HJ Sims Places Fannie Mae Loan for a Recently Completed Assisted Living and Memory Care Community in the Mountain West
A well-established, owner, operator and developer of seniors housing communities, recently partnered with HJ Sims to refinance a recently completed senior living community in the Mountain West. The experienced ownership group, currently operates more than 25 communities across the Western United States. As an experienced operator and owner, the group has also been successful in leasing their newly constructed communities up to stabilization.
While managing the effects of COVID, Sims identified an opportunity to pursue a refinance before the property was considered fully stabilized. The Fannie Mae loan was structured with a 12-year term versus the standard 10-year term, which provides additional flexibility for the borrower in pushing out any need to refinance or exit the investment. The loan includes two years of interest only payments, followed by a 30-year amortization. Structured at a conservative 70% loan-to-value, the non-recourse financing provided loan proceeds to pay off the construction loan in full and access equity, meeting the borrower’s previously planned objectives.
HJ Sims acted as financial advisor in analyzing and presenting multiple long-term financing scenarios to the ownership group. Ultimately, providing the borrower with clear decision making power and increased leverage in obtaining loan terms that exceeded their expectations. Through an ever-changing landscape, including increased COVID cases, State restrictions on senior living communities and market volatility, Sims led the borrower through a complex underwriting process, while also taking advantage of a short-term dip in interest rates to secure an attractive, fixed, interest rate.
After running a competitive process in obtaining terms for the client from multiple financing sources, the client ultimately selected a Fannie Mae execution after Sims was able to negotiate increased proceeds and a reduced investment spread relative to the initial offer. Through HJ Sims’ partnership relationships and specialized experience, there was no additional loan fee to the borrower, essentially making the advisory services and detailed management of the process by HJ Sims an added benefit at no additional cost.
Under tight timing constraints and almost daily changes in the effects of COVID felt across the globe and throughout the seniors housing industry, the loan closed on time with no changes in agreed upon terms or loan proceeds.
HJ Sims provides out of the box, creative financial solutions for seniors housing and healthcare real estate including debt, equity and advisory. Overall, Sims excels in providing customized, timely capital solutions allowing owners and operators to focus on what they do best, provide quality senior living at their communities.
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