Ziegler and M&T Realty partnered to refinance an independent living community in Kearney, Nebraska, that is owned by Omaha-based Essex Communities. Built in 1992, the community has 34 units and was 100% occupied at closing. Essex bought it in 2018 and immediately commenced substantial renovations, which were completed in 2019.
To reimburse its capital expenditure investments, extract equity and take out debt from a local lender that the company used to acquire the community, Essex relied on Ziegler to arrange a $4.37 million loan from Fannie Mae. The 10-year loan came with a fixed interest rate and two years of interest only, followed by a 30-year amortization period. It was structured at 75% loan-to-value, putting the value of the community at $5.83 million, or about $171,000 per unit.
The loan also carried a declining prepayment schedule, which will provide the Borrower with additional flexibility in future years. There was also supposed to be a COVID-19 debt service reserve escrow, which was later waived prior to the loan’s final approval.
