Senior Housing Finance Activity: KeyBank, Love Funding

KeyBank Arranges Loans for Affordable Seniors Housing Projects

Cleveland-based KeyBank Real Estate Capital (NYSE: KEY) has arranged a $23.8 million Fannie Mae loan for Harmony Housing, a 501(c)(3) non-profit organization based Douglassville, Georgia. KeyBank’s John Gilmore, IV, and Jeff Rodham arranged the financing.

The funds will be used to acquire three affordable and senior housing properties in Texas and Wisconsin, including the acquisition of Prairie Park Senior Apartments, a 96-unit, low-income housing tax credits (LIHTC) property in Madison, Wisconsin.

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The company has also arranged a $6.9 million FHA loan for Millennia Housing Development Ltd., for the renovation of Sherman Thompson Towers Apartments, a 151-unit affordable seniors housing community in Ironton, Ohio.

The project was awarded tax credits by the Ohio Housing Finance Agency (OHFA), and has a housing assistance payments (HAP) contract that provides rental assistance to 150 of the 151 units.

KeyBank’s Jeff Rodman and Kelly Frank originated the loan.

Love Funding Provides $5 Million Refinance Loan for Colorado Affordable Senior Housing Community

Washington, D.C.-based Love Funding has secured a $5.24 million refinance loan for affordable senior housing community Town Centre Senior Apartments in Broomfield, Colorado.

Love Funding Senior Vice President of Business Development Jonathan Camps secured the loan through the U.S. Department of Housing and Urban Development’s (HUD) 223(f) loan insurance program, which provided the team with a low-rate, non-recourse financing that will pay off two existing loans.

A portion of the funds will be allocated to needed repairs to the building, as well as funding the reserve account.

Town Centre Senior Apartments is comprised of 88 affordable one-bedroom and two-bedroom units for individuals age 55 and up.

CBRE Capital Markets Secures $20 Million Construction Loan for Morningstar of Glendale

Houston-based CBRE Capital Markets has secured a $20.19 million loan on behalf of a joint venture between MorningStar Senior Living, N-Shea Group and an institutional equity partner for the construction of Morningstar of Glendale.

The arrangement is a four-year floating rate construction loan with 42 months of interest only from a regional bank.

Morningstar of Glendale will be a 144-unit independent living, assisted living and memory care community located in Glendale, Arizona. This will be MorningStar’s fourth community in the Phoenix metropolitan area. Upon project completion, the property will be managed by MorningStar.

HJ Sims Arranges Loans for Washington, D.C., Pennsylvania, Florida Senior Living Communities

HJ Sims, a privately held investment bank and wealth management firm based in Fairfield, Connecticut, has recently financed a few senior living community projects.

Specifically, HJ Sims recently secured $190 million to finance the expansion and renovation of Ingleside at Rock Creek, located in Washington D.C. Ingleside at Rock Creek had pursued an expansion project for its 105-unit independent living community, as well as the addition of a new health services building featuring a memory care unit. 

HJ Sims sought to maximize the amount of bank financing, enabling the community to draw down a portion of funds as needed to lessen the interest costs during the construction period. HJ Sims ultimately created a hybrid financing structure, featuring short-term bank financing with long-term bond financing. This arrangement saved Ingleside roughly $6 million of long-term debt, according to HJ Sims. In addition to locking in $60.5 million in new bank financing and retaining $26.8 million of existing bank debt, HJ Sims secured investor participation with more than $112 million sold to institutional bond funds and more than $17 million sold to individual investors.

HJ Sims also arranged a $32.1 million loan for Lutheran Community at Telford (LCT), a life plan community located in Telford, Pennsylvania. HJ Sims’ James Bodine and Patrick Mallen originated the loan.

LCT teamed up with HJ Sims in September 2016 to explore options to refinance existing debt and also fund infrastructure needs for a planned expansion project. Of $35.4 million in total debt, LCT had roughly $19.3 million of outstanding fixed rate and variable rate bonds. Its fixed rate bonds were approaching an optional redemption date in early 2017, and the letter of credit underlying LCT’s variable rate bonds was scheduled to renew/terminate in fall 2017.

LCT ultimately modified the terms of its Series 2010 bank debt to reduce the interest rate and extend the tenor, refinanced its outstanding fixed rate and variable rate bonds, and funded $2 million for capital expenditures, allowing the company to reduce the interest rate and extend the credit commitment on the Series 2010 bank debt. The financing was completed in two steps, spearheaded by the modification of LCT’s Series 2010 Bank Debt, which was completed on an expedited basis in April. The interest rate was then reduced from 3.15% to 2.80% and the tenor extended form 2024 to 2027. The refinancing of its fixed rate and variable rate bonds and new capital funding was completed in June with a synthetic fixed rate of 2.74% and 13-year tenor.

HJ Sims also recently arranged a $43.8 million bond for Tuscan Gardens at Palm Coast, a new assisted living and memory care community spanning 152,000 square feet in Palm Coast, Florida.

Senior bonds consisted of $39.6 million of tax-exempt and taxable bonds that provided for a loan of roughly 78% loan to cost. The company also structured $2.7 million of tax-exempt subordinate bonds that were sold to accredited investors and an institution. Overall blended yield on the bond issue was roughly 7.42%.

The proceeds will be used to create three buildings that will be comprised of 86 assisted living and 44 memory care units.

Written by Carlo Calma

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