Phoenix, AZ – October 13, 2021 – Berkadia Seniors Housing & Healthcare announced today the $20.6 million in HUD financing across two transactions.
The first transaction was an $11.19 million HUD loan for an Affordable Assisted Living Community secured by Managing Director Jay Healy via the 232/223(f) program for a Texas based non-profit sponsor. The loan, carrying an interest rate in the low 2 percent range, retired both the construction and mezzanine debt tied to the project. At the time of underwriting, occupancy hovered around 90 percent.
The 128-unit Assisted Living Community was constructed in 2015 in partnership with the Dallas Housing Authority, the ground lessor. The income restricted property offers high-quality, affordable housing for low-income seniors qualifying for Medicaid coverage. Medicaid funds services, including meals, housekeeping, oversight and personal care. Additionally, Supplemental Security Income (SSI) and Section 8 vouchers are used to pay for housing rent not covered by Medicaid.
“Given the need driven nature of this project, performance fared well throughout COVID,” said Healy. “There continues to be strong demand for affordable assisted living options, and as a result, I think we’re going to see more and more public-private partnerships between care providers and public housing authorities. From a financing perspective, the HUD loan programs are quite complementary.”
The second transaction encompassed two loans through HUD’s 232/233(f) program secured by Managing Director Ed Williams, which resulted in aggregate loan proceeds of $9.41 million for an Idaho-based sponsor. The first loan involved the refinance of a 36-bed standalone Memory Care facility in Flathead County, Montana compromised of two buildings: a purpose-built memory care building constructed in 2010 and a renovated 8-bed memory care building constructed in 1990. At the time of underwriting, occupancy at the facility was 88 percent. The $6.26 million, 35-year term loan represents a 72.0 percent loan-to-value and debt of $174,000 per bed. Loan proceeds allowed the sponsor to refinance the existing debt through HUD.
The second loan comprised the refinance of a 45-bed Assisted Living facility located in Yakima County, Washington. The 35-year term, $3.15 million loan represents a 76.2 percent loan-to-value and debt of $70,000 per bed. Loan proceeds from this transaction were also used to refinance the existing debt through HUD. The 1995 vintage facility was purchased in 2018 as a vacant building. The sponsor completed approximately $500,000 in renovations and reopened the community in June of 2019. At the time of underwriting, occupancy at the community was 95.7 percent.
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.