$327 million transaction refinances 28 senior housing facilities for Brookdale Senior Living
NEW YORK, NY – December 13, 2018 – Berkadia announced today the closing of $327 million in fixed and variable rate financing for Brookdale Senior Living, Inc. Berkadia’s Senior Managing Directors Heidi Brunet and Lisa Lautner of the Seniors Housing & Healthcare team originated the transaction through Freddie Mac’s new Structured Pool Transaction program. The deal closed on November 16 and will be used to refinance 28 senior housing facilities representing approximately 2,200 units. The ten-year, non-recourse Structured Pool Transaction features fixed and variable rate loan components and a 30-year amortization schedule. The fixed rate component was $213 million and the variable rate component was $114 million.
The property was financed through Freddie Mac’s Green Advantage program, which provides competitive pricing to finance upgrades that reduce energy or water consumption.
“We were excited to work closely with Freddie to utilize their new Structured Pool Transaction program in order to meet Brookdale’s needs for this unique portfolio of facilities,” said Brunet. “As we look ahead to 2019, we anticipate that more owners and operators will be looking for greater flexibility in financing solutions in order to create more value across their property holdings.”
Brookdale’s Treasurer George Hicks commented that “Brookdale places significant value in the ability to build flexibility into its capital structure, and we were very pleased to have been able to work with Berkadia and Freddie Mac to accomplish that on this transaction. The Seniors Housing Structured Pool Transaction allows us to achieve interest rate risk diversification by placing most of the debt into a fixed rate while allowing for the ability to obtain partial releases that can be repaid out of the variable rate portion.”
Freddie Mac’s Structured Pool Transaction targets large transactions and provides enhanced structuring to meet the borrower’s specific needs. The program provides various options, including combinations of fixed and floating rate debt components, no property assignments for the debt type, flexible releases and prepayments, faster Joint Underwriting path, and other customizable features.
“Freddie Mac has refined its Structured Pool Transaction program to achieve optimal flexibility for Senior Housing Borrowers who are financing crossed loan pools,” said Steve Schmidt, National Director of Senior Housing at Freddie Mac Multifamily. “We have already closed three large Senior Housing transactions under the program and our Borrowers are very receptive to the program’s various features. We are grateful to Brookdale and Berkadia for their close collaboration on this significant financing, which helped us further refine this program for the Senior Housing market.”
Berkadia’s Seniors Housing & Healthcare group leads the industry in innovative and comprehensive solutions for even the most complex independent living, assisted living, memory care and skilled nursing projects across the country. In addition to deep market knowledge, the group offers a full set of advisory, underwriting, loan origination services and products including FHA, Fannie Mae, Freddie Mac, Life Company, Proprietary Bridge Lending and Capital Markets Advisory Services. Last year, the team expanded its capabilities by adding an investment sales presence, rounding out its full-suite of services.
In 2017, Berkadia’s Seniors Housing team completed more than $1.7 billion in loan volume, including closing over $1 billion in financings in a single day.