CHARLESTON, S.C. — Berkadia’s Seniors Housing and Healthcare Group has arranged nearly $40 million in loan closings 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 Jay Healy, managing director with Berkadia. “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 the HUD 232/233(f) program totaling $14.7 million. The 70 percent loan-to-value, 30-year 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 a year ago. The owner-operator is based out of Pennsylvania.
Healy also closed two HUD 232/223(f) loans for two skilled nursing facilities located in Oregon and Washington. The loan proceeds of $15.4 million represented combined loan-to-value ratio of 74 percent. The loans 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.
In the third transaction, Healy closed two HUD 232/223(f) loans for two transitional rehab facilities totaling 76 beds. The $22.5 million in financing was underwritten to HUD’s maximum loan-to-value of 80 percent. 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.
Most recently, Healy secured a $6.7 million 232/223(a)(7) HUD loan to refinance the existing HUD debt associated with a 79-bed skilled nursing facility in Montana. The refinance allowed the borrower to not only reduce its interest rate by over 180 basis points, but also extend the remaining term by 12 years, allowing the Washington-based sponsor to save over $130,000 in annual debt service.
In the final transaction, Berkadia’s Ed Williams secured HUD financing in the form of a $2.8 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 in Indiana. The facility will retain the existing 114 beds and expand the building’s footprint by adding 23 private rooms. 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.
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