People’s United Bank announced several closed loans for clients in the Northeast. First, to finance the development of a brand-new, 60-unit/80-bed assisted living and memory care community in Manalapan, New Jersey, the bank provided a $14.3 million construction loan, which comes out to $233,300 per unit of debt. HJ Sims led the solicitation process. The loan comes with a five-year commitment, 30-year amortization and 30 months of interest-only payments for both the construction and lease-up periods.
The borrower was MRC Manalapan, a newly formed not-for-profit special purpose entity formed to build and operate the community. It is controlled by two principals, including LV Development, which is owned by the retired CEO of a major regional owner/operator. Springpoint Senior Living will operate the community under a long-term, triple-net lease.
Next, People’s arranged acquisition financing for a large 240-bed skilled nursing facility in Brooklyn, New York. We covered the purchase in May, which came at a $58.8 million price, or $245,000 per bed. Public records show Fortis Business Holdings acquiring a 50% interest, Zevi Kohn (of TL Management) a 40% interest, and Eliezer Jay Zelman the remaining 10% interest. Not-for-profit RiseBoro Community Partnership previously owned the property, operating it with occupancy in the mid-90s and a majority Medicaid census.
Although the most recent financials from 2017 revealed it had a loss of nearly $3.9 million, cash flow turned positive as soon as TL Management took over operations. In addition to nearly $13.08 million in assumed liabilities, the purchase price was covered by a $40 million acquisition loan from People’s, which in turn sold $10 million of it to Bryn Mawr Trust. The debt had a seven-year commitment and 30-year amortization. We will cover the other People’s transactions next week.
