Since the start of the year, Cambridge Realty Capital Companies National Originations Manager Hymie Barber reports the company has provided over $60 million in conventional funding for 16 skilled nursing and assisted living properties located in the states of Washington, Iowa, New Jersey, Pennsylvania and California.
“Cambridge structured creative funding solutions for six clients in these states. The transactions ran the gamut between agency debt, traditional banks and private equity,” Mr. Barber said.
Cambridge is one of the nation’s leading senior housing/healthcare funding specialists and consistently ranks among the nation’s leading FHA-approved HUD lenders. The company also offers an array of strategic financial advisory services that includes all lending options, and purposefully matches borrowers together with solutions and lending “partners” that best meet their temperament and stated short, medium and long-term objectives.
“Cambridge strives to match borrowers and lenders to maximize the relationship aspect. We are agnostic regarding the actual lender and have not created our own warehouse line for this reason,” Mr. Barber said.
“Our clients appreciate the fact that we’re exclusively senior housing/healthcare funding specialists with more than 30 years of experience working with borrowers in this industry. We frequently structure conventional funding options so clients can retain flexibility. We are often asked to assist in maximizing the ability to seamlessly transition to popular Agency solutions (HUD or FNMA) when this strategy best addresses the client’s long-term funding goals,” he said.
Mr. Barber says there were no “plain vanilla” conventional loans closed by Cambridge during the first four months of 2017. The various types of funding arranged “highlight the incredible bandwidth of strategic advisory services the company offers its senior housing/healthcare clients,” he said.
For example, the owner of a six-building, 273-bed SNF portfolio in Western Iowa was exiting the business after 30 years. Cambridge came up with a creative funding solution for the buyer that involved both the Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) coming together to provide $8 million in funding for the smaller rural properties.
“The loan covered 80 percent of the purchase price and effectively serves as a bridge to later HUD financing. Cambridge also arranged a working line of credit for the borrower.”
In another transaction, a Cambridge client purchased an under-performing, 100-bed skilled nursing facility in Eastern Iowa two years ago for $3.8 million. After turning the property around, the client refinanced it earlier this year with a $4.8 million conventional bank loan. Excess loan proceeds were leveraged up towards the purchase of two other properties in the area that were financed by Cambridge with a $2.5 million (80 percent loan to purchase price) bank loan. The buyer effectively purchased these facilities with 100% financing, requiring no additional out-of-pocket cash.
Three years ago in New Jersey, a Cambridge client leased an under-performing, 104-bed skilled nursing facility with an option to buy. In April of this year, Cambridge arranged a conventional bridge to HUD loan covering 100 percent of the $8.2 million purchase price, a $1 million improvement loan and an accounts receivable line of credit for the borrower. This is the third facility for this owner/operator in which Cambridge used creative acquisition and financing structures.
In other transactions through the first four months of the year, Cambridge was able to finance 100 percent of the $9.7 million purchase price paid by a client who exercised an option to purchase two assisted living properties in Southern California. The company also provided 80 percent loan-to-purchase price funding for a combined 50-bed skilled nursing facility and 22-bed personal care building in Pennsylvania.
Mr. Barber says Cambridge has been retained by clients to solely work in a strategic advisory capacity. For example, earlier this year, the company was retained by a real estate investor to provide strategic planning advice for a portfolio of properties the investor was considering in the Pacific Northwest.
The portfolio included two skilled nursing facilities and an assisted living property that were purchased for $20 million.
“This sort of advisory work is the logical outgrowth of Cambridge’s extensive experience in the senior housing/healthcare industry,” he added.