Kailua-Kona, HI – August 11, 2021 – Berkadia Seniors Housing & Healthcare announced today the $16.58 million in refinancing for 123-unit assisted living community in Kailua-Kona, Hawaii. Managing Director Jay Healy of Berkadia Seniors Housing & Healthcare secured the loan on behalf of the sponsor.
The 35-year loan was secured through HUD’s 232/223(f) Program. The HUD financing retired a $11.7 million Berkadia bridge loan funded in August 2017 to facilitate the acquisition and subsequent $4.5 million renovation completed in early 2020. The sponsor was also able to utilize HUD loan proceeds to pay off the remaining balance of the unsecured seller financing, as well as some outstanding partnership debt.
“I’m thrilled we were able to help a long-time client execute on their vision for this community,” said Healy. “Leveraging both our balance sheet and HUD expertise, we were able to tailor a solution satisfying all the needs of the borrower. By securing such an incredibly low HUD note rate with this debt consolidation on the only assisted living community on the ‘Big Island,’ our borrower has created a tremendous amount of value, positioning themselves quite well for the foreseeable future.”
The sponsor, a Washington based owner and operator, previously managed the building on behalf of the seller. At the time of purchase, occupancy was well below its potential due primarily to capital expenditure needs. As part of the remodel, the buyer addressed all deferred maintenance, updated the common areas and installed solar panels for both electricity and hot water. As a result, the sponsor was able to push rents and bring occupancy up to 87 percent, a number which is expected to continue to increase as COVID-depressed occupancy improves across the sector.
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.