Skip to content

Senior Living News Wire

Streaming News Covering Skilled Nursing, Memory Care, Assisted and Independent Living

Archive

Category: Health Care REIT

LTC Properties to Buy Skilled Nursing Property for $14.4 Million

LTC Properties, Inc. (NYSE:LTC) recently announced an agreement to purchase a 120-bed skilled nursing facility in Trinity, Fla. for $14.4 million.

The property was built in 2008 and will be added to a master lease at an incremental initial cash yield of 8.75%. The operator is an affiliate of Traditions Management and currently leases four properties with a total of nearly 600 beds from LTC Properties. 

 “LTC is pleased to announce this acquisition, again demonstrating our commitment to expand relationships with existing customers like Traditions Management, invest in newer skilled nursing properties and acquire assets in top MSAs,” said Wendy Simpson, LTC Properties’ chairman, CEO, and president said in a statement. 

The new master lease will contain all five properties with a total of 716 beds and have a GAAP yield of 10.7%. The initial lease term is 10 years with two five-year renewal options and annual rent escalations of 2.2%.

The transaction is expected to close on or around Nov. 1, 2013. —Alyssa Gerace

Regal Lifestyle Communities Buys 4 Canadian Properties for $62 Million

Regal Lifestyle Communities Inc. (TSX:RLC) is buying four retirement communities in southern Ontario from Community Lifecare Inc. and its affiliates for $61.8 million.

The acquisition will be partially financed through an unsecured bond offering of $25 million and $12.5 million from a private placement of common shares. Regal will also arrange or assume approximately $34.5 million of first and second mortgages secured by properties in the portfolio. 

“We are pleased to be able to announce a sizable acquisition less than a year after completing our initial public offering,” Regal president and CEO Simon Nyilassy said in a statement. ”These four quality retirement homes are well established in strong markets in Port Perry, Ottawa, London and Chatham, Ont., and will be immediately accretive to Regal’s AFFO per share and will lower the company’s payout ratio.”

The 542-unit portfolio is comprised of the 100-unit Port Perry Villa in Port Perry; the 142-unit Lynwood Park Lodge in Ottawa; the 131-unit Grand Wood Park in London and the 173-unit Chatham Retirement Resort. 

Financing details can be accessed here. —AG

The be.group Looking to Sell Calif. Senior Living Community

The be.group has given residents of its Twelve Oaks assisted living community in La Crescenta, Calif. a 60-day notice to move out, with closure tentatively scheduled to occur no later than November 1.

The senior living company has received approval from the state Department of Social Services, which licenses Residential Care Facilities for the Elderly, and began notifying residents and their family in late August. 

“The community’s condition is such that it would require extensive renovation and expansion to bring it up to be.group standards,” the company says in a Frequently Asked Questions release on the closure. “Its topography and sprawling nature of the property make it difficult to effectively serve its assisted living population, which is frailer and has higher-level care needs than the typical older adult resident.”

Following a “thorough review” of possible renovation options, be.group determined the cost and scale required to complete the project made it infeasible. 

The company is working with a broker to find a buyer for the property, Dan Hutson, a spokesman for the company, told NBC4.

Many of the community’s residents have already transferred to other be.group properties, according to the company, and it’s working with residents and their families to ensure appropriate placement for the remaining residents. —AG

MBK Senior Living Expands with Colo. Senior Living Acquisition

MBK Senior Living has closed escrow on Hillcrest of Loveland, an 84-unit senior living community approximately 50 miles north of Denver, Colo. There is no debt on the property, which was 100% occupied at time of purchase, but the acquisition price was not disclosed. 

This is the third community that MBK now owns and operates in Colorado, as it has acquired The Inn at Greenwood Village and The Palisades at Broadmoor Park in Colorado Springs within the last year.

The acquisition of Hillcrest of Loveland to MBK Senior Living’s portfolio brings the company’s number of owned and managed properties to more than 1700 units.

“We are thrilled to introduce Hillcrest residents and their families as well as the entire Loveland community to MBK’s heritage of commitment to exceed the quality, service and care expectations of those we serve, “ said Terry Howard, president of MBK Senior Living. 

Hillcrest offers independent living, independent living “plus,” assisted living, and MBK Senior Living’s signature memory care neighborhood, Connections for Living by MBK. 

Amenities include an outdoor patio and gazebo; library/fireplace lounge; and a theatre, and residents have access to chef-prepared, restaurant-style dining, scheduled transportation, housekeeping and linen services, and social, recreational, wellness, and educational classes and activities. Apartment styles include studios and one- and two-bedroom units. —AG

Paragon Healthcare Acquires Brookshire Senior Care Center

Paragon Healthcare Group’s acquisition of Brookshire Residence and Rehabilitation Center means that the senior living facility will undergo an array of improvements, including new amenities and more staffing. 

Plans are currently underway to upgrade Brookshire’s memory care unity, short-term rehab program, and training for staff based on the needs of the community and feedback from local physicians, family and staff. 

Healthcare improvements include hiring a new regional clinical director who is bringing additional training for complex cases such as respiratory and tracheostomy care. Paragon is also introducing a new high-tech therapy program and renovating the short-term rehab wing. 

Additional plans include expanding dining menus with home-cooked meals, Wi-Fi access, as well as renovations to facility patient rooms and common areas to create a welcoming environment. 

“We’re very excited for the new improvements by Paragon Healthcare Group,” said Rick Carr, regional director of marketing at Brookshire. “Paragon’s hands-on approach and involvement is helping us to provide better customer service and care. Starting with out name change, we are slowly removing the stigma of nursing home care by introducing 5-star care and hospitality.”

Another important focus for the company will be to renew and improve relationships with local vendors and businesses in the community. —Jason Oliva

Health Care REIT Buys MOB for $49.5 Million

Health Care REIT (NYSE: HCN) last week purchased the Bethesda Health City medical complex west of Boynton Beach, Florida, for $49.5 million, The Palm Beach Post reports.

Bethesda Health City includes 133,000-square-feet of offices on 35 acres near Bethesda West Hospital, and adds to the 80 properties owned by the Toledo, Ohio-based REIT in Florida. 

The sellers, Investcorp and Flagler Investment, paid the Bethesda Health System $37 million for the property in 2011. —JO

Gentiva to Acquire Harden Healthcare for $409 Million

Gentiva Health Services, Inc. (NASDAQ: GTIV) is strengthening its presence in the home health industry through the $409 million purchase of Harden Healthcare.

The acquisition of the Austin, Texas-based Harden will add the company’s home health, hospice and community care businesses to Gentiva’s portfolio. 

The purchase price to be paid by Gentiva is approximately $408.8 million, consisting of $355 million in cash and approximately $53.8 million in Gentiva common stock. To fund the transaction and finance existing its existing term loans, Gentiva expects to raise a new $855 million term loan facility. 

As part of the transaction, Gentiva will become a preferred provider for Harden’s 49 skilled nursing and assisted living facilities in Texas. 

“This transaction is a great strategic fit for Gentiva and we believe it will provide significant long-term value for our shareholders,” said Gentiva Executive Chairman Rod Windley. “I consider the Harden transaction a milestone in the continued Gentiva growth story.”

Excluding its long-term care business, Harden’s 2012 consolidated revenue was approximately $476 million.

The transaction is scheduled to close in the fourth quarter of 2013 and is subject to customary closing conditions. —JO

Healthlease REIT Completes Acquisition of Development Projects

Healthlease Properties Real Estate Investment Trust (TSX: HLP.UN) completed three development properties acquired from the Smith/Packett portfolio, as well as the commencement of the operating triple-net leases of the facilities. 

The two North Carolina properties offer assisted living and memory care, while the other is a standalone memory care community comprising a total of 191 beds. 

The Smith/Packett portfolio, which was acquired earlier this year, is triple-net leased to tenants affiliated with leading national operators of assisted living, memory care and skilled nursing facilities. 

“The successful acquisition and completion of these development properties are testaments of our ability to execute on our growth strategy,” said Zeke Turner, chairman and CEO of the REIT. “The completion of these development properties is consistent with our goal of adding high-quality assets that further strengthen and diversify our property portfolio.”

Two of the recently completed North Carolina facilities, a 54-bed Alzheimer’s facility located in Youngsville and a 77-bed combination assisted living and Alzheimer’s facility located in Clayton, will be managed by Saber Health Care Group, LLC. —AG

Share

Nine of the biggest senior living companies are working with Harvard Medical School researchers to examine the sector’s role in the changing healthcare system.

Brookdale Senior Living (NYSE:BKD), Atria Senior Living, Elmcroft Senior Living, Emeritus Corporation (NYSE:ESC), Erickson Living, HCP, Inc. (NYSE:HCP), Health Care REIT, Inc. (NYSE:HCN), Sunrise Senior Living, and Ventas, Inc. (NYSE:VTR) have all pitched in to create a $150,000 Assisted Living Sector Healthcare Policy Research Fund.

“This support allows us to examine what role senior living providers have in the new models of care that have emerged under health care reform,” David Grabowski, PhD, a professor of health care policy at HMS who is leading the research study, said in a statement.

The research is based on the premise that senior living community residents often need an array of health and supportive services in order to maintain the best quality of life, but many times they receive fragmented care from multiple providers and payers.

