After a COVID-19-related change, HJ Sims closed the refinance of a CCRC in Atlanta, Georgia, along with a couple other transactions. After refinancing in 2016 and obtaining a 2018 pre-development financing, the community recently broke ground on an expansion that will add 53 independent living residences scheduled to open in 2022. The $107 million project comprises 39 units in a five-story building and three buildings each with four or five units, all ranging between 1,700 and 3,200 square feet. It will bring the campus’ total number of units to 479, including independent living, assisted living and skilled nursing services.
On behalf of the borrower, HJ Sims coordinated a request for proposals to gauge interest in both the entrance fee and long-term debt. But in light of the pandemic, Sims worked with the board and management of the community to pivot from tax-exempt financing that would consist of short-term bank debt and long-term, fixed-rate bonds to a taxable all-bank financing. The deal closed early and matched with the borrower’s goal of maximizing its ability to deleverage the debt without penalty.
HJ Sims also arranged construction debt for an assisted living/memory care project in Monmouth County, New Jersey being built by MRC Manalapan in collaboration with Springpoint Senior Living, which will operate it going forward under a long-term lease. MRC principals provided the equity on the development, and following solicitation led by Sims, People’s United Bank was selected to provide $14.3 million of taxable senior debt. The construction/mini-perm loan came with a five-year balloon maturity, in addition to tiered-interest rate pricing that reflects the progression from construction to opening to stabilization. There were some security features attached to the financing, including a revenue pledge, dual guarantees provided by MRC principals, and a limited tenant guaranty.
Finally, we covered the deal earlier in May, but HJ Sims and Voralto Living formed a joint venture to acquire a new, 60-unit assisted living/memory care community in North Texas. CBRE arranged four-year, floating-rate acquisition debt from a national bank, while Sims’ equity provided liquidity to overcome any short-term performance issues stemming from COVID-19.
