Alec Blanc of Monarch Advisors closed a refinance and recapitalization of a 108-unit assisted living/memory care community in southern Louisiana, just outside of Baton Rouge. After opening the community in 2018, the local owner/operator was first introduced to Monarch in March 2020. At the time, the property was not yet stable (around the mid-70% range), and occupancy did not improve much throughout 2020, which is not a surprise. However, lease-up quickened in early 2021, with occupancy reaching the mid-90% range, and the owner engaged Monarch to source approximately $18.5 million in senior debt to refinance the original construction loan and provide the sponsor with about $5.5 million in cash for other business purposes.
Their existing construction lender initially declined the request but eventually came on board to stay involved in the quality asset. The loan has a five-year term and 4.5% fixed interest rate. The owners are also providing personal recourse but plan to go to HUD once the prepayment penalty burns off.
