HFF arranges $21 million refinancing for Hotel Tria in Cambridge, MA

BOSTON, MA – HFF announced today that it has arranged a $21 million refinancing for Hotel Tria (top left photo), a 121-room boutique hotel in Cambridge, Massachusetts.

HFF worked exclusively on behalf of KW Development LLC to secure a new $16 million first mortgage provided by Ladder Capital Finance LLC. 

In a separate transaction, HFF also advised the ownership in securing a $5 million mezzanine and preferred equity loan on behalf of KW Development from a private investor.  The combined proceeds of these loans were used to refinance the existing loan on the property.

Hotel Tria is located at 220 Alewife Brook Parkway on Route 2 in Cambridge in the burgeoning neighborhood of West Cambridge.  The property benefits from the recent and planned development in the area and its proximity to the Alewife MBTA train station. 

Acquired by the owner in 2008, the property underwent an extensive renovation and expansion in 2009, which included the renovation of the existing 66 guest rooms along with the addition of 55 guest rooms.

 The property is part of the Best Western franchise and has earned the distinction of being named a Best Western Plus hotel by the brand.  Hotel amenities include a business center, fitness center, shuttle service, bar and on-site Starbucks.

The HFF team representing KW Development LLC was led by senior managing director Riaz Cassum (middle right photo) and director Lauren O’Neil.

KW Development LLC (“KW”), based in Wayland, Massachusetts, was formed in 1984 by Robert Karol to develop, own and manage lodging properties and commercial real estate. 

Over the years, KW has developed, owned and managed a successful hotel portfolio under the Marriott, Starwood, US Franchise Systems and Choice Hotels brands as well as a variety of other commercial real estate assets.

Contacts: 

              

RIAZ A. CASSUM

 HFF Senior Managing Director                         

617) 338-0990                                                   

rcassum@hfflp.com   

LAUREN O’NEIL                               

HFF Director                                 

(617) 338-0990                               

loneil@hfflp.com                            

 MYRA F. MOREN

HFF Director, Marketing

(713) 852-3500

mmoren@hfflp.com

Cambridge Arranges $8.46M HUD Construction and Permanent Mortgage Loan for Alden Estates of Skokie, IL

CHICAGO, IL--Cambridge Realty Capital Companies has arranged a 12-month construction and 40-year FHA-insured permanent mortgage loan for Alden Estates of Skokie (top left photo), a 56-bed skilled nursing home facility in Skokie, Ill.

Cambridge Chairman Jeffrey A. Davis (lower right photo)  said the $8.46 million HUD Section 232 loan will refinance and fund substantial rehabilitation work at the property.

The fully-amortized loan was arranged for the buyer, an Illinois limited liability company, and underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business unit that underwrites HUD loans.

The interest rate was not disclosed.

Cambridge is the creator of The Signature Experience™, a four-step process designed to transform the traditional lender/borrower relationship and identify “ideal” capital solutions for worthy projects. The company has a national origination office in Los Angeles, and numerous correspondent and brokerage relationships nationwide.

Contact:
Evan Washington, Phone: (312) 521-7604, Fax: (312) 357-1611, E-Mail: ew@cambridgecap.com

Cambridge Realty Capital Chairman Jeff Davis Co-Authors Article on Senior Living Property Sector

CHICAGO, IL--How the senior living property sector is perceived by the institutional investor is explored in an article published in a recent issue of the Journal of Real Estate Portfolio Management.

The article, co-signed by Elaine Worzala (bottom left) of Clemson University, Judith F. Karofsky of Madison, Wisconsin-based Real Estate Insites LLC, and Cambridge Realty Capital Companies Chairman Jeffrey A. Davis, (top right photo)  provides both an academic and business perspective on the subject.

The authors point out that the demand for real estate products designed with elderly end-users in mind is growing. They also note that the risk/return profiles of these investments are shifting.

According to an executive summary prepared by the authors, the aim of the research was to shed light on the perceived risks and returns associated with the specific types of investments available in the senior housing sector at this time.

Members of the Pension Real Estate Association were queried to learn how they view this property sector compared with alternative real estate investments and more traditional institutional investments, such as stocks and bonds.

