Southern California Assisted-Living Project Nabs $59M in Construction Financing
Willis Development, a West Hollywood, Calif. builder, has pinned down a $59 million financing package to jumpstart development on an assisted-living facility near Los Angeles.
The financing, headlined by a $38.7 million construction loan from East West Bank, was arranged by Dekel Capital, an L.A. bank led by Shlomi Ronen. Dekel also contributed a $20.7 million equity investment through its proprietary-fund arm, Dekel Strategic Investors.
East West’s four-year loan—with an interest only structure for the first 36 months—came in at a loan-to-cost ratio of 65 percent, valuing the project at just under $60 million.
It’s Dekel’s fourth time partnering with Willis on a housing development for seniors—and precisely the sort of project Ronen envisioned when he launched Dekel’s equity platform five years ago.
“Multifamily and senior-housing projects have been our nice,” he explained. “That capital has generally been focused on making 5-15 million investments in just those two product types.”
The deal will fund construction on Sage Glendale Senior Living, a project planned for a lot at 509-525 West Elk Avenue in Glendale, Calif., about five miles north of downtown L.A. When completed—Willis expects construction to take about a year—the complex will have 81 assisted-living apartments, as well as 28 private and semi-private units for residents with dementia and other cognitive impairments.
“In Glendale, where there are fewer than 20 facilities to serve a growing senior population of more than 200,000, this financing will help Willis Development meet the current and future demand for quality senior housing in what is the third largest city in Los Angeles County,” Ronen added in a written statement. He pointed to research from the Public Policy Institute of California that estimated that more than a million of the state’s elderly citizens will need assisted-living care a decade from now.
According to American Communities Survey data, Glendale itself has more than 30,000 residents who were 65 or older, and tens of thousands more set to turn 65 by 2019. Median household income is just $56,000, which puts it in the middle of the pack among California cities.
Residents at Sage, which will share a block with an apartment complex and a car dealership just east of Interstate 5, will have access to a garden, a library, a commercial kitchen and a beauty salon.
Representatives for East West and for Willis Development declined to comment.