Transactions & Financings: Cambridge’s $446M IRR Volume; Vium’s $750M First Year

Cambridge Realty Capital found a way to place new debt during the coronavirus pandemic. The West Palm Beach, Florida-based financial services firm announced it closed on $446 million in interest rate reduction (IRR) loans from April 2020 through December 2020 — activity driven by the firm’s proactiveness to help clients reduce debt load during the coronavirus pandemic.

An IRR loan allows loan holders to reduce their current rate of interest in the event that the overall interest rates drop.

In total, Cambridge completed 46 IRR loans. The debt on its portfolio carries reduced interest rates ranging from a low of 5.5% of the outstanding loan balance to a high of 22%.

Sales and operator transitions

Chicago Pacific Founders acquires Houston community

Chicago Pacific Founders acquired The Shores at Clear Lake, a 100-unit assisted living and memory care community in Houston, Texas. Terms of the deal were not disclosed.

The community will be managed by CPF’s wholly owned subsidiary, Grace Management.

Blueprint completes 3 transactions

Blueprint Healthcare Real Estate Advisors completed the following transactions:

• Managing Director Connor Doherty and Associate Ryan Kelly were the sole brokers in the sale of a skilled nursing and assisted living facility in Akron, Ohio, near the University of Akron campus.
• Senior Managing Director and Head of Business Development Steve Thomes and Executive Managing Director and Co-Founder Ben Firestone brokered the sale of a 57-unit assisted living and memory care community, and a separate 41-unit memory care community, in the Portland, Maine market. The buyer is a Massachusetts-based owner-operator with a sizable footprint in New England.
• A team consisting of Head of Capital Markets Alex Florea, Executive Managing Director and Co-Founder Jacob Gehl, Senior Director Amy Sitzman, and Managing Director Humair Sabir advised and arranged acquisition financing for Ranch Estates of Tucson, a 107-unit assisted living and memory care facility in Tucson, Arizona, formerly known as Sage Desert. The community was acquired by Chicago Pacific Founders through its subsidiary, CPF Living Communities.

Evergreen Real Estate Group acquires affordable housing community in Cleveland, $18M renovation planned

Evergreen Real Estate Group acquired Carter Manor Apartments, a 270-unit historic apartment building in downtown Cleveland, Ohio, that primarily serves as affordable housing for seniors and people with disabilities. The Chicago-based affordable housing developer will spend $18 million to renovate and modernize the building. All apartments will be improved with refreshed kitchens, bathrooms and flooring. Additionally, 14 units will receive accessibility upgrades. Evergreen also plans to modernize three of the building’s elevators, repair the facade and underground parking garage, replace the roof, and update major mechanical systems. Common area renovations include the addition of a community kitchen and new paint and flooring in corridors.

SLIB completes 3 deals

Senior Living Investment Brokerage completed the following transactions:

• Managing Directors Ryan Saul and Bryan Clousing were the sole brokers in the sale of a three community assisted living portfolio in Wisconsin. The communities are Mission Creek, an 85-unit facility in Waukesha; Bella Vista, a 134-unit facility in Oshkosh, and Lakeshore Manor, a 36-unit community in Oshkosh. The seller was a public REITthat divested to monetize the assets and reduce the number of assets leased to their existing tenant. The buyer is a private regional company with communities in Wisconsin and across the Midwest.
• Managing Director Jason Punzel, Senior Vice President Vince Viverito and Vice President Brad Goodsell facilitated the $32.5 million sale of a 116-unit assisted living and memory care facility in Anchorage, Alaska. The seller is a local developer and operator. The buyer is a national REIT, which will use a third-party operator to manage the community.
• Punzel, Goodsell and Viverito also teamed up on the $8 million sale of a 42-unit/62-bed assisted living facility and memory care facility in Hillsboro, Oregon. The seller is an owner-operator retiring from the industry. The buyer is a national private equity fund who will use a third-party operator. The buyer also plans to convert some assisted living units into memory care, and conduct a community-wide renovation.

Financings

Dwight Capital completes $94M HUD refinancing for Florida community

Dwight Capital closed a $94.3 million HUD loan for The Village at Gainesville, a 651-bed senior living community in Gainesville, Florida offering assisted living, memory care, and board and care. The deal was facilitated by Managing Principal Josh Sasouness and originator Avi Lifshitz.

CBRE completes 2 financing packages

CBRE National Senior Housing completed the following financing transactions:

• CBRE arranged $103 million in construction financing for Holden of Pearl, a 237-unit senior housing community in development in Portland, Oregon. CBRE National Senior Housing Vice Chairman Aron Will, First Vice President Austin Sacco and Vice President Matthew Kuronen arranged the financing on behalf of a joint venture between Alliance Residential Company and its institutional partner. Upon completion, the community will be operated by Milestone Retirement Communities.
• Will, Sacco and Kuronen arranged a seven-year, $39 million fixed rate refinancing package on behalf of 269-unit rental CCRC in the Providence, Rhode Island market. The loan, which comes with 24 months of interest only, was arranged through CBRE’s Fannie Mae DUS multifamily loan origination program.

NorthMarq arranges $7.7M refinance of Georgia independent living community

NorthMarq Capital Vice President Mark Ebersold arranged a $7.65 million refinancing package for Cottages of Wesleyan, a 45-unit independent living community in Macon, Georgia. The transaction was structured with a 10-year term on a 30-year amortization schedule through Fannie Mae.

Griffin Living secures development financing for Georgia community

Griffin Living secured development financing for an upcoming assisted living and memory care community in Acworth, Georgia. The development, Varenita at West Cobb, will be the latest addition to Griffin’s Varenita brand.

