Riverside Refinance

Three years after buying a 207-unit independent living community in Riverside, California, Capitol Seniors Housing (CSH) is refinancing it, at a much higher value. The private investment firm bought Olive Grove (now Welbrook Arlington) in August 2013 for $16.25 million, or $76,651 per unit. Back then, the property consisted of two independent living buildings that were built in 1980 and 1984. Occupancy was only in the high-60% range, with average IL monthly rates of about $1,600. CSH clearly saw potential in the property, and invested between $5.5 and $6.0 million to convert one building to assisted living and memory care and add a separate dining room to that building (to be serviced by the kitchen in the other). Assisted living and memory care rates would also start at $3,300 and $4,200, respectively. As a result, first-year stabilized revenues and EBTIDA were projected to be $6.2 million and $2.3 million, respectively, up from an estimated $2.8 million and $700,000, respectively, as an IL community. CBRE had arranged $13.8 million in interest-only bridge financing to finance the acquisition, and now, Aron Will of CBRE has originated a $16.72 million refinance, with a floating rate and 10-year full term interest only, through Fannie Mae.