Transactions & Financings: Brookdale Completes Sale of Home Health, Hospice Arms; Vicar’s Landing Secures $116M Bond Financing

Brookdale Senior Living (NYSE: BKD) completed the previously announced sale of its home health, hospice and outpatient therapy business line to HCA Healthcare. The sale was first announced in February.

Under the terms of the deal, the Brentwood, Tennessee-based senior housing operator sold an 80% stake in Brookdale Healthcare Services to HCA for $400 million. It received $300 million in cash proceeds at closing, minus transaction costs and purchase price adjustments.

“This transaction strengthens Brookdale’s financial position, continues providing our residents with access to high quality services, and provides meaningful growth opportunities for BHS,” Brookdale President and CEO Cindy Baier said in a statement.

Affiliations

Blueprint lands new operator for California senior housing community

Blueprint Healthcare Real Estate Advisors Executive Managing Director and Co-Founder Christopher Hyldahl and Senior Associate Scott Frazier ran a confidential process to secure a new operator for a senior housing community in Culver City, California, offering independent living and assisted living services. The new operator selected is looking to expand its regional footprint in the state.

Blueprint worked with the owner and operator by assisting with contract negotiations and due diligence.

The Arbor Company adds 2 Illinois communities

The Arbor Company added two senior housing communities in suburban Chicago to its portfolio: Arbor Terrace Highland Park, a community in Highland Park, Illinois including 64 independent and assisted living units and 22 memory care units; and Arbor Terrace Glenview, with 59 independent and assisted living apartments and 24 memory care units. The properties join The two other senior housing communities in the Chicago market operated by Arbor: Summit of Uptown in Park Ridge and Arbor Terrace Naperville.

Sales and operator transitions

Blueprint completes 3 transactions

Blueprint Healthcare Real Estate Advisors completed the following sales:

• Executive Managing Director and Co-Founder Ben Firestone and Senior Director Jacob Gehl facilitated the $31 million sale of a memory care portfolio totaling 96 units in Midlothian and Virginia Beach, Virginia. The sale was initially paused because of Covid-19, but Blueprint continued to work closely with the seller to understand key objectives and underlying motivation to sell. The buyer was ProMedica, which added the communities to its Arden Courts memory care line, rebranding the communities as Arden Courts Richmond and Arden Courts Virginia Beach.
• Firestone and Managing Director Dan Mahoney facilitated the sale of a 108-unit independent living and assisted living facility in Washington state, focusing on middle market seniors. Terms of the deal were not disclosed. The seller turned to Blueprint for guidance in disposing of the property prior to closing out an investment fund. The buyer is planning modest capital expenditures intended to refresh living units and common areas, and increase occupancy with private-pay residents.
• Senior Directors Brooks Blackmon and Amy Sitzman, along with Senior Associate Giancarlo Riso, were the sole brokers in the sale of a 72-unit assisted living facility in the Columbia, South Carolina market that recently underwent a $1 million renovation. The faculty is located less than a mile from Lexington Medical Center, one of the area’s largest hospitals. The buyer and seller have an existing relationship, and the familiarity between parties resulted in the transaction closing within 90 days of going under a letter of intent.

Cushman & Wakefield arranges $15M sale of 2 entitled senior housing sites in Massachusetts

Cushman & Wakefield (NYSE: CWK) represented Barberry Homes in the $14.55 million sale of two entitled land sites in Millis and Natick, Massachusetts to Anthology Senior Living. The Natick site, when complete, will consist of 86 assisted living and memory care units on 5.53 acres and the Millis site will feature 105 independent living, assisted living and memory care units on 7.697 acres.

Cushman & Wakefield’s National Senior Housing team — Vice Chairman Rick Swartz, Executive Managing Director Jay Wagner and Director Sam Dylag — led the transaction on behalf of Barberry Homes.