The building will feature 58 assisted living and 23 memory care units, and amenities including patios, reflecting ponds, a dog park, a theatre, an outdoor fireplace with a seating area, an outdoor bistro cafe dining experience, gardens, an exercise room, walking paths, and an activity lawn.

Ratings Outlooks

Fitch announces bond rating updates on 9 CCRCs

Fitch Ratings announced the following bond ratings updates:

• Fitch assigned a “BB” issuer default rating to Dow Rummel Village, a life plan community in Sioux Falls, South Dakota. Fitch also also affirmed the “BB” rating on $21.45 million in Series 2016 health facilities revenue refunding bonds and $29.14 million in Series 2017 health facilities revenue bonds issued by the City of Sioux Falls on behalf of Dow Rummel. The rating outlook is stable. Key rating drivers include stable and strong occupancy in a competitive market, a track record of stable midrange operating performance, and a high debt load following the 2017 bond issuance.
• Fitch assigned a “”BB” issuer default rating and affirmed the “BB” rating on $39.13 million in Series 2017 residential care facilities revenue bonds, as well as $67.95 million in Series 2018A revenue care facilities revenue and revenue refunding bonds issued by South Carolina Jobs-Economic Development Authority on behalf of South Carolina Episcopal Home at Still Hopes, a CCRC in West Columbia, South Carolina. The rating outlook is stable. Key rating drivers include consistent occupancy across service lines and signs of a post-pandemic recovery, adequate operations despite pressures from Covid-19, and moderate cash growth from new residential units.
• Fitch assigned a “BBB” issuer default rating and affirmed the “BBB” rating on $43 million in Series 2015 revenue refunding bonds issued by the Maryland Health and Higher Educational Facilities Authority on behalf of Edenwald, a CCRC in Towson, Maryland. The rating outlook is stable. Key rating drivers include solid demand and market position, improving operating performance, and growing margins which are driving incremental cash growth.
• Fitch assigned an “A” issuer default rating and affirmed the “A” rating on $59.15 million in Series 2015A revenue bonds and $32.04 million in Series 2018A revenue bonds, issued by Collier County (Florida) Health Facilities Authority on behalf of Moorings, Inc., the obligated group for Moorings Park at Grey Oaks in Naples, Florida. The ratings outlook is stable. Key rating drivers include a robust census across multiple campuses, steady operating performance, and a strong financial profile.
• Fitch assigned a “BBB” issuer default rating and affirmed the “BBB” rating on $85 million in Series 2016 retirement facility revenue refunding bonds issued by Residential Care Facilities for the Elderly Authority of Fulton County, Georgia on behalf of Lenbrook, a CCRC in Atlanta. The ratings outlook is stable. Key rating drivers include a solid market position, strong operations, an ongoing independent living expansion, and an anticipated financial improvement despite temporary pressures.
• Fitch downgraded the issuer default rating on Forest at Duke, a CCRC in Durham, North Carolina, from “A” to “BBB.” It also assigned a “BBB” rating on $49 million in Series 2021 first mortgage revenue bonds to be issued by North Carolina Medical Care Commission on behalf of the community. The ratings outlook is stable. Key rating drivers include strong demand and market position, solid core operations, and slight but expected deterioration stemming from taking 14 independent living units offline in conjunction with the construction of a new health center.
• Fitch assigned a “BB” issuer default rating and affirmed the “BB” rating on $82 million in revenue bonds issued by the Connecticut Health and Educational Facilities Authority and the Public Finance Authority Healthcare Facility of Wisconsin on behalf of Seabury, a CCRC in Bloomfield, Connecticut. No ratings outlook was shared. Key drivers include Seabury’s status as a single-site CCRC, stable demand and pricing characteristics, smart capital investment, improving core operations, stable liquidity and elevated leverage.
• Fitch assigned an “A” issuer default rating and affirmed the “A” rating on Series 2013 bonds issued by the Washington State Housing Finance Commission on behalf of Emerald Heights, a CCRC in Redmond, Washington. The ratings outlook is stable. Key drivers include strong demand characteristics and operating history, plans in place for a large expansion and significant capital expenditures, and a robust financial profile highlighted by strong revenue defensibility and operating risk assessments.
• Fitch downgraded the rating on $6 million in Series 1997 revenue refunding bonds issued by the New Jersey economic Development Authority on behalf of Harrogate, a CCRC in Toms River, New Jersey, from “B” to “BB-.” Fitch also assigned Harrogate a “B” issuer default rating. The ratings outlook remains negative. Key drivers include weak independent living occupancy in the face of elevated competition, weak core operations and cash flow, and constrained liquidity.

Miscellaneous

K4Connect selected for National Association of Realtors tech incubator

K4Connect was selected for the National Association of Realtors’ 2021 REACH program by Second Century Ventures, the real estate association’s strategic investment arm. The REACH program helps technology companies launch into the real estate vertical and its adjacent markets, and also provides education, mentorship and market exposure.

K4Connect was selected for the program because it offers tools and solutions for senior living services.

Vium Capital ends first year with $750M in volume

Vium Capital, the financial services venture launched in April 2020 by Lancaster Pollard veterans Steve Kennedy and Kass Matt, ended its first year of operation closing 25 transactions totaling $750 million in par volume.

The closings included funding for 63 separate projects across 17 states, consisting of bridge, FHA/HUD and tax exempt bond financings. Vium partnered with a Midwestern-based bank to provide the debt. Additionally, the firm partnered with a Midwestern-based GSE lender to provide Fannie Mae and Freddie Mac financing.