Transactions and Financing: PGIM, Greystone Facilitate Harrison Street-Oakmont Deal; Habitat, Phoenix, Alta Grow

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

Greystone placed and completed financing for the purchase of 16 of the parishes in the portfolio. The package included Freddie Mac borrowings. The terms of the deal were not disclosed.

PGIM Real Estate granted an acquisition loan to 12 municipalities. The company did not provide any information about the loan amount.

Bryan McDonnell, Head of US Debt and Chair of Global Debt at PGIM Real Estate said, “This loan is backed by an exceptionally well diversified group of assets held in eight MSAs with favorable market dynamics and a dense and affluent regional demographic Basis benefit. “.”

This is the third major funding package from PGIM. In October 2020, the company provided a $ 460 million loan to finance the acquisition and recapitalization of a senior residential portfolio of 10 properties operated by Seattle-based Merrill Gardens. In April PGIM entered into a joint venture with Signature Senior Lifestyle, a subsidiary of Revera, to develop and operate senior living communities in the greater London area.

Sales and operator transfers

Alta Senior Living enters Florida

Alta Senior Living entered the Sunshine State by acquiring an independent, 175-unit residential 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. The repositioning of 22 units on the first floor from assisted living to secure memory maintenance is planned.

“Waterside Landing is exactly the kind of acquisition opportunity we’re looking for,” said Douglas Brawn, Principal of Alta Senior Living. “This community has so much potential and we saw the vision immediately on our first community tour. It took us several months to come up with the right business plan, but we’re excited to be completing the renovations, improving the design and amenities, and converting half of the first floor into assured memory maintenance. “

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Alta has offices in Santa Monica, California and West Palm Beach, Florida, and is working on several other acquisition opportunities in both states. The company 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 Senior Citizens’ Community (CCRC) in Milwaukee, a suburb of Mequon, Wisconsin.

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

“The energy in our strategic pipeline is palpable, which I see as an endorsement of the dedicated Lifespace team members who serve and support our residents and each other every day of the year,” said CEO Jesse Jantzen. “Only after intensive due diligence and analysis, in which culture is an essential part, do we go the way of growing together.”

Lifespace is a not for profit based in West Des Moines, Iowa. The company recently revamped its management and is in growth mode.

Phoenix Senior Living will lead the assisted living facility in Alabama

Phoenix Senior Living took over the helm of Autumn Cove Senior Living, an assisted living and memory maintenance facility in Anniston, Alabama.

Financing

Welltower completes offering of $ 500 million senior notes

Welltower (NYSE: WELL) has successfully completed an offering of 2,050% senior unsecured notes due in January 2029. The proceeds will be used for general corporate purposes including debt repayment and investments in healthcare and senior housing.

Wells Fargo Securities, Citigroup Global Markets and Morgan Stanley acted as agents for the offering.

Healthpeak praises US $ 450 million for its first green bond offering

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

The offer is expected to end on July 12, provided the customary closing conditions are met.

Wells Fargo Securities, Credit Agricole, JP 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 $ 124 million financing for Oregon CCRC

Ziegler completed a $ 124.2 million bond on behalf of Friendsview Manor, a nonprofit CCRC based in Newburg, Oregon. The 2021A and 2021B series bonds were issued by the Yamhill County Hospital Authority, are federal and state income tax exempt, and are not publicly rated.

Proceeds will be used for an ongoing expansion project consisting of 28 new self-contained residential duplexes and an extension to the community center in Springbrook Meadows, 96 new self-contained apartments in the University Village neighborhood, and the replacement of Charles Beals Health Center with 79 new residential care facilities.

MidCap Financial Closes First $ 46M Mortgage on Sonata Portfolio of 5 Real Estate Prop

MidCap Financial has completed an initial $ 46 million mortgage with funds managed by Fortress Investment Group affiliates. The loan enabled the acquisition of a portfolio of five senior living communities in South Florida totaling 444 units that will continue to be operated by Sonata Senior Living. MidCap’s loan is structured with 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.

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

The refinance, a Section 223 (a) (7) HUD loan, lowered the interest rate on the property’s debt burden by 33% and resulted in an annual debt servicing saving of $ 118,000. SMF also negotiated a nearly ten year loan extension and built around $ 700,000 into the new loan to supplement an existing replacement reserve fund.

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

Valuation prospects

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

Fitch Ratings has assigned Senior Unsecured Notes issued by Healthpeak Properties (NYSE: PEAK) a “BBB +” rating, 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 through the sale of the majority of senior rental apartments, which is offset by a smaller and more concentrated portfolio of life sciences properties, medical practices and CCRCs.

Fitch announces updates to the bond ratings of 4 CCRCs

Fitch Ratings announced the following updates to its bond ratings:

  • Fitch assigned an issuer default rating of BBB- and confirmed a BBB- rating for $ 47 million in the 2016 and 2017A series of fixed income bonds issued by the Industrial Development Authority of the City of Lexington, Virginia on behalf of the Lexington Retirement Community were doing business as Kendal in Lexington. The rating outlook is stable. Key rating drivers include stable operational performance, strong demand in a soft housing market, and a stable financial profile.
  • Fitch has given an issuer default rating of “BB +”, removed it from criteria monitoring, and confirmed the “BB +” rating for $ 65 million 2020A, 2020B-1 and 2020B-2 series bonds issued by the Connecticut Health & Educational Facilities Authority issued on behalf of McLean Affiliates, a retirement community based in Simsbury, Connecticut. The rating outlook is stable. Major rating drivers include recent pandemic pressures on census and operations, although operations are expected to improve; and an improved financial profile.
  • Fitch downgraded the $ 20 million Series Revenue Refund Notes issued by the Massachusetts Development Finance Authority on behalf of Orchard Cove, a CCRc in Canton, Massachusetts, from “BBB +” to “BBB”. Fitch has also given a “BBB” issuer Defaut rating. The rating outlook is stable. Main drivers include weakened operations due to disruptions from the coronavirus pandemic, which resulted in a debt service coverage breach in fiscal 2020 and a slow recovery so far in fiscal 2021. Net entry fees fell significantly in fiscal 2020 due to moving in restrictions and marketing disruptions, and although moving in started this summer, the occupancy of Independent Living Units (ILU) is expected to remain below historical levels for the next 1-2 years Level will lag behind.
  • Fitch confirmed the “BB +” rating of $ 46 million in 2016 Series Notes issued by the New Hope Cultural Education Facilities Finance Corporation Retirement Facility on behalf of the Crestview Retirement Community in Bryan, Texas. Fitch has also assigned Crestview an issuer default rating of “BB +”. The rating outlook is negative. Key rating drivers include sparse operations due to pandemic impacts that slowed the uptake of outside qualified care facilities and the move in of independent housing units in 2020. Crestview has violated its DSCR agreement with 0.7x coverage versus the required 1.2x and is seeking an exemption from its bondholders.

miscellaneous

GlynnDevins operates as Attane

GlynnDevins, a senior housing and health care marketing company, is now known as Attane.

The new name represents a symbolic but purposeful name that upholds the company’s position to deliver results, growth and success. In the past eight months, GlynnDevins has acquired two marketing technology companies – Linkmedia 360 in October 2020 and Bluespire in February 2021 – each referred to as “a GlynnDevins Company”. Since these acquisitions, the company has integrated operations, solutions and marketing experts from all three companies and has grown rapidly, with an average annual growth rate of 33% over the past five years.



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