Aron Will, Mitchell Kiffe and Matthew Whitlock of CBRE arranged $410 million in financing on behalf of NorthStar Healthcare Income and The Freshwater Group/Watermark Retirement Communities to purchase a portfolio of 15 rental and entrance fee CCRCs. The seller, Fountains Senior Living, a subsidiary of Arcapita, had previously hired Watermark as the day-to-day operator of the portfolio, which consists of six entrance-fee and nine rental CCRCs with 3,663 total units (with 2,330 independent living units, 945 assisted living units, 156 memory care units and 320 skilled nursing beds in 232 rooms).
NorthStar will lease the entrance fee properties to affiliates of The Freshwater Group, pursuant to a master net lease, while the rental properties will be held under a RIDEA structure, with NorthStar owning 97% and Freshwater owning 3%. To finance the $640 million purchase price (or $174,700 per unit), CBRE secured a seven-year fixed rate CME loan from Freddie Mac of $410 million, which includes 39 months of interest-only and an interest rate of 3.92%. This is a big move not only for NorthStar, but also for Freddie Mac. This loan is one of the organization’s first entrance-fee CCRC financings and the largest to date within the CME program.