This can result in unnecessary healthcare expenditures and lower quality of care, so Grabowski and his team will examine whether providing more comprehensive, coordinated services in the senior living sector reduces the need for Medicare-reimbursed services and Medicaid-financed nursing home care.

The United States’ ability to meet the needs of its aging population is an important political, economic, clinical, and social imperative, says Will Clark, Brookdale’s senior vice present of strategy and brand, and a member of the HMS Health Care Policy Advisory Council.

“Harvard’s reputation for tackling some of health care’s biggest challenges and generating meaningful insights that shape our nation’s policy is unparalleled,” said Clark. “We are confident Dr. Grabowski and his colleagues’ research will be influential in determining the appropriate role senior living can and should play in our evolving health care system.” 

Goals of the research initiative include creating awareness for the potential senior living has to positively impact the health, well-being, and overall cost of care for seniors; identifying barriers to creating more integration among senior living and the healthcare system; influencing policy; and identifying innovative models that integrate senior living with  the healthcare system, says Brookdale.

The two-phase study will begin with analyzing the role of assisted living in new payment-delivery models, and presenting a conceptual model of how an intergrated model might work, as well as the opportunities and challenges associated with such an approach. Then, with the results of the first phase as a foundation, the second phase of the project will consist of primary data work and potentially the development of a pilot program. 

Brookdale has previously taken part in a pilot deploying the INTERACT program in senior living settings after winning a $7.3 million grant in partnership with the University of North Texas Health Science Center from an Affordable Care Act initiative funding healthcare innovators. 

Written by Alyssa Gerace

Share

Care Investment Trust Closes Acquisition of 2 Senior Housing Assets

Care Investment Trust LLC, a subsidiary of Tiptree Financial Inc. (NASDAQ:TIPT) that focuses on senior housing real estate investment, and privately-held senior housing owner and operator Premier Senior Living, L.L.C., recently announced the closing of a previously announced acquisition of two senior housing facilities located in Baldwinsville and Geneva, New York for an aggregate of $21.9 million.

Premier will manage the two properties under a triple-net master lease with an initial 12-year term and two renewal options of five years each. Occupancy across the newly acquired, 131-bed portfolio was approximately 97% as of July 2013. 

“Care is pleased to be working with Premier Senior Living, an experienced operator in the senior housing sector,” said Torey Riso, Jr., President and CEO of Care. “We sincerely hope that this will be the start of a long-lasting, mutually beneficial relationship between our growing organizations.”

Premier currently operates other assisted living and memory care facilities in New York, Ohio, and Florida. 

“We sourced this opportunity through a 25-year relationship with the sellers and we are delighted to have successfully completed our first, of what we hope will be many transactions with Care,” said Wayne Kaplan, Co-founder and Managing Member of Premier. 

Housing Authority Approved to Issue $12 Million of Bonds for Senior Housing

The Canton Housing Authority has received approval from the Canton City Council to issue $12 million in bonds to Canton Cove Properties to develop a senior living community in the city, reports the Cherokee Tribune. 

The city council voted 5-0 to approve the issuance, which will provide the majority of funding for the $13.1 million project, a 79-unit assisted living and memory care community off Reinhardt College Parkway in Georgia. 

The Canton Housing Authority will only be the issuer of the bonds, with no liability for payments if the developer stops making them. Read more

Diversicare Completes Disposition of Arkansas Senior Care Portfolio

Diversicare Healthcare Services Inc. (NASDAQ:DVCR) has completed a previously disclosed disposition of 11 skilled nursing facilities in Arkansas, effective Sept. 1. The transaction was completed through amending Diversicare’s existing master lease with the properties’ owner, Omega Healthcare Investors, Inc. (NYSE:OHI). 

 ”The decision to exit Arkansas after 20 years was not one that we took lightly. These facilities were staffed with, and managed by, a dedicated group of caregivers committed to providing high quality services to the patients and residents we served,” said Kelly J. Gill, president and CEO of Diversicare. “We believe this transaction demonstrates our continued execution of our strategic portfolio management efforts and further evidences our commitment to the strategic plan we embarked upon nearly three years ago.”

Omega has not announced which operator has assumed the leases for the Arkansas properties. 

Clearview Capital Completes Expands Senior Care Inc. Empire with 11th Acquisition 

Active Day/Senior Care, Inc. a portfolio company of Clearview Capital, LLC, has completed the acquisition of Guardian Programs Adult Medical Day Care of Glassboro, N.J. in a transaction that closed on June 20.

Active Day/Senior Care is an adult day health services provider with 79 centers in eleven states. Designed to be a cost effective alternative to home health services, nursing homes and assisted living facilities, the company’s centers offer a daytime program of nursing care, social services, meals and recreational activities to elderly and disabled adults. 

The transaction is the eleventh add-on acquisition that Active Day/Senior Care has made since Clearview Capital’s initial investment in the Company in late 2005. The company announced its plans to make additional acquisitions in the future both within its current footprint and in new markets.

Pacifica Companies Acquires Santa Fe Assisted Living Community

San Diego-based Pacifica Companies recently acquired an assisted living and memory care community in Santa Fe, New Mexico, after buying the property’s debt and pursuing foreclosure earlier in 2013. 

Rosemont Assisted Living Community of Santa Fe will now be managed by Pacifica Senior Living of San Diego, the management company’s vice president of operations told residents and their families in an August letter.

Pacifica is a privately-held real estate investment firm that owns 41 senior living communities throughout the United States. In January, Pacifica Rosemont filed a foreclosure complaint against the Rosemont community for defaulting on $7 million of debt that Pacifica had acquired from The Federal Loan Mortgage Co. 

Centura Health to Sell Senior Living Community to Frontline

Frontline Management is in talks to acquire Villa Pueblo Senior Living Community in a deal expected to close during the fourth quarter. 

The 14-story senior living community includes independent living, assisted living, and skilled nursing units. 

Villa Pueblo’s current operator is the Sisters of Charities Health Care System. Centura is a healthcare system formed by the Sisters of Charities Health Care System and Catholic Health Initiatives. Frontline Management is a management, development, and consulting services firm specializing in senior housing.

Centura was represented by Evans Senior Investments. 

Azura Living Buys Colo. Memory Care Community

Azura Living announced on its website the July 1 acquisition of Metzler Memory Care in Castle Rock, a 48-unit memory care community in Colorado.

The property, renamed Azura Memory Care of Castle Rock, was sold by a local real estate owner who has previously built another senior housing property that he sold in 2012. He was represented by Evans Senior Investments. 

Azura Living also operates Azura Rehabilitation Suites in Lakewood, a short-term rehabilitation-focused skilled nursing facility, along with 14 memory care properties in Wisconsin. 

Aviv REIT Closes $3.5 Million SNF Acquisition

Aviv REIT, Inc. (NYSE: AVIV) announced recently it has acquired a post-acute and long-term care skilled nursing facility Texas for $3.5 million. The property is triple-net leased to Trinity Healthcare, LLC, an existing Aviv tenant.

Trinity, a skilled nursing facility operator, currently operates three other facilities in Texas, all of which are leased from Aviv. The triple-net lease has an initial cash yield of 11.00%, initial lease term of 10 years, and an annual compounded escalator based on CPI.

“This is our third attractive acquisition with Trinity in less than a year and we are committed to working collaboratively with Trinity to help grow its business,” said Craig M. Bernfield, Chairman and CEO of Aviv, in a statement. “Trinity sourced this acquisition and brought it to us because of our strong relationship with them. Our ability to cultivate strong relationships with operators is key to providing us ongoing opportunities to grow our business.”

Health Care REIT Completes Triple Net Lease with Emeritus

Health Care REIT, Inc. (NYSE:HCN) announced last week that the company completed its previously-announced triple net lease transaction with Emeritus Corp. (NYSE:ESC). Health Care REIT entered into a long-term, triple net lease with Emeritus on a portfolio of 38 Class A senior housing communities previously owned in an 80/20 joint venture between Health Care REIT and Merrill Gardens. As part of the transaction, Health Care REIT acquired Merrill Gardens’ 20% equity interest in the joint venture for $173 million, which now includes pro rata mortgage debt of $74 million.

Capital Senior Living to Close Illinois SNF

Capital Senior Living (NYSE:CSU) is closing one of its skilled nursing facilities in Illinois according to a notice filed with the state last Wednesday, reports the Post-Tribune. 

Town Centre Health Care, in Merrillville, Ill., includes a 120-bed skilled nursing facility that CSU plans to close on November 4, although the operator said in the filing it will continue to manage the community’s independent and assisted living units.

The skilled nursing facility’s occupancy was not disclosed. 

Wedgwood Apartments LLP Sells Texas Senior Complex

Wedgwood Apartments LLP of Centennial, Colo. recently sold a San Antonio senior apartment complex, according to the local Business Journal.

The high-rise community has 301 units comprised of studio, one, and two-bedroom apartments for 55+ adults. On-site amenities include a beauty salon, fitness facilities, a restaurant, and a game room.

The sale price was not disclosed, nor was the seller, described only as an out-of-state investor by Hendricks-Berkadia, which negotiated the deal and arranged the financing. 

