Nelson Brothers Real Estate Acquire Property In First Of A Kind Transaction With Hud Loan For Tenant-In-Common (TIC) Investment

TIC Investors

Posted By: Pat Nelson / Feb 23 2009

Aliso Viejo, Calif. — Nelson Brothers Professional Real Estate, LLC, and Premier Senior Living, LLC, (New York) have acquired a 120-bed assisted living facility in Eden, NY. According to Patrick Nelson, co-founder of Nelson Brothers the Southern California-based real estate investment group, this is the first joint venture between the two companies.

The property, Eden Heights of Eden, was purchased for $6,987,000 with $2,087,000 in equity and a HUD-insured loan of $4,900,000 from Love Funding. Securing a HUD-backed loan was a pioneering step for the TIC industry.

For Patrick, this was a long process but well worth the effort. “It’s a one-of-a-kind loan for TIC investors. The benefits to investors are terrific. With HUD standing behind the loan, it provides stronger terms and less volatility. As an example, this loan was a 6.05% 33 year loan, fully amortized with no balloon payments and fully assumable – to help protect against interest rate risk.”

In working with the government, Nelson Bros. found that HUD has also provided extensive due diligence on both the property and the operator. According to co-founder Brian Nelson, “They adhere to strict reserve and maintenance policies to ensure the operators are keeping the property in excellent condition, which is a tremendous benefit to investors who want minimal involvement in day-to-day operations.”

Nelson added that Eden Heights represented everything an investor could ask for with stable occupancy and a strong historical track record in a needs-based asset that is fairly resilient in a recession-based economy. “We can’t say enough how excited we are to have a government agency like HUD closing on a TIC property. It speaks volumes about the confidence that they have with Premier Senior Living as our operator too”, said Nelson.

Wayne Kaplan and Robert P. Borsody, owners of Premier Senior Living, both concurred they were pleased with the flexible approach by the Buffalo HUD office with the complex financing arrangement required to make the acquisition. According to Kaplan, “their office seemed to incorporate the ‘yes we can’ attitude of the new federal administration resulting in jobs and services that will be protected and preserved within the community.

Also, the quality of the care and facilities were attractions for us. We will not be making staff changes so residents will continue to enjoy the same excellent, consistent level of service.” Both Kaplan and Borsody between them aggregate over 37 years owning and operating Assisted Living Facilities in New York State and throughout the country.

Nelson Bros. launched their real estate company in 2007 concentrating on the acquisition, financing and ownership of two need-driven assets classes that offer sustainable long-term growth, University Student Housing and Assisted Living Facilities.