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Transactions & Financings: PGIM, Greystone Facilitate Harrison Street-Oakmont Deal; Lifespace, Phoenix, Alta Grow

Harrison Street Real Estate Capital’s $1.2 billion acquisition of 24 senior living communities formerly owned by Healthpeak Properties (NYSE: PEAK) and Gallaher Companies in early June was facilitated with loans from two large financial firms.

Greystone placed and executed financing for the purchase of 16 of the communities in the portfolio. The package involved Freddie Mac loan assumptions. Terms of the deal were not disclosed.

PGIM Real Estate provided an acquisition loan for 12 communities. The firm did not disclose the loan amount.

Bryan McDonnell, head of U.S. debt and chair of global debt for PGIM Real Estate, said, “This loan is secured by an exceptionally well-diversified group of assets located across eight MSAs with favorable market dynamics, benefitting from dense and affluent regional demographic bases.”

This is the third major financing package provided by PGIM. In October 2020, the firm provided a $460 million loan to help fund the acquisition and recapitalization of a 10-property senior living portfolio operated by Seattle-based Merrill Gardens. In April, PGIM entered into a joint venture with Signature Senior Lifestyle, an affiliate of Revera, to develop and operate senior housing communities around greater London.

Sales and operator transitions

Alta Senior Living enters Florida

Alta Senior Living has entered the Sunshine State by acquiring a 175-unit independent living and assisted living community in Margate, Florida.

Over the next year, Alta plans to invest $6.5 million to renovate the property, known as Waterside Landing. Plans include repositioning 22 first-floor units from assisted living to secured memory care.

“Waterside Landing is exactly the type of acquisition opportunity we’re seeking right now,” said Douglas Brawn, Principal of Alta Senior Living. “This community has so much potential, and we immediately saw the vision during our first community tour. It took us several months to tailor the right business plan, but we’re excited to complete the renovation work, enhance the design and amenities, and convert half of the first floor to secured memory care.”

Alta has offices in Santa Monica, California, and West Palm Beach, Florida, and is working on several other acquisition opportunities in both states. The firm is an integrated investment, development and operations company that owns and/or operates 530 units in three states.

Lifespace acquires CCRC Newcastle Place

Lifespace Communities has acquired Newcastle Place, a continuing care retirement community (CCRC) in the Milwaukee suburb of Mequon, Wisconsin.

Newcastle Place has 257 residences on 52 acres. This is the sixth Lifespace community in the Midwest and brings the company’s total portfolio to 16 CCRCs.

“The energy in our strategic pipeline is palpable which I view as an affirmation of the dedicated Lifespace team members that serve and support our residents, and each other, every day of the year,” CEO Jesse Jantzen stated. “Only after considerable due diligence and analysis, of which culture is a critical component, do we proceed down a path towards coming together.”

Lifespace is a not-for-profit based in West Des Moines, Iowa. The organization recently overhauled its executive leadership and is in growth mode.

Phoenix Senior Living assumes management of Alabama assisted living facility

Phoenix Senior Living assumed management of Autumn Cove Senior Living, an assisted living and memory care facility in Anniston, Alabama.

Financings

Welltower closes $500M senior note offering

Welltower (NYSE: WELL) successfully closed an offering of 2.050% senior unsecured notes due January 2029. Proceeds are earmarked for general corporate purposes, including repayment of debt and investing in health care and seniors housing properties.

Wells Fargo Securities, Citigroup Global Markets and Morgan Stanley served as representatives for the offering.

Healthpeak prices $450M initial green bond offering

Healthpeak Properties successfully priced its first green bond offering, a public offering of $450 million of 1.35% senior unsecured notes due 2027. The price to investors was 99.877% of the principal amount of the notes. Net proceeds of the offering, after deducting the underwriting discount, original issue discount and fees and expenses, are expected to be approximately $445.3 million.

The offering is expected to close on July 12, subject to the satisfaction of customary closing conditions.

Wells Fargo Securities, Credit Agricole, J.P. Morgan, RBC Capital Markets, Scotiabank, PNC Capital Markets, Regions Securities, SMBC Nikko, TD Securities, Truist Securities and US Bancorp are acting as joint book-running managers for the offering.

Ziegler closes $124M financing for Oregon CCRC

Ziegler completed a $124.2 million bond issuance on behalf of Behalf of Friendsview Manor, a nonprofit CCRC in Newburg, Oregon. The Series 2021A and Series 2021B bonds were issued through the Yamhill County Hospital Authority, are exempt from federal and state income tax and do not carry a public rating.

Proceeds will be applied to an ongoing expansion project consisting of 28 new independent living cottage duplexes and an expansion to the community center at Springbrook Meadows, 96 new independent living apartments in the University Village neighborhood, and replacement of the Charles Beals Health Center with 79 new residential care units.

