CreativCap secured debt for two clients, including a bridge loan and a lifeco refinance. The $53 million bridge loan was closed on behalf of a new client, Inspired Living, and facilitated the refinancing of two assisted living/memory care communities. Each community consisted of 127 units (81 AL and 46 MC), with one located in Florida and the other in Louisiana. Both communities were well-occupied, with occupancy rates in the upper 80s and lower 90s, but needed additional time to improve margins to desired levels, primarily through rent increases.
However, because lenders favor projects that are already achieving the desired margin or communities with upside in occupancy, margin improvement is tougher for lenders to underwrite, which posed a challenge for the borrower in obtaining refinancing. Initially, Inspired Living, which is affiliated with Validus Senior Living Management, engaged multiple institutions to secure the bridge loan for two of its communities, but faced limited success in this challenging environment. So, after being engaged by the client, CreativCap collaborated with an established multifamily bridge lender to structure the first seniors housing bridge loan using a Collateralized Loan Obligation framework. This structure allowed for a single security to be backed by a pool of debt.
CreativCap also closed a $12.75 million loan for a repeat borrower for a two-story, 78-unit AL/MC community situated on 3.32 acres in Southern California. The community is leased by the borrower to an experienced operator based in the Pacific Northwest. The community was over 80% occupied at closing, and a life insurance lender was able to meet the borrower’s desire for a tight spread on a 4.5-year fixed-rate loan.
