Utilizing its balance sheet lending program, Live Oak Bank closed two conventional loans on behalf of senior living clients. Adam Sherman led the way on both transactions. The first was arranged for a to-be-built assisted living/memory care community in Mason, Ohio being developed by Berengaria Development, the real estate arm of Marcus Investments. There will be 23 AL and 18 MC units, with BrightStar Senior Living, an affiliate of home health care provider BrightStar Care, leasing and operating the property upon completion. The project received a $6.9 million loan, with a five-year term, 25-year amortization and 24 months of interest only payments to accommodate the construction and lease-up period.
The second loan was closed for the well-capitalized private investment firm buyer of a brand-new 90-unit assisted living/memory care community in a significant Texas market. That market experienced the woes of overdevelopment, meaning that after this community opened three years ago, it experienced a slow lease-up and operating losses for an extended period.
As a result, the original developer/owner sold it below cost. Totaling $10 million, the acquisition loan came in at 70% loan-to-value, putting the purchase price at $14.3 million, or just under $160,000 per unit. Proceeds of the loan will also fund a renovation and the continued lease-up costs. It featured a five-year term, an interest-only period and flexible prepayment options.
