Three years after acquiring a 48-unit assisted living community in Shawnee, Kansas, Granite Investment Group is refinancing it. Ross Holland of Lancaster Pollard led the way on the transaction (not LP’s first with Granite), securing a $6.9 million Fannie Mae loan with a seven-year term and a variable interest rate.
Granite had bought the community in February 2015 from a local partnership that had originally developed the community in 2000. It was 90% occupied and operated at a 25% margin on approximately $2.4 million of revenues at the time of the transaction. It sold for $7.2 million, or $150,000 per unit, with an all-in cap rate of 8.4%. HUD bridge financing provided by GE Capital, Healthcare Financial Services funded the deal, while Ben Firestone, Jacob Gehl and Michael Segal of Blueprint Healthcare Real Estate Advisors handled the sale.
Operations have since improved under the management of Advantage Health Group, and assuming a conservative 70% loan-to-cost for the refinance, that means the value of the facility has increased over 30% in the three years. Not bad.
