A former community health center in Washington, D.C. is being redeveloped into a mixed-income senior apartments community thanks to HUD financing arranged by Rob Rotach of Walker & Dunlop. Originally built in 1925 as The Hebrew Home, the building served as a skilled nursing facility until 1968 when it was purchased by the District of Columbia to convert it to a community health center. However, it has stood vacant since 2009, and is now being redeveloped into an affordable senior apartment community with 185 total units, 88 of which will benefit from an adaptive reuse rehabilitation loan. It is also being designed to achieve a LEED certification.
The project’s capital stack will include a variety of different funding sources, starting with the 40-year $10.13 million HUD loan. Walker & Dunlop also worked to provide both 9% and 4% Low Income Housing Tax Credits, cash-collateralized tax-exempt bond proceeds, and finally subordinate debt provided by the D.C. Department of Housing and Community Development. Victory Housing, Brinshore Development and Banc of America CDC were the property’s co-developers.
Given the affordability issues facing the seniors housing industry even before COVID-19 began affecting seniors’ 401-Ks and their adult children’s jobs, investors and developers will likely have to address that segment of the population that cannot pay $5,000 per month for assisted living care (or higher). Affordable communities will also have to adapt to be able to provide at least some services to frailer residents, or at least coordinate with home health providers. The issue isn’t going away.