Share

Three Pillars Senior Living Communities Issued $22.8 Million Bonds

Cain Brothers served as sole underwriter in the issuance of the Three Pillars Senior Living Communities Series 2013 bonds, issued as unenhanced fixed rate bonds and rated “A-” by Fitch on the underlying credit strength of Three Pillars. The $22.82 million bond issuance was used to refund and consolidate all four of Three Pillars’ outstanding debt obligations into a single bond issue.

The Series 2013 bond financing provides Three Pillars with a more stable capital structure by consolidating four outstanding bond issues (two fixed, two variable) into a single fixed rate tax-exempt bond issue with flexible bond covenants and 30-year level debt amortization, at an average yield of 3.99%. The Series 2013 issue enhanced Three Pillars’ risk profile by eliminating interest rate risk and bank renewal risk and improving key credit metrics.

Cain Brothers created an amortization structure that allowed Three Pillars to stretch out its debt structure from 2026 to 2043 and lowered maximum annual debt service by over $566,000—a 26% reduction. 

Three Pillars consists of Wisconsin Masonic Home, Inc., Masonic Center for Health and Rehab, Inc., and Village on the Square, Inc., which together serve as a continuing care retirement community offering independent living, assisted living, and skilled nursing care. In total Three Pillars’ facilities offer 151 independent living units, 95 assisted living units and 85 skilled nursing beds.

Cambridge Arranges $10.2 Million of Loans for Four Nursing Homes

Cambridge Realty Capital Companies reports arranging $10.2 million in HUD Lean loans to Pacifica Nursing and Rehab to refinance four skilled nursing home properties owned by North American Health Care, Inc. in California and Utah.

The fully-amortized loans were arranged for the owner using the HUD Section 232/223(a)(7) funding program and were underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUD loans.

Hymie Barber, National Originations Manager and Managing Director of Catalyst/Cambridge Healthcare Finance in Los Angeles, the company’s West Coast affiliate, led the transaction. Combined, the refinanced loans saved the owner $250,000 in mortgage payments annually, Barber said

The four senior care properties included in the Pacifica portfolio are: Pacifica Nursing and Rehabilitation, a 68-bed skilled care nursing home in Pacifica, Calif. with a $2.08 million loan total; Coventry Court, a 97-bed skilled nursing home in Anaheim, Calif. with a $2.2 million loan total; Garden View, a 97-bed skilled nursing home in Baldwin Park, Calif. with a $2.3 million loan total; and Orchard Park Care Center, an 89-bed skilled care nursing home in Orem, Utah with a $2.5 million loan total. 

Cambridge Provides $14 Million Loan for Chicago Senior Care Center

Cambridge Realty Capital Companies recently announced closing a $14 million loan to refinance Alden Northmoor Rehabilitation and Health Care Center, a 198-bed skilled care nursing home in Chicago.

The fully-amortized, 32-year term loan was arranged for the owner using the HUD Section 232/223(f) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

Ziegler Closes $14.8 Million Financing for PRCN

Ziegler recently announced the closing of a $14,840,000 tax-exempt, fixed-rate Presbyterian Retirement Communities Northwest Series 2013 Bond issue. Presbyterian Retirement Communities Northwest is a Washington-based not-for-profit corporation established in 1956 to develop, own, and operate senior housing communities.

The Series 2013 Bonds, along with other available funds, are being issued to refund all of PRCN’s outstanding Series 1999A Bonds; pay or reimburse PRCN for the costs of the acquisition of land and the acquisition, construction, remodeling, renovation, and equipping of existing facilities at Exeter House, Park Shore, and the its corporate headquarters; fund a debt service reserve fund; and pay the costs of issuing the Series 2013 Bonds and refunding the Series 1999 Bonds.

KeyBank Arranges $21 MIllion of Loans for Two Senior Housing Properties

KeyBank Real Estate Capital recently closed two HUD Section 232/223(a)(7) loans totaling $21 million for senior housing properties in Maine and Texas. 

One loan was in the amount of $12.5 million for Williamsburg Village Health Center, a 242-unit skilled nursing facility in Desoto, Texas. Alison Holland, VP of Healthcare Agency Lending for KeyBank, worked with the borrower, Stonegate Senior Living, to complete the refinance. 

The other loan was an $8.5 million refinance for Mid Coast Senior Health Center, a 100-unit skilled nursing and assisted living/memory care community in Brunswick, Maine. Jack Boulder, SVP for Key Bank’s Senior Housing and Healthcare Group, and John Everett, VP of KeyBank’s Commercial Banking team, worked with the borrower, Mid Coast Health Services, on the transaction. 

Love Funding Secures $8.95 Million Refinance for Conn. Health Center

Love Funding recently announced the closing of an $8.95 million loan to refinance Birmingham Health Center, a 120-bed skilled nursing facility in Derby, Conn.

Leonard Lucas, senior director of Love Funding out of the firm’s Boston office, secured the loan through HUD’s Section 232/223(a)(7) loan program, allowing Lucas to lock in a low, fixed interest rate over the remaining term of the original loan and generating significant debt service savings for the borrower.

Birmingham Health Center was built in 1965 and underwent renovations in 2003 and 2004. It is operated by Spectrum Heatlhcare, based in Connecticut. 

Lancaster Pollard Refinances 7 Properties in N.C. and Ill. 

Lancaster Pollard recently assisted Oliver Development with the $7.5 million refinance of Cambridge Hills Assisted Living in Roxboro, N.C.

Cambridge Hills is a 120-bed, 60-unit assisted living community built in 2000. Oliver Development was looking to refinance its existing bank debt and obtain non recourse, fixed-rate financing and generate credit capacity with its bank, and followed Lancaster Pollard’s recommendation to use the HUD Section 232/223(f) program for the refinancing. 

John Randolph out of Lancaster Pollard’s Atlanta office, led the transaction, which refinanced existing debt from multiple bank loans into one loan and established a replacement reserve account along with allowing Oliver Development to benefit from significant debt service savings. 

In another transaction, Lancaster Pollard guided Petersen Health Care through its first HUD financings, recommending the Peoria, Ill.-based company to refinance six of its skilled nursing facilities using the HUD Section 232/223(f) program. 

Petersen Health Care owns and operates more than 90 senior living communities in the Midwest and the company’s leadership was looking to strengthen its financial position by refinance existing variable rate loans from a bank syndicate on the six facilities. 

The company’s new long-term FHA loans eliminate the owner’s personal guarantee from the facilities’ debt structure, appropriately leverages each property’s balance sheet, and provides more than $170,000 in annual debt service savings from a lower interest rate and approximately 30-year blended term and amortization. 

Additionally, Petersen was able to use some of the refinancing proceeds to add $1.6 million to the facilities’ replacement reserve accounts and completed $650,000 in capital improvements in conjunction with the refinance. Steve Kennedy, senior vice president with Lancaster Pollard out of the Columbus, Ohio office, led the transaction. 

Capital One Closes $48 Million Loan for LCS-Westminster Partnership

Capital One Bank announced recently it served as the lead bank and administrative agent for a $48 million, five-year term loan to LCS-Westminster Partnership, IV LLP.

The loan will be used to refinance and expand Sagewood, a newly constructed senior living community located on 47 acres in Phoenix, Ariz. with 278 independent living units, a 48-bed health center with skilled nursing and assisted living units. The loan will also be used to finance the construction of 14 additional casitas to the existing 24, and complete a second dining venue for Sagewood.

LCS-Westminster is a joint venture of The Westminster Funds and LCS, with The Westminster Funds serving as the majority equity partner for LCS-Westminster developed projects. 

Love Funding Secures $28 Million Refi for Two Miami SNFs

Love Funding recently announced the closing of two loan refinancings totaling $28 million for two skilled nursing facilities that are part of the Plaza Health Network.

Arch Plaza Nursing and Rehabilitation Center and Ponce Plaza Nursing and Rehabilitation Center are among nine senior care facilities in the Miami area that are part of the Plaza Health Network, owned by independent affiliates of the Hebrew Homes Health Network, a not-for-profit organization. 

Love Funding’s Washington, D.C. office secured the loan through the HUD Section 232/223(f) LEAN program, which enabled the borrower to lock in a low fixed-rate non-recourse loan for a 30-year term. 

Love Funding Closes $5.5 Million Construction Loan for Ill. ALF

Love Funding recently announced closing a $5.51 million construction-to-permanent loan for Cedarhurst of Edwardsville, a new assisted living community under development in Edwardsville, Ill.

Robyn Cunningham, a senior director out of Love Funding’s St. Louis office, together with Director Adrian Hartman, secured the financing through the HUD Section 232 new construction loan program. The program enabled the borrowers to lock in a fixed, low-rate, non-recourse loan for a 40-year term once construction is completed.

Cedarhurst at Edwardsville will offer 54 memory care beds and is being developed by Metro Asset Group LLC. 

National Health Investors Announces $370 Million Credit Facilities

National Health Investors (NYSE:NHI) announced recently it has entered into amended $370 million senior unsecured credit facilities including a $250 million revolving credit facility and $120 million of 7-year term loans.

