Market Commentary: All the Fixin’s

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by Gayl Mileszko

Some of our favorite local coffee shops, lunch spots, and five-star dining rooms where we have celebrated life’s most momentous occasions, have scaled down, converted to take-out or shuttered in the past year. There is no doubt that restaurants have been among the businesses hit hardest during the pandemic. More than 110,000 eating and drinking establishments closed last year, temporarily or permanently. On average, these eateries had been in business for 16 years; 16% had been open for at least 30 years. The restaurant and food service industry which represents about 10 percent of all payroll jobs in the economy has suffered massive damage even with Paycheck Protection Program assistance. The National Restaurant Association estimates that nearly 2.5 million jobs have been erased. Many of those who have struggled to survive have downsized, pivoted to outdoor venues or artisanal grocery stores. They have innovated by creating meal kits, adding alcohol-to-go, or dramatically altering their menus to offer more of the comfort foods in greatest demand from those of us who have been in great need of comfort.

There are approximately 216 Philadelphia area eateries that have closed in the past year but Vetri Cucina is not among them. This highly acclaimed restaurant also features private dining, sponsors classes, and has run an innovative community partnership for the past 12 years along with having a second location in Las Vegas at The Palms. We are pleased to have Chef Marc Vetri, a past James Beard award winner, with us for our Sims Late Winter Conference next week. He will be offering a virtual pasta-making class as one of the four special networking opportunities to conclude our day-long series of keynote speakers, breakout sessions, panels and roundtables on financing methods, operating strategies and technological advancements in senior living. We invite you to join us for the conference. The full agenda and registration process can be accessed via this link.

Philadelphia is just one of more than 19,500 cities, towns, and villages in America significantly impacted by the pandemic. The hits to business and labor have dented state and local revenue while costs related to COVID-19 have soared in many places, producing budget holes that have forced service reductions and layoffs from within a workforce of 18.6 million. State revenues fell 1.6% in FY20 and are expected to decline another 4.4% in FY21, but the variance is significant. Eighteen states are in fact seeing revenue come in ahead of forecasts. Revenue losses may total as much as $300 billion through 2022 while the need for higher spending on health care, jobless aid and food assistance has grown. Federal assistance has totaled $300 billion so far and the debate rages on over the amount and terms to be included in the stimulus bill still making its way through Congress. State and local borrowing has been understandably reduced in the interim. This, in turn, has led to lack of supply in the municipal bond market just as demand for paper, yield, and tax-exempt income has surged.

Municipals are outperforming taxable counterparts for four consecutive weeks and net inflows into municipal bond mutual funds and ETFs exceed $20 billion so far this year. The ICE BoAML Treasury Index is down 0.71%, and the Corporate Index return is down 0.39% but the Muni Index is up 0.34% and the High Yield Muni Index has gained 0.74% as prices reach nosebleed levels. Examples of high priced fixin’s include University of Texas bonds with a 5% coupon due in 2049 which traded last week at $163.429 and New York Dorm Authority bonds for Columbia University due in 30 years at $166.494. The ratio of municipal bond yields to Treasury yields has hit all-time lows, reflecting how rich tax-exempt valuations are relative to governments; the 10-year ratio is 58% and the 30-year is 67%. AAA municipal general obligation bond benchmarks have dropped 3 basis points since the start of the month. The 2-year stands at 0.08%, the 10-year at 0.69% and the 30-year at 1.34%. The 2-year Treasury is flat at 0.10% but the 10-year has gained 14 basis points and stands at 1.20%. The 30-year at 2.00% is up 18 basis points. Over $14 billion of U.S. high yield corporate bonds priced last week and yields fell below 4% for the first time in the market’s history. Party City received orders in excess of $3.5 billion for a $750 million five-year corporate bond offering rated Caa1/CCC+ which was increased in size and priced two days earlier than expected at a price of 8.75%. On the equity side, volatility has dropped by 40% on positive vaccine and stimulus news; the VIX Index at 19.97 is down from the year’s high at 33.09. The rally in stocks continues. The Dow is up over 5%, the S&P 500 up 6%, and the Russell 2000 up 10%. The Nasdaq, which just marked its 50th birthday, has gained 7.8%. Oil prices have increased more than $7 a barrel to exceed $60, silver prices are up 1.4% and Bitcoin has skyrocketed more than 37%.

