Berkadia Seniors Housing & Healthcare Arranges $47 Million in Financing for Five Skilled Nursing Facilities
Charleston, SC – January 11, 2022 – Berkadia Seniors Housing & Healthcare announced today the $47 million in financing for five skilled nursing facilities across the country. Managing Director Jay Healy of Berkadia Seniors Housing & Healthcare secured the financing on behalf of the borrowers.
The five skilled nursing facilities include:
The HUD refinancing of a 40-bed, Medicare-only skilled nursing facility located in Sacramento, California. The $14.45 million of HUD loan retired the construction debt and covered transaction costs for the repeat, California-based client.
Representing only 48 percent LTV, the project was appraised at over $740,000 per bed. The facility was constructed in June 2018 but did not receive its Medicare certification until August 2019. The property contains all private rooms, catering to individuals in need of short-term rehab. Occupancy at the time of closing was in the mid-90s.
A $10.4 million Berkadia bridge loan for a repeat client to refinance existing HUD debt and cover approximately $3.6 million of capital expenditures for a 105-bed skilled nursing facility located in Yakima, Washington. Funded improvements include common area and resident room renovations, interior and exterior repainting, as well as new nursing stations throughout the building.
Originally built in 1975, the 5-Star facility has historically averaged 90 percent occupancy and a Medicare mix of approximately 30 percent. The renovations will allow the project to maintain its competitive advantage and continue driving quality mix. Berkadia plans to refinance the bridge debt through HUD in 2022.
For the third transaction, Healy secured a $9.2 million HUD loan secured by a 90-bed skilled nursing facility, located in East Haven, Connecticut.
The Connecticut-based sponsor acquired the subject property and its assets for $8.5 million in 2018 after the prior owner had defaulted on their debt. The sponsor subsequently invested over $1.5 million into the property for capital expenditures, including a new therapy gym. These improvements allowed the sponsor to increase occupancy to the mid-90s and quality mix to 15 percent, resulting in a valuation of $11.5 million. The 80 percent LTV loan paid off the first mortgage, as well as additional debt incurred in connection with the renovation.
Healy completed interest rate reductions on two existing HUD loans totaling $13 million for a Baltimore, Maryland-based sponsor. The borrower was able to reduce the 4 percent notes rates to below 3 percent, resulting in annual debt service savings of nearly $80,000. The sponsor did not come out of pocket for any transaction costs, including the 6 percent prepayment penalties.
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.