MidCap Financial closes $46M first mortgge for 5-property Sonata portfolio

MidCap Financial closed a $46 million first mortgage with funds managed by affiliates of Fortress Investment Group. The loan facilitated the acquisition of a portfolio of five senior housing communities in south Florida, totaling 444 units, which will continue to be operated by Sonata Senior Living. MidCap’s loan is structured with an initial funding to facilitate the purchase of the communities and future funding for capital improvements. The financing was arranged by JLL on behalf of Fortress.

Sims closes $11M loan for Louisiana senior housing community

HJ Sims affiliate, Sims Mortgage Funding, closed a $10.8 million loan for Metairie Manor, a 287-unit, affordable senior housing community in Metairie, Louisiana, operated by the Archdiocese of New Orleans.

The refinancing, a HUD Section 223 (a)(7) loan, reduced the interest rate on the property’s debt load by 33% and produced an annual debt service savings of $118,000. SMF also negotiated an extension of the loan term of almost ten years, and built approximately $700,000 into the new loan to supplement an existing replacement reserve fund.

The savings from the new loan expands Metairie Manor’s capacity to expand services and programs to its residents, and increase its capital reserves – all without an increase in the existing Section 8 funding.

Ratings Outlooks

Fitch rates Healthpeak’s unsecured notes “BBB+;’ rating outlook stable

Fitch Ratings assigned a “BBB+” rating to the senior unsecured notes being issued by Healthpeak Properties (NYSE: PEAK), consistent with its long-term issuer default rating and existing senior unsecured debt ratings. The rating outlook is stable.

This reflects the improvement in portfolio quality as a result of the sale of the majority of rental senior housing assets, which is balanced by a smaller and more concentrated portfolio of life sciences properties, medical office buildings and CCRCs.

Fitch announces bond rating updates on 4 CCRCs

Fitch Ratings announced the following bond ratings updates:

  • Fitch assigned the “BBB-” issuer default rating and affirmed the “BBB-” rating on $47 million in series 2016 and 2017A fixed rate revenue bonds issued by Industrial Development Authority of the City of Lexington, Virginia on behalf of Lexington Retirement Community, doing business as Kendal at Lexington. The rating outlook is stable. Key rating drivers include steady operating performance, strong demand in a soft housing market, and a stable financial profile.
  • Fitch assigned a “BB+” issuer default rating, removed from under criteria observation and affirmed the “BB+” rating on $65 million series 2020A, 2020B-1, and 2020B-2 revenue bonds issued by Connecticut Health & Educational Facilities Authority on behalf of McLean Affiliates, a retirement community in Simsbury, Connecticut. The rating outlook is stable. Key rating drivers include recent pandemic pressures to census and operations, although operations are expected to improve; and an improved financial profile.
  • Fitch downgraded $20 million in series 2019 revenue refunding bonds issued by the Massachusetts Development Finance Authority on behalf of Orchard Cove, a CCRc in Canton, Massachusetts, from “BBB+” to “BBB.” Fitch also assigned a “BBB” issuer defaut rating. The rating outlook is stable. Key drivers include weakened operations due to disruptions from the coronavirus pandemic, leading to a debt service coverage violation in fiscal 2020 and slow recovery thus far in fiscal 2021. Net entrance fees declined significantly in fiscal 2020 due to restrictions on move-ins and marketing disruptions and although move-ins have begun to pick up this summer, independent living unit (ILU) occupancy is expected to continue to lag historical levels for the next 1-2 years.
  • Fitch affirmed the “BB+” rating on $46 million outstanding series 2016 revenue bonds issued by New Hope Cultural Education Facilities Finance Corporation Retirement Facility on behalf of Crestview Retirement Community in Bryan, Texas. Fitch has also assigned Crestview a “BB+” issuer default rating. The rating outlook is negative. Key rating drivers include thin operations due to pandemic-related effects, which slowed external skilled nursing facility admissions and independent living unit move-ins in 2020. Crestview violated its DSCR covenant with 0.7x coverage versus the 1.2x required, and is seeking a waiver from its bondholders.

Miscellaneous

GlynnDevins Rebrands as Attane

Senior living and health care marketing firm GlynnDevins is now known as Attane.

The new name represents a symbolic, yet purposeful name that upholds the company’s position of delivering results, growth and success. In the past eight months, GlynnDevins acquired two marketing technology businesses – Linkmedia 360 in October 2020, and Bluespire in February 2021 – with each branded as “a GlynnDevins company.” Since the time of those acquisitions, the company has integrated operations, solutions and marketing professionals from all three companies, and experienced a rapid growth trajectory with a five-year average annual growth rate of 33%.

The post Transactions & Financings: PGIM, Greystone Facilitate Harrison Street-Oakmont Deal; Lifespace, Phoenix, Alta Grow appeared first on Senior Housing News.

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