CLW Health Brokers $9.5M Sale of Alabama Retirement Community

TUSCALOOSA, AL--CLW Health Care Services Group of Tampa, FL  is pleased to have represented Capstone Village, Inc. in the 9.5 million sale of Capstone Village, (top left photo)  an Entrance Fee Continuing Care Retirement Community located on the campus of The University of Alabama in Tuscaloosa, Alabama.

The 159-unit, 24-acre  Capstone Village includes 22 Independent Living Garden Homes, 108 Independent Living Apartments, and a 29-unit Health Center (13 Assisted Living and 16 Memory Care units).
Tuscaloosa News.com reports the university  will not be responsible for about $51 million in mortgage bonds. The university will assume payback of deposits and owe $800,000 immediately and another $2.1 million when vacant units are resold.

Sale will be official once a court order is obtained. Trustees approved buying Capstone Village, on the eastern edge of campus, for about 20 cents on the dollar.

“Given the location of Capstone Village and the fact that many of the residents, if not most of the residents, are friends of the university, it’s important for us to protect this piece of property and our relationship with the inhabitants,” UA President Robert  E. Witt told trustees.

Built in 2005, Capstone Village sits on 24 acres of UA’s campus and has 159  units in a 228,000-square-foot facility, with 22 patio homes totaling 35,000 square feet behind it. It’s valued at $40 million, said Lynda Gilbert, (middle left photo)  UA vice president for financial affairs.

Under the sale terms, UA will pay $9.5 million to Capstone’s lenders but will not be responsible for about $51 million in mortgage bonds. In other words, UA would own the community outrightwhile Capstone’s lenders will take a loss.

“The bondholders have decided they no longer want to be in the retirement community business, so they’re moving away from those type of investments, and this is one of their last commitments to these types of facilities,” Gilbert told trustees. “They are just cleaning up financial statements, and we were able to take advantage of their changes of philosophy.”

UA officials first floated the idea of a retirement community on campus in the early 1990s, and in 1998, trustees leased 24 acres off Fifth Avenue East to Cooperative Retirement Services  of America, based in Memphis, Tenn.

CRSA set up Capstone Village Inc., the nonprofit company that developed and marketed the $45 million complex. Although several prominent current and former UA staff members serve on the company’s board of directors, the community has been independent of the university and pays rent to UA.

“It’s a major accomplishment for our long-term plans,” trustee chairman Finis St. John said. Capstone will continue to operate as a retirement community, said Debbie Lane (lower right photo), UA spokeswoman.

“We plan to make sure (it)continues to be a vibrant retirement community for a long time,” she said.

UA plans to keep Capstone Village as a nonprofit, but there has been no decision on whether its staff will become university employees, Lane said.

UA will pay the $9.5 million from cash reserves, but, under the resolution approved by trustees, there is an option to include up to $14 million for the purchase in a future bond issue. The $4.5 million padding between the purchase price and the potential bond is in case UA has to spend any more on renovations or upgrades once it becomes owner of the facility, Lane said.

“We don’t anticipate needing it, but it will give us wiggle room if we do,” she said.

As part of the sales terms, UA will take over paying back residential deposits, which as long as vacancies are filled will not cost UA money long term.

Before residents can move in, they must pay an entrance fee, or deposit, which is 90 percent refundable when they move out and the unit is resold. Under the proposed sale terms, UA will assume payback of deposits and owe $800,000 immediately, which UA will pay from reserves, and another $2.1 million when vacant units are resold. The occupied units now have about $14 million in deposits that will become a revolving liability for UA.

The trustees’ executive committee approved the action Thursday by conference call. The committee can act on behalf of the full board so no other action is needed.

A court order approving the sale is still needed, but UA and Capstone’s lenders hope to close the sale before the end of the year.

Contact:
Allen McMurtry, CEO (lower left photo) CLW Health Care Services Group, 4301 Anchor Plaza Parkway, Suite 400, Tampa, FL 33634, (813)-349-8349, CLW Health Care Services Group