The team at Walker & Dunlop (W&D) recently closed four HUD transactions for senior care facilities located across the country. Largest (and perhaps most notable) among them was a $35.9 million refinance of a 166-unit behavioral assisted living community in Arizona. The community houses assisted living residents with a secondarily behavioral diagnosis, and this was a unique project for HUD’s LEAN program given the behavioral component and unique payor type, but the program executed on the transaction. To account for the added risk, W&D underwrote the transaction at a lower LTV than traditional senior housing projects. The refinance paid off bank debt and partnership debt.
Next, the team closed a $14.6 million refinance of an 80-bed skilled nursing facility in Colorado. Built in 2017, the facility caters to short-term rehab patients, primarily with Medicare. Increased surgeries that occurred post-COVID (and improved reimbursement rates) helped improve operations, allowing the borrower to retire the original construction loan and operator debt.
Two memory care communities in Texas, owned by a nationally recognized owner/operator, obtained two HUD loans courtesy of the W&D team. Totaling 116 beds and built in the late 2000s, the communities were both stabilized with occupancy at 90%. They also showed improved census and rent growth during the underwriting process and completely cut its agency staffing usage. This improved performance helped the borrower achieve its desired new loan proceeds, totaling $12 million across the two properties ($6.4 million and $5.6 million, respectively). The refinance retired existing debt.
Finally, W&D refinanced a 72-bed skilled nursing facility in Arizona with a $15.3 million HUD loan. Built in 2011 and catering to short-term rehab patients, the facility was owned by a regional owner/operator that wished to retire third-party bank debt. Operations at the facility re-stabilized since the pandemic, with improved occupancy, expense controls and reimbursement rate increases.
Kevin Giusti, Senior Managing Director, and Daniel Baron, Director of FHA Finance, handled the transactions.
