BWE, together with Blueprint Capital Markets, closed two loans totaling $17.82 million to provide financing for the acquisition of two Class-A memory care communities: Windsong at Southridge ($10.42 million) and Windsong at Eola Hills ($7.4 million). Lundat Kassa of BWE handled the financing, having been brought onto the deal by the team at Blueprint, led by Senior Managing Director, Kristen Ahrens.
Both acquisition bridge loans, which have five-year terms, 72% loan-to-cost and no-prepayment penalties, are non-recourse with fixed and competitive rates. BWE will provide permanent financing for the properties through HUD, a process that has already begun for Windsong at Southridge, which sold for $14.47 million, or $258,000 per unit. The process will begin within 24 months for Windsong at Eola Hills, which sold for $10.28 million, or $184,000 per unit. The loans have been structured to maximize exit proceeds up to 100% LTC for the borrowers.
Ahrens, along with Dan Mahoney, Dillon Rudy and Pat Maloney of Blueprint facilitated the sale, which closed in April. Built in 2018, Windsong at Southridge is a stabilized, 56-unit private-pay community in Kennewick, Washington. It was generating more than $1.4 million in EBITDAR. Built in 2015, Windsong at Eola Hills is a 56-unit value-add community in Salem, Oregon. The community was generating $800,000 in EBITDAR.
Strong buyer interest resulted in six offers, with the sellers (which are exiting the seniors space through this divestment) ultimately choosing a Pacific Northwest-based operator partnering with a West Coast equity group. The operator has additional buildings in its portfolio, but these are the first properties it has purchased with this capital partner, and this is the capital partner’s first acquisition as a fund. Occupancy fluctuated, which led to some tougher discussions, but ultimately the transaction crossed the finish line at an 8.6% cap rate.
