Brookdale Senior Living Secures $327M Via New Freddie Mac Program

Brookdale Senior Living has secured $327 million in fixed and variable rate financing, according to Berkadia, which originated the transaction through Freddie Mac’s new Structured Pool Transaction program.

Freddie Mac’s Structured Pool Transaction offers various options, including combinations of fixed and floating rate debt components, no property assignments for the debt type, flexible releases and prepayments, faster Joint Underwriting path, and other customizable features.

For example, the Brookdale transaction is a ten-year, non-recourse structure that has a fixed rate component of $213 million and a variable rate component of $114 million. The structure allows Brookdale to diversify its interest rate risk by placing most of the debt into a fixed rate, says Brookdale’s Treasurer George Hicks. At the same time it has the ability to obtain partial releases that can be repaid out of the variable rate portion, according to Hicks.

“Freddie Mac has refined its Structured Pool Transaction program to achieve optimal flexibility for senior housing borrowers who are financing crossed loan pools,” said Steve Schmidt, National Director of Senior Housing at Freddie Mac Multifamily. He reports that the GSE has already closed three large senior housing transactions under the program.

Brookdale will use the proceeds to refinance 28 senior housing facilities representing approximately 2,200 units.

Berkadia’s Senior Managing Directors Heidi Brunet and Lisa Lautner of the Seniors Housing & Healthcare team originated the transaction.

The property was financed through Freddie Mac’s Green Advantage program, which provides competitive pricing to finance upgrades that reduce energy or water consumption.