$10M Construction Loan Goes to South Bay

BRYAN, TX-South Bay Partners Ltd. of Dallas has obtained a five-year construction miniperm loan in the amount of $10.6 million for developing its most recent skilled nursing and assisted living facility. The facility, already under construction, is anticipated for an October 2010 completion.

Like many borrowers these days, the Dallas developer ended up turning to a regional bank for financial help in building its 95-bed facility, the third phase of its multiphase project at University Drive and Boonville Road. South Bay has already built a 205-unit senior housing facility and 66-unit Alzheimer’s facility.

Metropolitan Capital Advisors senior director Kevan McCormack tells GlobeSt.com that, given the environment, finding financing was a challenge. McCormack, who arranged the financing, says the fact that South Bay is an experienced and active developer and operator helped with the process. Also helping was the product type itself.

“Assisted living is a needs-based product as opposed to a choice-based product,” explains McCormack, who worked with MCA principal Scott Lynn on obtaining the loan. “If you need to go into assisted living, there generally isn’t a choice.”

Lenders tend to like the needs-based product when it comes to financing, he continues. With the current market and economy, he adds any type of real estate that has a high-demand component is attractive to lenders as well.