HJ Sims Closes Life Insurance Company Loan for Assisted Living and Memory Care Community
HJ Sims was recently successful in bringing a new solution for long term financing to a valuable client seeking to pay off the construction debt of a newly completed, 74 unit assisted living and memory care community located in the Mountain West.
The well experienced, regional, owner/operator, currently operates more than 1,400 units across 26 communities in three different states. With over 16 years of experience, the ownership group also has a proven track record of identifying opportunistic locations, developing from the ground up and achieving stabilized occupancy in record time for assisted living and memory care communities
HJ Sims was proactive in the beginning to lay the ground work for a plan of finance during the development and pre-opening of the 74-unit community. Long before the property achieved stabilized occupancy, HJ Sims had already prepared several options for the next step in the capitalization strategy, including retiring the full recourse construction loan.
After the analysis of several loan options, a life insurance company was selected to provide the $10.5MM in loan proceeds, which were used to not only pay off the maturing construction debt but also provided a higher than expected return of equity to the Sponsor. The non-recourse loan was structured with a ten-year term, including 18 months of interest only payments, followed by a 30-year amortization.
After creating a competitive bidding process among permanent financing providers, HJ Sims was successful in providing the borrower with additional negotiation leverage in obtaining the most attractive and cost-effective terms available.
Through a turbulent market, HJ Sims closely monitored what seemed to be an ever-fluctuating interest rate environment. The fixed interest rate was locked upon initial deposit at the beginning of the underwriting process not towards the end, eliminating the uncertainty of rising interest rates and widening the gap of comparison even more between the competing lenders.
HJ Sims acted as strategic advisor and placement agent, managing the process from start to finish, also providing access to multiple financing options to consider with complete transparency, which also resulted in introducing a new form of debt to the borrower to add to their growing portfolio.
Overall, HJ Sims leveraged its industry expertise, strategic network and “roll up your sleeves” attitude to bring not just a solution to the table but a solution that was different from all the rest.
HJ Sims has been providing creative capital solutions in the seniors housing and healthcare space for more than 85 years as a specialized investment bank. Products include; proprietary bridge financing under an A/B uni-tranche structure, in-house mezzanine debt, HUD financing and permanent financing, advisory services and equity investments. HJ Sims excels in providing creative, timely solutions to allow our clients to focus on what they do best, provide high quality senior living and care at their communities and healthcare facilities.
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