A partnership between a regional New England operator and a private fund based in Atlanta acquired a 120-bed skilled nursing facility located about 40 miles from downtown Boston, Massachusetts. Built in the 1980s, the facility was occupied in the 80s. Its new owners were able to consummate the deal with an acquisition loan arranged by JD Stettin of Carnegie Capital.
The financing included a $4 million bank loan and a $1.5 million working capital line of credit. Mr. Stettin arranged the bank loan to include an earn out upon achieving a 1.25x debt service coverage ratio, which represents 82% of the purchase price. It comes with a five-year term, fixed rate of 4.35% and two years of interest only, and there was no bank fee nor any prepayment penalty.
Meanwhile, the working capital line is coterminous with the first mortgage and comes with a floating rate of Price + 1%. There is also no annual fee.
