Emeritus Nets $163M in Loans for Seniors Housing Buy

KeyBank Real Estate Capital has secured $163 million in loans to finance the purchase of 19 senior housing properties nationwide. The package will finance Emeritus Senior Living’s purchase of the 19 properties, which range in individual price from $2.9 million to $14.7 million. Upon the completion of the purchases, Emeritus will serve as proprietor of the sites, which are located natonwide. The portfolio consists of over 1,500 units in the properties, all of which are assisted living facilities, some with Alzheimer’s care. KeyBank used its long-standing relationship with Freddie Mac to close the deal on behalf of Emeritus. Freddie Mac provided the loans through its Conventional Cash Seniors Housing product. The pool of 19 cross-collateralized and cross-defaulted commercial mortgages has a 10-year term, with an optional 12-month extension at the end of the term. The initial 12 months of the loan are for interest only, and the loan has an amortization period of 30 years, with a 10 year yield maintenance period. The minimum debt service coverage was 1.38 and minimum loan-to-value ratio was 75 percent. The deal was completed within 60 days in order to comply with the required acquisition timing. “Underwriting is tighter, and pricing is up a little, but on the whole this was a fairly straightforward deal,” Dave Shillington, managing director of KeyBank Real Estate Capital’s agency lending division, told CPN. “Frannie Mae and Freddie Mac are still active in seniors housing, which is helping keep the market stable.” KeyBank Real Estate Capital is a subsdiary of KeyCorp, a bank-based financial services company with assets totaling more than $97 billion. KeyBank Real Estate Capital annually finances about $20 billion in commercial real estate lending. This transaction is KeyBank’s second with Emeritus Senior Living; as previously reported by CPN, KeyBank provided funding for Emeritus’s purchase of three facilities in June.