The researchers learned that institutional investors do not appear to be investing in most of the seniors housing product available because they perceive it to have relatively high risk compared to more traditional real estate investments or alternative investments like international real estate.

The authors provide an in-depth analysis of the major senior housing sub-sectors and offer recommendations regarding what can be done to improve investor perceptions.

The complete Journal of Real Estate Portfolio Management article is posted in the Papers and Presentations section of the Resource Center tab on the www.cambridgecap.com website.

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

Cambridge Says Company's First Closing Under HUD's New Lean Program is Skilled Nursing Home in Beaver Dam, KY

CHICAGO, IL--Cambridge Realty Capital Companies says the 83-bed Beaver Dam Nursing & Rehab Center (top right photo) in Beaver Dam, Ky., is the first nursing home facility to be refinanced by the company using HUD’s new Lean funding process.

Cambridge Chairman Jeffrey A. Davis said a $4.2 million FHA-insured loan was arranged for the owner, a Kentucky limited liability company, by Cambridge Realty Capital Ltd. of Illinois, the Cambridge subsidiary that underwrites HUD loans for nursing home facilities.

Chicago-based Cambridge is one of the nation’s leading senior housing/healthcare lenders, with more than 300 closed transactions totaling more than $2.75 billion since the mid-1990s.

The company has consistently ranked among the top FHA-approved HUD lenders in the country.

Davis said the Beaver Dam nursing facility has 58 skilled and 25 personal care beds. The fully-amortized 26-year first mortgage loan was underwritten utilizing HUD’s Section 232 pursuant to 223(f) program, which is used to refinance existing HUD loans.

“We‘re especially pleased to be able to announce this historic first for Cambridge. We fully anticipate that it will be the first of many transactions underwritten by our company in an exciting new era for HUD and healthcare borrowers,” Davis said.

He points out that sweeping changes have radically altered the way HUD applications and loans are being processed and approved.

By organizationally restructuring and adopting the highly touted “Lean” management concept pioneered by Toyota Motor Corp., HUD made a bold commitment to process loans on a timetable that more closely resembles the timing for conventional loans, he noted.

In a significant change, responsibility for processing HUD Section 232 loans has shifted from HUD field offices to the FHA’s Office of Insured Health Care Facilities (OIHCF) in Washington, D.C., which also has jurisdiction over the HUD Section 242 hospital mortgage insurance program.
“The idea behind this move was to create a unified, single-source for program and policy development, and a more consistent and user-friendly platform for borrowers and lenders,” Davis said.

With the Lean management process, loan applications are filed electronically, feature fewer exhibits, and require “conventional” market-basket appraisals instead of HUD-specific reports. Eventually, the goal is to review an application, issue a commitment and get to closing within 40 days, he added.

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

Cambridge Realty Capital Provides $90.6M in HUD-Insured Loans to Refinance Portfolio of Nursing Homes in Illinois

CHICAGO, IL--Cambridge Realty Capital Companies reports the closing of $90.6 million of HUD-insured Section 232 loans to refinance a portfolio of 10 Intermediate and Skilled Care nursing facilities.

The 10 HUD-insured loans were closed and funded simultaneously to accommodate the payoff of a single credit facility.

Loans for individual properties in the portfolio ranged in size between $3.1 million and $14.8 million.

The 10-loan portfolio includes Southview Manor and Community Care Center in Chicago, and the West Chicago Terrace, Frankfort Terrace, Crestwood Terrace, Kankakee Terrace, Bourbonnais Terrace, Joliet Terrace, The Terrace of Waukegan, and Sycamore Terrace of Quincy.

Combined, the properties include 1,488 intermediate-care and 65 skilled-care beds. Terms for the fully-amortizing loans ranged between 27 and 35 years.

Cambridge Chairman Jeffrey A. Davis (middle left photo) said the first-mortgage loans were arranged for the owner, an Illinois limited liability company, utilizing HUD’s Section 232/223(f) program.

The loans were underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge subsidiary that underwrites HUD-insured loans for healthcare facilities.

