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8/28/15
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Pillar originated $35.6 mil in refi money on a portfolio of five senior care facilities located in Southern California. The HUD loans took out existing HUD debt originated in 2011.
The borrower behind these projects is a skilled nursing owner and operator. The transactions allowed the borrower to significantly lower annual interest payments, maximize debt service savings and pay off existing debt.
Pillar originated four HUD 232/223(a)(7) fixed-rate, fully amortizing 25-year loans each with a 3.65 percent interest rate. The individual loans included: $5.496 mil to refinance Brighton Place Spring Valley; $6.817 mil to refinance Brighton Place East (aka Presidio Health Care Center); $8.747 mil to refinance Brighton Place San Diego; and $6.060 mil to refinance Vernon Healthcare Center. Pillar also originated an $8.482 mil HUD 232/223(f) fixed-rate fully amortizing 35-year loan with a 3.45 percent interest rate to refinance the California Nursing and Rehab Center.
Members of Pillar’s Healthcare Finance team, Joshua Hausfeld, Managing Director of Pillar’s Bethesda office, and Evan Hom, Director in Pillar’s New York office, originated the loans. Pillar is a Guggenheim Partners affiliate.
“We had to work through a number of challenges that went well beyond refinancing nursing facilities with typical HUD (a)(7) debt,” said Hausfeld. “Issues such as bifurcating an existing master lease that was part of a larger portfolio with another facility, creating a new master lease structure and a cross default guarantee agreement, a new accounts receivable line of credit, and other issues had to be addressed before we could close the loans.”
Brighton Place Spring Valley, a 75-bed skilled nursing and rehabilitation facility, and Presidio Health Care Center, a 50-bed skilled nursing and rehabilitation facility, are located in Spring Valley. Brighton Place San Diego is a 99-bed skilled nursing and rehabilitation facility. Vernon Healthcare Center is a 99-bed skilled nursing and rehabilitation facility located in Los Angeles. California Nursing and Rehab Center is an 80-bed skilled nursing and rehabilitation facility located in Palm Springs.
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