It was a team effort from Greystone to successfully close a Fannie Mae refinance of an assisted living community on the New Jersey Shore. Working on behalf of the borrower, Sage Healthcare Partners, Greystone’s DJ Elefant originated the $24 million loan, with Neal Raburn providing support in structuring, underwriting and closing the transaction. The 10-year loan (with a 20-year amortization and two years of interest only) replaces the original bridge loan provided by Greystone to enable Sage Healthcare Partners to acquire the property in 2017.
Originally built in 1949 and renovated in 1997, the six-story community also had one floor converted to memory care in 2010. Back then, it was owned by United Methodist Communities but was struggling operationally, with 70% occupancy and negative cash flow. In came Sage Healthcare Partners, paying $18.25 million, or over $130,000 per unit, but that didn’t include the land, as all the land in Ocean Grove is owned by the Ocean Grove Camp Meeting Association of the Methodist and Episcopal Church.
However, Sage did negotiate a new ground lease with the Association. Since then, the company made investments in the property, which clearly have significantly increased its value. Assuming an aggressive loan-to-value of 80%, the property’s value has increased to $30 million, or under $220,000 per unit, at least. Quite the turnaround.