LUTZ, FL-Palm Health Partners has received a commitment from HUD for construction financing for two skilled nursing and assisted living facilities. The two construction loans total $45.7 million, roughly 80% of the projects’ loan-to-cost.
The total price tag for the two projects is about $63 million, according to Joshua Hausfeld, vice president and loan originator in Love Funding’s Washington D.C. office. He obtained both loans on Palm Health Partners’ behalf.
Hausfeld arranged the loans through HUD’s section 232 program for healthcare facilities. The transactions were among the first construction loans to close under HUD’s LEAN program, and to accommodate the lengthy approval process, he arranged for the borrower to receive early start authorizations for both projects, which allowed West Palm Beach, FL-based Palm Health Partners to complete the required site, foundation and utility work for the project prior to closing.
“It really came down to the strength of the sponsorship – they have a group of 20 people who are the best in the industry – and the borrower’s previous operational successes and their strategy going forward,” Hausfeld tells GlobeSt.
The first project is Lutz Care and Rehabilitation Center, a skilled nursing facility in Lutz, FL, about 10 miles north of Tampa. Hausfeld arranged a $13.98 million, fixed-rate loan for the 55,227-square-foot facility. The 100% non-recourse loan boasts an interest rate of 5.38% for a 40-year term. It requires interest-only payments for the construction term.
Situated on 5.9 acres, the $20-million Lutz Care and Rehabilitation Center will be completed early next year. Designed by O’Keefe Architects of Tampa, FL, the $20 million project will consist of 120 beds in 68 units.
The second project, located in Wellington, FL, is a skilled nursing and assisted living facility dubbed Chatsworth at Wellington Green. Situated on 46 acres, the 139,800-square-foot facility will feature 120 skilled nursing beds and 52 assisted living beds. The facility will occupy only six acres; the rest of the parcel will be developed into 250 and 300 independent living units in the near future.
With a construction cost of roughly $43 million, Chatsworth at Wellington Green will receive a $31.8 million construction loan. Similar to the Lutz project, the loan is 100% non-recourse for a 40-year term and will have a fixed-rate of about 5.3%. It requires interest-only payments for the construction term.
Designed by MSA Architects of Miami, the project is scheduled completion later this year because Palm Health Partners completed a significant portion of the construction prior to closing the HUD loan.
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