November 6, 2014:
Your biweekly update on people, places, projects, plus…
Top Senior Living Developments
Name
Type
Developer
Cost
Westhampton Senior Living,
Westhampton, NY
AL-69
Westhampton Care Center
$12 million
Gifford Retirement Community,
Randolph, VT
IL/AL/SN
Gifford Medical Center
$30 million
Lighthouse of Howard,
Howard, WI
IL/AL/MC-130
Evidence Development Companies
$21 million
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Home is where the Heartis
We’ve written about senior care development in Texas quite a bit recently, but a relatively new brand is making its mark in the Lone Star State. The Heartis brand, developed by Dallas-based Caddis (formerly Caddis Partners), launched in 2013 with the development of Heartis Conroe in Conroe, Texas. Two more communities are set to open next month in Cleburne and Eagle Mountain (Ft. Worth area), and by the end of the year, Caddis will have secured financing (mostly conventional bank financing) for a total of 12 projects. The size and unit breakdowns vary by each community, though currently the company builds a prototype of approximately 78 units (90 beds) with a combination of 54 assisted living and 24 memory care units, which Caddis has determined by experience and working with local operators. The company will diversify its operators, with four to five properties per operator. Three more Heartis communities are set to open in the first half of 2015: Heartis Amarillo, Heartis Cypress, and Heartis Clear Lake, all in Texas. Not to mention, Caddis recently closed on land in San Antonio and Waco, and will soon in Arlington, with all breaking ground in the near future to be managed by Frontier Management. Caddis also plans to branch out of the state, having signed a partnership agreement with Pathway Senior Living out of DePlaines, Illinois, to do 5 projects in Illinois and the Midwest, as well as looking into developing in the upper Midwest and the Southeast, like the Atlanta area. Independent living will also be in the works soon as “Phase Two” construction projects for some of its existing facilities or as part of future developments. Caddis looks to develop five to six of its Heartis communities a year, fast on track to becoming a national brand.
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A new Kansas City senior living project
Sentio Healthcare Properties, with development partner O’Reilly Development Company of Springfield, Missouri, is taking a big step into the Kansas City-area market, with the development of a $22.4 million, 142-unit senior living project (costing $157,747 per unit), The Parkway of Blue Springs, Missouri, expected to open in the summer of 2015. Arrow Senior Living will be brought in to operate, which is a new management relationship with Sentio, though currently operates one of O’Reilly’s communities. Key to Sentio’s move into Kansas City was its local partners, with O’Reilly and Arrow (based out of St. Louis) which helped with obtaining the CON. Sentio, which owns senior housing properties in 12 different states, marks its first entry into Missouri with this development, as Sentio liked the current demand for a continuum of care on a rental basis in the Kansas City area. The Parkway will feature 76 IL units, 34 assisted living units and 32 memory care units all in one continuous building. Through a banking relationship of O’Reilly Development Company, the joint venture received conventional construction debt to help fund the project, though the amount was not disclosed. SWD Architects of Kansas City and Build LLC of Seattle, Washington were brought in as architect and contractor, respectively. Expect to hear more from Sentio as it continues to grow its senior living portfolio.
To expand or not to expand with HUD?
Obtaining construction lending for addition or expansion projects from HUD is rare and is difficult. In fact, in fiscal year 2013, the Department insured mortgages for only 3 projects with 398 units, totaling $16.9 million. The time it takes to go through HUD alone, because it is longer than traditional or commercial financing, steers many away from that option. Plus, the property to be expanded must already have a HUD mortgage on it, and it has to be stabilized. But, if you are willing to wait it out, it may be worth it. Governor’s Village, a 48-unit assisted living community which includes 24 units for residents in need of memory care, was built in 2001, but has been itching to expand ever since 2010. Love Funding originally refinanced the property in 2007 with a HUD 232/223 loan, which replaced the existing commercial loan, and had the rate reduced in 2011. But the owner, Randal Residence, wanted to grow, and waited until demand numbers in the Cleveland area went its way, as there were already quite a few assisted living communities nearby. But, by late-2013 occupancy was strong (in the low 90s) and there was a need in Cleveland for assisted living, so Randal Residence, with the help of Bob Smallwood of Love Funding, went to HUD to obtain a $5.32 million loan, with a low, fixed-rate and coterminous with the other HUD loan on the property (28 years). Smallwood attributed the relatively quick closing (about 6 months) to HUD’s improved processing of new construction applications and the strength of Governor’s Village. With the loan proceeds, the borrower plans on nearly doubling the community’s capacity by adding another 38 assisted living units and taking away one memory care unit, bringing total capacity to 85 units. Randal Residence brought in contractor The Douglas Company and architectural firm C.C. Hodgson to complete the expansion……………..Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
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