CHARLESTON, SC – December 1, 2020 – Berkadia’s Seniors Housing and Healthcare Group secures nearly $40 million in loan closings since September for skilled nursing facilities across the country, including Alabama, Illinois, New Jersey, Washington, Idaho, Indiana, and Montana.
“While COVID-19 has certainly presented some unique challenges for us as a HUD healthcare lender, we remain steadfast in our commitment to this sector and those that serve the most vulnerable of our population,” says Managing Director Jay Healy. “As such, we’ll continue working in tandem with HUD to make sure all qualified projects are able to maximize the benefits of the HUD 232 program and take full advantage of historically low interest rates. And in this operating environment, access to low cost permanent financing is as critical as ever.”
Healy recently secured three loans through HUD’s 232/233(f) program resulting in aggregate loan proceeds of $14.72 million. The 70 percent LTV, 30-year term loans were secured by three skilled nursing facilities located in Alabama, Illinois and New Jersey, totaling 273 beds. HUD loan proceeds were used to retire a cash-out bridge loan made by Berkadia’s Proprietary Lending Group less than 12 months ago. The owner/operator is based out of Pennsylvania and is a repeat borrower of Berkadia.
Healy closed two HUD 232/223(f) loans for two skilled nursing facilities located in Oregon and Washington. The aggregate loan proceeds of $15.38 million represented combined LTV of 74 percent based on the $190 thousand/bed portfolio valuation. HUD loan proceeds were used to retire construction and mezzanine financing on the 2016-built Washington state project, and Berkadia bridge debt on the other. The original purpose of the Berkadia bridge loan was to allow the Washington-based sponsor to recoup equity ahead of the HUD refinance.
Healy recently closed 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 thousand/bed. At the time of closing, combined occupancy was 95 percent. The HUD loan proceeds were used to paydown Berkadia bridge debt that was funded in 2019 to allow the Utah based owner/operator to exercise purchase options at both locations. Berkadia’s Proprietary Lending Group had financed 96.5 percent of total costs.
Most recently, Healy secured $6.7 million 232/223(a)(7) HUD loan to refinance the existed HUD debt associated with a 79-bed skilled nursing facility located in Montana. The refinance allowed the Borrower to not only reduce their interest rate by over 1.8 percent, but also extend the remaining term by 12 years, allowing the Washington-based sponsor to save over $130 thousand in annual debt service.
Managing Director Ed Williams secured HUD financing in the form of a $2.82 million 241(a) supplemental loan for a repeat Indiana-based sponsor. The loan proceeds will be used to expand on the existing skilled nursing units at the property located in Indiana. The facility will retain the existing 114 beds and will expand the building’s footprint by adding 23 private rooms. After the expansion is complete, the facility will include 58 private rooms which will greatly enhance its marketability. The supplemental loan is funded at 90 percent of total cost and will run coterminous with the original HUD loan set to mature in 28 years.