As interest rates are rising, one lucky borrower was able to lock in a 2.25% interest rate for 35 years. And that loan won’t be funded until construction is completed on an expansion project. This sounds better than HUD financings of a year ago.
HJ Sims announced the closing of a $32.2 million bank financing for a CCRC in Pontiac, Illinois called Evenglow Lodge. The loan proceeds will be used for the construction of 76 new assisted living units, the demolition of the existing assisting living building, as well as new common space and other space used by the health center.
Phase one is the assisted living project, which broke ground in 2021. Phase two will consist of the construction of 24 new independent living units, and construction of this phase will begin in 2023.
The initial financing for phase one will come from a bank loan, arranged by Sims, which will be repaid with $32 million from the U.S. Department of Agriculture at the 2.25% interest rate, which has already been locked in. When the assisted project is completed, Evenglow Lodge will begin construction on the new IL units. Presumably, the bank lender that is funding the assisted living project will then turn to the IL project when the AL loan is paid off.
Because the USDA does not finance independent living, Sims had to pair the various bank loans with the USDA loan for the assisted living portion. The IL loan will have two tranches. One will be paid off with the entrance fees received, while the other will become part of Evenglow’s long-term capital structure.
Lynn Daly and Brady Richardson of HJ Sims arranged the financing on behalf of Evenglow Lodge.
