In a recent story of successful collaboration that led to an optimal client outcome, Lument’s mergers & acquisitions (M&A) and asset management teams worked together to find a beneficial exit for a distressed borrower.
Summit View of Rocky Top, LLC, is a 117-bed skilled nursing facility (SNF) that offers a broad range of services, including short-term rehabilitation and traditional nursing care, along with an 18-bed behavioral health hospital. Located in Rocky Top, Tennessee, approximately 25 miles away from Knoxville, the community has served as an important source of housing and care for area seniors for decades.
In recent years, however, Summit View experienced financial and operational difficulties as a result of the COVID-19 pandemic and the lingering effects. Given the continued pressures of maintaining debt service and other loan obligations that became increasingly burdensome, the borrower strategized with Lument Securities and Lument’s asset management team to find an outcome where all sides would benefit.
The decision to sell, including the sale of the operations arm, was not an easy one as the facility largely operated through local roots and a tight-knit community culture. Although a financial turnaround was needed, ownership wanted to ensure its loyal staff and residents were transitioned properly post-close. As a result, as with many of Lument’s M&A processes, Lument hand-picked a customized investor list with a special focus on financial wherewithal, a track record of operating success in the Southeast, and a shared vision of success for the SNF’s future.
Lument Securities orchestrated a competitive marketing process that generated significant interest. To accelerate sustainability, Lument suggested an interim manager change with a group that would fund working capital, providing financial relief for the borrower, its employees and sustained quality care for its residents. This became an increasingly critical cushion that allowed the facility to stabilize and even improve during the transaction process.
Ultimately, Lument Securities advised Summit View of Rocky Top on its sale to Core LTC Services, a private long-term care operator based in Tennessee. Lument Securities closed the sale in the spring of 2024 with a structure that included a U.S. Department of Housing and Urban Development (HUD) change of ownership participants (CHOP) transfer.
“This transaction is a great example of the power of Lument–a one-stop capital solutions provider,” said Wong-Hammond. “Through seamless coordination of various parties with sometimes conflicting objectives, we were able to navigate transaction nuances and successfully execute in a volatile capital environment.”
As a result of the successful sale, Summit View will continue to operate, serving as an important source of senior housing and healthcare access to the aging population in Rocky Top, Tennessee.
This transaction demonstrates why Lument Securities has earned a leading reputation as a trusted sell-side advisor to closely held businesses, local and national in scope, throughout the United States. It also demonstrates how the expertise of Lument’s servicing and asset management teams can prove beneficial to finding ideal outcomes. As the nation’s #1 FHA/Ginnie Mae servicer, according to the Mortgage Banker Association’s 2023 Commercial/Multifamily Mortgage Servicer Rankings, Lument has extensive knowledge to help borrowers find a path to success. To learn more, reach out today.
