Senior Housing and Healthcare Borrowers Need to Keep Funding Options Open, Expert Says

CHICAGO, IL--Many capital sources that have traditionally been there for industry borrowers get failing or near-failing grades in a new “report card” issued by one of the nation’s leading senior housing/healthcare lenders.

Speaking at a seminar jointly sponsored by Chicago-based Cambridge Realty Capital Companies and the Northbrook, Illinois-based accounting firm of Frost, Ruttenberg & Rothblatt, P.C., Cambridge Chairman Jeffrey A. Davis (top right photo) said FHA-insured HUD loans and loans from commercial banks remain the primary funding sources for long-term care and senior housing, to which his firm awards an “A” letter grade in the current credit crisis.

In the company’s scoring system, governmental conservators Fannie Mae and Freddie Mac have slipped a full letter grade to a B due to changes in underwriting, and taxable and tax-exempt bond funds earned the same letter grade as well.

Venture capitalists earned a C+ grade, but insurance companies, pension funds, investment banks and the equity markets earned near-failing marks (a D), and conduits (REIMICs) are off the grid entirely with a failing grade.

“Despite all the disheartening news on the economic front, funding is still available for qualified projects at rates that are very competitive by historical standards. Borrowers shouldn’t automatically assume that it’s impossible to improve their financial situation in the current climate,” he advised.

The jointly sponsored seminar was entitled The Changing Landscape … How Our New President and the Current Economic Slowdown Impact the Economics of Senior Housing and Long-Term Care in Illinois.

Presenters for the accounting firm were Ted Bokios, CPA, a senior manager in Accounting and Auditing; Steven N. Lavenda, CPA, (middle right photo) founding director of FR&R Healthcare Consulting; Betsy Anderson, (top left photo) an officer and director of FR&R Healthcare; and Gary H. Barron (bottom left photo) , director and founding member of the FR&R Tax Department.

Also on the program was Cambridge Realty Capital Ltd. of Illinois CEO Andy Erkes.

Davis believes the President’s stimulus package will have a long-term positive impact on the senior housing/healthcare industry. For the short-term, he outlined the issues owners will need to consider when pursuing capital in today’s tight credit market.

“Now more than ever, it’s important for borrowers to be ready with a thoughtful business plan, a thorough market feasibility study and a financial forecast that includes appropriate financials for the business.

"The plan should detail the qualifications of principals and fully describe how the funds will be used. An up-to-date title report should also be provided,” he said, adding:

“Preparation is the key to a successful presentation, and borrowers must be ready to provide requested information and documentation in a timely fashion. It’s important for borrowers to thoroughly understand their product. And it helps to know where the lender’s hot buttons reside.”

Erkes described the organizational and administrative changes that have revolutionized the way HUD processes healthcare loans for its Section 232 funding program. In making long overdue changes, HUD has consistently sought the advice and counsel of experienced FHA-MAP-approved lenders, and continues to work on timing and product delivery issues, he noted.

Responsibility for processing HUD 232 loans has shifted to FHA’s Office of Insured Health Care Facilities (OIHCF) in Washington, D.C. Loan applications are now being filed electronically, feature fewer exhibits and require conventional market-based appraisals instead of HUD-specific reports.

The goal is for HUD to be able to review an application, issue a commitment and get to closing within 40 days, Erkes said.

Contact: Evan Washington, Phone: (312) 521-7603, Fax: (312) 357-1611, E-Mail: ew@cambridgecap.com

HFF named by First Centrum, LLC to secure joint venture equity for Daniel Island, SC Project

WASHINGTON, D.C. – The Washington, D.C. office of HFF (Holliday Fenoglio Fowler, L.P.) has been named by First Centrum, LLC to secure a joint venture equity partner for the development of Verena at Daniel Island, (top right photo) a 110-unit, senior independent living apartment community on Daniel Island, an island town in Charleston, South Carolina.

HFF directors Dave Nachison (top left photo) and Alan Davis (middle right photo) are leading the effort to arrange the equity financing on behalf of the sponsor.

“First Centrum, LLC is confident in their ability to secure construction and mini-permanent financing for the project and is seeking a joint venture partner that will provide approximately $5.0 million in equity,” said Davis.

“The project generates a return on cost that clearly justifies and compensates for taking development risk even in this economic environment.”

Located in the center of Daniel Island’s urban village, Verena at Daniel Island residents are within walking distance of retail shops, restaurants and community amenities accessible via miles of dedicated pedestrian paths.

The one- and two-bedroom apartments will have “condo level” finishes and will range in size from 658 to 1,385 square feet.

Community amenities will include a community/dining room, coffee bistro, hair salon, exercise center, wellness and massage room, theater, art studio and game room. Each resident’s rent will also include daily breakfast and another served meal, all utilities except phone and cable, weekly maid service, a dedicated bus for transportation and access to a full time activities director.

First Centrum brings more than 30 years of multifamily and senior housing development experience to this project and applies a fully integrated approach with in-house architecture, general contracting, development and property management capabilities.

First Centrum's development efforts have included luxury rental, single family and multifamily for-sale communities restricted or targeted to residents 55 years of age and older.

Contacts:

David R. Nachison, HFF Director, (202) 533-2500, dnachison@hfflp.com

Alan M. Davis, HFF Director, (202) 533-2500, adavis@hfflp.com

Kristen M. Murphy, HFF Associate Director, Marketing (713) 852-3500, krmurphy@hfflp.com

Interstate Hotels & Resorts Elects Chris Shackelton to Board

ARLINGTON, VA—Interstate Hotels & Resorts (NYSE: IHR), a leading hotel real estate investor and the nation’s largest independent management company, announces that Chris Shackelton has been elected to its board of directors, bringing the total number of directors to nine.

