One year on from acquiring an assisted living/memory care community in Wellsville, New York, ownership is refinancing its acquisition debt with intent of going to HUD within the next year. Built in 1989 with 89 units and 137 beds, this community was the only licensed seniors housing community in Alleghany County. Occupancy was around 80% before COVID-19 struck the community and caused census to fall to 70%. The seller, a private individual looking to retire and divest his last asset, engaged Senior Living Investment Brokerage to sell the property but was not able to move any new admissions in until March 2021 because of the state-mandated admission freeze. COVID caused trailing-12-month EBITDA ended March 2021 to drop to around $400,000 during the sale process.
To fund its $8 million, or $90,000 per unit, purchase, Willow Ridge Senior Living (which was founded by former Brookdale Senior Living and Holiday Retirement executive Mike Morris) received a $4.4 million SBA 7a loan from Live Oak Bank, with a 25-year term and three months of interest only. The loan also came with a variable rate based on the WSJP rate plus a spread. After bringing the community’s occupancy to 100%, Willow Ridge wanted to pursue a fixed-rate HUD refinance, so it engaged Greystone to provide a $6.96 million non-recourse bridge loan with an initial two-year term and two six-month extensions to take out the SBA loan. Then Greystone will replace the bridge loan with HUD debt.
