Armadale Capital closed a $133 million Section 223(f)/242 FHA-insured mortgage loan for MUSC Health, the teaching hospital unit of the Medical University of South Carolina, located in Charleston, SC.
The loan proceeds will be used to refinance a $129 million bridge loan which, in late February 2019, funded the acquisition of four acute care hospitals and ancillary facilities previously owned by a for-profit health system. MUSC Health’s 700 bed main facility in downtown Charleston has been re-named MUSC Health University Medical Center.
While based in Charleston, MUSC Health, an agency of the State of South Carolina, has been pursuing strategic initiatives over the past several years to expand its footprint in the State and enhance access to healthcare for South Carolina residents. The acquired facilities added approximately 827 licensed acute-care beds to the MUSC Health system for a total licensed bed count of approximately 1,600 throughout South Carolina.
“We appreciate the hard work and dedication of our staff and financing team as well as our new colleagues in the four newly acquired facilities. We also want to thank the U.S. Department of Housing and Urban Development (HUD) Office of Hospital Facilities, and the State of South Carolina Treasurer’s Office for their efforts, partnership and support,” said Dr. Patrick Cawley CEO of MUSC Health.
In terms of the financing, MUHA was able to take advantage of current market conditions and secure a fixed mortgage interest rate of 3.00% for the 25-year amortization period. This rate is one of the lowest rates for a 25-year FHA insured hospital loan in the program’s history. FHA Section 242 of the National Housing Act provides mortgage insurance on loans for acute care hospital facilities ranging from large urban teaching institutions to rural critical-access hospitals. The program began in 1968 and has been utilized by hospitals in most states throughout the U.S.
NY-based Armadale Capital also served as FHA lender and led MUHA’s $361 million FHA Section 242 refinancing in 2012 and $47 million FHA Section 241 refinancing in 2013, saving MUHA over $70 million in interest costs. In 2016, the firm also led the $316 million FHA Section 241 financing of the Shawn Jenkins Children’s Hospital and Pearl Tourville Women’s Pavilion, slated to open in early
