner buyout and refinance of existing facility debt,” said Healy, who again led the transactions for Lancaster Pollard. “We then submitted the FHA 232/223(f) applications as soon as the new debt eligibility guidance was released.”

As part of the new HUD guidance, debt eligibility and seasoning definitions may be broadened to enable more immediate refinancing of project-related debt in the operator’s name. Additionally, bridge financing may be utilized for partner buy-outs and identity of interest (IOI) purchases. Both of these options are subject to the review of HUD. Eligible indebtedness and loan-to-value (LTV) requirements vary, depending on the specific circumstances surrounding a transaction.

CBRE Arranges $77.3 Million Sale and $50.5 Million Financing of Senior Housing Communities in Georgia 

CBRE Capital Markets’ National Senior Housing group recently arranged the sale of two senior housing communities in Georgia to an affiliate of Arcapita Investment Management US for $77.25 million, or $327,330 per unit.

The communities included in the transaction are Arbor Terrace of East Cobb in Marietta, Georgia, which has 90 units; and Arbor Terrace Peachtree City in Peachtree City, Georgia, which has 146 units.

“The buyer will continue to use the current operator, The Arbor Company, through the acquisition of these communities. Plans to further expand this relationship are ongoing,“  CBRE National Senior Housing Executive Vice President Lisa Widmier said.

Widmier and Matthew Whitlock of CBRE Capital Markets’ National Senior Housing team represented the seller, affiliates of Capitol Seniors Housing.

Meanwhile, Aron Will of CBRE Capital Markets’ National Senior Housing Team originated $50.5 million in acquisition financing on the borrower’s behalf. CBRE, via its Freddie Mac Seller Servicer direct lending program, secured a fixed-rate, seven-year loan with 36 months interest only.

Together, Arbor Terrace of East Cobb and Arbor Terrace Peachtree City have 236 independent living, assisted living, personal care and memory care units.

Walker & Dunlop Closes $25 Million Fannie Mae Loan for Seniors Community in Washington 

Walker & Dunlop Inc. recently arranged a $25 million loan for Wheatland Village, a Class A independent living, assisted living and memory care community operated by Portland, Oregon-based Generations Senior Living in Walla Walla, Washington. In total, the community has 134 independent living units, 62 assisted living units and 38 memory care units.

Generations Senior Living developed Wheatland Village in 2004 via a partnership with a not-for-profit hospital.

William Jackson and Jeffrey Ringwald of Walker & Dunlop structured the 15-year, fixed-rate Fannie Mae loan featuring a 30-year amortization schedule. The deal consolidates two existing loans and has a 60% loan-to-value ratio.

Written by Mary Kate Nelson

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