Sims Funds Two Subordinate Loans For Affinity Developments
Sims was approached by two separate Affinity-led joint ventures (“Affinity”) to provide financing in connection with the development of two senior living communities in the Carolinas. The first community, in Bryson City, North Carolina, will have 50 assisted living beds; and the second development, in Beaufort, South Carolina, will have 59 assisted living beds and 24 memory care beds. Sims successfully provided two mezzanine loans totaling $4.035 million to Affinity to complete the development. These are the fifth and sixth financings that Sims has completed for Affinity.
There were several challenges associated with these financings:
- The debt needed to be structured in a way that met the requirements of the senior lender for each transaction.
- The terms of Sims’ mezzanine financings had to be flexible enough to allow for current and future capital needs of both Affinity-led ownership groups.
- The financings needed to be closed on tight timelines in conjunction with multiple lenders to ensure that the Affinity-led joint venture met its development timeline.
A new entity, Affinity Development Funding I, LLC (the “Sims Issuer”), was formed to issue taxable bonds. The bonds were successfully sold to Sims’ high net worth accredited investors. The proceeds from the bonds were used by the Sims Issuer to fund the two subordinate loans. This approach allows Sims’ high net worth clients to invest in selected transactions but leaves the asset management and key decisions in the hands of Sims and its partners.
Sims was able to underwrite and then implement two separate subordinate debt structures that met the unique needs of each Affinity-led ownership group, as well as the Senior Lenders, in a timely fashion. Sims’ ability to be flexible resulted in both short and long-term cost savings for Affinity and allowed Affinity to preserve its capital for future projects.
A creative financing solution for strategic growth is an example of Sims using its extensive investor base to provide attractive financing to senior housing providers. Sims excels in filling the niches that allow an owner or developer to complete a transaction by providing custom financing.
For more information, please contact: