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Silicon Valley Healthcare Portfolio financed by Thorofare Capital

Silicon Valley Healthcare Portfolio

$21,500,000 Recapitalization Financing

Menlo Park & Sunnyvale, CA | March 2022

Thorofare Capital has funded a $21,500,000 bridge-to-agency loan for the recapitalization of The Silicon Valley Healthcare Portfolio. The portfolio consists of Crescent Oaks and Silver Oaks, two standalone memory care facilities totaling 76 beds.

Crescent Oaks is a 22-unit, 33-bed memory care facility located on Crescent Avenue in Sunnyvale, CA. Silver Oaks is a 26-unit, 43-bed memory care facility located on Coleman Place in Menlo Park, CA.

The sponsor exercised its master lease option buyout to acquire both facilities at a below fair-market price from its private equity real estate fund landlord.

Thorofare’s recapitalization financing allowed the sponsor to capture the timely opportunity of acquiring 100% fee simple ownership of its operations upon both properties achieving stabilized physical occupancies north of 94%.

Starting in 2018, the sponsor implemented a significant renovation program, which included remodeling the unit interiors, new exterior and interior painting, lighting fixtures, plumbing upgrades, HVAC replacement, common area upgrades, signage and remediating deferred maintenance.

The partial recourse, interest-only bridge loan includes an earn-out future funding facility subject to a cash-flow and appraisal test and was sized to an agency takeout financing within its initial 18-month loan term. The loan offers a flexible prepayment window and partial release pricing to maximize the sponsor’s loan repayment strategies, including a potential sale of one or both properties.

The Silicon Valley Healthcare Portfolio is located within densely populated, affluent areas with unmet demand for memory care beds due to the high barriers-to-entry. Sunnyvale’s population of 230,970 includes nearly 14% of residents ages 65+ and counts Google, Apple, and Stanford as its major employers. Menlo Park’s population of 140,707 includes 13.5% of residents ages 65+ and counts Facebook, Oracle, and YouTube as its major employers.

The sponsor is a second-generation, family-owned and operated real estate firm with over 30 years of experience in the senior housing industry. The sponsor specializes in the pre-development, development, owner’s representation, and operation of senior housing properties in California with a portfolio including eleven (11) properties totaling over 930 units valued at over $150 million.