MidCap Financial, through its correspondent relationship with Bellwether Enterprise Real Estate Capital was able to close a Fannie Mae refinance of a 167-unit senior living community in Lexington, Kentucky. The deal closed in mid-March before huge swaths of the country had been shut down but still a difficult time to get transactions across the finish line.
At the end of 2018, the borrower, Atlas Senior Living, had acquired the community as part of a purchase option from DMK Development. Before that, Atlas had leased and operated the $26 million development, which was nearly stabilized at the time of the sale. Opened in August 2017, it features 114 independent living, 38 assisted living and 15 memory care units. To fund that acquisition and provide for future operating capital needs, MidCap provided a $35 million floating-rate bridge loan. No purchase price was disclosed, but based on a typical loan to value of 70%, we can estimate it was somewhere near $300,000 per unit.
Fast forward to today, and MidCap, with its relationship with Bellwether, has taken out that bridge debt and replaced it with a $36.3 million permanent loan through Fannie Mae. It comes with a 12-year, fixed-rate term and represents a 70% loan-to-value, putting the community’s value at around $51.9 million, or $310,000 per unit.