CHICAGO - Beech Street Capital LLC has closed on a $9.6 million loan to refinance the Lake Park Center, a 210-bed skilled nursing facility in Waukegan, IL.
The transaction, made under under HUD/FHA 223(a)(7), was originated by Joshua Rosen, executive vice president of Beech Street. Working in the Chicago office, Rosen heads the firm's healthcare efforts.
“Skilled nursing facilities typically have very tight operating margins,”
Rosen says in a press release. “The business is both highly regulated and extremely labor intensive. Reducing debt service is critical - which is why we
recommended a Section 223(a)(7) loan.”
HUD sees the use of Section 223(a)(7) refinancing and mortgage modifications as a default prevention tool to protect its existing insured portfolio.
The borrower, who was not identified, had been paying more than 5% in interest but as a result of the transaction, that rate was cut in half, according to Beech Street.
Rosen said the firm expects to see more refinance activity in the seniors market in 2013.
“The conditions are really favorable right now for anyone with a current HUD-insured mortgage to refinance under Section HUD 223(a)(7),” Rosen says. “Not only are rates at all-time historical lows, but HUD is reducing the (a)(7) queue."
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