A senior living community with a troubled financial past recently refinanced its debt with HUD via a $13.3 million loan. But how did it both sink so low and then turn around to be viable for a HUD refinance? Built in 2005, this 112-unit community, with independent living, assisted living and memory care services, is located in Madera, California, near Yosemite National Park. With Woodset Partners LLC as the owner and Integral Senior Living as the operator, the community received ALFA’s Best of the Best Award in 2010. Then, the problems began in 2013 when the community’s bank decided against extending its construction financing and sold the loan to a finance company which chose not to extend its maturity. So, Woodset had 30 days to pay off the loan in full or else it would lose the community to the finance company.
That is when Lancaster Pollard stepped in and recommended putting in place a bridge loan which could then be taken out by HUD financing. Acting as Woodset’s investment bank, LP marketed the bridge loan to several bridge lenders who could conceivably close in under 30 days, and ultimately selected a Maryland-based company that provides senior and subordinate debt financing to the health care industry. LP ended up helping to close the $11.3 million bridge loan in 21 business days, thus avoiding the takeover attempt. Fast forward to 2015 when LP then refinanced the bridge loan with a $13.3 million HUD loan, which paid off the bridge loan and $900,000 in mezzanine debt. In addition, the refinance provides significant debt service savings, a $445,000 deposit to the replacement reserve account and funds substantial repairs to the property. Jason Dopoulos led the transaction for LP.
