To support the acquisition of a 50-unit assisted living community in Green Bay, Wisconsin, Walker & Dunlop structured a HUD loan assumption for the out-of-state buyer, Senior Opportunity Funds Holding Company. We covered the deal in January when Ray Giannini of Marcus & Millichap announced he represented the seller, a husband-and-wife team who have worked diligently to maintain census and keep the community COVID-free throughout 2020.
Contrary to many seniors housing communities today, this property was fully occupied, with a 100% private pay census at the time of closing. It also reported strong cash flow and was relatively new construction, having been built in phases from 2009 to 2019.
The seller decided to exit the industry and received $9.2 million, or $184,000 per unit, for the community. Walker & Dunlop’s Kevin Giusti led the origination team to secure the $9.09 million HUD loan on the property. In addition, the seller provided an $800,000 note, which brings the total financing amount well above the purchase price. Cash flow is strong enough to cover future debt service payments (the low interest rate and 35-amortization period for the HUD debt helps that), but it is a little riskier to operate with that amount of leverage.
Previously only focused on developing senior living communities in the Southeast, the buyer identified Wisconsin as a region to expand its presence. And maybe Walker & Dunlop will help finance future purchases as well.
