Bridge loans are the hottest lending product for seniors housing and care right now (we’re actually hosting a webinar on that very subject next month), and CBRE Capital Markets is expanding its presence in that market with a large new vehicle aimed at providing more flexible short-term loans to seniors housing and multifamily borrowers. The program is called MF1 Capital, LLC and was structured as a mortgage REIT focused on providing equity to multifamily (about 75% of its business) and seniors housing (the remaining 25%) owners. CBRE’s strategic partners on the vehicle include multifamily real estate investment management firms Limekiln Real Estate and Berkshire Group. What sets this program apart is its flexibility for borrowers. There is no defined credit lock or cash flow requirements that would normally make it tough for communities still in lease-up to obtain bridge financing. CBRE will still source and service the loans on behalf of MF1, adding yet another financing option for its clients.
Kicking off the program, Aron Will and Adam Mincberg of CBRE closed three separate two-year bridge loans to finance the acquisition of three assisted living/memory care communities in Lexington, Kentucky and Cincinnati, Ohio. The properties are actually part of a seven-property portfolio acquisition for a joint venture between LCS and TH Real Estate, an affiliate of Nuveen and TIAA. CBRE provided acquisition financing through Freddie Mac for the four other properties, which were stabilized. However, these three properties were built between mid-2016 and late-2017 and were still in lease-up. So, they needed another source of acquisition financing. In comes MF1, which provided the floating-rate, interest-only loans.