The revolving credit facility matures in five years, including an embedded 1-year extension option. The term loans mature in seven years. At closing, the new facilities replaced smaller credit facilities that originated on May 1, 2012 and provided for $320 million of total committed facilities. 

“We appreciate the considerable commitments offered by the banks participating in this credit facility, which result in low borrowing costs, extended loan maturities and additional borrowing capacity that offers substantial support to NHI’s growth,” said Justin Hutchens, president and CEO of NHI. 

Wells Fargo Securities, LLC, BMO Capital Markets and KeyBank National Association were joint lead arrangers for the facilities and arranged a syndicate that included nine banks. BMO Capital Markets and Wells Fargo Securities, LLC were joint lead arrangers for the $120 million 7-year term loan facility. Other banks in the credit facility are Bank of America, Regions Bank, Pinnacle National Bank, United Community Bank, Stifel Bank & Trust and UMB Bank.

The terms of the amended credit facility can be seen here.

Health Care REIT Announces Continued Conversion Option for Senior Notes

Health Care REIT (NYSE:HCN) on July 1 notified holders of its 3.00% Convertible Senior Notes due 2029 of their continued ability to convert all or a portion of their notes into cash and, if applicable, shares of the company’s common stock through the close of business on Sept. 30, 2013.

The notes remain convertible because the closing price of shares of HCN’s common stock, for at least 20 trading days during the 30 consecutive trading-day period ending on June 28, 2013, was greater than 120% of the conversion price in effect on that date.

More details can be viewed here.  

NorthStar Realty Finances Completes $1.1 Billion Offering for Non-Traded REIT

NorthStar Realty Finance Corp. (NYSE: NRF) announced on July 1 that NorthStar Real Estate Income Trust, Inc. successfully completed its primary offering having raised $1.1 billion in aggregate gross offering proceeds, including $528 million year-to-date, through its captive broker-dealer, NorthStar Realty Securities, LLC. 

“We are extremely pleased with the successful completion of our first sponsored non-traded REIT and are looking forward to capitalizing on this strong momentum with our $2.75 billion of additional non-traded products currently being offered,” said David T. Hamamoto, chairman and CEO. “These programs are expected to generate substantial long-term fee income for our shareholders and the completion of NorthStar Income is a strong testament to the growth of our asset management business and our diverse and broad commercial real estate platform.”

Capital One to Hold $100 Million Loan for Formation Capital

Capital One Bank acted as a joint book runner on a $213.5 million secured term loan to FC Ranger Acquisition, LLC, to finance the acquisition of a portfolio of 26 senior housing properties. 

Formation Capital is the sponsor behind FC Ranger Acquisition, LLC and partnered with SAFANAD for the acquisition. 

Capital One Bank will hold $100 million of the term loan and will also provide deposit and treasury management services to the facilities. 

Caremerge Raises $2.1 Million for Business Expansion

Caremerge, a Chicago-based health tech provider of mobile and web communication and care coordination solutions, has raised $2.1 million in a Series A Funding.

The company’s HIPAA-compliant and secure mobile/web apps allow senior care providers to quickly capture, chart, and share seniors’ information with families and outside stakeholders such as ACOs, MCOs, hospitals, and physicians.

“Today, long term care is challenged with increasing regulations, high staff turnover, reduced reimbursements and lower profit margins,” says Asif Khan, the founder of Caremerge. “Most people believe that the long-term care industry is slow to adopting technology. At caremerge, we beg to differ and believe that until now technology hasn’t adopted to the unique challenges and workflows of long-term care.”

Grazyna Kulczyk of Poland, an entrepreneur, real-estate developer, and art collector, led the investment, with participation from another Switzerland-based investor.

Athena Heritage, a Swiss Financial Management company, provided advisory services to the investors, and Privity FZ LLE, a U.A.E.-based company, also played a key role in the transaction. 

Caremerge was founded in 2010 and was selected by GE and StartupHealth in a Health Growth Acceleration program in April 2013. 

Share

Health Care REIT (NYSE:HCN) announced on Thursday an agreement to buy out Merrill Gardens’ equity interest in a 38-property portfolio of senior housing communities for $173 million.

The REIT already owns 80% of the equity interest in the properties through a joint venture with Merrill Gardens and has now agreed to acquire the remaining 20%. HCN also agreed to enter a triple net lease with Emeritus Senior Living (NYSE:ESC) to manage the portfolio, which has approximately 4,400 units of independent living, assisted living, and memory care concentrated in Washington and California.

“Expanding in the independent living arena complements our well-established assisted living, memory care and home healthcare services,” said Granger Cobb, president and CEO of Emeritus.  “It enables us to better meet the evolving needs of the growing senior population.  This accretive transaction also represents an opportunity to consolidate community operations in what continues to be a fragmented market, while expanding our relationship with Health Care REIT.”

As part of the lease agreement, Emeritus will pay Merrill Gardens a $10 million management contract termination fee.

“This transaction reflects the flexibility of our business model and the power of our relationship investing platform,” said George Chapman, Chairman and CEO of Health Care REIT, in a statement. “We are excited to grow our long-time relationship with Emeritus. Their strong existing footprint in the markets where this portfolio is located will allow for a seamless transition and value creation over the long-term. Merrill Gardens has made the decision to concentrate its efforts on new development projects. Merrill Gardens will continue to be a strategic partner for Health Care REIT.”

HCN and Merrill Garden will remain joint venture partners for 10 other senior living communities totaling 1,428 units concentrated in markets including Seattle, San Jose and San Diego. Merrill Gardens will continue to manage these communities, which will serve as a platform for their development projects.

Additionally, HCN announced it will have the right of first opportunity on all future Merrill Gardens acquisitions and development projects.

“We are focused on our development strategy and continuing our nearly 20-year partnership with Health Care REIT,” said Bill Pettit, CEO of Merrill Gardens.

The transaction is expected to close in the third quarter.

Written by Alyssa Gerace

Share

The Affordable Care Act is sure to impact the senior housing space, and the Big Three healthcare REITs expect their capital will be a crucial component for operators to stay in the game.

“The winners from the operating standpoint will be able to create new operating models or paradigms to lower the cost of care,” said Jay Flaherty, chairman and CEO of HCP, Inc. (NYSE:HCP) during a company presentation for REITWeek 2013, held this week in Chicago. “For us, this is a tremendous time to be making investments. It’s going to create new thinking about assets, and how those assets are needed.”

Medical office buildings (MOBs), for example, in the past have been used primarily as doctors’ offices. “Now, with the advances in technology, you’re seeing a significant amount of noninvasive surgical procedures done there, at a lower cost for the overall healthcare system,” he said.

MOBs can play a different role, including as part of a “virtual ACO,” said George Chapman, chairman, CEO, and president of Health Care REIT (NYSE:HCN) in his company’s presentation. HCN has multiple capital relationships at one such “ACO,” where a MOB and hospital system are flanked by a Genesis-run rehabilitation center and a Brandywine memory care community.

“We tell our senior housing operators, ‘If you’re part of a network, ultimately you’re going to have to assess how much risk you can take as part of that network,’” Chapman said. “Evidence-based care and measuring outcomes are going to be part of the ‘brave new world’ of healthcare, and your infrastructure is going to have to be better.” 

Improving infrastructure to stay competitive takes capital, though, and going forward, consolidation will certainly happen, he said.

“It’s almost inevitable that operators will have to come together, and that there will be M&A activity which may or may not give us more investment opportunities,” he said. “[The operators] will need to have better infrastructure, and better personnel to make their product better, and they may want to merge to create more power together, better systems together, and more opportunity to compete.” 

REITs have been aligning themselves with the biggest, best operators to help ensure continued investment success even after the healthcare landscape changes.

Health Care REIT has acquired senior housing giant Sunrise Senior Living in a $4.3 billion deal and has an established capital relationship with one of the nation’s largest post-acute care providers, Genesis Healthcare. HCP’s stated strategy is to partner with the people who are going to be leaders in their respective fields: Emeritus and Brookdale in senior housing, and HCR ManorCare on the skilled nursing and post acute side. 

For Chicago-based Ventas (NYSE:VTR), healthcare reform is not a matter of if, it’s a matter of when—and it’s already gearing up for changes in care coordination and risk sharing.

“Those are going to be important drivers of opportunity for our business as we look forward,” Ray Lewis, president of Ventas, during the REIT’s presentation. “It’s a real opportunity for us—you’re going to see a lot more vertical and horizontal integration as companies coordinate care, and prepare to take risk in preparing to care for those patients [for a set payment].”

How that will play out in the industry, according to Lewis, is that healthcare systems are going to move away from “tying up valuable capital” in real estate.

“As assets flow to the most efficient holders of real estate —REITs—I think we’ll play a role in driving this change or convergence,” Lewis said. “Big picture, that’s what the ACA will do for the healthcare REIT space, but it will be over time—not this year. [It will happen in] five to seven years, and that’s a real big opportunity for us.”

Written by Alyssa Gerace

Share

Capital One Closes $19.5 Million Loan for Revera Health Systems

Capital One Bank announced on Monday it had provided a three-year, $19.5 million secured term loan to Revera Health Systems, Inc., a long-term care and rehabilitation provider with multiple skilled nursing centers across the U.S.

