A not-for-profit CCRC in the Rancho Bernardo area of San Diego, California is planning a large expansion to its skilled nursing services, to include a brand-new 72-bed, three-story skilled nursing building, plus various improvements to the assisted living and memory care communities. The project is Phase II of a three-phase retooling of the 500-unit community, which is managed by Life Care Services.
To fund the $51.6 million expansion, the CCRC provided $7.1 million of equity, reallocated about $5.5 million not used in the Phase I project, and turned to HJ Sims to facilitate a $39 million direct bank placement bond issue with City National Bank. The tax-exempt bonds were issued on parity with the Series 2010 Bonds and the Series 2014 Phase I bonds. Funds will be drawn down over the 18-month construction period at a floating rate (which will shift to a fixed rate after the initial construction). In addition, the bonds will be interest-only during that period, and then principal will be amortized over 25 years with a put date in 2022.
The transaction marked the first time that Cal Mortgage insured draw-down bonds. What’s next for the CCRC? Phase III will comprise brand-new independent living and memory care units.