When a CCRC in Norfolk, Virginia wanted to launch a major $200 million expansion of its campus, it turned to its long-time partner HJ Sims to finance the project. The two go way back (to the early 2000s), with Sims structuring, placing or underwriting the initial seed capital transaction, the first phase of development financing, a refinancing in 2014 and finally, the current development financing.
This transaction saw Sims arrange a $100 million draw-down bank loan, coordinating with SunTrust Bank and TD Bank. SunTrust served as administrative agent and provided $65 million of the financing. Then, Sims underwrote $101.1 million of fixed-rate bonds, resulting in over $500,000 in savings on annual debt service. In total, the hybrid financing saved the CCRC $20 million in net debt service and reduced its projected maximum annual debt service by about $1.5 million. The bonds were distributed to a pool of institutional and private investors.
The new project will feature 147 units in a 24-story tower with views of downtown Norfolk. Plus, the CCRC will add two new restaurants, a lobby lounge and a grand hall. After starting to accept 10% deposits in 2017, the development has already achieved at least 70% in presales. Not bad, considering the units are expected to open in 2021.