Proceeds of the loan were used to refinance existing senior debt on eight of the health system’s skilled nursing facilities in Maryland, New Hampshire, New Jersey, and Vermont. Revera Health Systems also expanded its relationship with Capital One Bank to include despots and treasury management services. 

RED CAPITAL GROUP Closes Acquisition Financing for Ariz. Senior Care Community
 
RED CAPITAL GROUP, LLC recently closed a bridge-to-FHA financing solution for the acquisition of Prescott Nursing and Rehabilitation Center and Boulder Gardens Assisted Living, a 109-bed skilled nursing and assisted living community in Prescott, Ariz.
 
The property, formerly known as Meadow Park Care Center and Peppertree Square, was purchased by an affiliate of Pioneer Health Group, an Arizona-based long-term care community owner and operator.
 
Red Capital Partners, LLC, RED’s proprietary lending arm, closed a $5.96 million bridge loan to finance the acquisition, which closed in December 2012, to accommodate the seller’s closing deadline.
 
At the same time of the bridge financing, Red Mortgage Capital, LLC, RED’s mortgage banking arm, processed a $6.88 million FHA Section 232/223(f) loan, which closed in February 2013, to refinance RED’s bridge loan, fund capital improvements, and provide low fixed-rate, non-recourse permanent financing for the buyer. 
 
Lee S. Delaveris, director of Red Mortgage Capital, LLC, was the lead banker on the transaction. 
 
Cain Brothers Structures $35.5 Million Bond Issue for N.Y. ALF Project
 
Cain Brothers recently structured and closed a $35,515,000 tax-exempt fixed-rate bond issuance for The Hamlet at Wallkill, a 200-bed new construction assisted living community project in Wallkill, N.Y.
 
The FilBen Group, a for-profit developer, owner, and operator of assisted living and skilled nursing facilities, hired Cain Brothers to serve as sole underwriter on the unrated financing for the development and construction of a start-up assisted living community. 
 
The Hamlet at Wallkill will provide high-quality assisted living services to private pay and Medicaid-eligible seniors, in addition to memory care. 
 
Cain Brothers and FilBen used private activity bonds, which are subject to volume cap restrictions, in order to obtain tax-exempt financing at attractive rates. 
 
“Volume cap allotments are awarded on an annual basis; therefore any private activity bonds subject to volume cap requirements must be issued by December 31 of the allotment year,” said Cain Brothers. “Because the necessary volume cap was secured too late in 2012 to market the bonds on a permanent basis before year end, Cain Brothers implemented a strategy that employed a short-term financing mechanism with a three-month mandatory tender. This financing structure preserved the allotted volume cap and allowed long-term capital providers ample time to analyze the project, conduct site visits, and meet with the FilBen management team.”
 
The bonds were remarketed in February 2013, and Cain Brothers was able to secure long-term financing at an attractive cost. Construction is slated to begin in April 2013, with full stabilization expected to occur in Summer 2016.
 
Lancaster Pollard Closes $7.5 Million Loan for Ohio Memory Care Center
 
Lancaster Pollard recently closed two loans totaling $7.5 million to refinance Alois Alzheimer Center in Cincinnati, Ohio.
 
The Health Care Management Group owns and operates the memory care community, which opened in 1987. Lancaster Pollard refinanced the center’s two existing FHA-insured loans with HUD’s non-recourse Section 232/223(a)(7) mortgage insurance program, helping The Health Care Management Group realize more than $103,000 in annual debt service savings.
 
Kass Matt, senior vice president and regional manager at the Ohio-based firm, was the lead banker on the transaction. 

Grandbridge Seniors Housing Closes $5.3 Million Loan for Wash. Community

Grandbridge Real Estate Capital’s Seniors Housing Group recently closed a $5.3 million loan to refinance Highgate Senior Living, a 48-unit assisted living community in Yakima, Wash. Grandbridge facilitated the long-term, fixed-rate loan through Fannie Mae. 

Grandbridge Closes $12 Million Loan for Senior Living Community

Grandbridge’s Seniors Housing Group also recently closed a $12.25 million short-term loan for the acquisition and renovation of Quail Park, a 49-unit assisted living and memory care community in Eugene, Ore.

The loan was through BB&T Bank to allow the community, managed by Living Care, to be repositioned for permanent financing. 

Brookdale Modifies Corporate Line of Credit

Brookdale Senior Living (NYSE:BKD) announced on Wednesday it had modified its existing revolving credit facility with GE Capital, Healthcare Financial Services.

The modification extended the maturity date of the facility to March 31, 2018 and decreased certain costs associated with the facility, along with providing options to increase the committed amount initially from $230 million to $250 million, and then from $250 million up to $350 million. 

The interest rate payable on advances has been decreased through the modification, reducing the LIBOR floor by 1.5% and the spread by 1.25% and reducing the fee payable on the unused portion of the facility from 1.0% to 0.5% per year.

Brookdale secures the revolving credit facility by first priority mortgages on some of its communities. Availability under the revolving credit facility will vary from time to time as it is based on borrowing base calculations related to the appraised value and performance of the communities securing the facility. 

RED Completes 60 Seniors Housing Transactions Worth $460 Million in 2012

RED CAPITAL GROUP, LLC announced last Friday that its banking arm, Red Mortgage Capital, LLC was the top originator for FHA/Ginnie Mae loans in 2012, providing 231 FHA loans totaling $2.176 billion.

During the year, the firm completed 330 transactions totaling more than $3.3 billion in capital to the multifamily, affordable, student, and seniors housing and healthcare industries, representing a 40% increase compared to the previous year’s total number of transactions, and a 13% increase in volume. 

Of the 330 total transactions, 60 were for seniors housing and healthcare deals in 2012, amounting to $460 million.

NorthStar Realty Originates $11.25 Million Loan for Calif. Senior Housing Campus

NorthStar Realty Healthcare recently announced it had originated an $11.25 million senior loan for a senior housing campus in Madera, Calif. The community, built in 2006 and operated by Integral Senior Living, has 112 units offering independent living, assisted living, and memory care. The loan has a 3-year term with an 8% interest rate.

Health Care REIT Announces Conversion Option for 3.00% Notes

On Tuesday, Health Care REIT, Inc. (NYSE:HCN) notified holders of the $494.4 million outstanding principal amount of its 3.00% convertible senior notes due 2029 that they are entitled to convert all or a portion of their Notes into cash and, if applicable, shares of the company’s common stock.

Holders’ right to convert begins on April 9, 2013 and ends at the close of business on July 9, 2013. The notes are convertible because the closing price of shares of the company’s common stock, for at least 20 trading days during the 30 consecutive trading-day period ending on March 31, 2013, was greater than 120% of the conversion price in effect on March 31, 2013.

Love Funding Closes $4.71 Million Loan for Senior Apartment Complex

Love Funding announced on Thursday the closing of a $4.71 million loan refinancing for Porthaven Manor, a 102-unit, age-restricted apartment community in Port Huron, Mich.

Bruce Gerhart, Love Funding’s Midwest regional director, secured the financing through the Department of Housing and Urban Development’s Section 232/223(f) loan insurance program. 

Porthaven Manor, built in 1989 with low-income housing tax credits administered by the Michigan State Housing Development Authority, is restricted for adults aged 62 and older and is required to set aside 20% of its units for income-qualified residents that pay below-market rents. 

The refinancing allows the property’s owners to pay off Boston Financial Institutional Tax Credits, which financed the tax credits. 

Share

Sunrise Stockholders Approve Acquisition by Health Care REIT, Completed Jan. 9

Sunrise stockholders voted at a special meeting on Monday to approve the company’s previously-announced merger with Health Care REIT, Inc. (NYSE:HCN). A majority (98.3%) of the votes case by Sunrise stockholders were in favor of this proposal, representing 69.4% of the shares of common stock entitled to vote.

Sunrise stockholders received $14.50 per share from the merger, which includes a $2.10 special dividend. 

On Jan. 9, HCN and Sunrise announced the completion of the acquisition, an investment valued at $3.4 billion and expected to increase to $4.3 billion by July 2013 as the REIT continues to exercise rights to acquire additional joint venture partner interests at fixed purchase prices. 

Health Care REIT expects the $4.3 billion acquisition to generate a 6.5% unlevered initial yield, or 6.1% after capital expenditures.

Health Care REIT Announces Closing of $2.75 Billion Credit Facility

Health Care REIT, Inc. (NYSE:HCN) announced on Tuesday the closing of a $2.75 billion unsecured credit facility consisting of a $2.25 billion revolver and a $500 million term loan to be funded the same day. The facility replaces the company’s existing $2.0 billion unsecured revolving credit facility. 

The new revolver matures on March 31, 2017 and can be extended for an additional year at the company’s option. The term loan matures on March 31, 2016 and can be extended up to two years at the company’s option.

Based on HCN’s current credit ratings, the revolver bears interest at LIBOR plus 117.5 basis points and has an annual facility fee of 22.5 basis points. The term loan bears interest at LIBOR plus 135 basis points. HCN has an option to upsize the facility by up to an additional $1 billion through an accordion feature, allowing for aggregate commitments of up to $3.75 billion. The facility also allows for the company to borrow up to $500 million in alternate currencies.

