Senior Housing

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    $4,815,000 Cash-Out Refinance of a Seniors Apartment Property Fixed for 12 Years

    February 4, 2015

    Transaction Description: George Smith Partners successfully placed the $4,815,000 cash-out refinance on a 108 unit senior multi-family apartment complex, which has been owned by the sponsors for 10 years. The property was built in 2000 and shows well in this Pacific Southwest market. It is currently 97% occupied, thus qualifying for a significant return of capital to the Sponsor. The 4.37% non-recourse loan is fixed for 12 years and sized to 65% LTV over a 30 year amortization schedule. The 12 year fixed loan allowed lender to underwrite on the actual loan constant instead of an artificial underwriting constant. This innovative structure allowed for more loan proceeds.

    Rate: 4.37%
    Term: 12 Years
    Amort: 30 Years
    DCR: 1.25
    Non-recourse
    Lender Fee: 1%

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    90% LTC Ground Up 75 Room Skilled Nursing Facility (SNF) in US Southwest

    October 8, 2014

    Transaction Description:  GSP successfully placed a $4,700,000 senior construction loan for the Ground Up Construction of a 75 Bed SNF. The New State of the Art SNF will serve a community that has not had a new SNF built in over 15 years. The Sponsor had planned on using EB5 Financing, but the process was too slow, expensive and time consuming.
    Challenge: In a market where construction financing and equity are both tough to obtain, several developers look to EB5 Financing where you can obtain debt or equity from investors who want to earn a visa in exchange for creating US Jobs. Even with the Sponsor’s success in setting up an EB5 regional center, the process can take years, and cost hundreds of thousands of additional dollars.
    Solution: GSP took control of the capital process and met with EB5 Brokers, as well our relationship lenders, and our lenders in the market. We were able to show one of our community development lenders the benefits of the project, and have them do high leveraged first mortgage financing to 90% of the capital stack. This allowed the project to move forward without costly third party equity. The financing allowed our operator to own the entire project with limited equity investment
    Rate: 7.75% Fixed Construction; 7.25% Perm
    Term: 18 Month Construction; 10 Year Perm
    Amort: 18 Month IO; 25 Years
    LTC: 90%
    Prepayment: 3,2,1
    Recourse
    Advisor:  Bryan Shaffer
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    $8,000,000 Assisted-Living Acquisition & Reposition Loan

    April 10, 2014

    4 – 9 – 14
    Transaction Description: Shahin Yazdi successfully placed the 65% loan to cost for the acquisition and reposition of an un-stabilized assisted living facility. With occupancy at 70%, this West Coast asset operated below break-even coverage, requiring an interest reserve to cover the debt service short. The loan has a 10 Year term and is fixed for the first two years at 6.25% before floating at 2.25% over Prime. The Borrower may elect to choose a fixed option of the 5 year CMT + 4.25% in place of the Prime floater after the second year.
    Challenge: Physical occupancy was 70% at application with a 68% economic T-12 (trailing-12 month cash flow). Net income covered operating costs but was significantly below break-even at close. The Borrower required a limited recourse guarantee with a burn-down upon stabilization.
    Solution: Borrower experience with assisted living facilities was highlighted with a business plan from a sponsor who has repositioned similar products in the past. Market occupancy was considerably higher than historical operations. An interest reserve was structured to obtain a 1.0 dcr until stabilization. Market occupancy and Sponsor experienced gave comfort to the credit officer, allowing for a limited repayment guarantee (top 50%) to burn-down as various cash flow hurtles are obtained on a T-6 basis.
    Rate: 6.25%
    Term: 10 Years
    Amort: 2 Years IO then 23 Years
    LTC: 65%
    Prepayment: 3,3,3,2,1 open
    Recourse: Limited to top 50% burning off at stabilization.  Advisor: Shahin Yazdi
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    $14,000,000 Ground-Up Construction-to-Perm of a To-Be-Built Assisted Living Facility

    September 20, 2012

    9 – 19 – 12
    Transaction Description:  GSP successfully placed the $14,000,000 construction-to-permanent loan for a to-be-built Assisted Living Facility in Sacramento, California. The recourse construction facility is for eighteen months, interest only with the takeout underwritten and in place prior to construction funding. The permanent take-out loan is priced at SWAPs + 350 with a 6.0% floor, fixed for ten years, amortized over 25 years. The loan will be rate-locked at Certificate of Occupancy once rolled into the perm loan, sized to 70% of total construction costs. While this particular funded facility is for assisted living (considered seniors housing), GSP received significant interest from capital providers for construction financing across all asset classes as well. For National Investment Center Convention attendees, please touch base with Mr. Orchard via cell phone @ (310) 309-7005. Steve will be attending the Seniors Housing Conference in Chicago through its conclusion on Friday.
    Term: 18 Month Construction; 10 Year Perm
    Amort: 18 Months IO; 25 Years
    LTC: 70%
    Recourse
    Brokers: Steven Orchard, Michelle Lee

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