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CHEVY CHASE, MD-Commercial lender CapitalSource has provided $37 million in first mortgage debt as part of a total $50 million healthcare acquisition loan. The deal, which closed in Q4, involved the sale of six skilled nursing assets in Florida and Pennsylvania to Formation Capital. A private equity shop in Atlanta, Formation acquired the assets from Health Care REIT, kicking in a substantial amount of equity, according to CapitalSource’s Steve Gilleland. “This was a sweetheart of a transaction for that reason,” he tells GlobeSt.com. “We had to compete with several lenders for the business.”

Formation had been leasing the properties from Health Care REIT, which offered to sell the assets to Formation, Gilleland says. The portfolio compromises 760 licensed beds. The loan has a five-year term with an interest rate below 7% and an LTV of 68%.

Cash flow for the transaction is $8.6 million, Gilleland says, with rent penciling in at $6 million. The average occupancy rate is 92%. CapitalSource recently sold off several health care holdings, including 143 assets to Omega for $1 billion earlier this year. However the company has not exited the health care real estate sector, Gilleland says. On the contrary, it views it as a core asset for its business model. Going forward, it plans to intensify health care lending, seeking out deals similar to the Formation transaction.

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