“The ability to obtain HUD financing to close complex transactions of this kind sends an important message to multi-facility operators,” he said. “The transaction is indicative of the role HUD 232 financing can play for multi-facility owners in the current capital-constrained environment,” Davis believes.

Cambridge worked closely with Catalyst/Cambridge Healthcare Finance's National Originations Manager, Hymie Barber. Catalyst/Cambridge’s longstanding and successful relationship with Cambridge enabled Catalyst/Cambridge to facilitate the transaction from start to closing with aid and assistance from Cambridge at key and critical points in the transaction.

Moving forward, the Cambridge chairman anticipates that HUD will become an increasingly more attractive option for smaller and larger multi-facility owners alike as capital availability strains in the capital markets persist.

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

Cambridge Responds to 27 Loan Origination Requests in January Totaling $364.6M

CHICAGO, IL, Feb. 18, 2009--As the economy continued to slow, Cambridge Realty Capital Companies reports processing 27 loan origination requests totaling $364.6 million in January.

Chairman Jeffrey A. Davis (top right photo) said the company processed about the same number of loan requests in 2008, but the dollar volume for the current year was substantially below the $538.4 million tally for the same month last year.

Cambridge is one of the nation’s leading senior housing/healthcare lenders, with more than $2.75 billion in closed transactions since the mid-1990s. Davis points out that lenders close a relatively small percentage of origination requests received but believes it’s useful to track this information as an indication of market directions.

“What the data tells us is that borrowers haven't lost interest. But its obvious there’s been a drop in transaction size, with fewer new construction mega-projects in the mix to skew the volume total,” he noted.

“This trend has begun to settle in place over the past six months,” he added.

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

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

Cambridge Reports Loan Origination Requests in 2008 Relatively Strong Despite Economic Meltdown

CHICAGO, IL--In a year in which stocks imploded and the credit markets lost their way, efforts by senior housing/healthcare borrowers to improve the financial underpinning for their businesses never waned.

Cambridge Realty Capital Companies Chairman Jeffrey A. Davis (top right photo) says the company processed 333 loan origination requests in 2008, a total only slightly less than the 357 requests reviewed a year earlier.

But the total dollar volume for all processed requests in 2008 was somewhat higher, $4.7 billion compared with $4.3 billion a year earlier.

And the total number of beds/units was also up, from 53,228 in 2007 to 55,614 a year later.

Davis points out that lenders close a relatively small percentage of loan origination requests received, but believes it’s useful to track this information as an indication of market directions.

“Competitive interest rates contributed to relatively strong demand throughout the year and remain in place as the New Year begins,“ he noted.

“In the final quarter of 2008, the economic news was particularly bleak and origination requests were down 11 percent, from 110 in 2007 to 97 in 2008. However, dollar volume was not off dramatically, falling from $1.30 billion in the fourth quarter of 2007 to $1.23 billion for the same period in 2008,” he said.

Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge today has three distinctive business units: FHA-insured HUD loans, conventional financing and investments and acquisitions.

The company is one of the nation’s leading senior housing and healthcare debt and equity capital providers with more than 300 closed transactions totaling more than $2.75 billion since the mid-1990s.

Contact: Evan Washington, Phone: (312) 521-7603. Fax: (312) 357-1611.

E-Mail: ew@cambridgecap.com

Cambridge Chairman Believes Borrowers Have Stake in Changes Impacting HUD 232 Healthcare Funding Program

CHICAGO, IL--Now that the dynamic administrative changes that have streamlined the way that HUD processes FHA-insured healthcare loan applications under its Section 232 funding program are effectively in place, the federal agency has begun to focus more thoughtfully on what happens after loans are closed and money changes hands.

“In the past, asset management appeared to be little more than an afterthought. However, now that responsibility for managing the HUD 232 program has shifted to the FHA’s Office of Insured Health Care Facilities (OIHCF), the agency is moving rapidly to change this perception,” funding expert Jeffrey A. Davis (top right photo) observes.

Davis is Chairman of Chicago-based Cambridge Realty Capital Companies, one of the nation’s leading senior housing/healthcare lenders with more than 300 closed transactions totaling more than $2.75 billion since the mid-1990s. Over the past 10 years the company has consistently ranked among the top HUD 232 healthcare lenders in the country.

