Transactions & Financings: Welltower’s $4 Billion Credit Facility; Ziegler’s $141M Financing Deal Volume

Welltower (NYSE: WELL) improved its near- and long-term liquidity.

The Toledo, Ohio-based health care real estate investment trust closed on an expanded $4 billion unsecured revolving line of credit. This will replace an existing $3 billion credit facility.

Additionally, Welltower has two existing facilities outstanding: a $500 million term loan and a $250 million Canadian dollar ($250.5 million US) term loan. The new facility was supported by 31 incumbent and new financial institutions and was heavily oversubscribed. It consists of a tranche that matures on June 4, 2023 and a $3 billion tranche that matures on June 4, 2025. Both tranches may be extended for two successive terms of six months at Welltower’s option.

Affiliations

Lifespire of Virginia, Pinnacle Living finalize home health joint venture

Lifespire of Virginia and Pinnacle Living have agreed to a joint venture agreement to provide home health and other organizational support services.

The new venture, Senior Living Partners of Virginia (SLP), will allow both organizations to formally collaborate and expand their growth to serve those who currently do not live in senior housing. The JV also finalized the purchase of Williamsburg Landing Home Health and acquired its existing assets, including state and federal home health licenses and certifications.  The home health company will operate as Affirmation Home Health.

SLP has hired William Mayes to lead the new venture as CEO, and Jennifer Rauschenburg as administrator and director of clinical services.

Sales and operator transitions

Blueprint completes sale of independent living community in Southwest US

Blueprint Healthcare Real Estate Advisors Executive Managing Director & Co-Founder Ben Firestone, Senior Director & Head of Capital Markets Alex Florea, Senior Director Amy Sitzman, and Senior Associate Giancarlo Riso were the sole brokers in the sale of a 100-unit independent living community in the southwest. The buyer and seller agreed to a letter of intent in March 2020, but paused the transaction due to the coronavirus pandemic. Blueprint maintained communications between the two parties, and completed the deal.

Presbyterian Senior Living, Tryko Partners agree to buy Pennsylvania CCRC, Maryland independent living community

Presbyterian Senior Living and Tryko Partners entered a contract of sale where private equity firm Tryko will acquire Westminster Village, a 178-bed CCRC in Allentown, Pennsylvania; and Heritage Run, a 34-unit independent living rental community in Baltimore. Upon the anticipated summer 2021 closing, Tryko will launch a capital improvement program to fully modernize Westminster Village.

SLIB completes 2 transactions

Senior Living Investment Brokerage completed the following transactions:

• Managing Directors Jason Punzel, Brad Goodsell and Vince Viverito completed the sale of a 98-unit/118-bed assisted living and memory care facility in Las Vegas. The buyer is a national private equity fund bringing in a new third-party manager. The seller is a local developer.
• Punzel and Managing Director Ryan Saul were the sole brokers in the $10.2 million sale of Olympic Village, a 55-plus, entrance fee active adult community in Sun Prairie, Wisconsin. SLIB worked with current residents to assist in forming a new nonprofit entity to buy and control the property. The firm also helped source financing through Starion Bank and introduced the new owners to an operator, Attic Angel, to provide management services.

Financings

Ziegler completes 3 transactions, totaling $141.4M

Ziegler completed the following transactions:

• Ziegler served as the exclusive capital structuring advisor on behalf of Symphony Care Network in the $48.95 million acquisition of two skilled nursing facilities and a supportive living facility in the Chicago neighborhoods of Lincoln Park and South Shore. The seller is a publicly traded REIT, and is the final phase of a wider portfolio restructuring between Symphony and the seller.
• Ziegler placed and closed a $48 million financing package for Tabitha Grand Island, for the construction of a new community, Tabitha at Prairie Commons in Grand Island, Nebraska. The package consists of $33.95 million of Series 2021AB revenue bonds placed with Pinnacle Bank, a $12 million subordinate loan placed with Mission Investment Fund of the Evangelical Lutheran Church in America (MIF), and a $2.035 million tax incremental financing (TIF) loan provided by Pinnacle Bank. Proceeds will be used to finance the construction of Tabitha at Prairie Commons, fund an estimated 27 months of interest on the bonds, and pay certain costs of issuance associated with the financing.
• Ziegler closed a $44.415 million Series 2021 bond issuance on behalf of The Forest at Duke, a nonprofit continuing care retirement community in Durham, North Carolina, just south of Duke University. Proceeds, along with other available funds, will be used to fund the costs of the a capital improvement project consisting of a replacement health and wellness center that will include 90 new units (32 assisted living and 58 skilled nursing) in a “small house” format. Additionally, proceeds will pay a portion of the interest on the bonds and pay certain fees and expenses incurred in connection with the sale and issuance of the bonds.

