Berkadia has closed on $327 million in fixed and variable rate financing for Brookdale Senior Living. The transaction was originated through Freddie Mac’s new Structured Pool Transaction program.
The loan will be used to refinance 28 senior housing facilities encompassing approximately 2,200 units. The 10-year, non-recourse structured pool transaction features a fixed rate loan component of $213 million, a variable rate loan component of $114 million, and a 30-year amortization schedule. Financing was through Freddie Mac’s Green Advantage program, providing competitive pricing to finance upgrades that reduce energy or water consumption.
Senior Managing Directors Heidi Brunet and Lisa Lautner of Berkadia’s Seniors Housing & Healthcare team originated the transaction.
“We were excited to work closely with Freddie to utilize their new Structured Pool Transaction program in order to meet Brookdale’s needs for this unique portfolio of facilities,” said Berkadia senior managing director Heidi Brunet, in prepared remarks. “As we look ahead to 2019, we anticipate that more owners and operators will be looking for greater flexibility in financing solutions in order to create more value across their property holdings.”
Added Brookdale treasurer George Hicks, “Brookdale places significant value in the ability to build flexibility into its capital structure, and we were very pleased to have been able to work with Berkadia and Freddie Mac to accomplish that on this transaction. The Seniors Housing Structured Pool Transaction allows us to achieve interest rate risk diversification by placing most of the debt into a fixed rate while allowing for the ability to obtain partial releases that can be repaid out of the variable rate portion.”
The Freddie Mac Structured Pool Transaction program targets large transactions. In addition, it offers enhanced structuring to meet borrowers’ express needs. Various options are offered, including combinations of fixed and floating rate debt components, no property assignments for the debt type, flexible releases and prepayments, faster joint underwriting path and other customizable features.
The Seniors Housing & Healthcare Group at Berkadia seeks to provide innovative and comprehensive solutions for complex independent living, assisted living, memory care and skilled nursing projects nationwide. In 2017, it completed more than $1.7 billion in loan volume, including closing more than $1 billion in financings in a single day.
“Freddie Mac has refined its Structured Pool Transaction program to achieve optimal flexibility for Senior Housing Borrowers who are financing crossed loan pools,” said Steve Schmidt, national director of Senior Housing at Freddie Mac Multifamily. Three large senior housing transactions have already been closed under the program’s various features.