A CCRC in Greensboro, North Carolina is about to embark on a massive expansion with the backing of a bond financing underwritten by Cain Brothers, a division of KeyBanc Capital Markets. Founded over 100 years ago as the first Masonic retirement community, the not-for-profit WhiteStone, which is owned by The Masonic and Eastern Star Home of North Carolina, is set on a 43-acre campus. It has been managed by Life Care Services since 2006.
LCS Development is handling the expansion, which will feature 67 additional independent living units, a 36-unit assisted living/memory care building and an extensive renovation of the existing 20-year-old skilled nursing facility which will convert many semi-private rooms to private. Going into the pandemic, occupancy was strong, averaging in the mid- to high-90s across the senior care services. The operating margin, according to 2018 financials, was close to breakeven thanks to some substantial emergency physical plant expenses.
Project costs for the expansion are estimated at nearly $80 million. The CCRC refinanced its existing debt in 2017 with a new $23.855 million bond issue that significantly decreased its cost of capital going into the project, which will be funded by a combination of entrance fees (covering about 25% of the costs) and long-term, tax-exempt bonds totaling $75.4 million.
The bonds comprise $59.75 million in Series A, $6.445 million in Series B-1 and $9.19 million in Series B-2. The Bank of New York Mellon Trust Company, NA was the trustee bank for the issuance. Ownership will also make an equity contribution totaling approximately $527,000, with a $1.5 million line of credit and $1 million in fundraising contributions rounding out the capital stack.