He points out that FHA has adopted the Toyota Motor Corp.’s highly touted Lean management process to simplify and reduce the time it takes to review and process HUD applications.

The administrative shift to OIHCF created a unified single source for program and policy development and a more consistent and user-friendly platform for borrowers and lenders.

“Now OIHCF is rolling out new criteria and establishing new matrices to better manage and monitor the existing loans on their books. The emphasis is on closely monitoring loan assets so problems are identified earlier or avoided altogether,” he said.

A report issued by the agency notes that the asset management function for the HUD 232 program has historically relied on physical paper files. The emphasis has been geared toward regulatory enforcement rather than loss minimization, and little training, guidance or support was provided to the individual asset manager.

All this changes with a 232 program that offers sophisticated electronic systems for tracking asset management files and monitoring program activities.

Moving forward, Davis believes the situation dramatically improves, as OIHCF utilizes Lean production philosophy and techniques in concert with quality assurance criteria established by former U.S. Commerce Secretary Malcolm Baldridge (middle left photo) and enacted into law as the Malcolm Baldridge National Quality Improvement Act of 1987.

“The Baldridge criteria created the impetus for a new public-private partnership based on strategic planning and the establishment of viable quality improvement programs to strengthen the nation’s competitive posture and leadership role. OIHCF has made it clear that the criteria for performance excellence envisioned by Baldridge and improved upon by others will be utilized as part of its ongoing efforts to make meaningful improvements in the way assets are managed for the healthcare funding program,“ he said.

Davis said OIHCF acknowledges that the Lean development and asset management effort greatly depends upon responsible participation by lenders. Account executives are being assigned to lenders with responsibility for development pipeline management, quality assurance, and monitoring and asset management for the lenders’ portfolios.

The account executive’s role is not to underwrite loans but to effectively function as the lender’s advocate and as a quality control officer.

“The changes are important to borrowers because, at the end of the day, everyone involved with the HUD 232 process is a stakeholder in its success. Difficulties arise when loans are not actively monitored.

“From the borrower’s perspective, the changes will mean more active submission of operating financial statements and clinical records, and more frequent visits by consultants representing the lender. For lenders, changes involve learning to apply a new discipline as they become much more involved in the loans they create,” he said.

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

Cambridge Processes 22 Loan Origination Requests in November totaling $347.3M

CHICAGO, IL--The general slowdown in the number of loan origination requests processed by Cambridge Realty Capital Companies continued into November, but dollar volume for requests reviewed by the company were up appreciably, Chairman Jeffrey A. Davis (top right photo) reports.

Davis said the company processed 22 loan origination requests totaling $347.3 million in November. This compares with 24 requests totaling $294.9 million for the same month last year.

Over the past 12 months, Cambridge has processed 341 loans totaling $4.9 billion. In contrast, the company received 366 loan requests totaling $4.5 billion for the same 12-month period in 2007.

Davis points out that lenders close a relatively small percentage of the loan origination requests received, but believes its useful to track this information as an indication of market directions.

“There doesn’t appear to be a lot of evidence that borrowers are losing heart despite the severity of the current credit crunch,” he said.

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

Expert Says Funding Options Available in Sub-Acute Nursing Field

CHICAGO, IL--Nursing home owners wishing to expand and tap into profits from sub-acute nursing business are not without funding options.

“FHA-insured HUD loans can be an ideal vehicle for funding these projects, but conventional lenders with healthcare specializations are also interested in this profitable facet of the business,” says Cambridge Realty Capital Companies Senior Vice President Brent Holman-Gomez. (top right photo)

Cambridge is one of the nation’s leading senior housing/healthcare lenders, with more than 300 closed transactions totaling more than $2.75 billion since the mid 1990s. The company has consistently ranked among the leading HUD 232 lenders and offers conventional funding options as well.

Holman-Gomez points out that four years ago, sub-acute nursing was a new concept. Today, the business model is widely recognized as a proven bottom-line contributor and is projected to become an even more important profit center in the future.

