Transactions & Financings: Hudson Enters Space with Columbia Pacific Loans; Sabra $26.3M Sale-Leaseback

Hudson Originates $37.75 Bridge Loans for Columbia Pacific Advisors

Hudson Realty Capital completed its first health care deal on the heels of hiring senior living industry veteran Ashley Wilkens as director, deputy chief underwriter.

The transaction involved two bridge loans aggregating $37.75 million secured by two senior living and memory care communities. One is The Landing at Lake Worth in Lake Worth, Florida; and the other is Stonehaven Square in Tulsa, Oklahoma.

Sponsor Columbia Pacific Advisors will use proceeds to refinance existing debt. Eric Johnson of Ziegler represented the borrower.

Hudson Realty Capital is a New York City-based real estate investment and management firm that has executed transactions totaling more than $4.5 billion in aggregate value across the multifamily, office, industrial, retail, mixed-use and hospitality sectors. Earlier this year, the firm launched an FHA division and has grown that team.

Wilkens previously served as COO of Ziegler Financing Corp. and was managing director at Greystone, and will play a key role in driving Hudson’s growth in the health care space, according to a company press release.

Sales, affiliations and operator transitions

Arcadia Communities enters Florida with SLIB-facilitated deal

Senior Living Investment Brokerage facilitated the sale of Canopy of Berryhill, an 80-bed assisted living and memory care community located north of Pensacola Beach in Pace, Florida.

The seller was a partnership led by developer Rimrock Companies. The buyer, Arcadia Communities, expands into Florida for the first time with the deal. Arcadia intends to continue growing its platform throughout the Southeast.

The community opened in late 2019 and achieved 95% occupancy in less than a year, leasing up during the Covid-19 pandemic.

​​Bradley Clousing and Daniel Geraghty handled the transaction.

Life Enriching Communities, The Wesley Communities to affiliate

Life Enriching Communities (LEC) and The Wesley Communities have signed a letter of intent to pursue affiliation, the organizations announced on Oct. 13.

“One of our strategic initiatives over the last several years has been to proactively pursue affiliations and partnerships within the senior living sector,” said Scott McQuinn, President/CEO of LEC. “The senior living landscape has seen significant consolidation and we believe this will continue. Some of the pressures in the market that are driving this consolidation are the complexities of health care, competition, ability to attract and retain talent, technology, and financial capacity. We are looking forward to working with the team at The Wesley Communities to establish greater efficiencies and effectiveness to benefit the residents and associates of each community.”

LEC serves more than 2,000 people through senior living communities in the Cincinnati and Cleveland markets, and through a continuing care at home program. The Wesley Communities provides independent living, assisted living, memory care, nursing and hospice in the Columbus area, with more than 650 residents.

“We believe this is the perfect opportunity given that we are both faith-based, mission driven and United Methodist affiliated,” said The Wesley Communities CEO Margaret Carmany. “The timing is right, and we are confident the combination is in the best interest of residents and staff now, and those of the future.”

Sabra, Legacy Living sale-leaseback

Sabra Health Care REIT (Nasdaq: SBRA) on Oct. 1 completed the $26.3 million acquisition of a 113-unit senior housing property, in a sale-leaseback transaction with Legacy Living.

The property is located in Jasper, Indiana and opened in 2019, encompassing 18 independent living cottages, 70 assisted living units and 25 memory care units.

The initial lease rate is 6.93%, with annual escalators based on CPI with a floor of 2.25% and ceiling of 3.0%. The property is currently 94% occupied with initial lease coverage of 1.20x. Sabra has an option to purchase an additional 24 IL cottages at cost.

Sabra also recently announced the pricing of a public offering of 6.8 million shares of common stock. Total estimated gross proceeds of the offering are approximately $98.9 million or approximately $113.8 million if the underwriters exercise their option to purchase additional shares in full.

Proceeds will be used to fund a $325 million mortgage loan to Recovery Centers of America, among other potential uses.

Contour’s $35 million acquisition of Meridian-operated community

Real estate investor and developer Contour has acquired Estancia Senior Living for $35 million.

The community debuted in the summer of 2021, and is located in northern San Diego County, in Fallbrook. The property includes 79 assisted living and 25 memory care units, and the sale includes 5 acres of adjacent land that is vacant.

Estancia is operated by Meridian Senior Living, which was involved in the planning and design of the community.

“We are pleased with our basis on this asset and its positioning in the submarket,” said David Daneshforooz, Contour’s CEO. “We continue to look for the right value-add and ground-up development opportunities in the Seniors space, especially in California.”

SNF operator exists assisted living with Blueprint-facilitated deal

Blueprint successfully marketed two assisted living communities located in central and south-central Michigan: Maplewood of Marshall and Maplewood of Mt. Pleasant.

The communities previously were owned by a real estate investment trust, and they changed hands as the operator shifted to focus exclusively on its core business of skilled nursing and rehabilitation. The buyer was an entrepreneur with an expanding regional platform.

With a combined 93 assisted living units, the communities were renovated in the early 2000s and maintained over 95% occupancy prior to the Covid-19 pandemic.

JLL arranges $27.3M sale of active adult community

JLL Capital Markets announced the $27.3 million sale of Frost English Silver, a newly-built, luxury, 55+ community in Maplewood, Minnesota. JLL also arranged the acquisition financing for the 107-unit property.

An affiliate of Axial Real Estate Advisors acquired the property from Sherman Associates. On behalf of Axial, JLL secured a 7-year, fixed-rate Fannie Mae loan, to be serviced by JLL Real Estate Capital.

“This acquisition furthers a key component of our housing strategy devoted to serving an empty-nester population,” stated Axial SVP of Acquisitions and Capital Markets Scott Larson. “We are committed to active adult assets like Frost English Silver, and look forward to investing with developers and acquiring properties similar to Frost English Silver, both locally and nationally.”

