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CHEVY CHASE, MD-CapitalSource has received approximately $119 millionof cash proceeds from HUD mortgage financing on long-term careproperties that will be included among the 40 facilities expected tobe sold to Omega Healthcare Investors Inc. CapitalSource struck a dealto sell the bulk of its healthcare portfolio to Omega in November.These closing are the first of a multi-step transaction outlined underthe terms of the Securities Purchase Agreement between the twocompanies.

CapitalSource is using the proceeds from the HUD mortgages to addliquidity and pay down the company’s syndicated bank facility to $325million. With these closings and other sales, the company has realizedapproximately $347 million before expenses of the approximately $495million anticipated from the monetization of its net lease assetportfolio, according to James J. Pieczynski, president of theCapitalSource Healthcare Real Estate business.

CapitalSource is not exiting the healthcare real estate market, evenas it sells off its portfolio. Instead the company will be focusing onlending to this space, which it views as relatively healthy.In an earlier interview with GlobeSt.com, CapitalSource’s SteveGilleland points to a recent $37 million first mortgage debt financing as the type of deals it wants to underwrite.

That transaction involved the sale of six skilled nursing assets inFlorida and Pennsylvania to Formation Capital, a private equity shopin Atlanta. Formation acquired the assets from Health Care REIT. Theloan has a five-year term with an interest rate below 7%, an LTV of68%, cash flow of $8.6 million, and rent penciling in at $6 million.In 2010, CapitalSource plans to underwrite between $200 million to$300 million in such transactions, Gilleland says.

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