Fannie Mae and Freddie Mac continue to be the dominant providers of debt financing in the seniors housing industry, as evidenced by several deals that have closed in the waning days of 2009.
Ventas Inc. (NYSE: VTR), a large healthcare real estate investment trust, was able to refinance a 220-unit seniors housing community in Framingham, Mass., thanks to a $40.5 million commercial mortgage provided by Fannie Mae. KeyBank Real Estate Capital arranged the financing.
“This was a challenging transaction with lots of moving parts, undertaken at an uncertain time in the financial sector, says Richard Schweinhart, executive vice president and CFO of Chicago-based Ventas.
The share price of the giant REIT closed at $43.18 on Tuesday, Dec. 22, up from $28.95 a year ago. The company’s portfolio of properties includes seniors housing communities, skilled nursing facilities, hospitals and medical office buildings.
According to the American Seniors Housing Association, Ventas ranked as the sixth largest owner of seniors housing in the U.S. with 243 properties and 23,204 units in its portfolio as of July 1, 2009.
Freddie Mac also has been busy on the seniors housing financing front. The government-sponsored agency recently provided $12.3 million in financing for Seattle-based Emeritus Senior Living (NYSE: ESC).
Arranged by KeyBank, the funding will be used by Emeritus to refinance three seniors housing facilities, two in Texas and one in Oregon.
Approximately $6.4 million will be used to refinance Emeritus at Saddleridge Lodge, an 80-unit seniors housing property built in 1997 in Midland, Texas.
Another $3.7 million will be used to refinance Meadowbrook Assisted Living Community, a 55-unit seniors housing property built in 1986 in Ontario, Ore.
The final $2.1 million of the loan will be used to refinance Emeritus at Seville Estates, a 45-unit assisted living and memory care senior housing facility built in 1996 in Amarillo, Texas.
During the last two years, KeyBank has closed more than 30 agency-backed commercial mortgage transactions for Emeritus.
Emeritus has used the financing, totaling more than $229 million, to acquire new properties and to refinance debt on seniors housing properties across the country.
The stock price for Emeritus Corp. closed at $17.57 on Dec. 22, up from $9.90 a year ago.