Walker & Dunlop Completes $38 Million in Financing for Assisted Living and Memory Care Facilities
Walker & Dunlop, Inc. announced today that it structured $37,466,300 in financing for four assisted living and memory care facilities: Bloom at Bluffton in Bluffton, South Carolina; Bloom at Hilton Head in Hilton Head, South Carolina; Cascades of Tucson, in Tucson, Arizona; and Regency Jackson in Jackson, Tennessee.
Walker & Dunlop Managing Director Kevin Giusti and Senior Analyst Brian Neal led the origination team, which has extensive experience with senior housing and skilled nursing facilities across the country. With the spread of COVID-19 and corresponding changes to lending parameters, the team collaborated across Walker & Dunlop’s platform to determine the optimal solution for each client’s business strategy.
The Bloom Portfolio, comprised of two assisted living and memory care communities with 117 total units in South Carolina, was originally brought to the team through Director Alex Vice, who arranged the sale of the assets to WindRiver Companies. Working alongside the firm’s capital markets group, the team identified Locust Point Capital as the ideal capital provider. The $11,325,000 acquisition financing featured an 85% loan-to-value with a two-year term.
Leveraging their knowledge of the U.S. Department of Housing and Urban Development (HUD) lending platform, the Walker & Dunlop team refinanced the Cascades of Tucson, a 196-unit facility with assisted living, memory care, and independent living rooms. The transaction for this community effectively lowered the interest rate on the property’s existing mortgage, replacing the debt with a 35-year fixed rate loan. The new debt also provided approximately $1.2 million in proceeds for capital improvements, which will include a kitchen and dining renovation. The enhancements will include garden views and open-air dining.
For Regency Jackson, a 74-unit assisted living facility, the team worked closely with its client to provide a 35-year, fixed rate loan through HUD. Despite a drop in occupancy due to COVID visitation and move-in restrictions, Walker & Dunlop’s team effectively negotiated a new mortgage on behalf of its longstanding client, Regency Senior Living. The refinance replaced existing debt, provided approximately $2 million in reimbursements to the client, and funded repairs and improvements at the property. Following the lifting of COVID-related restrictions, the borrower was able to increase occupancy and resume normal operations.
“It was a pleasure working with our clients to optimize their debt structures and ultimately accomplish their business goals,” stated Giusti. “The past 18 months have been extremely difficult for owners and operators of seniors housing properties, as the global pandemic posed a disproportionate risk to their residents. I’m happy we were able to play a small role in the continued operations at these communities, which provide much-needed housing for our most vulnerable populations.”
Walker & Dunlop is the 5th largest HUD multifamily lender1, and in 2020 alone, the firm originated nearly $600 million of seniors housing, skilled nursing, and healthcare transactions through various capital sources. For information about Walker & Dunlop's view on the housing market, including expert perspectives on markets, leadership, and the road ahead, visit our Driven by Insight information center.
1 HUD.gov, based on origination volume for the agency’s 2020 fiscal year