Background

Willoughby RHCF is a replacement facility for an existing nursing home at the end of its useful life. Upon completion of the new state-of-the-art facility, all existing residents were transferred and the old facility was demolished. Because the new facility received staff and residents from an existing facility, the stabilization period for the new facility was much shorter than for a de novo nursing home.

The Challenge

The development site has a very high water table. In order to establish a suitable foundation, there could not be a basement and the foundation had to be reinforced with a network of piles sunk deep into the ground.

Outcome

The replacement cost of the new facility was $36.4 million. The FHA construction/perm loan was for $30.7 million. Total cash to close including operating deficit and working capital reserves was $3.7 million.