Greystone Closes First Freddie Mac Revolving Credit Facility in Seniors Sector
- Jan 08, 2014
New York—New York-based multifamily and healthcare mortgage provider, Greystone, has closed on a $150 million Freddie Mac Revolving Credit Facility. The transaction marks the first time the facility has been used in the seniors housing sector. The financing was closed on behalf of Oakmont Senior Living of Chino Hills, Calif., with an initial $29 million transaction.
“We are thrilled with Greystone and Freddie Mac’s combined ingenuity and ability to structure a Revolving Credit Facility that perfectly suits our needs,” says Joe Lin, CFO at Oakmont Senior Living. “The Facility allows us to finance assets off our construction loans sooner than ever before and we can increase the leverage of the facility as assets stabilize and then again on the exit refinancing.”
Freddie Mac’s Revolving Credit Facility allows seniors housing owners with large development and acquisition pipelines to borrow against increased values and income created at the properties at up to 75 percent leverage with an interest-only DSC of 1.5x for independent living communities and 1.6x for assisted living communities. The product provides a competitive floating rate, which is indexed to LIBOR. The lending aspect is based on income in place and has no minimum requirements for community occupancy. Fifty million dollars is the general minimum size for a Revolving Credit Facility, but one can be closed with as little as one asset totaling $10 million, according to Greystone.
“We are excited to have been able to provide immediate benefit to Oakmont’s robust development pipeline,” says Scott Kavel, head of Greystone’s senior housing finance group. “Freddie Mac worked with us to close their first-ever seniors housing Revolving Credit Facility in just 45 days from our initial concept meeting.”
Kavel also noted recent enhancements to the Facility should prompt borrowers to strongly consider it as an option for their overall finance strategy.
Oakmont’s portfolio consists of 34 communities on the West Coast, primarily in Northern and Southern California. The company’s Chino Hills, Calif., community — which is located about 35 miles east of downtown Los Angeles — offers independent living, as well as assisted living and memory care options.
Greystone, which has only been a Freddie Mac Senior Housing Seller/Servicer for about a year, has proven to be a leader in the industry and is on pace to be one of the GSE’s top five seniors housing lenders. The company was ranked in the top-10 for Fannie Mae lending and was the number one FHA lender in 2012.
“We value the importance of supporting the development and finance of seniors housing, and are excited to have worked with Greystone and Oakmont to bring the Revolving Credit Facility to seniors housing,” says Steven T. Schmidt, national director, Seniors Housing Group at Freddie Mac. “Greystone has served as a trusted partner to date, and we look forward to working with more of their borrowers.”