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ORLANDO-Southland Group LLC has received a $10.7 million loan on an $8.5 million purchase of four Florida assisted living facilities in Orlando, Melbourne, Lakeland and Ormond Beach. The loan, from a Merrill Lynch affiliate, covers the acquisition, leaseup and marketing costs for properties which are licensed for a total 300 beds.

Genesis Health Ventures of Philadelphia sold the assets for about $28,333 per bed. The Orlando office of Primary Capital Advisors arranged the two-to-three-year bridge loan but wouldn’t disclose the interest rate.

“The interest rate is floating, based on the LIBOR rate,” Todd Cohen, vice president and manager of Primary’s Florida division, tells GlobeSt.com. “The rate was very competitive, given the high leverage loan as a percentage of costs.” The loan-to-value “was not to exceed 80% LTV, but actual LTV was much less, based on the appraisals,” he adds.

The properties range from two years to five years in age with occupancy from 50% to 90%.

“As a result of the sponsorship and management team put in place, this loan required very little equity, which is remarkable, given the type of property,” Cohen says. “However, the lender could see the tremendous upside in purchasing quality properties such as these at a discount-to-market value.”

Norman Huey, managing member of the Southland Group, says the bridge loan “required minimal equity and out-of-pocket costs so that we can concentrate on the management, leaseup and operation of the facilities.”

The properties will be operated as Southeast Suites Assisted Living and will be managed by Proformance Senior Living Management.

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