Entering the senior living/healthcare lending market, Hunt Mortgage Group closed its first transaction in that sector with an $8.85 million refinance loan for a 50-bed memory care community in Rockwall, Texas through its new balance sheet lending platform launched earlier this year. Jim Neil, Director of Healthcare Lending at Hunt, was the originator while Jenifer Williams led the underwriting team on the transaction.
On the receiving end of this loan was The LaSalle Group, the developer of the prolific Autumn Leaves® brand of assisted living/memory care with 27 existing communities and 15 under construction. Its community in Rockwall opened in 2011 and stabilized by mid-2013. But when a new competitor opened nearby in 2014, the community saw its occupancy dip to as low as 65% as its new AL/MC competition sought to undercut them on price (could this be a microcosm of what we will see in the coming years as more and more communities come on line?). However, management responded by stressing its superior offerings and service, and occupancy has since stabilized again at 91% and is on its way up.
The bridge loan featured a 24-month term, plus one 12-month extension option, and Hunt will take the loan to HUD before then. With Hunt’s new bridge loan program, which launched earlier this year and features loans varying from $5 million to $30 million, 36-month terms with extension options, competitive floating rate spreads over 30-day LIBOR, and up to 80% loan-to-cost, the lender will look to further its relationship with LaSalle.