The best news is that COVID case counts have dramatically declined since the peak on January 8. The daily trend in the number of reported COVID-19 deaths has significantly fallen since the worst days on April 15 and February 12. More than 52 million doses have been administered since December 14, reaching 11.5% of our population. There is nevertheless still talk of possible travel bans and /or negative testing mandates for interstate air travel. Such trends and chatter are of course very closely monitored by global financial markets. There are of course many other major market moving events, including disruptive ones such as the deep freeze in Texas, unexpected tweets on cryptocurrency buys, fast-moving IPO’s like Bumble, and Gamestop-like gambits. Traders continue to linger over every word uttered by Federal Reserve Bank officials. Every step in the process of producing a multi-course stimulus package is being noted even though no final menu is expected until next month at the earliest. There are also fourth quarter corporate earnings, Treasury auctions and daily economic reports to feast upon. Fears of new strains, inflation, and negative rates are often peppered in.

In this holiday-shortened week, about $6 billion of municipal bonds are expected to come to market, including $1.8 billion of taxable munis. Last week’s calendar totaled $7.5 billion. In the high yield sector, the Oklahoma Development Finance Authority issued $72.1 million of non-rated revenue bonds for the Oklahoma Proton Center including 2051 term bonds priced at par to yield 7.25% and taxable 2041 term bonds priced at par to yield 11%. The Suffolk County Economic Development Authority in New York sold $35.6 million of non-rated revenue bonds for St. Johnland Assisted Living structured with 2054 term bonds priced at 5.375% to yield 5.325%. Gallatin County, Montana came to market with $7.3 million of non-rated taxable industrial development bonds for Bridger Aerospace Group that had a sole maturity in 2040 priced with a coupon of 6.50% to yield 6.75%. For today’s high yield taxable and tax-exempt offerings, we encourage you to contact your HJ Sims representative.

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Market Commentary: Hero With A Million Faces

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by Gayl Mileszko

Sarah Lawrence College Professor Joseph Campbell was a comparative mythologist who studied and relished stories told by peoples all around the world. He found a common theme across cultures and labeled it a monomyth. The tale always involves a hero who ventures forth from the ordinary world into a region of supernatural wonder when he receives a call to adventure. He or she receives help from a mentor along the way as fabulous forces are encountered and none of the familiar laws and order apply. Our hero endures a series of trials, sometimes assisted by allies, and manages to win a decisive victory. He receives a “boon” or award of some type and then must decide whether to return to the “world of common day”. The hero always decides to go home, of course. He encounters new trials along the way before making it back safely to share the bounty with his family and community.

For much of the past year, we have been immersed in a world that became supernatural. We have battled forces that we never before encountered in our lifetimes. Although never feeling heroic, countless numbers of mothers, fathers, teachers, doctors, nurses, grocery and postal workers, gas station attendants, long-haul truckers, farmers, public safety officials and National Guard troops have manage to fend off monotony, exhaustion, violence, disease, hunger, abuse, despair, homelessness, social isolation, and even bankruptcy while faced with joblessness or working multiple jobs, relocations, home schooling, triaging the sick, or caring for a frail relative. We live among these heroes and would love to shower great bounty upon them. We think in terms of the amazing fortune of Elon Musk, 49, a serial entrepreneur who is not only surviving but thriving in these challenging times. With a brilliant mind and boundless energy plus an array of mentors and allies, he has a current, personal net worth of $185 billion. Now the richest person in the world. Mr. Musk has pledged to share his reward by giving at least half of this vast sum to charity. If only we had such sums to bestow, we certainly know the most deserving.

Innovative, hard-working Americans of all backgrounds and ages are achieving mythical levels of success in the midst of this pandemic and it is inspiring. None of the usual laws and order seem to apply in the financial, scientific, academic, technological or service industries as central banks have taken monetary policy into heretofore unimaginable directions, elected officials have produced fiscal stimulus that is the wonder of all history, and the status quo of the world in 2019 was entirely upended by the COVID-19 pandemic. So: the opportunities are endless for those called to start ventures and expand businesses. Last year saw 56 new American billionaires, including IPO winners at Airbnb, DoorDash and Snowflake, and the founders of Zoom, Nvidia, and Netflix. Any number of our readers could be next.

