This project involves the purchase of an existing 179-unit assisted living facility in the Philadelphia metropolitan market, which is part of an adjoining medical facility which provides care to elderly patients. The proposed building purchase is an off-market transaction where the seller owns the adjoining medical building, and has agreed to a related-party sale well below market value, with the intention of rehabilitation of the property and reopening it as a licensed nursing home facility.
The property is fully licensed but not operational. But the borrower has extensive experience in this arena, currently operating three other similar facilities. He has transformed several other properties of similar nature, selling off major equity components, including one for over $9M in cash. No one will finance the property in it’s current stataus until rehab takes place. The value of the property as-is is $17M, and as completed is $41.7M. Our loan amount is $2.5M, or 15% LTV of current value.
The property is located in a highly desirable area within the Philadelphia metro area, just across the river from downtown. It is a highly established area with complimentary businesses and the plans include an expansion of a dialysis center to the northwest of the property. Our loan is for acquisition only, as the construction loan is already approved by another lender.
We have two take-out commitments from different lenders once the property is ready for full construction in approximately 4 months.