One of the truest tests of any business’s skill and professionalism is its performance and reputation over time. When Cambridge Realty Capital was first established in the 1980s, founder and President Jeffrey Davis set out to build a company that would not just stand the test of time but thrive and grow through relationship-building. When President Andrew Erkes joined the team shortly after Cambridge’s founding, Cambridge began specializing in HUD funding for senior housing and nursing homes along with conventional financing and equity ownership investments. “One of our very first senior living transactions,” Davis recalled, “was with The Abington of Glenview.” The Abington was a 192-bed licensed skilled nursing facility, and Cambridge provided its owner with a HUD loan. What Davis could not have known at the time was how long Cambridge’s relationship with The Abington would end up lasting, transcending both time and ownership groups.
Fast forward to 2021, and The Abington’s owners were looking to sell the facility. Innovative Management Associates of Illinois, a respected skilled nursing home operator, executed a Purchase and Sale Agreement to acquire The Abington for its portfolio of nursing facilities. Principals Joel and Eli Atkin chose Cambridge Realty Capital as the company’s funding partner based on Cambridge’s reputation as well as its longstanding involvement with The Abington. Cambridge provided Innovative Management with a conventional loan to fund a portion of their acquisition for $20 million with a money center bank at a 75% loan-to-value and 100% loan-to-cost, floating over LIBOR plus 250 with a two-year term and a 25-year amortization. This transaction closed on August 31, 2017 and included a $1 million revolving line of credit for accounts receivable financing.
Next, as the bridge loan was expiring and Innovative Management was looking for a replacement loan, Cambridge was called upon again and provided a $21,200,000 HUD Section 232/223(f) refinance loan to repay the bank, fund additional replacement reserves, and provide financing for costs and loan fee. The loan-to-value was 80% with a loan-to-cost of 100% and a 35-year term and amortization and an interest rate of 4.25%. This provided a closing and takeout for the bridge-to-HUD financing that took place in August 2017.
When the COVID-19 pandemic hit in early 2020 and interest rates began to drop, Cambridge realized that Innovative Management could benefit from a HUD Interest Rate Reduction (IRR) loan and reduce its loan’s 4.25% interest rate to under 4% and generate additional cash flow. The closing for this transaction occurred on April 30, 2020. Finally, because of Fed Chairman Powell’s creation of exceptionally low interest rates to address the pandemic, Cambridge found new opportunities for borrowers and was able to provide a second interest rate reduction loan to The Abington, reducing the 3.95% rate to 3.15%.
The Abington of Glenview is an excellent example of how Cambridge Realty Capital focuses on providing unique financial solutions for its borrowers, as well as always staying aware of potential cost-saving opportunities for borrowers through a variety of structures. In the case of The Abington of Glenview, this included a bridge-to-HUD acquisition loan, a HUD 232/223(f) refinance loan, and two separate HUD interest rate reduction loans with zero borrower costs as part of the structure. Cambridge was able to remain client-centric and create the right structure for the transaction. In just the last 12 months alone, Cambridge Realty Capital has closed more than 60 IRR loans for existing clients, saving operators hundreds of thousands of dollars in the wake of a worldwide pandemic. “We are always looking for new opportunities and hope that all borrowers will pay attention to Cambridge’s unique skill set and relationship-building opportunities,” Davis summated.