It is not fable but fact that the divide between the wealthiest and poorest Americans has been exacerbated by COVID-19. Our economy has long been being described as having a “K” shape, meaning that wealth is built on wealth at the top while those people and industries closer to the bottom struggle and often sink. The current K shaped recovery reflects that prosperity and wealth is returning more rapidly for those at the top while many others strain more and more to get by. Debates rage in Washington over whether and how to address the disparities. Proposals are once again being circulated for increases in the minimum wage, affordable housing, tax credits, student debt forgiveness, tuition-free public colleges, stimulus checks, and child allowances, among others.

The latest economic data tells the story. Weekly jobless claims remain higher than in any previous recession dating back to 1967. We are still down 11 million jobs from pre-pandemic days. The employment-to-population ratio at 57.5% has barely budged over the past four months. Labor productivity fell at a 4.8% annual pace in the final months of 2020, the biggest quarterly decline since 1981. The overall economy has split in two, with some sectors booming and others depressed. Some of those shifts are temporary, but many others are long-term and structural. Very, very little of this is reflected in the stock and bonds markets, where the divide between Wall Street and Main Street is most evident.

Since the national emergency was declared on March 13, the Dow has gained 8,200 points or 35%, the S&P 500 is up 44%. the Nasdaq is up nearly 78% and the Russell 2000 has increased by 1,080 points or 89%. Oil prices have increased by 83% or $26.24 per barrel. Gold is up 20% or $303 an ounce. Silver prices have gained almost 13% or $12.73, and Bitcoin has smashed all records with its 728% increase. On the bond side, the 2-year Treasury yield has plunged 78% to 0.11% but the 10- and 30-year yields have recently climbed. The 10-year is up 21 basis points to 1.17% and the 30-year has increased by 43 basis points to 1.95%. Municipal benchmarks have dramatically outperformed their government counterparts. As demand from individual and institutional buyers has escalated while supply has significantly lagged, the 2-year AAA general obligation bond yield has fallen by 102 basis points from 1.12% to 0.10%. The 10-year is down 88 basis points to 0.73%. And the 30-year has dropped 94 basis points from 2.32% to 1.38%.

New records are again being set this month and feel surreal in the context of the pandemic and recession. Stock indices are at record highs. Bitcoin has topped $47,000. Dogecoin, a cryptocurrency that started out as a joke intended to parody the thousands of currencies that sprang up after Bitcoin in 2013, topped $10 billion in market value on Monday. Corporate high yield indices have fallen to all-time lows: the Bloomberg Barclays High Yield index dropped to 3.96% and CCC rated issues fell to 6.21%. The ratio of municipal yields to Treasury yields is at historic lows: state and local debt maturing in 10 years now yields 60.29% of Treasuries; the historic ratio averages 85%.

The hunger for yield and income has driven bond prices to extreme levels. On the corporate bond side, more than $59 billion of high yield bonds have already been sold this year. U.S. Steel (rated Caa2/B-) just received orders for more than $3 billion of bonds in a $750 million note sale that priced at 6.875% and is trading above par. On the municipal side, Austin, Texas wastewater bonds are trading at $136, New York City water and sewer bonds over $132, Durham, North Carolina general obligations at $141, California general obligations at $135, and Nashville subordinate airport bonds at $127. The City of Detroit, which filed the largest municipal bankruptcy in 2013 and saw its full faith and credit tax pledge produce a recovery of only 74 cents on the dollar just brought a $175 million Ba3 rated general obligation self-designated social bond deal structured with 2050 term bonds with a 5.00% coupon that sold at a price of $123.577 to yield 2.37%. The offering was reportedly 20 times oversubscribed.

We are living in a world that is far from ordinary, facing our own individual trials and celebrating our victories, small and large, every day. As with the mythical heroes, we all have mentors and allies, whether or not we recognize them as such. We encourage you to look to your HJ Sims representatives as your constant allies. To that end, we invite you to join our Late Winter Conference, a virtual event to be held on February 24 hjsims.com/2021lwc, to hear from us along with senior living industry leaders and experts including Joseph Coughlin, the Director of the Massachusetts Institute of Technology AgeLab, who will provide thought-provoking insight into how COVID-19 has impacted the 50+ demographic. In the interim, in much the same way as we commend the everyday heroes within the talented and dedicated members of our Sims family of companies, we hope that you too continue to recognize and reward those of mythic proportions within your own families and organizations.

