At a time when investors remain skittish about skilled nursing, one New York real estate investment firm helped a Brooklyn SNF secure a $78 million loan, the latest milestone in a 15-year partnership.
Recently, New York-based real estate lending, investment, and advisory services firm Greystone provided a $78.4 million HUD-insured permanent refinance loan for New York-based Centers Health Care (CHC)’s Boro Park Center for Nursing & Rehabilitation — a transaction that represents one of the “largest-ever HUD loans” for a SNF, according to Greystone.
CHC acquired the Brooklyn SNF almost six years ago from a non-profit, according to Fred Levine, managing director of Greystone’s Monsey, N.Y. office, and originator of the transaction. The center was underperforming and was in dire need of improvements and renovations at the time, Levine told Skilled Nursing News.
“Over the course of the five or six years, [CHC has] turned it from a struggling building that was tired and old to a world-class care [facility],” said Levine, who called the SNF the “centerpiece of the community.”
Growing interest
While Levine and Greystone have developed their own special niche investing in, and forging relationships with, SNFs, he acknowledged a growing interest in the skilled nursing industry among financiers, particularly among those that had previously focused on non-medical properties.
“A lot of real estate investors are looking at the nursing home world because, when [they’re] buying apartment buildings, multi-family projects or office buildings, a lot of their returns are very low,” said Levine.
This could seem counterintuitive to those who work in health care finance, given the additional challenges that come with operating a SNF — from shifting reimbursement models to aging buildings to staffing woes. But In Levine’s experience, this perception holds true, particularly due to traditional real estate properties’ high prices and the competitive market, he adds. Further, real estate investors are becoming more and more attracted to the additional business upsides that come with health care properties.
“Real estate investors are looking at the health care world… because health care is not only a real estate play, but there is also the business involved, and so you’re able to get a little bit better return — or a lot better return — in this industry than other real estate transactions,” said Levine.
Embracing culture
Nestled in the Borough Park neighborhood of Brooklyn, Boro Park Center provides clinical services such as comfort care and palliative care; amputee recovery and training; and cardiac therapy, among others. The facility sits adjacent to Maimonides Medical Center, which proved to be lucrative as Boro Park Center made a name for itself in the community.
“As their reputation grew to providing great care, more and more hospitals referred… their patients that need long-term care, or short-term care or rehab, to Boro Park Center,” said Levine.
The facility has not only become a trusted SNF in the community, but has also become a cultural center of sorts for residents and their families and friends.
The facility has devoted two floors to the Asian community, which creates a familiar space for its residents, according to Levine. The overall aesthetic of these floors reflect Asian themes, the food served is tailored to their tastes, and nurses and other staff speak various Asian dialects, he explains.
In the same vein, the center has also embraced residents who observe Orthodox Jewish customs by providing areas with Kosher food, as well as various spaces for them to pray and have dinner with their families who visit during the Sabbath.
“It’s an amazing outreach program that worked,” said Levine of the center’s rehabilitation and efforts of connecting with the community.
Written by Carlo Calma
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