Shackelton is a managing partner and co-founder of Coliseum Capital Management, LLC, currently Interstate’s largest shareholder with 3.7 million shares held, or approximately 12 percent of the company’s outstanding shares.

Coliseum is a private investment partnership that makes long-term investments in both public and private companies.

Prior to Coliseum, Shackelton was an analyst at Watershed Asset Management. Previously, he worked in the investment banking division of Morgan Stanley & Co.

“Chris’s impressive depth and breadth of experience encompasses a wide range of investment and financing activities, and he will be a valuable resource to our board,” said Thomas Hewitt, (top right photo) chief executive officer.

“As Coliseum is our largest shareholder, Chris already is thoroughly knowledgeable about our company and will be able to make an immediate contribution.”

CONTACTS:

Julie Tullbane, Daly Gray Public Relations, T 703-435-6293, F 703-435-6297, julie@dalygray.com

Bruce Riggins, Chief Financial Officer, Interstate Hotels & Resorts, (703) 387-3344

CB Richard Ellis No. 1 in U.S. Investment Sales Activity in 2008

Leader in Office, Industrial, Multi-Family and Retail Transactions

LOS ANGELES, CA – CB Richard Ellis Group, Inc (CBRE) was the No. 1 firm in U.S. investment sales activity on a national basis in 2008, with a 17.9% market share—according to Real Capital Analytics' 2008 data.

RCA, which tracks national commercial real estate sales of $5 million and greater, found that CBRE, with $25.3* billion in transaction values, had a commanding 10.3 percentage point advantage over the second place firm and sold more property than the number two and three firms combined.

CB Richard Ellis was the leader in office, retail, industrial and multi-family properties. RCA estimates that over $141 billion** of office, industrial, retail, multi-family and hotel properties were sold in the U.S. in 2008.

"During challenging times clients seek out the platform and the professionals that delivers superior market insight and unrivaled transaction execution," said Gregory S. Vorwaller, (top right photo) CBRE Investment Properties President. "2008's results underscore that CBRE is the trusted advisor of choice across all categories of commercial real estate investing."

Other significant findings include:

CBRE was the nation's top firm in office sales in 2008 with a market share of 21.9% representing $11.5 billion of transactions.

CB Richard Ellis' market share in multi-housing sales was an industry leading 18.3% in 2008. The firm's $6.8 billion in sales was double that of it nearest competitor.

In industrial sales, CBRE dominated with $ 4.5 billion in sales, for a market share of 21.4%/--three times the nearest competitor.

CB Richard Ellis recorded the highest market share—9.7%—in the retail sector, totaling $1.9 billion in transactions in 2008.

* Does not include CBRE's individual property sales valued at less than $5 million.** Excludes privatization activity.

Contact: Robert McGrath, 212.984.8267, robert.mcgrath@cbre.com

The Georgian Terrace Hotel Names Carl Dees General Manager

ATLANTA, GA—Officials of The Georgian Terrace Hotel, (top right photo) Atlanta’s iconic hotel, today announced the promotion of Carl Dees to general manager.

In his new role, Dees will be primarily responsible for overseeing the completion of the property’s current $11 million renovation, as well as the day-to-day operations of the hotel.

The luxury, all-suite hotel is owned by a real estate fund managed by San Francisco-based Fremont Realty Capital, with management provided by Virginia-based Crescent Hotels & Resorts.

“Carl Dees is a well respected, hotel professional with more than 25 years of hospitality experience,” said Matthew Reidy, (middle left photo) senior managing director of Fremont Realty Capital.

“He brings with him a successful track record of directing properties under such brands as Hilton and Marriott, while improving upon their bottom lines. His proven leadership skills, high energy and creative approach to hospitality will help drive the renovation project and long term success of The Georgian Terrace.”

Before joining The Georgian Terrace Hotel, Dees was general manager of the 224-room Livonia Marriott in Mich., where he oversaw a $4.9 million renovation.

Prior to that, he was general manager of the Detroit Airport Marriott in Romulus, Mich., which generated $10 million in annual revenue under his supervision. He studied Business Administration at Mississippi State University, Meridian campus.

Built in 1911, The Georgian Terrace Hotel, located at 659 Peachtree Street NE in midtown Atlanta and listed on the National Register of Historic Places, has played host to some of Atlanta’s most preeminent events, including the star-studded party for the 1939 premiere of the classic, Oscar-winning film, “Gone with the Wind.”

For more information, please contact the hotel at (404) 897-1991, or online at the hotel’s Web site: http://www.thegeorgianterrace.com/.

Additional information about Crescent Hotel & Resorts may be found on the company’s Web site http://www.chrco.com/.

Contact: Chris Daly, Vice President, Daly Gray Public Relations, ph: 703-435-6293, chris@dalygray.com

C&W negotiates lease for new Firehouse Subs in Leesburg, FL

ORLANDO, FL –Cushman & Wakefield of Florida, Inc. (C&W) announced the lease of 2,400 sf at 717 North 14th Street in Leesburg for a new Firehouse Subs Restaurant.

Headquartered in Jacksonville FL, Firehouse Subs has 349 locations in 17 states nationwide. This seven-year lease represents the 59th Firehouse Subs location in Florida.

Retail Brokerage Associate Mindy Boehm (top right photo) negotiated the lease, representing the landlord, Walling Enterprises, in the transaction for the property.

Contact: Brook Hines, Tel: 407-541-4401, brook.hines@cushwake.com
www.cushwake.com