The summer activity continued for Regions Bank. Earlier this week, we covered the bank’s refinance of two construction loans for a senior living community in the Cincinnati, Ohio area and for a community in Lorton, Virginia. Chris Honn also closed a non-recourse balance sheet loan for an assisted living/memory care community in Merced, California. Built in the late 1990s, the community features 84 units and was stabilized under the management of a large California-based operator.
The owner, a large privately owned developer/operator based in San Diego and a new customer for Regions Bank, obtained an $8.33 million loan to repay existing bank debt and provide some cash out. It came with a floating rate for an initial term of five years that can be extended for one year. There are also two years of interest only.
Finally, we heard of Newmark Knight Frank’s involvement in the refinance of a Jacksonville, Florida suburb, but Regions Bank provided the loan. The property in question was developed by Vestcor Communities in January 2018 on a 4.1-acre plot purchased for $2.5 million. Operated by Harbor Retirement Associates, it consists of 94 independent/assisted living and 20 memory care units, with a development cost estimated at over $27 million, or about $235,000 per unit. The property stabilized by January 2020, and even with the pandemic it remained consistently over 98%.
So, in July 2020, the Newmark team was hired and secured several term sheets for the community, eventually selecting Regions to provide a $25.1 million non-recourse balance sheet loan, which comes out to about $220,200 per unit. There is a floating rate for an initial term of five years, with a one-year extension option and performance-based loan increases. Proceeds from the transaction repaid existing debt and provided some cash out to the owners. Amber Crosby and Chris Honn originated the loan, which they may replace with agency debt sometime in the future.