Most typically, sub-acute residents enter the nursing home following hospital stays of three or more days and hope to exit and return to their own homes following a short-term stay. Primarily, the concept is being marketed to individuals with financial resources and those with Medicare benefits, which cover costs for up to 90 days.

Holman-Gomez points out that serving this market segment is more capital-intensive, with owners investing more in both staff services and facilities.

Significant investments are being made to improve older homes and create the sort of environment and ambience that appeals to sub-acute residents.

Some owners of existing homes are dedicating entire wings of their buildings to this more profitable sub-acute market segment, while others are completely retro-fitting their facilities to cater to these residents.

In what’s becoming a more competitive industry, owners hoping to attract this lucrative business are stepping up marketing efforts to doctors and hospitals. The trend has been for owners to offer improved services and more spacious private rooms and a “homey” ambience to attract residents.

Holman-Gomez believes HUD is an excellent choice to fund these improvements because the high loan-to-cost value on these loans minimizes the amount of additional investment that will be needed by the owner.

Owners can either underwrite existing business income with increased loan proceeds for minor to mid-sized improvements, or underwrite projected business income from a substantial new construction project.

While the capital markets are tight, some conventional lenders with healthcare specializations are providing funding to refinance with expansion and for accounts receivable financing to fund business growth, he said.

Contact: Evan Washington, Phone: (312) 521-7603. Fax: (312) 357-1611

E-Mail: ew@cambridgecap.com

Loan Origination Requests are Down Slightly in October, Cambridge Realty Capital Reports

CHICAGO, IL--With no end to the credit crisis in sight, loan origination requests processed by Cambridge Realty Capital Companies for the month of October were down slightly from the same month last year and loan dollar volume was off as well.

But year-to-date volume remained ahead of last year’s total for the same 10-month period, as senior housing/healthcare borrowers continued to try finding ways to get things done despite election year distractions, the stock market crash and all the pessimistic news impacting the economy, Cambridge Chairman Jeffrey A. Davis (top right photo) observed.

In October, Cambridge processed 24 origination requests totaling $278.1 million compared with 30 requests totaling $368.4 million for the same month last year. For the year-to-date, origination requests were down from 310 in 2007 to 286 this year.

However, year-to-date dollar volume of $4.3 billion in 2008 was ahead of last year’s total of $3.9 billion through October. Presumably, attempts to fund more expensive new construction activity is pushing this year’s volume totals higher, he speculated.

Davis points out that lenders close a relatively small percentage of the loan origination requests received, but believes it’s useful to track this information as an indication of market directions.

“What the numbers suggest to us is that the industry is dealing with a lot of bad news rather well,“ he said.


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

Cambridge Provides $12.6M Insured HUD Loan to Fund Purchase of Danville, IL Nursing Facility

CHICAGO, IL--Cambridge Realty Capital Companies has provided a $12.6 million FHA-insured first mortgage loan to fund the purchase of Hawthorne Inn of Danville (top right photo) , a 140-bed skilled nursing/ board and care facility in downstate Danville, Ill., Chairman Jeffrey A. Davis (bottom left photo) announced.

The fully-amortized, 35-year term mortgage was arranged for the purchaser, an Illinois limited liability company, by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business unit that underwrites FHA-insured loans.

The purchase was funded using the HUD Section 232 pursuant to Section 223(f) funding program.

Davis said the property has 64 skilled nursing and 76 board and care units. Interest rate for the loan was not disclosed.

Contact: Evan Washington, Phone: (312) 521-7603. Fax: (312) 357-1611

E-Mail: ew@cambridgecap.com

Cambridge Capital's Davis Says Difficult Times for Financial Markets Create Opportunity for Senior Housing and Helathcare Borrowers

FHA-Insured HUD Loans Remain Rock-Solid in Tumultuous Environment

CHICAGO, IL--Dramatic moves by world financial leaders appear to have staved off a meltdown of the global financial system, but economists broadly agree that what’s ahead for the economy isn’t all that rosy.

