Mesa West Capital has provided a joint venture led by SRM Development with $67 million in short-term, first mortgage debt to refinance Westmont of Milpitas, a recently opened 199-unit senior housing community in the Silicon Valley community of Milpitas, California.
Developed by SRM, Westmont of Milpitas was completed in late 2020 and was introduced to the market in February 2021 in the midst of the pandemic, which severely impacted the entire senior housing sector. Although leasing was slow due to COVID-19, at time of loan closing, the community is well positioned to benefit from the local demographics and market dynamics, according to Mesa West Executive Director Matt Snyder who led the origination team out of the firm’s Chicago office.
“Milpitas is part of the San Jose MSA, which has above average population growth of persons 75 and older and strong average and median household income, which is beneficial for senior housing product,” said Snyder. “As the only senior housing community in the area offering three levels of care and with little competitive supply within a five-mile radius of the community, we expect the sponsors to stabilize the community relatively quickly, especially as we move the Coronavirus from pandemic to endemic,” he said.
The four-story community consists of 163 assisted living, 28 memory care and 8 independent living units. It also offers several shared amenities such as a commercial kitchen, activity room, lounge areas, beauty salon, dining room, indoor pool, fitness room, theater/chapel, art/crafts room and a library. Located at located at 80 Cedar Way, Westmont of Milpitas is within seven miles of four full-service hospitals and medicals centers.
The property is managed by Westmont Living, a joint venture partner, which owns and operates 17 full-service senior housing communities, located primarily in California.
Proceeds from the five-year, floating rate, non-recourse loan pays off the existing construction loan on the property.