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HJ Sims Partners with StoneCreek Real Estate Partners to Facilitate $2.8 Million in Non-recourse, Low-interest Rate PACE Financing

CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

HJ Sims Partners with StoneCreek Real Estate Partners to Facilitate $2.8 Million in Non-recourse, Low-interest Rate PACE Financing

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful November 2020 closing of a $2.8 million PACE financing on behalf of StoneCreek Real Estate Partners (StoneCreek).

Based in Dallas, TX, StoneCreek is a collaboration of recognized and seasoned professionals with 50+ years of combined experience in the operations, development and ownership of successful senior living communities in TX, CO, and AZ.

The StoneCreek of Copperfield development is a new construction, 108-bed senior housing community that will include 74 assisted living units, 22 memory care units and 12 independent living cottages, providing local access to quality senior housing and care in the Copperfield area of Houston, TX. The community will be operated and managed by Civitas.

Founded in 2012, Civitas is a Fort Worth, TX based for-profit owner/operator of senior living communities in TX, FL, OK, NM, KY and AZ. Civitas has 100+ employees and manages 45+ senior living communities. In 2018, Sims provided $5.85 million in preferred equity to Civitas for the development of a new community in Red Oak, TX. In 2019 Sims completed a $72.32 million all-bond acquisition financing of three communities operated by Civitas in east TX.

While assisting StoneCreek in their search for financing alternatives, Sims proposed the use of Property Assessed Clean Energy (PACE) financing, a voluntary low-cost, non-recourse assessment placed on a property and based on the qualified energy efficiency, renewable energy, water conservation, residency improvements and related costs, contributed by the project. The program finances 100% of the energy efficiency, renewable energy, water conservation, resilience improvements and the related costs for ground-up new construction and renovations/retrofits up to 20% of the property’s appraised value. The financing is collected with regular local real estate taxes and assessment payments are amortized at a fixed rate throughout the useful life of the project.

Sims coordinated with StoneCreek, Civitas, the PACE provider and the Texas PACE Authority to obtain approval for PACE from the senior construction lender. Despite the atypical nature of the program, the financing team was able to assuage the concerns of the senior construction lender while navigating a variety of bureaucratic components. In place of typical mezzanine debt with interest rates between 12-15%, StoneCreek implemented the strategy PACE to fund $2.8 million in construction financing at an interest rate of 5.85%, a significantly lower interest rate.

StoneCreek, with the guidance of Sims, accessed $2.8 million in TX-PACE financing to lower their total cost of capital. The project is also supported by a $19.6 million construction loan from a traditional lending partner.

Financed Right® Solutions—James Rester: 901.652.7378 |  [email protected], Curtis King: 603.219.3158 |  [email protected] or Ryan Snow: 843.870.4081 | [email protected]

 

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, Sims has nationwide investment banking, private wealth management and trading locations. Member FINRA, SIPC. Testimonials may not be representative of another client’s experience. Past performance is no guarantee of future results.  Facebook, LinkedIn, Twitter,  Instagram.

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HJ Sims Releases 2020 Corporate Social Responsibility Annual Report

The HJ Sims Corporate Responsibility program is designed to provide inspiration to our team, clients and to those we serve. Our mission is to:

  • Affect change and make a difference in our local communities by bringing awareness to and increasing support for economic, social and environmental well-being through coordinated corporate and regional efforts, including the donation of funds and/or volunteering staff time
  • Engage and inspire our staff by providing access, time and opportunities for giving back in meaningful ways

Read the HJ Sims 2020 Corporate Social Responsibility Report.

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Market Commentary: Peering Out From Our Burrows

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by Gayl Mileszko

On Groundhog’s Day, we learned that there are six more weeks of winter ahead and we were not surprised. Gobbler’s Knob was perfectly reflective of much of America: full of excitement over the prospect of good news but depressed by the prevailing climate, the big COVID-19 shadow hovering over everything, and the virtual nature of this year’s celebration causing us to watch yet another event live-streamed to our remote burrows. Even though we live in an era of smart phones and mega data, we still eagerly anticipate the groundhog’s prognostication every February 2nd. The little eight-pound rodent may be wrong 75% of the time but, full of hope, we still tune into the annual announcement from the inner circle of top-hatted club members. This year was particularly gloomy for the rural western Pennsylvania borough, as it has been for many towns reliant upon tourism. The annual festivities, which typically bring in as many as 50,000 revelers and $4 million of revenues, were limited to a small number of organizers due to the Pandemic.