HCN will use proceeds from the credit facility to fund announced investment activity for general corporate purposes including investing in health care and senior housing properties.

Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC arranged the facility as joint book runners and joint lead arrangers. Bank of America, N.A. and JPMorgan Chase Bank, N.A. were co-syndication agents. KeyBanc Capital Markets Inc. was a joint lead arranger and KeyBank National Association was Administrative Agent. Deutsche Bank Securities, Inc. served as a joint lead arranger and documentation agent. 

GE Capital Agents Credit Facilities of $725 Million for Genesis/Sun Healthcare Deal

GE Capital, Healthcare Financial Services, is serving as administrative agent on a $400 million asset-based revolving credit facility, and as syndication agent on a $325 million cash flow term loan credit facility for Genesis HealthCare, being used to support the acquisition of Sun Healthcare Group, Inc.

GE Capital Markets served as joint lead arranger and sole book runner for the revolving loan and joint lead arranger and joint bookrunner on the term loan.  

Lancaster Pollard Has Record Year, $946.8 Million of Senior Housing Financing

Lancaster Pollard finished its record year with 190 closed transactions with a total loan amount of $1.4 billion. Of those transactions, 132 were in the seniors housing sector, totaling $946.8 million. The firm financed skilled nursing facilities, assisted living facilities and CCRCs in 28 states and primarily used HUD funding through FHA Sec. 232/223(f), FHA Sec. 232/223(a)(7) and FHA Sec. 232/241 programs. However, the firm also financed facilities using the Fannie Mae Seniors Housing program and privately placed tax-exempt bonds.

Lancaster Pollard Provides $6.1 Million Financing for Utah Senior Care Center

Lancaster Pollard recently announced the closing of a $6.1 million loan used to refinance Abbington Manor, a 79-unit assisted living and memory care community in Lehi, Utah.

Wentworth Senior Living Services manages Abbington Manor, which consists of two separate sites located about two miles apart.

The borrower was seeking to refinance its existing loan to take advantage of current low interest rates, benefit from debt service savings, and fund various critical repairs. Although the Abbington Manor has two separate sites, the borrower wanted to demonstrate that the sites comprised one community so it could get one loan and reduce closing costs.

HUD agreed that the two sites shared enough common resources and management to qualify as one operation, and Lancaster Pollard was able to obtain the loan using the FHA Section 232/223(f) program. The borrower will benefit from more than $95,000 in annual debt service savings with the new low interest rate and 30-year term. Additionally, the refinance will fund significant renovations associated with accessibility and safety for the community’s residents. 

Major repair items include seismic retrofitting, a fire suppression system, and a resurfaced parking lot. The borrower will also be able to make a “substantial” deposit to its replacement reserve, says Lancaster Pollard. 

HJ Sims Provides Capital for Senior Housing Acquisition

Herbert J. Sims & Co., Inc. through its affiliate HJ Sims Investments, LLC, provided financing to Watermark Retirement Communities, an affiliate of The Freshwater Group, to acquire a senior living community in Oregon. 

The finance plan included a first mortgage loan from Freddie Mac in addition to equity from a joint venture between The Freshwater Group and Prudential Real Estate Investors—10% of which needed to be provided by either TFG or a co-investment partner. 

Sims was able to structure a preferred equity investment that worked with an existing joint venture agreement between TFG and Prudential in time to close with a Freddie Mac first mortgage/bridge-to-agency senior loan.

A new entity, Fountains Acquisition Finance I, LLC was formed to issue taxable bonds, says Sims, the proceeds of which were used to make the equity investment in a new TFG/Sims partnership, which in turn invested in the joint venture with Prudential to complete the transaction. 

The bonds were structured to have a low current interest rate that grows as the cash flow improves, allowing most of the community’s current operating cash flow to be retained to further the revenue enhancement plan. 

Lancaster Pollard Refinances Hoosiers Care Portfolio for $39 Million

Columbus, Ohio-headquartered Lancaster Pollard recently refinanced seven not-for-profit skilled nursing and pediatric facilities in Indiana and Illinois owned by Indiana-based Hoosiers Care, Inc., and managed by Exceptional Living Centers of Lexington, Ky.

The refinanced facilities are:

  • Exceptional Living Center of Brazil in Brazil, Ind.
  • Randolph Nursing Home in Winchester, Ind.
  • Richland Bean-Blossom Health Care Center in Elletsville, Ind.
  • Vernon Manor Children’s Home in Wabash, Ind.
  • Exceptional Care and Training Center in Sterling, Ill.
  • Swann Special Care Center in Champaign, Ill.
  • Walter J Lawson Children’s Home in Loves Park, Ill. 

Lancaster Pollard recommended that the owner use the FHA Section 232/223(f) program to refinance Hoosier Care’s tax-exempt bonds with 30-year, fully-amortizing, fixed-rate mortgage loans totaling $39 million. The transaction resulted in millions of dollars in annual debt service savings and also served to fund more than $1.5 million in replacement reserves and $141,000 in repairs and improvements across the portfolio.

The firm’s Steve Kennedy, senior vice president and regional manager, and Chris Blanda, vice president, led the team on the refinancing. 

Oxford Finance Provides $20 Million Financing to Senior Living Provider

Oxford Finance LLC recently announced the closing of a $16 million senior secured term loan and $4 million revolving line of credit with American Senior Living Communities.

Proceeds of the term loan were used to refinance two skilled nursing facilities in Rhode Island, while the revolver will be used to fund ongoing working capital needs at the two sites. 

Share

Lancaster Pollard Closes $107.4 Million of Loans in November

Lancaster Pollard closed 16 senior living transactions for a total loan amount of $107.4 million. The 16 facilities, all located in the Midwest, contained a total of 1,239 skilled nursing beds and 416 assisted living units. All the financings used the FHA Sec. 232/223(f) to refinance existing debt and substantially lower the cost of capital. 

Health Care REIT Announces Pricing of $1.2 Billion of Senior Notes

Health Care REIT, Inc. (NYSE:HCN) announced on Tuesday it had priced $1.2 billion in aggregate principal amount of senior unsecured notes issued in the following tranches:

  • $450 million of 2.25% notes due March 15, 2018 priced to yield 2.35%
  • $500 million of 3.75% notes due March 15, 2023 priced to yield 3.792%
  • $250 million of 5.125% notes due March 15, 2043, priced to yield 5.184%

HCN plans to use the net proceeds from the offering to repay certain secured indebtedness to be assumed in connection with the previously announced acquisition of Sunrise Senior Living, Inc. (NYSE:SRZ). If this acquisition isn’t completed or if proceeds remain following the repayment of this secured indebtedness, HCN intends to use the proceeds for general corporate purposes, including investing in healthcare and senior housing properties. 

Pending such use, the net proceeds may be invested in short-term, investment grade, interest-bearing securities, certificates of deposit, or indirect or guaranteed obligations of the United States.

BofA Merrill Lynch, Deutsche Bank Securities, UBS Investment Bank, Citigroup, and Credit Agricole CIB acted as joint book-running managers for the offering.

The offering is expected to close on Dec. 6, 2012. 

NHI Advances $10 Million to Capital Funding Group

National Health Investors, Inc. (NYSE:NHI) announced on Thursday it has funded an additional $10 million to Capital FUnding Group, Inc. for its healthcare loan investments. The total credit facility of $15 million has now been fully funded by NHI and will mature in April 2015. 

The CFG family of companies represents comprehensive financing solutions for healthcare facilities, including bridge loans and FHA-insured mortgages for the long-term care, assisted living, and hospital sectors. 

Cambridge Provides Loans for 6 Chicago-Area Properties

Cambridge Reality Capital Companies recently provided FHA-insured funding totaling $72.1 million for six properties owned by Alden Health Care & Senior Living in the Chicago metro area.

The properties were refinanced using HUD’s Section 232/223(a)(7) program with fully-amortizing, 35- or 40-year term mortgages underwritten by Cambridge Realty Capital Ltd. of Illinois, Cambridge’s business that specializes in HUD funding programs. 

The largest of the six loans was $18.7 million and was used to refinance Alden Des Plaines, a 152-bed skilled nursing and assisted living center in Des Plaines. On the other end of the scale was a $3.6 million loan to refinance Alden Bloomingdale, a 48-bed intermediate care facility in Bloomingdale. 

Cambridge Finances 10-Property Portfolio of Ill. Nursing Homes

Cambridge Realty Capital Companies recently provided $90.5 million of FHA-insured financing for a portfolio of 10 individually refinanced skilled nursing facilities in Illinois. 

The loans were arranged for JLM Financial Investments, a private equity group headquartered in Austin, Tex. that specializes in developing commercial real estate and senior housing. 

The fully-amortized loans were refinanced using HUD’s Section 232/223(a)(7) program and were underwritten by Cambridge Realty Capital Ltd. of Illinois. 

The Ensign Group to Renew Stock Repurchase Program

The Ensign Group, Inc. (NASDAQ:ENSG) announced on Wednesday that its board of directors has authorized the company to renew its stock repurchase plan, allowing the company to purchase up to $10 million of its common stock over the next 12 months. 

“This program reaffirms our continued confidence in the Company’s near and long-term financial and operating performance, and our commitment to enhancing shareholder value,” said Christopher Christensen, Ensign’s President and CEO.

