Inland Empire Senior Community Lands $40M in Financing
The new owner took a series of mortgages, revenue bonds and tax credit equity to acquire and fund capital improvements at the property.
Elderly Housing Development & Operations Corp. has secured $40 million in financing to acquire and renovate the fully affordable, 150-unit Dino Papavero Senior Centre in the Inland Empire, according to Yardi Matrix. The seller, the Senior Citizen Housing Development Corp. of Fontana, traded the asset for $16.2 million, per documents filed with the Municipal Securities Rulemaking Board.
Built in 1980, the eight-story Class C property’s units are one-bedroom apartments with 565-square-foot floorplans. The new owner estimates the renovation work will take 18 months and cost approximately $11 million. The Hecky Group is providing architectural services, and Morrissey Construction Co. will act as general contractor for the project.
Diverse capital stack
The Huntington National Bank provided an $8.9 million loan through HUD which matures in 2061. The seller of the property provided a second, $12.4 million mortgage with a term of 55 years. Additionally, the California Municipal Finance Authority issued $18.7 million in multifamily revenue bonds to the borrower. The bonds mature in 2022 and have a coupon rate of 1.5 percent, according to the MSRB. Beyond the mortgage and bond financing, R4 Capital is providing an additional $10.3 million in tax credit equity to the owner.
Located at 16707 Mary Gold Ave. in Fontana, Calif., the senior community is two blocks from the San Bernardino Freeway, next to a wide variety of retail options and close to Kaiser Permanente’s Fontana Medical Center. A local bus route runs along the north side of the property, connecting it to the town center and the wider metro area.
The Inland Empire is home to an aging population that is growing, in part, due to the market’s considerably lower costs compared to the region. However, as supply remains limited, rents have increased 4 percent year-over-year through July, among the fastest growth rates in the country.