The past year has created a painful emotional bookmark for billions of people with its unforgettable sacrifices and losses. While many traditions have been upheld in some form, COVID-19 has been a huge disrupter, and an accelerant of change. It has revealed broken health systems, brittle supply chains, deep political divisions, a fragile social fabric and real economic inequality, forever changing much about what we value, how we reason, how we make decisions. Many industries and neighborhoods have been entirely transformed. Some of this may have been inevitable. Nonetheless, there are many positives to be found. Communities and causes have become very important to us and a tremendous amount of good and good will has been generated. Health care heroes have worked selflessly to care for the stricken, and we developed new appreciation for our farmers, truckers, grocery store, manufacturing, and pharmacy workers as brilliant minds converged to create and deliver vaccines in record time. Further developments in artificial intelligence, retail robotics, drone deliveries, cellular medicine, 3-D printing, and urban agriculture, to name a few, have been accelerated. We expect to see innovators and entrepreneurs deliver spectacular new products and services in the months and years ahead.

Future trends are among the topics that we will address in more depth at the HJ Sims 18th  Annual Late Winter Conference later this month. The virtual gathering will focus on how the Pandemic has impacted retirement living and planning, some of the new strategies, technologies and best practices being employed by senior living providers, and innovative ways to finance acquisitions, developments, and expansions. To attend the virtual event being held on Wednesday, February 24, please register at hjsims.com/2021lwc.

The first month of 2021 just came to a close. January was a symphony in at least three movements involving mass vaccinations, new swearing-ins, and short squeezes that ended on many uncertain notes. The Fed kept short-term rates unchanged, as everyone expected, and is continuing its bond-buying program at $120 billion per month. The initial reading for fourth quarter gross domestic product came out at 4%, below expectations. Many market observers were mesmerized and traders were distracted by the retail investor-fueled rallies in extremely shorted stocks including GameStop and AMC, portrayed by some in the media as a modern day David and Goliath story. Stock markets reacted in shock and weakened as trading and clearing operations were disrupted by restrictions, margin calls, and delays. In addition, investors began to face the realities of very different energy, trade, immigration, regulatory, and tax policies as the new Administration issued executive orders. The VIX volatility index rose 6% on the month, the Dow lost 2% and the S&P fell 1%, while the Nasdaq gained 1.4% and the Russell 2000 climbed 5% as fourth quarter earnings season began. Oil prices increased by 7.6% to $52.20, silver was up 2.4% to $26.98, and Bitcoin gained 25% to close at $35,725 while gold prices fell 2.5% to $1,847.

U.S. Treasuries lost 1.13% in January and high grade corporate bonds fell 1.23% while high yield corporates gained 0.37%. The 2-year Treasury yield closed down 2 basis points on the month to 0.10% while the 10-year increased by 15 basis points to 1.06% and the 30-year ended 18 basis points higher at 1.82%. The 10-year Baa corporate bond benchmark yield rose by 10 basis points to 2.75%. Investment grade corporate issuance on the month totaled $127.5 billion with the financial sector accounting for 62%. High yield issuance totaled $49 billion, the third largest monthly total on record, and demand remains very strong: PetSmart, for example, saw more than $12 billion of orders for its $2.35 billion CCC rated deal. In other fixed income sectors, convertible bonds returned +3.55% in January while preferreds lost 1.36%

The municipal market posted a 0.65% gain last month; high yield led the way with returns of 1.91%. Transportation bonds gained 1.56% and hospital bonds were up 0.72%. Taxable munis maturing in 10-15 years finished 1.31% higher. The 2-year AAA general obligation benchmark yield fell 2 basis points to finish at 0.11%, the 10-and 30-year yields ended basically flat at 0.72% and 1.38%, respectively. The traditional relationship with U.S. Treasuries has been upended. Municipal/Treasury ratios dropped to new lows with the 10-year at 67% and the 30-year at 76%. Investors added record amounts of cash to municipal bond funds and ETFs, $10.7 billion so far this year. As is typical for January, new issue supply was low at $24 billion, with $6.7 billion coming as taxable debt, and the clamor for bonds with yield was unrelenting. The Chicago Board of Education sold $558 million of BB-/BB rated bonds at levels unrelated to its credit in the midst of a threatened strike by teachers. General obligation bonds due in 2041 were priced with a coupon of 5.00% to yield 2.24%, only 105 basis points over the AAA benchmark yield. The issue was reportedly 30 times oversubscribed. The CSCDA Community Improvement Authority issued $176 million of non-rated multifamily housing revenue debt designated as social bonds due in 2056 at a rate of 4.00% to yield 3.55%. The District of Columbia came to market with a $28.1 million non-rated charter school financing for Rocketship structured with 2061 term bonds priced at 5.00% to yield 3.33%.

