The Dealmakers Forum: Senior Care Financing News

A sign of the lending market getting healthier is more balance sheet loans getting done.  While HUD and the agencies still tend to dominate, at the end of the year there were several other financings completed, not to mention a large slug of tax-exempt bond financings.  On the balance sheet side, Prudential Mortgage Capital Company closed a $58.5 million loan for a joint venture between Sunrise Senior Living and CNL Senior Housing VI, LLC.  It is a seven-year, fixed-rate loan for a cross-collateralized portfolio of four communities in Massachusetts, California, Georgia and Nevada with a total of 298 units.  Karen McGinnity and Neil Patel of Prudential worked on the transaction.

Contemporary Healthcare Capital ended the year with a bang.  First, it funded a $4.5 million senior mortgage loan from its Senior Lien Fund I, LP for the recapitalization of a 72-bed dementia care facility in New Port Richey, Florida.  A few days later they closed on two loans for the construction of a 48-unit dementia care facility in Sun City West, Arizona.  The Senior Lien Fund provided a $6.0 million construction mortgage loan while Contemporary Healthcare Fund I, LP provided a $4.075 million mezzanine loan.  The total construction debt comes to about $210,000 per unit.  Finally, both of the funds just mentioned provided a total of $5.3 million in senior mortgage, mezzanine and preferred equity financing for the acquisition and renovation of an assisted living and memory care facility located in North Carolina.     

MidCap Financial closed on the purchase of a $28 million fixed rate mortgage loan secured by a 280-bed skilled nursing facility in Oakdale, New York.  The facility was built in 2001 and has revenues of $33 million and a debt service coverage ratio of 2.0x.  Its Medicare census is a high 26%, and the borrower is planning to refinance the loan through HUD.

Moving on to some HUD business, Lancaster Pollard completed $21 million in loans for two skilled nursing facilities in Texas.  The first transaction refinanced $9.71 million of debt on a 132-bed facility in Plano with a new loan with a 35-year amortization and an interest rate below 4%, resulting in substantial annual debt service savings.  The second loan refinanced a 132-bed nursing facility in Lubbock that was constructed in 2007 with financing from KeyBank.  The HUD loan was for $11.976 million, with a sub-4% interest rate and a 35-year amortization.  Jim Neil of Lancaster Pollard spearheaded the refinancings.  Separately, Quintin Harris of Lancaster Pollard closed on a $3.8 million HUD refinancing for a nursing facility in Iowa that will also fund $800,000 of improvements.  In addition, Kass Matt arranged $4.5 million in HUD refinancing for a 100-bed skilled nursing facility in Ohio that will save $40,000 annually in debt service.

Harry Cheatham of Love Funding closed a $4.6 million HUD refinancing of a 46-unit assisted living and memory care center in Milan, Illinois.  The community was built in two stages in 2001 and 2007 and is licensed for 30 Alzheimer’s units.  The 35-year loan will reduce the borrower’s debt service and a small portion of the proceeds will be used for some repairs... Want to read more? Click here for a free trial to The SeniorCare Investor and download the current issue today