Senior Housing Finance Activity: Berkadia, Walker & Dunlop

Walker & Dunlop Arranges $20 Million and $6.9 Million Loans for Senior Housing Projects in Florida, Wisconsin

Bethesda, Maryland-based commercial real estate services and finance company Walker & Dunlop (NYSE: WD) recently arranged a $6.9 million loan for William Booth Towers, a 15-story, 168-unit Section 8 apartment community in Orlando, Florida, that’s restricted to residents 62 years old and older.

The Walker & Dunlop origination team was led by Jeff Kearns. The team used the HUD 223(f) program to refinance William Booth Towers’ existing HUD 202 loan.

The refinance resulted in the property owner’s interest rate falling 3%. The refinance also resulted in proceeds, which will be utilized to complete a $3.5 million rehabilitation of the community. 

Walker & Dunlop also recently structured a $20 million loan for The Oaks of Shorewood, a community for seniors 55 years old and older in Shorewood, Wisconsin. 

Walker & Dunlop’s Tim Cotter and Jeff Schmidt led the origination team, which arranged the three-year, interest-only loan through TCF Bank. Additional loan terms include a floating rate, 75% loan-to-value, and debt service coverage ratio of 1.37x. The community will be developed by Minneapolis-based developer Sherman Associates, which plans to deliver the $26 million community in 2018. 

Once complete, the community will be a four-story building with 67 two-bedroom units and 34 one-bedroom units. 

PSRS Arranges $2.6 Million Acquisition Financing for Senior Housing in San Diego

PSRS recently arranged $2.6 million in acquisition financing for Melroy Investments, which will use the funds to buy an undisclosed, three-story, 26-unit senior housing community in San Diego.

The nonrecourse loan has a 4% fixed rate and three years of interest-only payments.

The total purchase price was $5.1 million. The community is restricted to residents 55 and older. 

On top of the $2.6 million loan, PSRS included $700,000 in “earn outs” for hitting specific benchmarks as far as rent growth. If earned, Melroy will utilize that money for future acquisitions and property improvements.

CBRE Arranges Loans for Two CPF Living Communities in Las Vegas

CBRE National Senior Housing Vice Chairman Aron Will recently arranged financing on behalf of the real estate private equity arm of Chicago Pacific Founders—CPF Living Communities—for The Echelon, a 116-unit independent living community in Las Vegas.

Specifically, CBRE secured a non-recourse, five-year fixed rate loan that includes 24 months of interest only from a CMBS Lender. The Echelon will continue to be operated by Grace Management, a wholly owned subsidiary and management the arm of CPF LC.

The Echelon is currently 98% occupied.

Will also recently arranged acquisition financing on behalf of CPF Living Communities for Acacia Springs, a 160-unit independent living and assisted living community in Las Vegas.

CBRE Multifamily Capital originated a $13.5 million, 7-year, non-recourse fixed-rate loan with 3.5 years interest only via its Fannie Mae DUS Multifamily loan origination program. The community will be operated by Grace Management once the transaction is closed.

iBorrow Provides $9.3 Million Loan for Assisted Living Community in California

Private commercial real estate lender iBorrow recently provided a $9.3 million bridge loan for the renovations at an unnamed assisted living community in Long Beach, California.

The 64,090-square-foot community was originally built in 1929. When renovations are completed, it will have 56 assisted living units, as well as a rooftop garden, ocean views and some retail. 

The name of the borrower was not revealed. iBorrow’s Will McCabe originated the loan. 

CBRE Arranges Financing for Senior Housing Community in New Jersey

CBRE National Senior Housing Vice Chairman Aron Will recently arranged construction financing on behalf of senior housing investment company Capitol Seniors Housing for a to-be-built, Class A, 85-unit assisted living and memory care community in Shrewsbury, New Jersey.

Specifically, CBRE secured an approximately $16.75 million, non-recourse, five-year floating rate loan that includes 48 months of interest only from a regional bank. Once construction of the property is complete, regional senior housing operator Chelsea Senior Living will be brought on to third-party manage the community, which will be called Chelsea of Shrewsbury.

Currently, Capitol Seniors Housing owns 25 properties comprising 2,545 units.

JLL Arranges $39.2 Million Loan for Senior Living Community in California

JLL recently arranged a $39.2 million Freddie Mac permanent loan for the purchase of a 280-unit senior living community in Santa Fe Springs, California, Commercial Observer reported.

Standard Property Company purchased the community, which is called South Fulton Village. JLL Managing Director C.W. Early handled the transaction.

The sponsor was able to retire over $37 million in bridge financing into the new, tax-exempt permanent loan with the government-sponsored enterprise by converting a number of the units to affordable housing. The bridge loan featured a loan-to-value ratio of 85%.

The new financing involves three years of interest-only and a 35-year amortization schedule at a fixed rate under 4%. The loan features a 16-year term.

Berkadia Senior Housing Group Arranges Several Senior Housing Loans

Heidi Brunet and Chris Honn of Berkadia’s Senior Housing Group recently worked with Freddie Mac to provide a $30 million, 10-year, fixed-rate loan for a new senior housing customer. The 125-unit independent living property opened in October 2015 in suburban Columbus, Ohio. The borrower used the proceeds to pay off construction loan debt.

Brunet also closed a $44 million, 10-year fixed rate Freddie Mac loan on a 323-unit independent and assisted living community in South Florida originally built in 1989. Cash out loan proceeds were utilized to pay off existing debt, recapture some equity and complete planned renovations.

Written by Mary Kate Nelson