Collateral Real Estate Capital LLC recently provided $173.4 million in first mortgage loans secured by a pool of five seniors housing facilities on Long Island in New York. The pool, comprised of a mix of independent living and assisted living units on Long Island, has a total of 640 units, which is approximately 63% assisted living (including Alzheimer’s care) and 37% independent living. Individual properties range in size from 118 units to 141 units. The transaction was structured as an installment sale.
The loan was funded by Collateral and sold to Freddie Mac utilizing its fixed-to-float loan product. The transaction features a 12-year term, with four years of interest-only and an optional thirteenth year at a floating rate. After the interest-only period, the loan amortizes over 30 years.
“It was important for the lender on this transaction to be flexible and willing to invest the time and effort necessary to understand and structure the transaction, as it included all the standard acquisition issues — plus, it involved pilot mortgages, several future fundings, and the defeasance of bonds,” says Scott Kavel, managing director of seniors housing for Collateral Real Estate Capital. “Additionally, the approvals by two different industrial development authorities were required, as well as a number of other unique issues.”
The individual projects funded by Collateral include Bristal at East Meadow; Bristal at Massapequa; Bristal at North Hills; Bristal at North Woodmere; and Bristal at Westbury. Scott Kavel and Richard Thomas, both officers of the company’s seniors housing group, have completed more than $3 billion in mortgage and equity financing for seniors housing and multifamily projects across the country over the past 10 years. Collateral has a current servicing portfolio of $9.3 billion.