A former office-to-senior-care conversion project in New Jersey just received a recapitalization and revolver, courtesy of Metropolitan Bank and G Capital. Grant Goodman of G Capital arranged the loan on behalf of an experienced developer/investor with a 30+ year track record and a diversified investment portfolio. The borrower has deep expertise in the hospital sector, but this was its first senior care deal. It had partnered with a veteran SNF operator to convert the asset into a modern senior care facility inspired by the Green House model, investing significant equity in the project. Featuring both skilled nursing and assisted living services, it re-opened in March 2020. That was unfortunate timing, as the facility faced immediate headwinds dealing with the pandemic, and ownership had to invest more equity in the extended lease-up period. But it has since surpassed 90% occupancy and achieved a five-star rating.
So, the time came for a recapitalization, and Goodman approached a mix of banks, debt funds and HUD finance companies to provide an array of options. Robert Albano of Metropolitan Bank ultimately led the way in providing $29.5 million in total financing, including a $500,000 ABL revolver. The loan has a three-year term and 12 months of interest only, with a fixed rate featuring a seven handle. There is also exit flexibility to go to HUD in the next year. The borrower is now planning several more similar redevelopment senior care projects.