Financings

Ziegler closes $116M financing for Vicar’s Landing

Ziegler closed on $115.63 million in Series 2021A and Series 2021B bonds for Life Care Ponte Vedra, doing business as Vicar’s Landing, a CCRC in Ponte Vedra Beach, Florida. The community occupies a 24.3-acre site within Sawgrass, a 4,800-acre private resort and residential community within Ponte Vedra Beach, approximately 20 miles southeast of Jacksonville.

The Series 2021A Bonds were Fitch “BB+” rated tax-exempt fixed rate bonds and the Series 2021B Bonds were draw down bonds directly placed to PNC Mortgage Corporation. Proceeds from the Series 2021 Bonds will be used together with other available funds to refund Series 2014A&B Bonds and Series 2016 Bonds, finance a portion of the cost of an expansion project, fund a debt service reserve and capitalized interest, and pay the cost of issuance of the Series 2021A Bonds.

Vicar’s Landing plans to develop, own and operate an expansion to the Community to be known as Vicar’s Landing at Oak Bridge.

Ratings Outlooks

Fitch announces bond rating updates on 4 CCRCs

Fitch Ratings announced the following bond ratings updates:

• Fitch affirmed the “A-” issuer default rating for RiverWoods, a life plan community in Exeter, New Hampshire. The rating outlook is stable. Additionally, RiverWoods at Exeter $52 million of debt that is directly placed with banks that are not rated by Fitch, but the debt is incorporated in the IDR. Key rating drivers include strong market position, high independent living occupancy, and an expected return to stable operations, post-Covid.
• Fitch assigned a “BB” issuer default rating and affirmed the “BB” rating on $120 million in Series 2017 A and B senior living revenue bonds issued by the Philadelphia Authority for Industrial Development on behalf of Wesley Enhanced Living. The rating outlook is negative, reflecting ongoing pandemic-related pressures on the provider’s operating and financial profiles in fiscal years 2020 and 2021. Notably, Wesley’s high exposure to skilled nursing revenues and governmental payors, thin historical operational performance, and adequate liquidity position provide limited financial cushion at the current rating level to absorb prolonged disruptions to operations, census, or cash flow levels. However, the rating affirmation reflects the provider’s strong historical demand indicators, revenue diversification from five separate CCRC campuses, recently completed campus renovation and repositioning projects, and the receipt of a $7.1 million PPP loan in April 2021, which management expects to be fully forgiven. Additionally, Wesley has yet to release its audited financial statements and covenant calculations in fiscal 2020, which were due December 31, 2020, and Fitch believes the provider may violate its rate covenant of 1.2x. A one-time violation would result in a consultant call-in or detailed report of needed improvement, and it would be viewed as a credit negative and reflected in the maintenance of the negative outlook.
• Fitch assigned a “BB+” rating to $26.35 million in Series 2021B-1 and 2021B-2 bonds issued by the Florida Development Finance Corporation on behalf of Mayflower Retirement Center in Winter Park, Florida. The rating outlook is stable. Key rating drivers include good market position in a competitive service area, a midrange operating risk assessment, high levels of recent capital improvements, and a consistent financial profile through moderate stress.
• Fitch assigned a “BBB” rating to $80.9 million in Series 2021 residential care facilities revenue and refunding bonds to be issued by the Virginia Small Business Financing Authority on behalf of LifeSpire of Virginia. Additionally, Fitch assigned a “BBB” issuer default rating and affirmed the “BBB” rating on $34.7 million in Series 2014A residential care facility revenue refunding bonds issued by the Industrial Development Authority of Botetourt County, Virginia; $74.9 million in Series 2016 residential care facility revenue refunding bonds issued by the Economic Development Authority of the City of Newport News, Virginia; and $49.8 million in Series 2017C residential care facility revenue refunding bonds issued by the Economic Development Authority of Henrico County, Virginia, on behalf of Lifespire. The rating outlook is stable. Key rating drivers include stable demand and pricing characteristics in multiple markets, expected stability in the provider’s financial profile, and a track record of adequate cost management.