HJ Sims Closes Fannie Mae Loan for Recapitalization of Texas Senior Housing Community
An experienced regional, owner, operator and developer of seniors housing communities (the “Borrower”) recently partnered with Sims to recapitalize an assisted living and memory care community in Texas. The well-established group currently manages over 1,500 units across 20+ communities. Sims previously completed two financings for a related healthcare company owned by common Principals of the Borrower.
The Borrower sought to refinance its existing debt and complete a partner buy-out at a community that recently reached stabilized performance. Sims worked with the Borrower to evaluate a number of financing options to meet its goals of maximizing debt proceeds, while limiting its cost of capital and interest rate exposure in a rising interest rate environment.
Sims explored multiple bridge and permanent financing options for the Borrower including traditional bank debt, high-leverage first mortgage uni-tranche loans, FHA-insured financing, and various agency and life insurance company financing options. Sims ultimately provided the Borrower with two compelling options: (i) a term sheet for a bridge-to-HUD first mortgage uni-tranche loan, with Sims providing the B-tranche of the loan, and (ii) in conjunction with an agency lending partner, secured a quote from Fannie Mae. Along the way, Sims provided a thorough analysis of each set of terms, providing the borrower with thoughtful details in considering the best and most effective option. The Borrower ultimately selected to move forward with the Fannie Mae loan, favoring the lower fixed-interest rate of the agency debt on a non-recourse basis relative the Bridge option which offered more in total proceeds at a higher leverage point. Additionally, the Fannie Mae loan offered a 10-year term with a 3-year interest only period followed by fixed principal payments based on a 30-year amortization schedule.
HJ Sims acted as strategic advisor and placement agent, managing the process from start to finish while providing complete transparency to the borrower in analyzing multiple financing options to consider.
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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