Transactions & Financings: Ziegler Closes on $125M HumanGood Package; Diversified Completes $53M Sale

Sales and operator transitions

Diversified Healthcare Trust completes 4-property, $53M sale

Diversified Healthcare Trust (Nasdaq: DHC) completed a previously announced sale of four properties for a combined $43 million. The disposition includes three senior living communities with a combined 239 units located in Washington and Montana for $46 million.

These sales were part of a previously announced plan to sell up to $900 million of assets in connection with the restructuring of its business arrangements with Five Star Senior Living (nasdaq: FVE). Proceeds will be used to repay debt and for general business purposes.

Wickshire Senior Living acquires Ohio community for $3M

Wickshire Senior Living completed the $2.7 million acquisition of Sunrise of Poland, an assisted living and memory care facility in Poland, Ohio, Youngstown Business Journal Daily reports.

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The community was rebranded as Wickshire Poland.

Standard Companies, Alliant Capital partner on Illinois affordable senior apartment acquisition

Standard Companies and Alliant Capital formed a joint venture to acquire Westwind Tower, an 11-story, 150-unit affordable senior apartment building in Elgin, Illinois. The sale is being facilitated with $1 million in 4% low-income housing tax credits.

Cadence assumes management of 4 Tribute communities

Scottsdale, Arizona-based Cadence Living is taking over management of four communities in the Washington, D.C. metropolitan area: Tribute at One Loudoun in Ashburn, Virginia; Tribute at The Glen in Woodbridge, Virginia; Tribute at Black Hill in Germantown, Maryland; and Tribute at Melford in Bowie, Maryland.

“We are excited to bring these beautiful Tribute communities into the Cadence family and culture,” stated Cadence Principal Rob Leinbach. “We look forward to integrating these state-of-the-art communities into the fabric of the greater local community and creating an environment for seniors of celebration – or ‘Tribute’ for the local community.”

Since being founded in 2016, Cadence has grown its portfolio at a steady clip. Today the company’s portfolio numbers 31 communities across 10 states.

Imperial acquires senior housing and care campus

The Madlyn and Leonard Abramson Center for Jewish Life has been acquired by Imperial Healthcare Group. Blueprint served as advisor for the transaction, with an initial marketing process in Q1 2020 generating eight competitive proposals. 

The Abramson Center is located near Philadelphia in North Wales, Pennsylvania, and encompasses 324 licensed skilled nursing and long-term care beds, 46 personal care units and two independent living units. The community dates to 2001 and spans 78 acres, and has undergone $5 million in renovations since 2008.

“The [nonprofit] seller valued a continuation of its mission and religious programming, an ongoing relationship with the incoming buyer, and substantial direct care staff retention,” Blueprint stated in announcing the deal.

Financings

HJ Sims closes financing packages totaling $174M

HJ Sims arranged a $107.4 million refinancing package on behalf of Westminster Communities of Florida.

Part of the proceeds – $50 million – are earmarked for upcoming expansion projects.

Sims also closed a $77 million financing package for Casa de las Campana, a life plan community in San Diego managed by Life Care Services. LCS Development serves as the developer.

The community refinanced outstanding legacy debt, as well as debt related to a previously phased expansion. Casa de las Campana anticipates annual cash flow savings on existing debt of $2.45 million through 2035, with net present value savings of $12 million and 18.3% of refunded debt over the 30-year amortization.

Ziegler closes financing packages totaling $206M

Ziegler closed on $125 million in capital, placed with Washington Federal Bank, for the HumanGood Obligated California Group. The package consists of:

  • $15.5 million in Series 2020A revenue and refunding bonds, refinancing an existing tax-exempt bank placement
  • $64.8 million in Series 2020B taxable revenue and refunding bonds – a Cinderella refinancing of two fixed rate tax-exempt issues
  • A $33.8 million taxable term loan, providing new money for various uses
  • An $11 million taxable revolving line of credit

Proceeds of the Series 2020A Bonds, along with other available funds, will be used to refinance the Series 2012 private placement. The Series 2020A Bonds have a commitment period of 16 years, matching the existing maturity of the Series 2012 private placement, and they pay variable rate interest based on 79% of 1-Month LIBOR plus a bank spread. The Obligated Group has entered into an interest rate cap with a strike price of 2.4% to hedge rate risk on the Series 2020A Bonds.

Proceeds from the Series 2020B bonds will be used to advance refund existing Series 2012A and a portion of 2013A bonds using a Cinderella structure.

Proceeds from the taxable loan will fund various campus improvements across HumanGood’s California communities and refinance a portion of the Series 2013A bonds.

Proceeds from the credit line will be used to fund future capital projects as needed.

Ziegler, working on behalf of Spokane United Methodist Homes, doing business as Rockwood Retirement Communities, closed on $81.4 million in Series 2020A and Series 2020B bonds issued through the Washington State Housing Finance Commission.

Proceeds will fund the next phase of redevelopment for Rockwood at Whitworth, which involves demolishing the remaining portions of a manor, a health care center, two duplexes and two courtyard homes, to build 117 new independent living apartments, an underground parking garage and additional common and administrative areas.

Hunt Capital Partners closes $5M low-income tax credit financing

Hunt Capital Partners, working with Envolve Community Management, closed on a $5.2 million low-income housing tax credit package for the acquisition and rehabilitation of Shady Oaks Manor, a 138-unit affordable senior apartment property in Ft. Worth, Texas. Additionally, all units will benefit from a Section 8 project-based Housing Assistance Payments rental subsidy.

The total development cost for the redevelopment is $22.6 million.

KeyBank secures $2M for Ohio affordable senior housing property

KeyBank Community Development Lending and Investment (CDLI) secured a $2 million financing package to renovate Hopeton Terrace, an affordable senior apartment building in Chillicothe, Ohio. This is the first project in the country to be recapitalized through the Department of Housing and Urban Development’s (HUD) Rental Assistance Demonstration for Project Rental Assistance Contracts (RAD for PRAC).

Ratings Outlooks

Fitch places Christian Care Centers on ratings watch negative

Fitch Ratings downgraded the ratings assigned to the following bonds issued by Mesquite Health Facilities Development Corporation (Texas) on behalf of Christian Care Centers to ‘B+’ from ‘BB-‘:

  • $22.3 million retirement facility revenue bonds, Series 2016
  • $29.1 million retirement facility revenue bonds, Series 2014.

The ratings have been placed on rating watch negative. Key ratings drivers include operational pressures stemming from Covid-19. Occupancy has fallen in all service lines. Ranging from 84.8% in independent living to 64.35 in skilled nursing occupancy. Despite the receipt of $1.241 million in HHS stimulus funds, Christian Care’s total revenue decreased by 5% through August, compared to the same time frame last year, primarily due to reduced nursing revenue and investment income. Expenses have also increased in 2020 compared to 2019 because of pandemic related supply costs and bonus pay provided to employees.

Miscellaneous

Standard Communities $206M investment in Illinois affordable senior apartments wins industry award

Standard Communities’ preservation and expansion of a six property, 855-unit, senior affordable housing portfolio in Chicago and its metropolitan area won the Novogradac Tax Credit Developments of Distinction Award.

The Standard team implemented a comprehensive $40 million renovation that transformed and enhanced amenity spaces, upgraded unit interiors, and modernized building systems – all without displacing residents. Additionally, Standard partnered with nonprofit community service providers to design and implement an extensive suite of resident services and community programming, provided at no cost to residents.

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