Property Type: 120 Bed Nursing Home Loan Amount: $3,600,000 Loan: Permanent Financing
Transaction Summary: An owner of three SNFs wanted out of the day to day business and wanted to maximize his annual cash return. New York Commercial Lending performed an extensive financial modeling session which compared the annual returns from a range of options, including sale of the facilities, and refinancing the facilities and hiring an outside management company. Next, we secured qualified offers from buyers to determine the market value of the facilities and introduced the client to several management companies. Action Plan: We concluded that the client’s annual after tax income generated from sale of the facilities was $557,000. Alternatively, the annual after tax income arising from a refinance, structured with a longer term, lower interest rate, was $750,000 after payment of an annual management fee. Results: New York Commercial Lending secured a new non-recourse loan and helped source a management company. Our borrower is out of day to day operations with lots of time and cash to spend… Moreover, this solution enabled our client to retain the "upside value" of the facilities.