CBRE Capital Markets - Senior Housing Construction Financing: Azpira Place of Lake Zurich

CBRE Capital Markets professionals continue to prove that the market is open by working with owners and investors to provide creative sales and debt solutions for their clients. Below are the highlights of a recently completed loan origination:

Azpira Place of Lake Zurich:

Aron Will, Executive Vice President of CBRE National Senior Housing has arranged construction financing on behalf of a joint venture between Pathway Senior Living (“Pathway”; Developer/Operator) and Virtus Real Estate Capital (“Virtus”; institutional equity partner) for the construction of the Azpira Place of Lake Zurich (the “Property”). The Property is a to-be-built, class “A”, Assisted Living/Supportive Living Facility (“SLF”) located in Lake Zurich, IL (Chicago MSA). The Property will be managed by Pathway.

The Property will consist of 120 Assisted Living units. The 105,000 square foot, three-story building will be situated on a 5.82 acre parcel and is located in the west end of Lake Zurich, a mature, affluent suburb 33 miles northwest from the Chicago Loop. Lake Zurich is neighbored by other affluent municipalities with high-value home sales and a high percentage of seniors age 65+: Barrington, North Barrington, and Lake Barrington to the west, Mundelein to the northeast, Wauconda to the northwest, Hawthorn Woods and Long Grove to the east. Fox River Grove and Cary are also within a 7-mile radius. Pathway has operated SLFs in the state of Illinois since 1997 and is intimately familiar with the model. The percentage of SLF units will give the Property a distinct competitive advantage with regard to their product offering in the marketplace.

CBRE secured a 70% LTC, $18.313 million, 4 year floating rate construction loan with 36 months of Interest Only. The loan was placed through a regional bank.

Pathway Senior Living is a privately held, Chicago-based senior housing company founded in 1997 and managed by an experienced team dedicated to improving the lives of older adults. Today, the company operates 20 seniors communities consisting of over 1,300 Assisted Living units and over 600 senior apartments in the Chicago area and Wisconsin. Pathway has developed 22 senior housing communities from the ground up; 18 of which are in Chicagoland. They currently have a very robust development pipeline in Chicago consisting of four projects in various stages of development in the northern and western suburbs. Pathway’s growth will focus on high-quality, predominantly private pay communities in underserved markets in need of high-acuity Assisted Living and Memory Care in Illinois and the surrounding states.

Founded in 2003, Austin, Texas based Virtus Real Estate Capital is a real estate private equity sponsor focused on recession-resilient asset classes. Virtus is composed of a seasoned group of professionals who bring together an extensive array of skills and experience. Since 2006, the Virtus Healthcare team has invested in over $800MM of senior housing and medical office assets as a team. Members of the team have worked together for numerous years and have honed an approach to real estate investing that places an emphasis on downside protection as well as upside potential. Virtus employs an income plus growth strategy within all of its funds. Since inception, Virtus has been involved in 35 Investment Partnerships and Funds totaling $2.5 Billion in acquisition value. Virtus’ team consists of professionals formerly from some of the most respected operators in the nation. Few private equity fund teams have more experience within operating companies. Today, Virtus has partnered with LCB Senior Living, Leisure Care, American House and Pathway Senior Living.

CBRE completed over $2 billion in combined senior housing investment sales and loan originations in 2014. In 2014, CBRE originated over $808 million in senior housing debt across 60 assets and was Freddie Mac’s #1 Senior Housing Lender in the country. Year to date through June 2015, CBRE originated $940 million in senior housing debt across 46 assets. CBRE has been a Top 2 senior housing originator in the country from 2010 through 2014 and was the #1 Senior Housing/Age Restricted Lender in the U.S in both 2013 & 2014*.

Over $940MM in senior housing debt originations YTD June 2015 across 46 assets
Over $808MM in senior housing debt originations in 2014 across 60 assets
#1 Freddie Mac Senior Housing Lender in 2014
#1 Senior Housing/Age Restricted Lender in the US in 2013 & 2014*
Top 2 Senior Housing Lender in 2010, 2011, 2012, 2013 & 2014*
#1 Freddie Mac Lender in 2009, 2010, 2011, 2012, 2013 & 2014
Fannie Mae, Freddie Mac, HUD FHA, Mezzanine & Construction Debt Placement
$2 billion in Team’s Combined Senior Housing Investment Sales in 2014

*As per the Mortgage Bankers Association

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