Lancaster Pollard recently refinanced an $11.3 million bridge loan to the owner of a California senior living community with permanent, nonrecourse financing via a $13.3 million loan insured by the FHA Sec. 232/223(f) program. The financial advisory firm had helped close the bridge loan in 21 business days back in 2013 to keep in place the ownership of Cedar Creek Senior Living.
Cedar Creek Senior Living has 112 units, is owned by Woodset Partners LLC and is operated by Integral Senior Living. Located in Madera, CA, at the foot of the Sierra Nevada Mountains near Yosemite National Park, the community offers independent living, assisted living and memory care. The property opened in 2005 and in 2010 was the winner of the Assisted Living Federation of America’s Best of the Best Award.
In 2013, Cedar Creek’s bank decided against extending its construction financing and instead sold the loan to a finance company, which declined to extend the loan’s maturity. This decision resulted in the full loan amount being due and payable. Ownership had 30 days to pay off the loan or it was going to lose the facility to the finance company that purchased the loan.
Due to the timing needed to execute the transaction, Lancaster Pollard at the time recommended obtaining a bridge loan to ensure that Woodset Partners retained ownership of the facility. After a bridge loan was put in place, the firm could use Federal Housing Administration financing to refinance the loan into long-term permanent financing, Lancaster Pollard advised.
Working as Woodset Partners’ investment bank, Lancaster Pollard marketed the loan to a targeted list of several bridge lenders with the capability of closing the loan in the short timeframe. The marketing effort included screening inquiries from capital providers, soliciting term sheets and offers and preparing analyses of the various options. The firm ultimately selected a Maryland-based company that provides senior and subordinate debt financing to the health care industry.
The bridge loan avoided the takeover attempt and allowed Integral Senior Living and Cedar Creek to remain focused on providing care to residents.
The refinancing completed in 2015 removed many covenants, paid off the $11.3 million bridge loan and $900,000 in mezzanine debt and provides debt service savings. In addition, the financing funds repairs to the property and a $445,000 deposit to the replacement reserve account.
Jason Dopoulos led the transaction for Lancaster Pollard.