Seniors Housing Business

FEB-MAR 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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46 www.seniorshousingbusiness.com Seniors Housing Business n February-March 2018 © 2018 BOK Financial Corporation. Services provided by BOKF, NA. Member FDIC. BOKF, NA is a subsidiary of BOK Financial Corporation. *Transaction included $1.1 million of junior debt financing from BOK Financial Capital Corporation, a subsidiary of BOK Financial Corporation. Banking Services Designed For Healthcare From A Partner With Experience You Can Trust. BOK Financial has experienced professionals who can help you balance growth and expansion while providing capital support. Multi-facility Senior Housing Operator Acquisition of a portfolio of properties $135 million loan syndication Maryland Skilled Nursing Facility Term loan & revolving line of credit for acquisition $23.6 million New York Multi-facility Senior Housing Operator Acquisition, finance & bridge loan for seven properties $20.5 million Colorado Real Estate Investment Firm Portfolio refinance for three senior living facilities $7.7 million Ohio Assisted Living Facility Owner/ Operator Refinance two senior living facilities $23 million Colorado & Oklahoma Skilled Nursing Facility Owner/Operator Acquisition of Senior Housing Campus $6.8 million* Missouri Recent Healthcare Client Credit Solutions 918.588.6405 | www.bokfinancial.com we can still find them more typical leverage," says Joe Munhall, senior vice president and director of syn- dicated credit at Lancaster Pollard headquartered in Columbus, Ohio. Some regional bank lend- ers make loans that cover much more of the cost of development. "We can get you to 80 percent," said Richard Thomas, senior vice president in the Seniors Housing & Healthcare Finance Group of Grandbridge Real Estate Capital, a subsidiary of BB&T Bank. Grand- bridge has branches in 15 states and Washington, D.C. These same regional banks also offer interest rates that are signifi- cantly lower than the rates offered by large banks relative to the leverage of the loan. Many of these smaller banks serve developers in multiple ways. They are eager to keep the income flowing from these bank- ing services. "We've seen some regional banks get very aggressive to pro- tect their customers," says Wells Fargo's Peart. Those banks often offer lower interest rates than com- peting larger banks. "They are not off by 5 basis points, they are off by 25 to 50 basis points." Banks demand recourse Most of these financings are recourse loans, in which the bank will require anything from a com- pletion guarantee to a full repay- ment guarantee. That's especially true for con- struction loans that cover a greater percentage of development costs. "At 65 percent loan to cost, it is very difficult to get non-recourse loans," says Will. "A very small percentage of borrowers can get non-recourse financing at 55 or 60 percent loan to cost — really just best-in-class developers, who for the most part are also fully inte- grated operators," he adds. "It is not the same as construc- tion lending was three or four years ago," says Berkadia's Fen- ton. "The lender will ask for some type of a guarantee." Lenders are also paying more attention to the experience that borrowers have in seniors hous- ing. "Lenders ask more questions," Cushman & Wakefield Senior Housing Capital Markets has raised equity and arranged $20.5 million in financing for the construction of The Residence at Chadds Ford, an 84-unit independent living, assisted living and memory care community in the Philadelphia suburb of Chadds Ford. The borrower is LCB Senior Living. Webster Bank is providing $20.5 million of non-recourse construction financing at 65 percent loan-to- cost for the joint venture between LCB and its institutional partner.

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