Expansion project receives funding

A retirement community in Dallas, Oregon originally planned to expand its campus in 2007, but had to put in on hold during the Great Recession (bet that’s not the first time you’ve heard that). But now, the project is off the ground thanks in large part to a $27.6 million bond issue underwritten by Cain Brothers. Already with 45 independent living garden homes, 73 IL units, 65 assisted living units, 20 memory care units and 121 skilled nursing beds, the community, sponsored by the not-for-profit Mennonite Retirement Community, Inc. and operated by Life Care Services, was looking to add 40 new lodge-style IL apartments, a 21,000 square foot clubhouse and various new amenities. The proceeds of the bonds will help fund the expansion and also refund $2.5 million of existing debt. Cain Brothers had to navigate an unusual legal structure of the campus, where it had a number of distinct parcels based on the level of care with each having its own lender and reporting requirements. The overall true interest cost was 5.4% with a spread to the 30-year AAA benchmark of 232 basis point which, when compared to the 239-360 basis point spreads for recent expansion and start-up financings for senior living projects in the Pacific Northwest, is quite favorable. The bonds came with a 35-year final maturity.