It’s good to see business still getting done these days. Scott Kavel, Founder and Principal of Creativcap, took that to another level by announcing four transactions in the last week, including one sale and three loan closings. The transactions were likely nearly finalized before much of the mayhem started, but to close a deal in this environment is an accomplishment.
The sale included a stand-alone memory care community in the Southeast. Built in 2015, it features 65 units and nearly 54,000 square feet. Occupancy was over 95%, and operations stayed on track throughout the sales process. Its location is undisclosed but was in a top-tier market in the Southeast. That location, along with the property’s vintage and strong operations, pushed the purchase price to just under $22 million, or around $335,000 per unit. The buyer was a non-traded REIT that brought in a national operator to take over management.
Moving on to the loans, Mr. Kavel first arranged a $30 million five-year bridge loan from a regional bank for an independent/assisted living community also located in the Southeast. The all-in floating rate is approximately 3.0%. Using the proceeds, the community was planning to add some villas to its campus later this year, but we suspect those plans may be postponed. Then, a 222-unit independent living community received a $72.27 million loan, with a 10-year term, three years of interest only, a 30-year amortization schedule and a fixed interest rate in the mid-3s. Boasting over 90% occupancy after leasing up 122 new IL units it added in 2017, the community also includes a 20-bed skilled nursing wing that is leased to a local operator.
Mr. Kavel wrapped things up with a $15 million forward rate lock loan for the owner of a 77-unit assisted living/memory care community. Provided by a life insurance company, the loan comes with an eight-year fixed rate in the mid-3s and will be funded later in 2020 when the community’s existing loan opens for prepayment. Sounds like a pretty good deal for the borrower given the current environment.