February begins the second chapter of the 12-month investment cycle and we encourage you to contact your HJ Sims representative for a conversation on preparedness. What should you do? What should you NOT do? If there is one thing we have learned in the past year, it is that we are in a transition, with a new kind of permanent volatility, and we need to take preparedness to a new level. We are surrounded by predicters, from groundhogs to Nobel economists, from strategists to futurists, mystics to pollsters, entrepreneurs to oddsmakers but they all missed the timing and extent of the Pandemic that made Time Magazine declare 2020 the “worst year ever”. More surprises are undoubtedly in store. It makes sense to seek the best advice possible so as to be prepared as best we can to adapt to whatever the future has in store.

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Innovative Financing Strategies Create Operational Cashflow during COVID-19

CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

 FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the closing of a number of financings utilizing innovative financing strategies to create operational cashflow and advantageous results for senior living organizations.  

The Tax Cuts and Jobs Act of 2017 (the 2017 TCJA) had an enormous impact on the municipal bond market with the elimination of advance refundings. In 2018, Sims identified alternative strategies in the absence of advance refundings. Strategies included (1) Cinderella bank-held bonds, (2) taxable fixed rate advanced refundings, (3) forward refundings and (4) tender offers.

 

The use of Cinderella Bonds aims to secure an advance refunding that is at first taxable and converts to tax-exempt when permitted. It was applied to the financing of Marshes of Skidaway Island (The Marshes) in GA. In 2020, Sims approached The Marshes noting that a bank-placed Cinderella refinancing of outstanding fixed rate bonds would provide significant savings. Sims successfully closed the $47.1 million financing in December 2020, saving approximately $1.14 million annually and $15.36 million, in the aggregate, through a bank financing.

 

Westminster Communities of Florida, the largest provider of life plan communities in the State of FL, employed Sims to utilize a taxable fixed rate advance refunding of bonds issues to acquire Glenmoor after its successful turnaround. Sims analyzed bank-held and fixed rate bond advanced refundings, with a rapidly growing taxable fixed rate bond market. Westminster proceeded with a taxable advanced refunding and tax-exempt new money issuance to fund upcoming capital projects. Sims procured strong investor interest in the successful $107,360,000 transaction, achieving superior execution.

 

A Forward Refunding approach was utilized with Peconic Landing at Southold (Peconic) in NY. This strategy utilizes tax-exempt fixed rate bonds priced on a present-day basis, but not delivered and “closed” until ninety days prior to the call date of the refunded bonds. In 2019, Sims discussed potential refunding of Peconic’s bonds. The elimination of tax-exempt advance refundings meant immediate access to the tax-exempt market wasn’t possible, and the current BBB- rating made access to the taxable bond market impractical. Sims helped facilitate a forward refunding, securing pricing on a 20-year term on the refunding in late 2019 and saving Peconic $300,000+ in annual debt service with the ultimate settlement occurring in November 2020 amidst the COVID-19 pandemic.

 

A Tender Offer financing was implemented for the MD Obligated Group of Asbury Communities (Asbury). In 2018, Asbury MD Obligated Group’s capital stack was comprised of outstanding bonds placed directly with an institutional investor without an optional call feature and with a balloon payment. Sims negotiated an exchange of the bonds at a purchase price for a new series of bonds, extending the amortization, providing additional years of repayment and reducing the overall debt burden.

 

The 2017 TCJA changed the borrowing landscape for 501(c)(3) organizations. As the new administration and Congress identify and implement their fiscal policies, the Sims’ Financed Right® approach will ensure Sims will continue to assist clients in navigating the ever-changing market landscape, as we monitor market response to new laws and update the industry of developments and trends.

 

To learn details about each strategy, read the Sims Perspective, click here.

 

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, Sims has nationwide investment banking, private wealth management and trading locations. Member FINRA, SIPC. Past performance is no guarantee of future results.  Facebook, LinkedIn, Twitter,  Instagram.

