Santé of Tucson opened in early 2017 and, though a well-managed and high-quality property, it faced heavy new competition which created an oversupply of short-term rehab units in the market. Additionally, soon after opening, the financial partner in the project was placed under the control of a receiver in a multi-property securities fraud enforcement action involving the EB-5 immigrant investor program. Thomas Seaman Company was appointed receiver and ordered to monetize the property for the benefit of the investors, and Blueprint was engaged to market the facility. The transaction was positioned as a turnaround opportunity with the possibility of assuming the non-recourse HUD debt with favorable terms.
Blueprint delivered the upside potential to the market and made a recommendation to the receiver to sell to a Chicago owner-operator that had recently moved to Tucson and had success with another Tucson turnaround in the past year. After taking over operations on May 1, the facility was rebranded as Sapphire Estates Rehab Centre.
Blueprint successfully coordinated a complex transaction with the receiver, buyer, operator, and the HUD sponsor to bring the deal over the finish line. HUD approval for the loan assumption took approximately two months to complete, despite the government shutdown for part of the year and significant scrutiny by HUD.
The transaction team consisted of Amy Sitzman, Jacob Gehl, and Humair Sabir.