Axial is a real estate investment and advisory firm based in Minneapolis.

The JLL Capital Markets Investment Sales Advisory team representing the seller was led by Senior Directors Josh Talberg, Mox Gunderson, Dan Linnell, Director Adam Haydon, and Senior Managing Director Ken Dayton.

The JLL Capital Markets Debt Placement team representing the borrower was led by Managing Director Jeff Lepley.

Financings

Berkadia arranges $20.6 million in HUD financing for senior living communities

Berkadia Seniors Housing & Healthcare announced two transactions involving HUD financing, totaling $20.6 million:

— Managing Director Jay Healy secured an $11.9 million HUD loan for an affordable assisted living community, via the 232/223(f) program. The loan, secured for a Texas based non-profit sponsor, carries an interest rate in the low-2% range and retired construction and mezzanine debt. The community encompasses 128 units and offers affordable housing for residents qualifying for Medicaid; the ground lessor is the Dallas Housing Authority.

— Managing Director Ed Williams secured two loans through HUD’s 232/233(f) program for an Idaho-based sponsor, in the aggregate amount of $9.41 million. A $6.26 million loan will refinance a 36-bed memory care community in Montana. At the time of underwriting, the community had 88% occupancy; the 35-year term loan represents a 72% loan-to-value. A separate, $3.15 million loan will refinance a 45-bed assisted living facility in Washington state. Occupancy in this community was 95.7% at the time of underwriting, and the 35-year term loan represents a 76.2% loan-to-value.

Lument’s $47.1M package for Dallas community

Lument has underwritten $25 million in short-term bonds and closed a $22.1 million Freddie Mac unfunded forward loan to support the development of a mixed-income senior housing community in Dallas.

The project — dubbed The Oaks — is being co-developed by DHA Housing Solutions for North Texas (DHA) and Volunteers of America National Services (VOANS). VOANS is the sponsor and guarantor. Tracy Peters, senior managing director, and Dale Giffey, associate director, led the transaction for Lument.

“We are excited to work with Volunteers of America National Services to create much-needed affordable housing for the seniors in our community,” said Troy Broussard, president and chief executive officer for DHA, in a press release. “Our goal is to increase the amount of essential affordable housing across the communities we serve, and The Oaks is going to be a wonderful development in Oak Cliff that houses seniors and also provides access to healthcare for our neighbors.”

The financing structure involves:

— A $35 million construction loan from a national bank, which will be paid off upon stabilization using the Freddie Mac loan and tax credit equity

— Subordinate debt of $4.5 million from bond issuer HOI Inc.

— $750,000 in Capital Magnet Funds from VOANS

Plans for The Oaks call for 260 units for residents age 62 and older, with 216 units serving residents at or below 60% area median income. Other income or rent qualifications, voucher programs and subsidies are also in play.

The building design involves an interior landscaped courtyard, and planned amenities and services include an onsite medical clinic, rooftop decks, community garden, dog parks and fitness room.

Ziegler closes $9.9 million financing, prices $33 million of bonds for Holland Homes

Ziegler closed Holland Homes Series 2021 Bonds and concurrently priced $32.96 million of tax-exempt Series 2022 Bonds. The Series 2022 are forward delivery bonds scheduled to close on Feb. 16, 2022.

Proceeds from the 2021 Bonds will be applied to capital improvements for Holland Homes’ Breton Woods campus. Proceeds from the Series 2022 will be used to refund Holland Homes’ outstanding Series 2012 bonds, resulting in nearly $9 million of net present value savings.

Grand Rapids-based Holland Home is a nonprofit that currently operates 12 facilities on two campuses, encompassing 1,167 units.

Ziegler closes $71.3 million financing for Williamsburg Landing

Ziegler closed Williamsburg Landing’s $71,330,000 Series 2021A and 2021B Bonds.

Located in Williamsburg, Virginia, Williamsburg Landing is a life plan community situated on 138.56 wooded acres, and encompasses 317 independent living apartments, 72 assisted living units, 24 memory care units and 73 health and rehab units.

Proceeds of the bonds will be used, among other purposes, to refund nine existing bank obligations, as Williamsburg Landing is seeking to simplify its capital structure while taking advantage of current market conditions.

“The entire Ziegler team has enjoyed the opportunity to bring a transaction to the public market on behalf of Williamsburg Landing for the first time since 2005,” stated Tommy Brewer, managing director, Ziegler Senior Living Finance. “Greg Juanita and the finance committee did an amazing job converting a complex capital structure into a more flexible structure that will help Williamsburg Landing to grow and [prosper].”

Ziegler closes $38.7 million financing for new Stair Crest community

Ziegler has closed on a financing for PHW Muskego, an affiliate of Presbyterian Homes and Services (PHS), for the construction of a new community in Muskego, Wisconsin.

The financing consists of $38,680,000 of Series 2021 Fixed Rate Revenue Bonds.

PHW Muskego was formed in 2019 in order to construct and operate Stair Crest, a senior living community slated to include 80 independent living apartments and 40 assisted living units, 20 of which will be designated for memory care.

The borrower anticipates that about 102 apartments will be leased to religious sisters associated with the Sinsinawa Dominicans. The balance of units will be available to the general public.

PHS served approximately 25,600 older adults and owned or managed approximately 8,700 senior housing and assisted living apartments and 1,570 nursing home beds in fiscal year 2020. Subsidiary PHS Management will manage the community.

“We are very proud to be part of a financing that achieved an average fixed rate cost of capital believed to be among the lowest, if not the lowest, for a new senior living campus,” stated Aaron Schroeder, director, Ziegler Senior Living Finance.