Ensign expects to continue paying quarterly dividends and growing and diversifying its business. Christensen says the company’s “strong balance sheet, significant credit relationships, and untapped equity in its real estate portfolio” enable the “flexibility to opportunistically repurchase” Ensign shares while continuing to acquire both well-performing and struggling long-term care skilled nursing properties, assisted living communities, and start-up or early-stage hospice and home health agencies. 

Under the stock repurchase program, Ensign is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws, including Rule 10-b18 under the Securities Exchange Act of 1934 as amended.

The number of shares Ensign repurchases will depend entirely on the level of available cash, the attractiveness of alternate investment and business opportunities either at hand or on the horizon, and management’s perception of value relative to market price, as well as other legal, regulatory, and contractual requirements. 

Oak Grove Capital Originates $19.13 Million of Senior Housing Loans

Oak Grove Capital recently originated two senior housing loans through Fannie Mae totaling $19.13 million.

For Heathers Manor in Crystal, Minn., Oak Grove originated a $10.4 million loan for the property’s acquisition. LCS recently acquired an equity stake in Harrison Street Real Estate Capital’s portfolio of senior living properties, which includes Heathers Manor, replacing Lang Nelson’s equity interest in the property. 

Maples of Towson in Towson, Md. got an $8.73 million loan to refinance the property. 

Cambridge Closes $8.6 Million Loan for Wisc. ALF

Cambridge realty Capital Companies recently closed an $8.6 million loan to refinance Appleton Retirement Community, a 104-bed assisted living community in Appleton, Wisc. The fully-amortized, 35-year term loan was refinanced for the borrower using HUD’s Section 232/223(f) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois. 

Share

The senior housing industry considers 2011 as the Year of the REIT, but despite this year’s sharp decline in acquisition activity, it could just be a digestion period functioning as a calm before the next storm, said executives from several healthcare real estate investment trusts during NIC’s National Conference.

It’s possible many big players are essentially “hungover” from last year’s frenetic merger and acquisition activity, reminiscent of the scene from 2009 blockbuster The Hangover where bachelor party members wake up dazed and disoriented after a wild Las Vegas-based spree, joked panel moderator Steve Blazejewski, a principal on Prudential Real Estate Investors’ senior housing team.

A chart compiling NIC data on acquisition activity from 2009 through the second quarter of 2012 shows the senior housing industry experiencing a major tidal wave of deals that closed in the middle of 2011, but that activity has precipitously dropped off this year—at least so far.

The acquisition of Sunrise Senior Living (NYSE:SRZ) by Health Care REIT (NYSE:HCN), announced in August, should give numbers a boost in early 2013, said Chuck Herman Jr., executive vice president and chief investment officer at HCN. 

“We expect to see other REITs continue to be active,” he says, mentioning National Health Investors, Inc.’s (NYSE:NHI) recent activity: a 10-property RIDEA-structured deal with Bickford Senior Living that was announced last week. Another recent deal includes senior housing and care investor Formation Capital’s partnership with global investment house Safanad to acquire a $750 million portfolio of skilled nursing facilities.

The industry can expect to see some additional skilled nursing portfolio deals due to how they were capitalized in the early 2000s, says Herman, although the sector is “a little hairy” right now because of the uncertainties bred by healthcare reform and government reimbursement levels.

Last year’s deal activity put a spotlight on the senior housing sector, said panelist Steven Insoft, COO of Chicago-based Aviv REIT, and it’s continuing to get a lot of attention. But on the skilled nursing side, he said, interest “tends to ebb and flow.”

“We’re starting to see a lot of consolidation as a by product of capital coming back,” he said. “We’re not so much seeing development, but there’s renewed interest in recapitalizing assets we already own.”

But whether or not activity does ramp up again, 2012 ultimately won’t look like last year. ”There won’t be a peak again, but [rather] a new beginning with robust growth, at maybe a tier below [2011 levels],” said Insoft.

Ultimately, it’s more than just a digestion period, said Sharon Yester, chief asset management officer of CNL Financial Group. Operators of all sizes are rethinking how they look at their portfolios and focusing on the best way to grow. For the smaller ones, the best option may be to sell their assets.

“[Right now] is the calm before the storm,” she said.

Written by Alyssa Gerace

Share

Health Care REIT (NYSE:HCN) recently purchased a second North Carolina senior living community from Kisco Senior Living for $19.4 million, reports the Triangle Business Journal.

Abbotswood at Stonehenge is an assisted living community in Raleigh, N.C. HCN and Kisco are also partnering to develop a nearby retirement community after the original developer’s plans didn’t pan out. 

The senior housing investor recently purchased Magnolia Glen from Kisco for nearly $60 million and is currently in the process of acquiring Sunrise Senior Living’s (NYSE:SRZ) portfolio of communities. 

Written by Alyssa Gerace

Share

Health Care REIT to Offer 22 Million Shares of Common Stock

Health Care REIT (NYSE:HCN) is offering 22 million shares of its common stock along with granting underwriters a 30-day option to purchase up to an additional 3.3 million shares.

The REIT will use the net proceeds from the offering to repay advances under its unsecured lines of credit, repay other outstanding indebtedness, and for general corporate purposes, including investing in health care and seniors housing properties.

Bank of America Merrill Lynch, J.P. Morgan, and Morgan Stanley will act as joint book-running managers for the offering. 

KBS Strategic Opportunity REIT Originates $35.8 Million Mortgage for Calif. CCRC

Newport Beach, Calif.-based KBS Strategic Opportunity REIT Inc. recently originated a $35.75 million first mortgage loan secured by Ponte Palmero, a 239-unit continuing care retirement community in Cameron Park, Calif. 

The borrower is not affiliated with the REIT or its affiliates. Loan terms include a floating interest rate with an initial rate of no less than 11%, increasing annually to a floating rate of no less than 18% during the third year of its term. The loan will mature on Oct. 1, 2015.

Ponte Palmero is located 33 miles east of Sacramento on a 26 acre complex. It was developed in 2008 and has 100 assisted living, 104 independent living, and 35 memory care suites.

Prudential Closes $7.38 Million Refinance for Calif. Senior Care Community

Prudential Mortgage Capital Company, the commercial mortgage lending business of Prudential Financial, Inc. (NYSE:PRU) recently closed a $7.38 million refinancing for San Bernardino Villa LP.

The loan is for a 97-unit senior care facility located in San Bernadino, Calif. that is currently configured for 85 beds. It has 58 studio apartments and six one-bedroom assisted living apartments, along with seven semi-private and seven studio apartments designated for memory care residents. 

Martin Herz, a principal with Prudential Huntoon Paige, was the lead on the loan transaction, which features a 35-year term. 

Beech Street Provides $6.4 Million Loan for a N.Y. ALF

Beech Street Capital, LLC recently provided a $6.4 million to refinance Keepsake Village at Greenpoint, a 54-bed assisted living community in Liverpool, New York.

Joshua Rosen, executive vice president of Beech Street, originated the transaction using HUD’s Section 232/223(a)(7) loan program out of the firm’s Chicago office.

The existing mortgage had about 30 years remaining, and Beech Street was able to increase the loan term back to the original term of 35 years, allowing the broker to reduce annual mortgage payments and increase its debt service coverage. The property’s estimated remaining economic life, at 50 years, along with its quality condition helped support the increased loan term.

The financing will transfer the existing replacement reserve balance and continue the annual deposit to the replacement reserves, giving the property adequate funds for future realty and non-realty replacement.  

Oak Grove Capital Closes $4.2 Million Loan for Mass. Senior Housing Community

Oak Grove Capital recently closed a $4.2 million Fannie Mae MBS loan for Keystone Woods Supplemental, a senior housing community located in Springfield, Mass.

Share

Construction: Planned

Kisco Senior Living & HCN to Build N.C. Senior Living Community

Carlsbad, Calif.-based Kisco Senior Living is taking over the development of a N.C. senior living community, reports the News Observer, in a joint venture project with Toledo, Ohio-based Health Care REIT (NYSE:HCN).

Kisco is scaling back original plans made by Kane Realty for the continuing care retirement community, which will now have a rental model rather than entrance fee. The Cardinal retirement community will have 160 independent living units and 60 units for assisted living, nursing care, and memory care. 

HCN had originally been Kane’s financing partner on the deal.

Business Owner to Develop $17.5 Million Senior Living Project in Minn.

The former co-owner of a local restaurant has a new project in the works: the development of a 101-unit senior living community in Lakeville, Minn., reports TwinCities.com

Kingsley Shores Senior Living will be a three-story independent living, assisted living, and memory care community built on a four-acre plot. Businessman Frank Schoeben owns the land and is spearheading the $17.5 million project, says the article.

The development team includes Winkelman Building Corp, based in St. Cloud, Minn., Frisbie Architects Inc., based in River Falls, Wisc., and SilverCrest Properties, of St. Louis Park, Minn.

Upon completion of construction, SilverCrest will manage the property and is also part-owner. 

