CBRE Comes Full Circle

CBRE was all over the sale of a seniors housing community in Conroe, Texas, facilitating its sale on behalf of the previous owner and arranging acquisition financing for the buyer, Chicago Pacific Founders.

Originally built in 2016 by a joint venture between Paradigm Senior Living and Padua (a real estate development firm based in Houston), this community features 60 independent living, 60 assisted living and 20 memory care units, along with 17 detached IL cottages across an 11-acre campus. Its $30 million construction cost was financed by one of Lancaster Pollard’s first Propero™ loans, which totaled about $26.7 million. The JV contributed a portion of equity and also received a purchase option to acquire the community at a price based on Propero’s investment basis rather than the fair market value. The buy-back pricing was structured such that the tenant is incentivized to acquire the facility earlier rather than later. Until that purchase, Propero is the sole owner and triple-net leases the community to the operator.

The purchase must have occurred soon after opening, helped by a tremendous lease-up velocity averaging 10 move-ins per month. Less than two years into operation, occupancy surpassed 90%, and in 2018 the owners decided to refinance. Aron Will of CBRE arranged a $34.5 million loan from Freddie Mac, with a 10-year, floating-rate term and five years of interest only.

Then, just over a year later, the owners decided to sell the property. CBRE’s Lisa Widmier represented them in the transaction, while Aron Will, Austin Sacco and Tim Root went back to Freddie Mac to arrange a $37 million acquisition loan. It featured a 10-year, fixed-rate term with six years of interest only. Going forward, CPF’s wholly-owned management affiliate Grace Management will take over operations.

 

 

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