Skip to Content

Owner of long-term care facility defaults; Fannie Mae will take over

Click here for updates on this story

    LINCOLN, Nebraska (Lincoln Journal Star) — The owner of the Gramercy Hill senior living facility in Lincoln has voluntarily defaulted on its loan and plans to allow the facility to be taken over by Fannie Mae.

The default, which was made official last week with a filing with the county Register of Deeds office, was apparently part of a planned strategy by Gramercy Hill’s owner, Capital Senior Living.

The Dallas-based company said in August that it planned to transfer the ownership of 18 “underperforming” facilities to Fannie Mae, the government-sponsored mortgage company that holds the loans on the properties, to get rid of debt and increase its cash flow.

Capital Senior Living did not identify the properties, but Gramercy Hill, which is located at 6800 A St., was listed in an August court filing by Fannie Mae seeking to have it appointed as receiver of the properties.

Capital Senior Living did not respond to a request for comment about Gramercy Hill, but in a news release issued Dec. 9 it said it had started the process of transitioning the 18 properties to Fannie Mae, beginning with one in Texas. The company said ownership of all facilities should be transferred by the end of March.

Fannie Mae is a quasi-governmental organization that buys private mortgage loans in the secondary market. A spokeswoman for the company declined to comment specifically on Gramercy Hill or Capital Senior Living, but said properties transferring to Fannie Mae through a default would go through a public foreclosure auction. In such auctions, however, the debt holder is almost always the winner.

Assuming Fannie Mae takes control of the property, it would prioritize the care of the residents and work to ensure they would see little or no change in daily operations, the spokeswoman said.

Gramercy Hill, which opened in 1985, has about 145 units, a mix of both independent living and assisted living.

Capital Senior Living has six other long-term care facilities in Nebraska — one in Elkhorn that it owns, and five that it operates through leases, including The Windcrest on Van Dorn in east Lincoln. It does not appear to have any current plans to shed any of those properties.

Though the company did not specifically cite the COVID-19 pandemic as a reason for ceding the 18 properties to Fannie Mae, it likely played a role.

Capital Senior Living, which was already in financial trouble before the pandemic hit, said in its third-quarter earnings report that occupancy at its centers had declined this year, while at the same time it has had to spend an additional $4.6 million because of COVID-19.

CVS, Walgreens begin administering COVID-19 vaccine at long-term care facilities

The pandemic has wreaked financial havoc on senior care centers across the country. According to a survey done earlier this year by the American Health Care Association and National Center for Assisted Living, 65% of centers said they were operating at a loss and 66% said they cannot stay in business for another year at their current pace.

Heath Boddy, president and CEO of the Nebraska Health Care Association, said that scenario “would fit multiple entities in Nebraska.”

The pandemic has led to huge cost increases for staff and supplies, Boddy said, while at the same time the restrictions and safety concerns related to COVID-19 are leading many people to delay moving to senior centers.

“It’s just as tough as I have ever seen it, for sure,” he said.

Please note: This content carries a strict local market embargo. If you share the same market as the contributor of this article, you may not use it on any platform.

Article Topic Follows: National-World

Jump to comments ↓

CNN

BE PART OF THE CONVERSATION

News Channel 3 is committed to providing a forum for civil and constructive conversation.

Please keep your comments respectful and relevant. You can review our Community Guidelines by clicking here

If you would like to share a story idea, please submit it here.

Skip to content