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HJ Sims Partners with The Bethel Methodist Home to Refinance High Interest Rate Acquisition Bonds

CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

HJ Sims Partners with The Bethel Methodist Home to Refinance High Interest Rate Acquisition Bonds

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful December 2020 closing of a $30,030,000 financing for The Bethel Methodist Home, d/b/a The Knolls, a non-profit CCRC (Continuing Care Retirement Community) located in Valhalla, NY. The community, which opened in 2002 under the name Westchester Meadows, offers independent living, assisted living and skilled nursing services on one campus.

In 2008, Westchester Meadows experienced financial difficulty, which culminated in a bankruptcy filing in 2015. The community was acquired in 2016 with the proceeds of tax-exempt and taxable bonds privately placed with a single bondholder. Under new management, The Knolls began to thrive. Occupancy levels increased from 57% in 2016 to 91% pre-COVID and management has invested $12 million in renovations. Management contacted Sims to assist in refunding the existing high interest rate debt.

In addition to reducing the interest rate, a portion of the 2016 debt was to mature in 2023 and needed to be restructured. The challenge was to create a level debt service structure that would avoid the 2023 balloon payment while achieving overall savings. Additionally, a non-call provision blocked refunding the debt until 2024. Management and Sims negotiated an early exit, but it required a tight timeline for closing. Sims structured the taxable bond series to mature in 10 years. To lower debt service and create level annual payments, the tax-exempt series does not begin to amortize until the taxable series is retired, and extends 11 years beyond the prior maturity.

The new bonds needed to be issued in December 2020, but redemption could not occur until January 2021. Despite the success of The Knolls, marketing bonds for a recently financially troubled community during COVID-19 posed challenges. Sims’ team specializes in identifying and communicating the underlying strengths of every financing; this expertise was leveraged in marketing and the refunding was completed in 90 days.

On December 23, 2020, Sims closed on the $30.03 million Series 2020 Bonds for The Knolls with 20%+ of the issue purchased by Sims’ Private Wealth Management clients. The yield on the 10-year taxable series was 6.125% and the interest rate on the 35-year tax-exempt series was 4.90%, below the 7.00% yield on the prior debt.

“25 years ago, I worked with Sims and was waiting for the day to do another financing with their superb team of professionals. Finally, that day came, and Andrew Nesi and his team did not disappoint. During COVID-19, with a very small window dictated to us by our current lender and the holiday season upon us, we successfully met all deadlines and refinanced The Knolls through a combination of tax-exempt and taxable bonds, saving close to a $1,000,000 per year in interest and fees. Andrew recognized the strength of this community in the mere four years this campus has been part of Bethel, and now through this refinancing, strengthened our position. I look forward to many future endeavors with HJ Sims” – Beth Goldstein, CEO, The Bethel Methodist Home.

Financed Right® Solutions—Andrew Nesi: 203.418.9057 | [email protected]

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, Sims has nationwide investment banking, private wealth management and trading locations. Member FINRA, SIPC. Testimonials may not be representative of another client’s experience. Past performance is no guarantee of future results. Facebook, LinkedIn, Twitter, Instagram.

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HJ Sims Advises Presbyterian Villages of Michigan on Financing Independent Living Rental Expansion Project

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FOR IMMEDIATE RELEASE             

October 15, 2020

CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

HJ Sims Advises Presbyterian Villages of Michigan on Financing Independent Living Rental Expansion Project

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful September 2020 financing in the amount of approximately $38.18 million for Presbyterian Villages of Michigan (PVM), an award-winning non-profit, aging services network assisting people of all faiths and diverse communities across MI since 1945.

Sims completed its first financing with PVM in 2015, serving as underwriter for PVM’s Series 2015 bonds. Since 2015, Sims has continued to provide PVM with advisory services for planning future capital expansion projects, monitoring debt capacity and analyzing the obligated group structure.

In 2002, PVM acquired land immediately adjacent to its Village of East Harbor campus for an expansion project. In 2018, The Village of East Harbor completed a new Health and Wellness Center. The current project being financed comprises the final phase of the Health and Wellness Center project, and a new independent living rental expansion project known as Harbor Inn. The Harbor Inn campus will include 12 rental single-level ranch homes, 36 rental independent living units, and a three-story apartment building, encompassing 60 independent living units.

