CIBC Bank USA announced a couple of cash-out refinances for skilled nursing clients, both deals closing last week. The first was arranged for Strawberry Fields REIT to recapture equity at its 72-bed skilled nursing facility in Muncie, Indiana, which the REIT acquired in November 2019 for $3.15 million in cash.
Built in 1972, the facility was operating at the time of the sale at 72% occupancy, with a 72% Medicaid, 19% private pay and 9% Medicare census. It is also part of an Indiana county hospital UPL tie-up with Henry County Hospital and is being consulted by Infinity Healthcare Management. Strawberry Fields REIT had been leasing and subletting the property from the seller since November 2011, but the opportunity to buy the property arose, and the REIT completed the acquisition. Now, CIBC has closed a $3.0 million cash-out term loan that improves Strawberry Fields’ overall liquidity.
CIBC continued its work by closing another cash-out refinance of a four-property skilled nursing portfolio in North Carolina. Totaling 425 beds with an effective age of 10 years, the portfolio had been managed by a local operator for a number of years. Historical occupancy has been in the 70% range, and EBITDAR margins have been in the mid-teens. The borrower not only obtained a $40 million loan, with a five-year term, on the real estate, but also a capital expenditures facility for property upgrades and a revolving line of credit to support working capital.
