Heavenrich & Company Sells Independent Living Facility for Wells Fargo Bank

July 10, 2012 - Heavenrich & Company, a boutique investment brokerage company serving the senior housing sector, announced the sale of The Chamberlin, a 133-unit independent living facility located in Hampton, Virginia. Smith/Packett acquired the historic building from Wells Fargo Bank (NYSE:WFB) for $12,250,000.

Heavenrich was retained by Wells Fargo to sell the Note and identify a repositioning strategy that would maximize the value of their asset.

The Chamberlin was converted from a historic hotel and opened as independent living in 2008. It is located in Hampton, Virginia, which has the largest MSA between Washington DC and Atlanta and sits on the grounds of Fort Monroe, the nation’s oldest military base. Smith/Packett assumed the long-term land lease from the federal government as part of the transaction. “We saw this as a unique opportunity in our back yard,” said Jim Smith, CEO of Smith/Packett. The Chamberlin offers panoramic views of the Chesapeake Bay and over 900 feet of waterfront.

In connection with the acquisition, Sabra, through an indirect, wholly-owned subsidiary, entered into a single 15-year triple-net master lease agreement with affiliates of the sellers with two five-year renewal options. The two-property portfolio lease provides for annual rent escalators equal to the greater of the change in the Consumer Price Index or 2.5%, resulting in annual lease revenues determined according with GAAP of $3.4 million and an initial yield of cash rent of 9.5%.

According to Adam Heavenrich, “We contacted more than 100 groups, including operators, private equity groups and REITs and narrowed it down to twelve groups with serious interest. Ultimately, Smith/Packett was selected by Wells Fargo for their high bid and thorough due diligence early in the process”.

“This was a challenging project with a great deal of complexity. Heavenrich was poised and skillful in handling a delicate process,” said Drew Garfinkle, Senior Vice President, Wells Fargo Bank. The loan to finance the acquisition and conversion of the hotel to independent living was originated by Wachovia Bank, which was later acquired by Wells Fargo.

About Wells Fargo
Wells Fargo Bank is the fourth largest bank in the U.S. and has a market cap of $176 billion.

About Smith/Packett
Smith/Packett is widely considered to be the premier senior housing and healthcare developer in the Mid-Atlantic and Southeast states. Over the past 28 years, the company has developed or acquired more than 200 senior housing and healthcare facilities with an aggregate value in excess of $1 billion.

About Heavenrich & Company
Heavenrich & Company is a boutique investment brokerage company dedicated to the senior housing industry since 1994.