Cambridge Pursues New Strategy to Provide Even More Options for Senior Living Operators
CHICAGO–”If you can’t teach them, join them” is a new twist on an old aphorism which Cambridge Realty Capital President Jeffrey Davis is putting into practice in Cambridge’s business. It’s a new direction for Cambridge, and it’s all for the sake of providing more diverse, creative and accessible capital structures for its clients.
“A 70-75% LTV bank loan sometimes doesn’t work for the client for a variety of reasons and may not be totally competitive,” Davis points out. “Cambridge has created a wide net of private lenders who can solve different needs in conjunction with Cambridge’s government financing expertise. A government program like HUD that can go up to 80% LTV combined with some type of private lending program that qualifies and never goes beyond HUD’s constraints and covenants is a very strong combination in today’s world.”
Cambridge has been an authorized HUD 232 loan provider since the 1980s. Since that time, Cambridge has closed more than 550 HUD loans worth more than 5.5 million dollars. “HUD in and of itself is an excellent product,” states Davis. HUD 232 provides capital for senior living and skilled care facilities at very competitive rates at 30 years plus amortization and are non-recourse. However, when you add the power of a large and diverse network of private lenders with Cambridge’s own lending power, extensive experience and skillful expertise in senior housing, you get even more competitive rates, higher loan-to-value, and higher loan-to-cost. In other words, Davis asserts, “you have “the ultimate flexibility to focus on what is important as well as the ability to throw out the bank lending manual.”
Because Cambridge isn’t tied to a parent corporation or chain, it has much greater discretion when it comes to lending. “Cambridge is able and ready to react to the story and not solely the numbers or data,” Davis notes. In fact, Cambridge has a history of working with borrowers whose numbers didn’t exactly fit the ideal risk profile, like Transcendent Healthcare Founder Tom O’Niones.
In spite of being a licensed healthcare administrator with extensive experience in the skilled healthcare industry, O’Niones kept getting turned down by the big banks when he began looking for financing to purchase two facilities his new company had been awarded contracts to operate. Dejected but determined, O’Niones eventually found himself at Cambridge Realty Capital and a landlord/owner that saw beyond O’Niones lack of ownership experience and was willing to strike a deal with him.
“Cambridge went out on a limb for me,” O’Niones said. The investment may not have made sense in terms of hard data, but Davis recalls seeing in O’Niones a strong work ethic and solid business plan that belied the numbers. The deal worked out so well that O’Niones returned to Cambridge for another loan a few years later.
Its discretionary ability is just one advantage of working with Cambridge. “Cambridge has partners ready to react quickly on any deal,” said Davis. Not only that but “Cambridge has a strong team that’s always ready to go on a new deal and has access to both government and private programs.” Working with Cambridge also means less red tape for borrowers and fewer hoops to jump through. “You get a partner that has a multi-million-dollar balance sheet that is flexible, and who cares and reacts quickly and aggressively.”
Cambridge has stepped up its game and is currently seeking new partners in order to offer even more options for its clients. Inquiries are welcome.
Privately owned since 1983, Cambridge today has three distinct business units: FHA-insured HUD loans, conventional financing, and investments and acquisitions. The company is one of the nation’s leading specialized senior housing and healthcare debt and equity capital providers, with more than 550 closed senior housing transactions totaling more than $5.5 billion.
Cambridge has consistently ranked among the country’s top ten FHA-insured HUD lenders over the last 15 years and offers an array of conventional lending options, including permanent construction and interim loans on either a floating or variable rate basis. The company’s principal investment strategy includes direct property acquisitions, joint ventures, and sale/leasebacks. The company has acquired 16 facilities totaling approximately $60 million. Cambridge has a national origination office in Los Angeles, and numerous correspondent and brokerage relationships nationwide.