HJ Sims Arranges Expansion Pre-Development Loan for Phase II of the Toby and Leon Cooperman Sinai Residences of Boca Raton
“Once again, working with the HJ Sims team provided the absolute best solution to meet our senior living expansion pre-development financing requirements, and unforeseen financing challenges along the way. We required skillful financial advisors with years of senior living experience in evaluating our current debt structure, and future financings for our expansion construction project. HJ Sims was consistent in providing valuable insight, and several financing scenarios to executive management and our Board. Thanks to HJ Sims, our pre-development financing was obtained with SunTrust Bank.
Further, HJ Sims went beyond the usual support, by presenting financial alternatives and industry guidelines to our Board, to ensure that we accomplish our expansion project.”
– Mel Lowell, COO, Jewish Federation of South Palm Beach County, Board Member, Toby and Leon Cooperman Sinai Residences of Boca Raton
Partnered Right®
Toby and Leon Cooperman Sinai Residences of Boca Raton is an existing life plan community, which consists of approximately 234 independent living units, 48 assisted living units, 24 memory-support units, 60 skilled nursing beds and related common amenities. Sinai Residences is located in Boca Raton, Florida in South Palm Beach County. Sinai Residences opened in January 2016 and achieved stabilized occupancy of its independent living units in just nine months’ time, of its skilled nursing units in 11 months, of its assisted living units in ten months and of its memory care units in six months. All entrance fee debt associated with the initial development of Sinai Residences was repaid nearly two years prior to the expected final repayment of such indebtedness.
Structured Right®
Given the strong demand for its existing independent living offerings, Sinai Residences sought to expand the community through the development of approximately 111 additional independent living units. Thus, the team at Sinai Residences turned to HJ Sims, its partner during its original pre-development and start-up financing, to facilitate a bank request for proposals process to find a suitable commercial lending partner for an $8.1 million pre-development loan. That process generated significant interest in the community and resulted in a number of attractive proposals for interim bank financing.
Executed Right®
Before the financing could close, the development team was required to reconfigure the development plan for the additional independent living units, delaying the initial planned closing date. Furthermore, lower-than-expected attrition combined with higher-than-expected operating expenses for Fiscal Year 2018 resulting in a 1.0x Debt Service Coverage Ratio for that year. HJ Sims coordinated closely with Sinai and its ultimate chosen lending partner, SunTrust Bank, to facilitate the closing of the $8.1 million pre-development loan in light of the near-term challenges facing the project.
Financed Right®
On March 15, 2019, just over a month after receipt of the indicative term sheet, HJ Sims facilitated the closing of the $8,100,000 pre-development loan, which was structured as a two-year draw down commitment (the “Series 2019 Loan”). The Series 2019 Loan was provided by SunTrust Bank and its Aging Services/Senior Living Industry Practice Group. SunTrust’s experience in financing entrance fee continuing care retirement communities and HJ Sims’ experience in facilitating and underwriting such transactions together created an environment in which a one-time operating challenge and revision to the development plan did not adversely impact the terms or covenants by which the Series 2019 Loan was made available to Sinai Residences. This paved the way for the smooth continuation of the pre-development process as Sinai Residences moves towards the full Phase II expansion.
For more information on how Sinai Residences was Financed Right® by HJ Sims, please contact:
Aaron Rulnick
(301) 424-9135
Melissa Messina
(203) 418-9015
Patrick Mallen
(203) 418-9009