BMO Harris Bank’s Healthcare Real Estate Finance group closed on a whopping $145 million term facility with two participating banks to recapitalize Sagewood, an entrance-fee CCRC in Phoenix, Arizona. Westminster Capital and LCS own the property, with LCS serving as operator since its opening in 2010. The community has been expanded over the years, most recently with a $100 million, 101-unit independent living project in 2021, and now features 417 IL units, 44 assisted living units, 28 memory care units and 78 skilled nursing beds. The existing IL units were fully occupied prior to the project, and 96% of the new units were pre-sold by the end of 2018.
At that time, LCS and Westminster Capital recapitalized with a $118.8 million senior loan provided by National Health Investors, in addition to receiving a $61.2 million construction loan for the expansion project. The senior loan had a 10-year maturity and 7.25% interest rate that escalated by 10 basis points per year after the third year of the loan. The construction loan had a five-year maturity, an 8.5% interest rate, and will be paid off with proceeds from the entrance fees.
