June 03, 2020
Weeks before COVID-19 was confirmed in the U.S., Aegis Living, a seniors housing owner/operator of 32 West Coast communities, was preparing for the worst-case scenario. For Aegis, this meant mitigating the risk of infection and implementing a containment plan to protect residents and employees.
In March, a resident at their Marymoor community in Redmond, Washington, was diagnosed with the virus, which ultimately led to over a dozen residents and several staff testing positive. During this time, Aegis was working with their lender, Wells Fargo, to support Marymoor with a $10 million Freddie Mac Multifamily supplemental loan.
“A supplemental loan is a riskier execution, especially in this type of environment,” says Sheri Stettner, managing director at Wells Fargo. “But Aegis is a truly remarkable partner, and it was clear how important the funding would be in the fight against COVID-19.”
Working with Wells Fargo, an Optigo® lender, Freddie Mac was able to navigate the challenges and provide the funding needed. “There was a lot of teamwork to get this deal across the finish line,” says Jeff Bagley, Freddie Mac’s lead producer on the deal. “Not only from Aegis, who worked with us to provide documentation while there were COVID-19 cases at the property, but also with Wells Fargo and the people here at Freddie Mac.”
But the story doesn’t end here. By May, all the infected staff and residents, some who are well into their 90s, had made a full recovery to date. And we couldn’t be happier.
Seniors housing communities face unique challenges in providing resources. While they are often mistakenly grouped with nursing homes or long-term care facilities, it’s important to note how different they are, especially in terms of funding and operations.
Our typical seniors housing communities are classified as independent living, assisted living, or memory care properties. Many of these facilities serve seniors with less critical medical conditions – nevertheless, there is still a high degree of socialization between residents and staff members. Communities like Marymoor have had to adapt quickly and take extreme precautions to combat the virus effectively.
Aegis brought in leadership to provide on-site training and testing for all staff, especially frontline caregivers, and worked closely with the Centers for Disease Control and Prevention to do everything possible to prevent the spread. They also recognized their staff through “hero” payments and provided paid leave for caregivers in contact with the virus to prevent the spread by self-quarantining.
Redmond, Washington: The Aegis of Marymoor property stands tall, located in the epicenter of the coronavirus outbreak.
“Our funding provided liquidity to help Aegis carry out their mission for senior citizens and keep them safe,” says Kathleen Ryser, Freddie Mac senior director of Seniors Housing underwriting. “And not only safe, but to have the wherewithal to turn it around and make them well!”
Most seniors housing communities — unlike most skilled nursing, long-term care, or medical facilities — are not funded through Medicare, Medicaid, or HUD. So financing is critical, as the operators of these facilities shoulder the burden of this crisis and any financial hardship.
“It was very important to Dwyane Clark [founder of Aegis Living] to have cash flow for a number of things, like stocking up on personal protection equipment (PPE) and supporting employees,” says Sheri. Going forward, Aegis plans to use the loan to continue providing PPE, child care support, free meals for staff, tele-health offerings and much more.
“This funding makes it possible to take extraordinary measures to protect the safety and well-being of our residents and staff,” says Aegis Living CEO Dwyane Clark. “But it also allows us to drive continued innovation as we tackle this virus and lead the future of our industry. We’ve engaged a multidisciplinary team of experts to ensure every step we take is based on the latest science and medical research. I couldn’t be prouder of where we’re headed."
And we’re proud to have a hand in helping Aegis Living. We look ahead to the great things they’ll continue to do for their communities, employees and the seniors housing industry. As Steve Schmidt, senior director of Seniors Housing production at Freddie Mac says, “In good times and bad, we’re committed to providing liquidity, stability and affordability to borrowers like Aegis who put their residents and staff first.”
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