With every seniors housing development project, it is always important to have a contingency plan. Having a trusted financing partner goes a long way, too. That is why when a joint venture led by Affinity Living Group ran into some unexpected problems during the lease-up stage of their portfolio of four newly developed assisted living/memory care communities in North Carolina, they turned to HJ Sims to arrange some additional capital. Built between August 2015 and January 2017, these communities combine for 120 assisted living and 152 memory care units, and were developed by the joint venture, with Affinity as the operator.
The venture had contributed over $7 million of equity to the projects, which are in various stages of lease-up. But to recapitalize the portfolio, a subordinate loan on one of the communities had to be repaid. So, using its HUD Plus program, HJ Sims provided a $6.08 million mezzanine loan to pay off the existing subordinate debt, fund working capital and reserves across the portfolio and purchase FF&E. The loan was structured to meet the requirements of three separate senior lenders who had provided four construction loans and had planned to eventually refinance through HUD.