PulsePoints

For the first time in many years, mortgage interest rates are at a historic low. This creates great opportunities for everyone, and especially for those in the senior housing and healthcare industry. Borrowers in the business should take the time to see how refinancing your facilities could save you a great deal of money.

When it comes to refinancing, no one does it better than Cambridge. We are the originators of the Signature Experience, which focuses on developing relationships, finding ideal capital structures and solutions, and closing and funding debt and equity financing transactions in a timely manner. We stand by this process to give our clients the most efficient experience. We are one of the most knowledgeable companies in the industry when it comes to HUD lending, as it is our specialty. So whether you are in need of conventional or government financing, we can help you.

August is a big month for Cambridge, as it is the time we start preparations for the National Investment Center’s 21^st annual conference, which will take place from September 21-23 at the Marriott Waldman Park Hotel in Washington, D.C.  The conference is noted as the top deal-making event in the senior housing and healthcare industry. There will be opportunities for us to talk to other professionals in the industry, build relationships and discuss potential business ventures.

You can expect to see a variety of people there from the senior housing industry, including: owners, operators, investment bankers, real estate managers, and lending officers. Cambridge will have several senior representatives on-site. Make sure you take the time to meet with us!

We have a variety of programs that range from refinancing to sale/leasebacks, and we have the knowledge and skill set to help you save money. So if you plan to be in attendance, give us a call today to set up a meeting.

At Cambridge, we understand that every client is unique, so our approach is anything but generic. We offer a variety of financing solutions and tailor them to meet the specific needs of each borrower. One particular program that many senior housing owners/operators have found appealing in recent years has been our sale-leaseback program.

With the economy in “recovery mode,” many senior housing operators have discovered the advantages of leasebacks. For senior housing facilities in need of stimulating cash flow and preserving business, finding a buyer to purchase a property and lease it back for a designated amount of time is just the right move. Operators can remain with their senior facility and continue to manage it while equity is withdrawn from the real estate, making money available for rehabilitation, expansion, or re-investment. In addition, sale-leaseback programs also benefit the investor by providing cash flow through a lease agreement and reducing management hassle.

Both single properties and entire portfolios can opt for a sale-leaseback option. Some owners can utilize this program as an exit strategy while others can rely on it to better their existing facilities in hopes of regaining them in the future. Lessees may have a put option to reacquire the real estate at a later time during the leasehold.  Our knowledge of the senior housing industry puts owners/operators in good hands, so that they can focus on operating their facilities at the optimal level.

Cambridge Realty Capital Companies has provided a $5.7 million HUD Lean loan to refinance Villa St. Francis, a 170-bed skilled nursing home in Olathe, KS.

Chairman Jeffrey A. Davis said the fully-amortized, 27-year term loan was arranged for the owner, a Kansas limited liability company. The loan was underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in HUD financing.

Davis said the property was refinanced using HUD’s Section 232 pursuant to Section 223(f) funding program. The interest rate was not disclosed.

The Center for Medicare & Medicaid Services reported that Medicare made extra payments totaling $2 billion under a special clause in the system the past fiscal year, and has
therefore decided to cut funding by 11.1% across the board for skilled nursing facilities to make up for the money spent. The rate cut amounts to about $3.87 billion. The cut was proposed this year in April, made official in July, and
will take effect in October.

The American Health Care Association (AHCA), which represents nursing homes, is disappointed in the level of the cuts.  Cambridge shares their sentiments.  They have released a statement that the rate cut will put thousands of jobs at stake and threaten the quality of service provided at nursing home facilities. Governor Mark Parkinson, President and CEO of AHCA, wrote in a recent press release that “The CMS rule makes reductions beyond what is necessary for budget neutrality.”

So what is in store for nursing home facilities and seniors all over America? What will they do now that they will be receiving less payment for services they render? How will the facilities adjust their operations and services to fit the new budget for seniors? Cambridge believes strongly in the creativity and business acumen of nursing home providers and we know there are mitigation
strategies to reduce the impact of these cuts. We strongly support getting paid for fair market services rendered; as Medicare is one of the cornerstones of America’s healthcare delivery
system.

2011 has been a year of great accomplishments for Cambridge Realty Capital. Over the past seven months we have exceeded all the goals we have set forth for the year.

Cambridge has already closed $181 million dollars in financing during the first six months of the year, and our monthly loan origination requests in May were the highest we’ve received since 2003.

