HJ Sims secured long-term, fixed-rate bond financing for a CCRC in Pompano Beach, Florida (Fort Lauderdale MSA). Set on 70 acres, not-for-profit John Knox Village has been serving the local community for more than 50 years. It features nearly 1,000 units of mostly independent living, with a 64-unit assisted living community and a 194-bed skilled nursing facility.
It is continuing to grow, with a $3.9 million welcome center with sales, marketing and discovery rooms, in addition to conference rooms and a nearly 2,500-square foot open-air space for communal gatherings, going up this spring. A massive aquatic center is replacing a small pool area with a resort-style pool, a lap pool, 60-seat restaurant, sports bar, pickleball and bocce ball courts, a jacuzzi and a fire pit, all costing around $7.6 million.
However, the biggest project is the $100 million-plus Westlake expansion, which will include a 15-story residential tower and an adjacent 10-story building, with a total of 150 new independent living units that range in size from 1,277 to 2,364 square feet. Construction is expected to start next year, with move-ins beginning in spring 2023, but deposits are now being accepted.
Funding for these projects is coming in part from this HJ Sims transaction, which consists of $77.605 million in long-term bonds. Sims was approached when the pandemic was declared this winter and prepared the borrower for the Fitch-review process, since they were seeking a material increase in their debt. Ultimately, they retained their A- credit rating with a negative outlook.
HJ Sims executed on a majority 4.000% or lower coupon structure to minimize the debt service burden. The final pricing increased maximum annual debt service by just over $2.5 million for over $58 million in new long-term debt. And Sims was able to also alter some aspects of the existing master trust indenture, which provided additional flexibility to the borrower.