HJ Sims arranges $42M financing package for campus expansion

HJ Sims closed on a $41.9 million financing package for Sunset Retirement Communities, a Michigan-based nonprofit provider. Proceeds are earmarked to fund the expansion of independent living offerings at Waterford Place, a retirement community in Jenison, Michigan.

BMO Harris completes $73.4M construction financing for LCS New Jersey development

BMO Harris Bank’s Healthcare Real Estate Finance group closed a $73.4 million construction financing package for a joint venture between LCS and an institutional partner for a 220-unit independent living, assisted living, and memory care community in Florham Park, New Jersey. People’s United Bank was a $30 million participant in the deal.

Base Equities targeting $50M in commitments with new preferred equity fund

Los Angeles-based private equity firm Base Equities is launching a new small-balance fund focusing solely on small-balance $1 million to $5 million) preferred equity for commercial real estate investments, with an emphasis on multifamily transactions in the $5 million to $30 million. The fund is targeting $50 million in commitments from high net worth individuals, family offices and corporations, and will target value-add transactions with proven sponsors.

Approximately 25% of the fund’s commitments will be earmarked for other property types, including senior housing.

Ratings Outlooks

Fitch announces bond rating updates on 6 CCRCs

Fitch Ratings announced the following bond ratings updates:

• Fitch assigned a “BBB” issuer default rating, and affirmed the “BBB” rating on $164.44 million in various revenue, and revenue and refunding bonds, issued by the City of Atlantic Beach, Florida on behalf of the Naval Continuing Care Retirement Foundation, doing business as Fleet Landing The rating outlook is stable. Key rating drivers include the campus’ status as a single-site CCRC with strong demand across the care continuum, solid operating history, and a resilient financial profile withstanding moderate stress from a major independent living expansion.
• Fitch assigned a “BBB-” issuer default rating to Landis Communities & Affiliates, and affirmed the “BBB-” rating on $46 million Series 2015A health center revenue refunding bonds issued by the Lancaster County (Pennsylvania) Hospital Authority on behalf of Landis Homes Retirement Community. The rating outlook is stable. Key rating drivers include strong demand driven by independent living occupancy, strong revenue defensibility and midrange operating risk assessments, and sustained operations and cash flow.
• Fitch assigned the “BB” issuer default rating and affirmed the ‘BB’ ratings on Series 2018A revenue bonds issued by the Hospital Facility Authority of Clackamas County, (Oregon) and Series 2017A revenue bonds issued by the Public Finance Authority to Mary’s Woods at Marylhurst (MWM). The rating outlook is stable. Key rating drivers include strong demand trends, an expected improvement in operations, and stable but weak leverage metrics related to the completion of new independent living units.
• Fitch assigned a “BBB+” revenue rating on $65.5 million in Series 2021 revenue bonds expected to be issued by the Pennsylvania Economic Development Financing Authority on behalf of Presbyterian Homes Obligated Group (PHOG). Additionally, Fitch removed PHOG from under criteria observation, assigned a “BBB+” issuer default rating, and the “BBB+” rating on $14.2 million in Series 2008C variable rate revenue bonds issued by the Cumberland County Municipal Authority, and $9 million in Series 2013 revenue bonds issued by the Philadelphia Authority for Industrial Development. The rating outlook is stable. Key rating drivers include steady historical performance, a robust capital improvement plan, a stable financial profile withstanding moderate stress, and solid demand for services.
• Fitch assigned an “A-” issuer default rating and affirmed the “A-” revenue rating on approximately $28 million of revenue bonds issued by Westchester County Local Development Corporation on behalf of Miriam Osborn Memorial Home Association (MOMHA). The rating outlook was revised to positive. Key drivers include strong demand in a market with solid demographic drivers, steady operating performance, and a resilient financial environment withstanding stress.
• Fitch assigned “BBB-” ratings to $9.4 million of Series 2021 fixed-rate limited obligation revenue bonds and $31.8 million of series 2022 forward sale fixed-rate limited obligation revenue refunding bonds to be issued by the Economic Development Corporation of the City of Kentwood, Michigan on behalf of Holland Home Obligated Group (HHOG). Additionally, Fitch assigned HHOG “BBB-” issuer default rating, and affirmed HHOG’s existing limited obligation revenue bonds at “BBB-” The rating outlook is stable. Key drivers include solid demand within its market, an adequate long-term financial profile, an expected moderation in capital expenditures, and a history of solid operations.