BH Properties Provides $5 Million in Debtor-in-Possession Financing
By: BH Properties
CNMH filed for Chapter 11 protection in the Northern District of California in March 2021 due to financial challenges created by the Covid-19 pandemic. The non-profit, founded it 1954, currently owns and operates communities in Oakland and Pacific Grove totaling 351 units. The properties collectively were 64 percent leased at the time of the filing.
The 13-month facility, originated out of BH Properties $200 million DIP Platform, provides CNMH with sufficient liquidity during the Chapter 11 Case to fund working capital and general corporate requirements for essential, day-to-day operations ensuring the continued operation of the two facilities. Funds will be used to maintain the quality of resident care, pay employees and vendors on a timely basis and to preserve and maintain the value of the Debtor's assets until they can be sold, according to BH Properties' Senior Director of Investments, Andrew Van Tuyle.
"The DIP loan market for large corporations requiring more than $100 million in financial assistance is very efficient," said Van Tuyle. "However, smaller operators facing bankruptcy protection find it very difficult, very expensive, or both to get DIP financing. Because our process is very efficient, fast, and we understand the underlying real estate, we can provide DIP financing significantly below generally accepted DIP rates in a shorter amount of time," added Van Tuyle.
According to court documents, the terms of the BH Properties DIP financing were more favorable than eight other financial institutions.
Earlier this year, BH Properties provided the bankruptcy trustee for Neopharma, Inc. with DIP financing to maintain the penicillin manufacturing facility in Bristol, TN after filing for bankruptcy protection in December 2020. The company was sold as part of the bankruptcy process and BH Properties' loan was critical to maintaining the value of the company during the sale process.
About BH Properties
Founded 30 years ago, privately held BH Properties (https://bhproperties.com) is a vertically integrated real estate investment company focusing on the acquisition and management of a geographically and product diverse portfolio of assets. The Los Angeles-based company, with offices in Phoenix and Dallas continues to focus on value-add transactions, distressed debt, and ground leases. Today the company owns and operates nearly 10 million square feet across 19 states.
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