Transactions & Financings: Lifespace Communities Closing on $176M Bond Issuances; Integral Adds 9 Communities to Management Platform

Lifespace Communities is taking steps to strengthen its financial profile.

The West Des Moines, Iowa-based nonprofit is nearing completion on securing bond issuances totaling nearly $175.5 million. Proceeds will be earmarked for financing remaining project costs for Lifespace’s expansion and renovation projects at its life plan communities in Florida, Illinois, Kansas, Pennsylvania and Minnesota, refund the nonprofit’s Series 2010 bonds, fund 24 months of capitalized interest, and pay issuance costs of issuance.

The bonds include:

• $72.950 million Iowa Finance Authority revenue bonds, series 2021A;
• $30.0 million IFA revenue bonds, series 2021B;
• $17.515 million Palm Beach County Health Facilities Authority revenue bonds, series 2021C.

Fitch Ratings issued a “BBB” rating to these bonds, which are both expected to sell via negotiation on or about August 18. Fitch also assigned a “BBB” issuer default rating to Lifespace and removed from criteria observation $449.1 million of bonds previously issued through various authorities on behalf of the company.

Additionally, Lifespace anticipates issuing $55 million in series 2021D revenue bonds from IFA which are not rated by Fitch. These bonds are expected to be issued as direct placement bank debt with BMO Harris Bank to be repaid with initial entrance fees.

Sales and operator transitions

JCI Senior housing assumes management of 3 Texas communities

JCI Senior Housing assumed management of the following senior housing communities in Texas: Buda Oaks Assisted Living and Memory Care in Buda; SoCo Village Assisted Living and Memory Care in Austin; and The Philomena Assisted Living and Memory Care in Kyle.

Blueprint sells vacant Arizona health care building

Blueprint Healthcare Real Estate Advisors Senior Director Amy Sitzman and Senior Associate Giancarlo Riso facilitated the sale of a vacant 94-unit health care property in Phoenix, Arizona, originally developed by Mainstreet that had fallen into foreclosure. The buyer is a private owner-operator looking to expand its footprint in the market.

Blueprint also supported the buyer in sourcing equity capital to complete the transaction.

CBRE sells senior housing portfolio to Lone Star Funds

CBRE Senior Housing Executive Vice President Lisa Widmier represented the seller in the disposition of a five-property assisted living and memory care portfolio, totaling over 500 units, for an undisclosed price. The buyer was Lone Star Funds, which has tapped Grace Management to manage the buildings.

Integral Senior Living assumes management of 9 communities

Integral Senior assumed management of the following senior housing communities on August 1:

• Heartis Fayetteville, Fayateville Georgia, owned by Caddis
• Heartis Suwanee, Suwanee Georgia, owned by Caddis.
• GranVida Senior Living, Carpinteria, California, owned by Steadfast Companies.
• Preston Greens Senior Living, Lexington, Kentucky, owned by Steadfast Companies.
• Kiley Ranch Senior Living, Sparks, Nevada, owned by Investcor Development.
• Aspens at Fort Collins, Fort Collins, Colorado, owned by Imprint Property Group.
• Ashbrook Village, Duncan, Oklahoma, owned by Imprint Property Group.
• Creekside Village, Ponca City, Oklahoma, owned by imprint Property Group.
• Alderbrook Village, Arkansas City, Kansas, owned by Imprint Property Group.

The additions brings Integral’s portfolio total to 89 communities across 22 states.

Financings

Regions Bank arranges, closes $68M construction, mini-permanent loan

Regions Bank Healthcare Real Estate Managing Director Christopher Honn arranged and closed a $68 million new construction and mini-permanent loan on behalf of a joint venture between a Minnesota-based developer, an Arizona-based owner and operator, and a Midwest-based private equity firm. Proceeds will be used to develop a 213-unit senior housing community in San Diego, with a unit mix of 103 independent living, 86 assisted living and 24 memory care apartments.

The floating rate loan terms include a five-year initial term with four years of interest only, and a staged reduction in loan repayment recourse. At or prior to maturity, Regions may provide an agency permanent debt solution for the borrower.

BMO Harris Healthcare arranges $72.4M construction loan

BMO Harris Healthcare Real Estate was the lead arranger and administrative agent for a $72.4 million construction loan, issued on behalf of a joint venture between Bridgewood Property Company and Harrison Street Real Estate Capital, to finance construction of The Village on Morehead, a 199-unit luxury senior housing development from Bridgewood Property Company and Harrison Street Real Estate.

CBRE National Senior Housing previously announced its involvement in the deal.

HJ Sims completes 2 financings, totaling $71M

HJ Sims completed the following transactions, totaling $70.96 million:

• Sims closed on a $23.34 million financing package on behalf of Poydras Home, a continuing care retirement community in New Orleans consisting of 10 independent living units, 22 assisted living units, 11 memory care units and 64 private nursing care beds. Proceeds will be used to replace the skilled nursing cohort with a small-house model and add 14 new assisted living units across two three-story buildings. When completed, Poydras Home will be the first certified Green House project in Louisiana.
• Sims closed on a $47.62 million financing package on behalf of Asbury Communities, for its Pennsylvania obligated group, comprised of two CCRCs: Bethany Village Retirement Center in Mechanicsburg; and Springhill in Erie. The hybrid finance plan, consisting of bonds and bank debt, maximizes debt service savings while minimizing/eliminating renewal risk associated with traditional commercial bank financings.

Ratings Outlooks

Fitch announces bond rating updates on 2 CCRCs

Fitch Ratings announced the following bond ratings updates:

• Fitch removed Charlestown Retirement Community in Catonsville, Maryland from under criteria observation, issued an “A-” issuer default rating, and downgraded the rating on $89.6 million in series 2016 revenue bonds issued by the Maryland Health and Higher Educational Facilities Authority on behalf of Charlestown from “A” to “A-.” The rating outlook was revised from stable to negative, reflecting Charlestown’s mixed financial profile metrics – notably, cash to adjusted debt falls outside Fitch’s criteria for an “A” rating. Charlestown had a debt service coverage violation in 2020, which was driven by a year of thinner net entrance fee receipts: the $2.5 million of net entrance fees in 2020 was down over 45% from 2019, and caused by the challenges of sales and marketing during the pandemic, current residents choosing to age in place, and state-mandated coronavirus shutdowns.
• Fitch affirmed the “BBB+” rating on approximately $102 million State of Connecticut Health & Educational Facilities Authority revenue and revenue refunding bonds, series 2016F issued on behalf of Masonicare, a multisite nonprofit senior housing provider based in Wallingford, Connecticut. Fitch has also affirmed the “BBB+” issuer default rating for Masonicare and has removed the company from under criteria observation. The rating outlook is stable, reflecting the strength of their revenue defensibility based on a diversified business model, coupled with a low debt burden.

Miscellaneous

Enseo, a senior living tech platform offering senior living solutions that improve resident engagement and offer person-centered care, was recently ranked 15th on Fast Company’s third annual list of the top 100 best workplaces for innovators.