Senior Housing Finance Activity: HJ Sims, Walker & Dunlop

HJ Sims Arranges $93 Million Bond for New Hampshire Assisted Living Community

Fairfield, Connecticut-based HJ Sims, a privately held investment bank and wealth management firm, has arranged a $93 million bond for The Prospect-Woodward Home, an assisted living community, which will be based in Keene, New Hampshire.

New Hampshire Health and Education Facilities Authority was the issuer of the bond. The agency has a policy of restricting sales of below-investment-grade bonds to qualified institutional buyers and accredited investors in minimum denominations of $100,000. Despite this, HJ Sims utilized its network of individual investors to place roughly $18 million (or 20%) of the $93 million bond issue. 

In June, HJ Sims closed the bond issue with rates ranging from 3.50% to 6.375%. Through its proprietary product, Entrance Fee Principal Redemption Bonds, 40% of the bonds are expected to utilized within three years. 

Eighty percent of the independent living apartments were reserved at the time of bond closing. HJ Sims created three series of Entrance Fee Principal Redemption Bonds to capture initial entrance fees from new residents and to reduce debt quickly.

Walker & Dunlop Arranges $28 Million Construction Loan for Jackson Creek Senior Living

Bethesda, Maryland-based commercial real estate services and finance firm Walker & Dunlop, Inc. (NYSE: WD) has arranged a $28.2 million construction loan for Jackson Creek Senior Living, a 137-unit assisted living community in Monument, Colorado.

Ralph Lowen of Walker & Dunlop arranged the financing with the U.S. Department of Housing and Urban Development (HUD), through the agency’s 232 loan program. Lowen’s team structured the loan at 90% of total replacement cost with an 18-month, interest-only construction period, followed by a 40-year, fully amortizing permanent loan. 

Jackson Creek Senior Living will be located on 6.4 acres of land and will be housed in a three-story, 128,600-square-foot building with 80 assisted living, 30 memory care and 27 independent living units. The community is slated to open in late 2018.

Lancaster Pollard Arranges Loans for California, Michigan Senior Living Communities

Columbus, Ohio-based Lancaster Pollard has arranged a $6.5 million loan for Portland, Oregon-based BPM Senior Living Company to refinance Magnolia Grand, a 95-unit independent living community situated in Riverside, California. 

Lancaster Pollard had previously completed a Fannie Mae Seniors Housing financing for BPM on another property. Looking to replicate the experience for Magnolia Grand, BPM ultimately opted to pursue a Fannie Mae Seniors Housing financing for the property for the various benefits the financing provides, including its non-recourse feature, compelling terms and a low, fixed interest rate.

Matt Lindsay led the transaction for Lancaster Pollard, which closed in approximately 60 days. The loan refinances roughly $6 million in debt and will also fund various upgrade and improvement projects. 

Lancaster Pollard also assisted a Michigan-based owner and operator of senior living communities with a $13 million refinance through the Fannie Mae Seniors Housing program. Lancaster Pollard’s Brendan Healy led the transaction.

Located near the shores of Lake Michigan, the assisted living and memory care community provides holistic care for residents.

The Fannie Mae Seniors Housing financing carries a 12-year term and a low, fixed interest rate. The borrower was able to obtain equity in the transaction for use in improvements and to help in the operator’s plans for growth.

Capital One Arranges $77.7 Million Loan to Refinance Pacifica Companies Portfolio

McLean, Virginia-based Capital One has arranged a $77.7 million loan to refinance San Diego, California-based Pacifica Companies’ portfolio of nine senior housing communities in Arizona, California, Florida, Oregon and Utah.

The mortgage is comprised of $67.7 million in initial funding and an earn-out as specific conditions are met.

The transaction marks the second deal that Capital One has closed with Pacifica. 

A real estate developer, owner, investor and investment manager, Pacifica’s portfolio is valued at roughly $3 billion, and includes office, industrial, retail and net-leased single-tenant, multifamily, residential, senior housing and hospitality properties.

“We were able to offer Pacifica a very competitive rate and flexibility to meet their needs,” said Dague Retzlaff, senior vice president for Capital One Healthcare. “We were also able to build in an earn-out that will allow the company to recapture additional equity as property performance improves as renovated units lease up.”

Written by Carlo Calma