WASHINGTON, D.C. – January 29, 2021 – Berkadia’s Seniors Housing & Healthcare group secured nearly $1 billion in financing in 2020. The team’s 83 transactions encompassed a range of high occupancy property types—assisted living, skilled nursing, memory care—across the country.
“The COVID-19 pandemic presented unique challenges to the seniors housing and healthcare market and we saw a challenging market after the first two months of the year,” said Steve Ervin, Senior Vice President and Head of Seniors Housing Finance in Berkadia. “However, we were able to continue to deliver for our clients throughout the year by providing essential liquidity to the market. We expect momentum to accelerate into the new year as owners and operators regain confidence in the industry and its ability to care for those in need.”
Notable deals included:
- Two HUD 232/223(f) loans collateralized by two Transitional Rehab Facilities. The buildings are licensed only for Medicare and contain a total of 76 beds. The aggregate loan proceeds of $22.5 million were underwritten to HUD’s maximum LTV of 80 percent, representing total debt of $296,000/bed. At the time of closing, combined occupancy was 95 percent.
- A $22.24 million 232/223(f) HUD loan for a 157-bed skilled nursing facility in Worchester County, Maryland. The $141,700/bed HUD loan represents 80 percent LTV and carries a term of 35 years. Loan proceeds were used to pay off the existing debt. At the time of appraisal, Medicare accounted for 25.5 percent of the total census.
- $29.2 million in financing for a 7-property portfolio with 307 units across Tennessee, Arizona, Delaware and South Carolina. The portfolio was operating above 95 percent occupancy at closing. The communities were financed on behalf of a repeat client through a Fannie Mae variable rate loan with a 10-year term and five years of interest only. Proceeds were used to refinance one community and fund the acquisition of six other communities.
“We’re proud of the work we accomplished last year, particularly in partnership with HUD, to provide critical access to low-cost permanent financing for seniors housing owners and operators,” said Managing Director Jay Healy. “As vaccine distribution takes hold and the pandemic begins to abate, we expect activity to continue to pick up through 2021 and beyond. When we look at the market broadly, the need for care options is only continuing to grow.”
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. In 2017, the team expanded its capabilities by adding an investment sales presence, rounding out its full suite of services.