Additionally, Cambridge has gained exposure by attending conferences across the country, including the 2011 NIC National Skilled Nursing Investment Forum in Los Angeles, and the 2011 AHCA/NCAL Independent Owner Leadership conference in New Orleans, where our Chairman, Jeff Davis, provided a well-received presentation titled Blue Skies Ahead or a Storm Coming for Long-Term Care Capital.

Internally, we continue to enhance our internship program, which offers students from the most prestigious universities in/around Chicago the opportunity to work directly in finance and the senior housing and healthcare industry. As a marketing intern myself, I have been able to take what I have learned in the classroom at Northwestern and apply it to a professional setting at Cambridge. Together with other interns, we have launched a social media campaign that extends into Facebook, Twitter, the blog-o-sphere, and LinkedIn.

Overall, Cambridge already has a great number of achievements under our belt, and we look forward to more such success during the second half of 2011.

An $8.6 million HUD Lean Loan arranged by Cambridge Realty Capital Companies has refinanced Centralia Manor, a 120-bed skilled care nursing home in Centralia, Ill.

Chairman Jeffrey A. Davis said the fully-amortized, 35-year term first mortgage loan was arranged for the owner, an Illinois limited liability company. Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that underwrites FHA-approved HUD loans, used the HUD 232 pursuant to Section 223(a)(7) funding program to refinance the property.

The interest rate was not disclosed.

More than a catchy marketing gimmick, in recent years “going green” has become the thing to do, so it’s no surprise that even the senior housing sector is moving towards green living, since its benefits extend to the environment, residents, and operators.

Green facilities consume less water and energy, use solar power, improve air quality and utilize recyclable material. This is accomplished through building designs that allow more natural light to enter, installing solar panels, using low-flow toilets/shower heads,  recycling programs, and various other “green” techniques. Owners can also count on future savings since their facilities will be using less energy. In addition, once complete, facilities can receive Leadership in Energy and Environmental Design (LEED) Certification, legitimizing their eco-friendliness and making them that much more appealing to the new generation of seniors.

Owners and operators may need some help to fund their green-living turnaround, since it may be more costly then conventional construction/rehabilitation. And that’s where Cambridge comes in; we can help you find the right financing solution to help you and your facility save some green – cash – in the long run!

Cambridge Realty Capital Companies has provided a $5.2 million HUD Lean loan to refinance the Lakeland Rehabilitation and Healthcare Center, a 133-bed skilled nursing facility in Effingham, Ill.

Cambridge Chairman Jeffrey A. Davis said the fully amortized, 30-year term first mortgage loan was arranged for the property’s owner, an Illinois limited liability company, using the HUD Section 232 pursuant to Section 223(f) funding program.

Underwriting the loan was Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUD loans. The interest rate was not disclosed.

Student internships are a great way to gain exposure in a desired field and develop new skills in a professional setting.  However, we have all heard that many internships lack the element of a true learning experience.   Instead, duties include going on coffee runs, making photocopies, and any other less-than-glamorous tasks that need to be done in the office.  Because of these types of internships, students take away little from the experience and fail to inherit a skill set that they can carry with them in their future professional endeavors.  Luckily, my experience with Cambridge Realty Capital as an Associate Intern has been the complete opposite- and I couldn’t be more grateful for such an extraordinary opportunity.

As an Associate for Jeff Davis and his accomplished team of finance professionals, I was able to refine my analytical and communication skills and actively participate in the transaction process.  Working directly with the team on specific deals allowed me to familiarize myself with real situations that can not be accurately represented in a classroom setting.  Duties of all associates included training in financial analysis and due diligence work, participating in marketing calls and projects, and interfacing with potential clients.  Jeff and his team also did an excellent job in assigning specific projects tailored to each intern’s unique set of skills. 

Through this hands-on experience, I have acquired exceptional skills and distinctive knowledge of Commercial Real Estate, specifically within Senior Housing, that will help me succeed throughout my career.  I sincerely thank Jeff and the Cambridge team for this tremendous opportunity, as well as their hard work and dedication to the Associate program.  I highly recommend the Cambridge Internship program to any student looking to pursue a career in Finance or Real Estate. This was, hands down, the best opportunity for me as an aspiring Real Estate professional. 

(And for the record, I never once had to get anyone coffee!)