Calif. Senior Home to Expand Services, Build Senior Care Campus

Los Angeles Jewish Home plans to develop a senior care community in The Village at Playa Vista, called The Gonda Healthy Aging Westside Campus. The Gonda campus will include a continuing care retirement community with 176 units designated for for independent seniors, and 24 units for assisted living and memory care. Nearby will be a Brandman Centers for Senior Care PACE (Program of All-Inclusive Care for the Elderly) site that will have the capability to care for an additional 240 seniors. A 60-bed skilled nursing in the vicinity is also being planned. 

Joint Venture to Build 2 Senior Living Communities in Texas

Joint venture partners McFarlin Group, LLC and Stroud Development, LLC, both based in Dallas, Tex., are planning to build two assisted living and memory care communities in the Houston metropolitan area, bringing the number of communities the joint venture is developing in Texas to five. 

Orchard Park of Katy will provide assisted living and memory care services with the capacity for 97 residents. Amegy Bank of Texas will provide financing for the development, which is expected to break ground in October 2012 and open in late 2013.

Orchard Park of Pearland will be an approximately 70,000-square-foot project also with memory care and assisted living services and capacity for 97 residents. The McFarlin Group/Stroud Development joint venture utilized HUD’s Section 232 LEAN program for financing the project. Construction is expected to begin in the first quarter of 2013 and be completed by late 2013. 

“We feel Texas continues to have a lot of potential, and is currently looking at several markets throughout Texas with the DFW area being our current focus,” said Dustin Pridmore, Principal of McFarlin Group, in a statement.

The two companies currently have three other Texas projects in various stages of construction or planning, all financed through the Section 232 program.

All the Orchard Park communities have been designed by architectural firm Galier, Tolson and French Design Associates, based in Bedford, Tex. Each community will serve 57 assisted living residents and have a separate secured memory care wing with capacity for 40 residents. The communities’ amenities will include private dining spaces, special events venues, fitness and wellness areas, weekly linen and housekeeping services, and assistance with ADLs.

Meridian Senior Living will manage the communities upon completion. 

Northbridge Companies to Expand New Development Portfolio in New England

Northbridge Companies, based in Burlington, Mass., has added two new senior living development projects to its New England portfolio with a total expected construction cost of about $31 million.

The company will develop a $16.8 million assisted living and memory care community in the Boston suburb of Wayland, Mass. Carriage House at Lee’s Farm will have 62 units, 33 of which will be assisted living units with 29 designated for memory care. Northbridge secured financing for the project from Cambridge Savings Bank, with equity provided by a partnership including the Nordblom Company and RMA.

Northbridge will also develop Avita of Stroudwater in a joint venture with Sandy River 2. The Westbrook, Maine community will have 60 units all dedicated to memory care. The $14.45 million project is financed through TD Bank, with equity provided by a partnership between private investors and RMA. 

Construction: In the Process

Construction Begins on $6.5 Million Wisc. Senior Living Community

Applewood Senior Living recently broke ground on a $6.5 million assisted living and memory care community in Brookfield, Wisc., reports BizTimes.com. Applewood of Brookfield will have 48 private suites, each with its own bathroom and kitchenette. The community is expected to open in the spring of 2013. 

The developer has operated a similar community in the area since 1993. 

Dominion Partners to Build $23 Million Senior Apartment Complex in Fla.

Birmingham, Ala.-based senior living developer Dominion Partners will soon break ground on a 250-unit senior apartment complex in Santa Rosa Beach, Fla. as part of a joint venture with Mesa Capital Partners of Atlanta, Ga.

Construction is expected to take about a year to complete, with estimated development costs expected to exceed $23 million.

The apartments will include one-, two-, and three-bedroom units with community amenities including a clubhouse, resort-style pool, covered outdoor pavilion area, car wash area, and covered parking. There will also be a 1,500-square-foot health facility located within the community clubhouse.

The project team includes Atlanta, Ga.-based Multicon Construction LLC as general contractor; Birmingham, Ala.-based Maxus Construction providing construction management services; and Atlanta, Ga.-based Pucciano & English as architects. 

Construction: Completed

Vintage Senior Living Completes IL-to-AL Renovation

A Vintage Senior Living community, Narrows Glen, recently completed renovations that converted independent living units to 55 assisted living units. The renovations made the units wheelchair accessible with lowered thermostats, better lighting, wider door frames, larger bathrooms, and handrails and emergency call buttons in hallways. Residents will be able to get assistance with activities of daily living from staff. Other renovations include new carpeting and paint schemes.

Share

Accelerated joint venture buy-outs have increased the real estate value of the Sunrise Senior Living (NYSE:SRZ) acquisition by Health Care REIT (NYSE:HCN) from about $1.9 billion to $3.2 billion, the investment trust announced on Tuesday. 

“We are extremely pleased with our initial success in reaching agreements to purchase additional Sunrise joint venture partner interests,” said George L. Chapman, Chairman and CEO of Health Care REIT, Inc., in a statement. “The ability to transform what was initially announced as a $1.9 billion real estate opportunity into a $3.2 billion transaction upon closing accelerates our portfolio quality enhancement initiatives including increasing the private pay component of our portfolio and its concentration in east and west coast markets and top 31 MSAs.”

Since Aug. 22, 2012, when the deal was originally announced, HCN in collaboration with Sunrise has acquired or reached agreement to acquire majority interests in 38 of Sunrise’s 105 joint venture properties, increasing the expected real estate value of the transaction to approximately $3.2 billion upon closing. 

Of those 38 properties, 16 were subject to buy/sell rights and 22 were in joint ventures with no purchase option or buy/sell right.

The REIT has already closed the acquisition of five of the 38 properties for $243 million as part of its third quarter pipeline. All five of the properties are located in the United Kingdom and are managed by Sunrise. They were purchased from a partnership between Sunrise and an institutional investor.

Sunrise will acquire majority interests in the other 33 properties using proceeds from a $467 million loan provided by Health Care REIT. The loan is expected to close in the fourth quarter of this year and will be converted to ownership by HCN upon completion of the original Sunrise acquisition. 

Including the additional buyouts, HCN’s acquisition of Sunrise will now consist of 58 wholly owned properties and 67 joint venture properties. Out of the 67 joint venture holdings, 50 are subject to purchase options giving the REIT and Sunrise the right to buy the majority partners’ interests.

Following its second quarter earnings report, Health Care REIT announced it would have a $925 million acquisition pipeline in the third quarter. To date in the quarter, $375 million of those acquisitions have closed, with $263 million more expected to close in the third quarter of 2012. The REIT now expects $287 million worth of acquisitions will close in the fourth quarter of 2012. The aggregate acquisition amount includes approximately $134 million of debt the company expects to assume at an average interest rate of 5.6%.

Written by Alyssa Gerace

We are extremely pleased with our initial success in reaching agreements to purchase additional Sunrise joint venture partner interests,” commented George L. Chapman, Chairman and CEO ofHealth Care REIT, Inc. “The ability to transform what was initially announced as a $1.9 billion real estate opportunity into a $3.2 billion transaction upon closing accelerates our portfolio quality enhancement initiatives including increasing the private pay component of our portfolio and its concentration in east and west coast markets and top 31 MSAs.”

Share

Kohlberg Kravis Roberts & Co. L.P., Beecken Petty O’Keefe & Company, and Coastwood Senior Housing Partners LLC will acquire the management company business of Sunrise Senior Living (NYSE:SRZ) for approximately $130 million, Health Care REIT (NYSE:HCN) announced on Friday, Sept. 14.

For its part, HCN will invest approximately $26 million for a 20% interest in the new entity. Under the agreement, the sale will close immediately prior to the REIT’s previously announced acquisition of Sunrise.

“The acquisition of the management business by a partnership with substantial expertise in both health care and real estate, that includes KKR, BPOC and Coastwood, powerfully endorses the Sunrise value proposition,” said George L. Chapman, Health Care REIT’s Chairman and CEO. “The backing of Sunrise management ensures a stable and growing management platform that aligns perfectly with our long-term value creation expectations.”

“Our firm has deep roots in seniors housing, and we have always admired the relationship-based care that Sunrise provides seniors across the U.S. and internationally.  We are delighted to partner with Sunrise management and employees to continue to grow its platform and to maintain its longstanding legacy as the industry standard,” said Bill Petty, partner at BPOC.

Sunrise’s management business includes the national senior living provider’s existing management contracts covering 282 communities, which includes the 125 communities that HCN will acquire; leasehold interests in 15 communities; and 12 development parcels.

Additionally, a subsidiary of the Sunrise management partnership will employ all employees of Sunrise and operate under the “Sunrise” name and brand as terms of the agreement. 

Immediately following the completion of the sale of the management company, Health Care REIT will proceed with the acquisition of Sunrise.

The Sunrise management partnership has agreed that the management company entity will reduce the base management fees charged on the originally announced 20 wholly-owned communities to 5% of revenues, which will be adjusted up or down depending on achievement of net operating income performance hurdles. Additionally, basement management fees on the originally announced 105 joint venture communities, as joint venture partners are bought out and the properties become wholly owned, will be reduced to the lesser of the current management fee or 5.5% of revenues, which will also depend on the performance of net operating income. 

Health Care REIT expects to use proceeds from the sale of the management business to partially fund its acquisition of Sunrise Senior Living. 

Written by Alyssa Gerace

Share