Transactions & Financings: Healthpeak Closes $3B Credit Facility; Benedictine’s $132M Refinancing

Healthpeak Properties (NYSE: PEAK) has more credit at its disposal.

The Denver-based real estate investment trust (REIT) announced on Monday that it closed on a new unsecured revolving credit facility, with commitments totaling $3 billion. The facility reduces Healthpeak’s borrowing costs and extends the maturity date to Jan. 30, 2026. Furthermore, the REIT controls two six-month maturity extensions, subject to certain conditions.

The credit facility was arranged by BofA Securities, JPMorgan Chase Bank, and Wells Fargo Securities. BofA Securities. and JPMorgan Chase were the joint bookrunners for the credit facility. Bank of America is serving as the administrative agent and JPMorgan Chase Bank and Wells Fargo Bank acted as co-syndication agents for the credit facility.

Sales and operator transitions

Capitol Seniors Housing acquires 2 Dallas-area active adult communities

Capitol Seniors Housing acquired two active adult communities in the Dallas-Fort Worth Market: The Orchards at Arlington Heights, a 180-unit community in Arlington; and The Orchards at Market Plaza, a 180-unit community in Plano. Both properties offer one- and two-bedroom options.

The seller, Kompass Kapital Management, was represented by JLL Capital Markets (NYSE: JLL) Managing Directors Cody Tremper and Mike Garbers in the transaction. 

Focus, Life Care Services acquire Arizona community

A joint venture including an affiliate of Focus Healthcare Partners and Life Care Services acquired Fountain View Village, a senior housing community in Fountain Hill, Arizona consisting of 90 independent living units, 68 assisted living units, 45 memory care units, and an additional 48 memory units within a dedicated health center.

Life Care Services will manage the community.

Bryn Mawr Terrace sells to private operator

Bryn Mawr Terrace, a continuing care retirement community in Bryn Mawr, Pennsylvania, was sold to an undisclosed private operator. The community’s board of directors were advised on the sale by Lument Managing Director and Head of Mergers and Acquisitions Laca Wong-Hammond and Associate Director Dominic Porretta.

The transaction included an assumption of the existing U.S. Department of Housing and Urban Development (HUD)/Federal Housing Administration (FHA) loan that is also serviced by Lument, creating efficiencies in the closing process.

Salmon Health and Retirement sells Massachusetts assisted living and skilled nursing facility

Salmon Health and Retirement sold a retirement community in Northbridge, Massachusetts consisting of 154 skilled nursing beds and 28 assisted living units. Salmon made a strategic decision to exit skilled nursing and focus on its senior housing assets.

Blueprint Healthcare Real Estate Advisors Senior Managing Director and Head of Business Development Steve Thomes, Executive Managing Director and Co-Founder Ben Firestone, and Managing Director Ben Firestone advised Salmon in the transaction.

Financings

HJ Sims completes $132M financing package for Benedictine

HJ Sims completed a $132.4 million refinancing package on behalf of Benedictine Health System in Cambridge, Minnesota.

Historically, most of Benedictine’s affiliates were financed on a standalone basis, resulting in 36 series of outstanding debt for 19 different borrowers. The various series of debt were held by eight different banks or servicers with inconsistent terms, covenants, and reporting requirements. Benedictine’s board and executive leadership team sought to actualize a capital framework to ensure growth, transformation of service mix, and reinvestment in existing campuses. In August 2020, Sims was engaged to spearhead this project.

Sims constructed an initial obligated group, providing the foundation for Benedictine to realize its finance goals. Sims created and utilized a multi-faceted decision matrix that considered factors specific to each affiliate and its outstanding debt. Twenty-one senior living communities, 14 in Minnesota and seven in North Dakota, were selected for the obligated group.

Sims focused on finalizing key provisions for the master trust indenture to give Benedictine’s organizational and capital structure future flexibility. Sims determined the appropriate debt structure. Because most of the existing debt was bank debt, a shorter 20-year amortization was selected to avoid an extension of the debt’s weighted average maturity. Taxable debt was selected to refinance the debt allocated to the North Dakota communities to avoid using two issuers and to give Benedictine the flexibility of debt repayment. Sims worked with bond counsel to secure host approval and execute joint powers agreements among 20 municipalities or issuers throughout Minnesota.

Regions Bank arranges $36N construction loan

Regions Bank arranged a $35.9 million new construction and mini-permanent financing package for a 150-unit senior housing development in Chesterfield, Missouri. The property will include 96 independent living, 37 assisted living and 17 memory care units.

Managing Director Chris Honn and Senior Vice President Jack Boulder originated the financing for the owners, a joint venture between Shelbourne Healthcare and Cedarhurst Senior Living. The JV was represented by Greystone Managing Directors Matt Miller and Tyler Armstrong.

Ratings Outlooks

Fitch downgrades East Ridge Retirement Village to ‘CC’

Fitch Ratings downgraded the issuer default rating to East Ridge Retirement Village in Cutler Bay, Florida to “CC” from “B-,” and downgraded the rating on series 2014 health facilities revenue bonds issued by the Alachua County Health Facilities Authority, on behalf of East Ridge Retirement Village. Fitch also removed the negative rating watch on the IDR and revenue bonds.

The rating downgrade reflects Fitch’s belief that default, including debt restructuring is probable over the outlook period. East Ridge is negotiating a forbearance agreement with its bondholders. As a result of the provider’s annual debt service coverage ratio covenant violation, bondholders have the right to accelerate principal payments.

As of the end of East Ridge’s 2020 fiscal year on December 30, 2020, the debt service coverage ratio was 0.68x, and o.42x through June 30, 2021. Continual cash burn, persistent weak occupancy, inability to produce sufficient net entrance fees and high leverage have contributed to East Ridge’s financial condition.

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