Sonida Senior Living, a leading senior living owner-operator with 77 properties across 18 states, has refinanced a 10-asset portfolio with an $80 million package that includes up to $50 million of additional capital.
The assets were not identified by name or location. The properties comprise 941 units with a mix of independent living, assisted living and memory care units in five states.
The consolidation and refinancing of various debt obligations was completed by Greystone’s Senior Housing Capital Markets team, led by Cary Tremper, on behalf of Sonida. The initial term loan of $80 million was provided by a regional bank and has a four-year maturity with an optional one-year extension. It does include up to $50 million of additional capital, with an uncommitted $40 million accordion to fund Sonida’s future growth initiatives. The term loan will reduce the company’s total debt by $38.5 million and reduces the blended interest for the 10 communities by approximately 63 basis points, according to Sonida. It also includes future opportunities for additional, performance-based interest rate reductions and addresses all debt maturities through mid-2024.
Tremper said in a prepared statement Greystone serves as an advisor to its clients for their capital needs and a partner to find the best solution to meet short-term or long-term goals, particularly with today’s sometimes volatile market and rising interest rates.
More Sonida Moves
Kim Lody, president, CEO & director of Sonida, said in a prepared statement the refinancing package positions the company, formerly known as Capital Senior Living, for future growth. The company rebranded as Sonida Senior Living in November, shortly after closing on a $154.8 million transaction with Conversant Capital. At that time, Lody said in prepared remarks the infusion of capital from Conversant would allow the company to address immediate liquidity needs and help pave the way for future growth. The company’s communities currently serve nearly 7,000 residents.
Late last year, Sonida Senior Living announced an expansion of its relationship with Ventas by adding three managed communities in Arkansas as of Dec. 1, 2021.
In February, Sonida acquired two recently renovated senior living communities in the Indianapolis market for approximately $12.3 million. Northfield Senior Living and Southfield Senior Living include 157 independent living units. Located about 20 minutes outside downtown Indianapolis, Sonida said the new acquisitions would complement the company’s existing Indianapolis portfolio and leverage the strength of the local leadership team.
The properties recently underwent a significant refurbishment and the purchase, which works out to be about $79,000 per unit, represents a significant discount to replacement cost. The assets have an in-place November 2021 occupancy of 55.5 percent, as compared to Sonida Senior Living’s independent living occupancy of 82.7 percent for the same period. The company expects to deliver NOI growth through lease up and additional resident services.
The acquisitions were the company’s first since November 2016 and represent a shift into its growth plan following the $154.8 million capital raise and strategic investment from Conversant Capital.