GMACCM ORIGINATES LOANS VALUED AT $56.35 MILLION GMAC Commercial Mortgage (GMACCM) has funded $56.35 million for 10 loans financing skilled nursing and long-term care facilities in California, Texas, Nevada and Florida. Two of the largest transactions were $6.9 million for Harbor Health Care, a skilled nursing facility in Fullerton, Calif., and $5.7 million for McLennan County Nursing Home in Waco, Texas. Loan-to-value (LTV) for the 28-acre, 300-unit Harbor Health Care was 56.9% at initial funding and 78.5%, if fully disbursed. The McLennan facility is built on 1.95 acres with 224 units in a two-story skilled nursing facility. LTV was 71.2% with a fixed interest rate of 8.5% at 25-year amortization.
Included among the smaller loans was $1.88 million to the Fort Worth Nursing and Rehabilitation Center, a 130-unit skilled nursing facility located on 1.33 acres in Fort Worth, Texas. LTV was 75% with a floating interest rate.
SUMMIT CARE CORP. ACQUIRES SOUTH TEXAS REHAB CENTER Burbank, Calif.-based Summit Care Corp., a national seniors housing provider, has acquired the operations and leasehold interest in the Briarcliff Nursing and Rehabilitation Center in McAllen, Texas. The 194-unit, four-year-old facility will be retrofitted with an additional 80 units, which will include a 36-bed Alzheimer's unit. Under the terms of the agreement, Summit Care has the option to fully purchase the center in six years at a fixed rate. At present, occupancy is 95% with a quality mix of 58%.
CAMBRIDGE REALTY CAPITAL FUNDS $35 MILLION In its largest individual nursing home loan ever, Cambridge Realty Capital Ltd., a Chicago-based seniors housing and healthcare real estate lender, has provided $35 million in funding for the East Northport RCHF (nursing home) in Huntington, N.Y. The interest rate on the construction and permanent loans, funded under the HUD 232 program, was 7.37%. Marvin Ostreicher, one of New York's largest owners of skilled nursing facilities, is owner and operator of the 320-unit Long Island facility. Cambridge's New York regional office processed the loan.
G&L REALTY PAYS $28 MILLION IN HEALTHCARE TRANSACTIONS G&L Realty Corp., a healthcare real estate investment trust based in Beverly Hills, Calif., has acquired three skilled nursing facilities in Massachusetts and two development sites in southern Orange County for a total of $28 million. The three facilities contain 390 units and cost $20 million. Concurrent to its purchase, G&L entered into a 15-year triple net lease for the properties, with a first-year payment of $2.7 million. G&L plans to use the development sites for medical office and retail uses.
FOURTH QUARTER M&A REPORT HIGHEST LEVEL EVER Irving Levin Associates Inc., a financial services firm specializing in healthcare investments based in New Canaan, Conn., has reported in its Healthcare Merger and Acquisition Report that year-end 1997 reached the highest level ever ever for mergers and acquisitions in the health care services industry. There were 236 transactions during the fourth quarter of 1997, down 22.9% from the previous quarter's 306 deals, and down 7.1% from the 254 transactions in the fourth quarter of 1996. Physician Medical Groups had the largest number of deals, with 52, and Hospitals followed with 40.
J.G. WENTWORTH/ASHA RESEARCH REPORT ON LONG-TERM CARE The long-term care continuum (nursing homes, seniors housing and home/health care/community-based services) has, far and away, more growth potential over the next five to 10 years compared to the rest of the American healthcare system. That's according to Managed Care Flexes Its Muscle: Capitalization Infiltrates Long-Term Care, a report by J.G. Wentworth Partners L.P., a specialty finance company based in Philadelphia, and Washington, D.C.-based American Seniors Housing Association.
According to the report, three factors greatly favor long-term care: Aging Americans 85 and older - 20% of whom reside in nursing homes compared to 5% of those aged 65 and older who reside in nursing homes - will number 4.9 million by the year 2000, a 48% increase over 1990. The rapidly growing number of aging Americans will bring an increase in demand for nursing homes, seniors housing and home healthcare/community-based services. The limited supply of nursing homes, the surging demand for home healthcare and community-based services, and the growing recognition of the lifestyle and cost-saving advantages of seniors housing will significantly increase revenues for all three of these long-term sectors. Exceptionally cost-effective delivery of services by long-term care providers in a reimbursement environment that increasingly stresses managed care principles will draw a greater number of referrals, many of whom will be far younger than today's typical long-term care client. HMOs, commercial insurers and other types of payers will funnel beneficiaries of all ages requiring post-hospitalization rehabilitation, extended care for chronic conditions and assistance following surgical procedures to long-term care providers and away from more costly acute care sites.