“By most accounts, the U.S. already is in a recession that many believe could be long and protracted. The freeze gripping the banking industry is beginning to thaw but it will take time for the capital markets to begin functioning in a normal way,” cautions funding expert Jeffrey A. Davis. (top right photo) “We’ve pulled back from the precipice, but a host of other problems remain,“ he observes.

Davis is Chairman of Cambridge Realty Capital Companies, one of the nation’s leading senior housing/healthcare lenders with more than $2.75 billion in closed transactions since the mid-1990s. The company has three distinctive business units: FHA-insured HUD loans, conventional financing and investments, and acquisitions.

“At this time, many traditional lenders are out of the market. Senior housing/healthcare borrowers are relying primarily on government-insured programs or local and regional banking contacts to meet their funding needs.

“As anticipated, FHA-insured HUD loans have been rock-solid in the current crisis, with rates near historic lows. Conventional loans have and will continue to be adversely impacted by developments in the capital markets, but remain a viable option for some borrowers,” he noted.

Davis points out that effective interest rates for conventional loans have increased in recent weeks, while loan-to-value ratios have moved in the opposite direction.

(Pinecrest Care Center, DeKalb, IL, middle right photo)

As the financial system began to freeze up, bankers became increasingly more conservative in their overall activities.

“To avoid surprises, owners are well-advised to spend more time communicating and talking with their bankers," he believes.

"Because new developments can occur swiftly in the current cycle, it’s important for owners to be aware of the condition and capital level of their banking resources. There’s also a need to observe service levels and the way banks respond to customer needs,“

Davis says the good news for borrowers is that with the economy weakening, the Fed isn’t likely to increase short-term interest rates any time soon. The bad news is that the Fed’s ability to influence interest rates one way or another hasn't been all that impressive in the current cycle.

(The Pavilion at Crossing Point, Orlando, FL, bottom right photo)

The Cambridge chairman explains that popular HUD loans tend to mirror what’s happening with 10-year Treasury notes, while conventional commercial loans most typically are keyed to other benchmarks, such as the prime interest rate or the London Inter-Bank Offered Rate (LIBOR) index.

In October, 10-Year Treasury notes have fluctuated between 3.50 percent on October 7 to 4.04 percent eight days later on October 15. The prime rate remained at 5 percent but the one-month Libor rate was up more dramatically, rising to 4.17 percent on October 15 from 3.13 percent a month earlier on September 15.

“During periods of heightened anxiety, it’s not always easy to look ahead. But at some future time borrowers will probably look back on this moment in history as a good time to have secured financing at a relatively attractive rate near the low point for the cycle,” he observed.

For additional information, contact Cambridge at (312) 357-1601 or via e-mail at info@cambridgecap.com.

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

Cambridge Provides $6.5M FHA-Insured Loan to Refinance DeKalb, IL Nursing Home

CHICAGO, IL--Cambridge Realty Capital Companies has provided a $6.5 million FHA-insured first mortgage loan to refinance and fund a 5,075-square-foot addition at Pine Acres Care Center, (top right photo) a 119-bed skilled nursing home facility in DeKalb, Ill.

Cambridge Chairman Jeffrey A. Davis (bottom left photo) said the fully-amortized, 40-year HUD Section 232 healthcare loan was arranged for the company’s owner, an Illinois limited liability company, by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that underwrites HUD loans.

The interest rate was not disclosed.

Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nation’s leading senior housing and healthcare debt and equity capital providers, closing more than 300 such transactions totaling more than $2.75 billion since then.

Contact: Evan Washington, Phone: (312) 521-7603, Fax: (312) 357-1611

E-Mail: ew@cambridgecap.com

Cambridge Provides $8.9M Conventional Loan to Fund Harlee Manor in Springfield, PA

CHICAGO, IL--Cambridge Realty Capital Companies has provided a five-year $8.9 million conventional first mortgage loan to refinance Harlee Manor (top right photo) , a 169-bed assisted living and skilled nursing facility in Springfield, PA.

Cambridge Chairman Jeffrey A. Davis (top left photo) said the five-year loan was provided with cash-out for the property’s owner, Hardie Beloff of the Sproul Manor Partnership of Springfield.

The loan was amortized over 30 years with an interest rate of 6.75 percent.

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