PVM’s board, based on analysis provided by Sims, decided to absorb the Harry & Jeannette Weinberg Green Houses at Rivertown Neighborhood (Weinberg) into the Obligated Group, in addition to adding Harbor Inn to the Obligated Group. Sims worked with PVM and Fitch Ratings to secure a “BB” rating for the new bond issuance, and existing Series 2015 bonds. Weinberg is a 501(c)(3) designated, MI non-profit corporation located in Detroit. PVM has a Use Agreement with PACE Southeast MI, a joint venture of Henry Ford Health System and PVM, for the exclusive use of the Weinberg. Absorbing Weinberg into the Obligated Group allowed PVM to refinance the Weinberg Green Houses’ outstanding CDFI debt as part of the 2020 tax exempt bond financing.

The financing successfully closed on September 30, consisting of $18.18 million of Series 2020A bonds underwritten by Sims, and $20 million Series 2020B direct placement draw-down bonds purchased by Huntington Public Capital Corporation.

The Series 2020B bonds were issued in a floating-rate mode and hedged with a forward-starting SWAP beginning at the end of the draw period, and cancellable in five years, as well as a seven-year final maturity matching the loan tenor. The projected combined cost of capital of the 2020A and 2020B bonds is 3.48%.

“Following up on the 2015 restructuring and financing, HJ Sims went back to work with PVM’s Board and management leadership to provide key guidance to PVM’s next steps in expanding and strengthening its Obligated Group, resulting in the 2020 restructuring and financing, remarkably during COVID-19. Sims provided excellent leadership to the financing team. PVM looks forward to working with our partners at Sims as we immediately explore other financing needs to expand and reposition our service offerings,” Said Brian Carnaghi, SVP of Finance and Business Development, CFO, Treasurer, PVM.

Financed Right® Solutions—Aaron Rulnick: [email protected], 301-424-9135 | Patrick Mallen: 301-448-7111,  [email protected].

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, Sims has nationwide investment banking, private wealth management and trading locations. Member FINRA, SIPC. Testimonials may not be representative of another client’s experience. Past performance is no guarantee of future results.  Facebook, LinkedIn, Twitter,  Instagram.

An Exclusive Investment Opportunity: John Knox Village

**This financing has been successfully closed. Please contact you advisor for any potential secondary market opportunities.**

$72,480,000*
City of Pompano Beach, Florida
Tax-exempt Revenue and Revenue Refunding Municipal Bonds
Series 2020
(John Knox Village)

HJ Sims is pleased to serve as the sole underwriter for John Knox Village of Florida, Inc. (John Knox) is a 501(c)(3) corporation incorporated and existing under the laws of the State of Florida. John Knox owns and operates a Life Plan Community (LPC) located on approximately 65 acres in the City of Pompano Beach, Broward County, Florida. John Knox has grown from a small retirement community, consisting of a three-story building and 24 triplexes surrounding a lake, to the second largest CCRC in the State, and is comprised of 654 independent living units with various common areas; 62 assisted living units and associated common areas; and 194-bed skilled nursing suites (total 912 units).https://hjsims.com/johnknoxvillage

About the Bonds

  • Series 2020
    • $72,480,000*
    • Rated “A- Negative Outlook“ by Fitch Ratings
    • Tax-exempt from Federal Income Tax
    • Minimum denominations $5,000

 Use of Proceeds

  • Campus improvements, including the development of a community pavilion that houses a performing arts center, dining and other amenities
    • $41.5mm in project costs
      • $36.16mm in Pavilion Project costs
      • $5.4mm reimbursement in capital expenditures previously incurred
    • Refunding of $19.075mm in outstanding Series 2010 Bonds
    • Repayment of $12.2mm Line of Credit
    • Fund 20 months’ of Capitalized Interest
    • Fund a Debt Service Reserve

Security

  • Revenue Pledge
  • First Mortgage
  • Debt Service Reserve Fund

Key Financial Covenants

  • Debt Service Coverage Ratio – 1.10x tested on an annual basis
  • Days Cash on Hand – 100 days tested on an annual basis
  • Additional Debt Test
  • Limitations on Transfers

We are currently accepting indications of interest for these tax-exempt revenue bonds with an expected pricing week of October 19, 2020, and anticipated settlement week of October 26, 2020. For more information including risks, please read the Preliminary Official Statement in its entirety. If you have interest in purchasing these bonds, please contact your HJ Sims financial advisor, as soon as possible or call 877.577.3364.

LEARN MORE
877.577.3364

*Subject to change

No dealer, broker, salesperson, or other person has been authorized to give any information or to make any representation other than those contained in the Preliminary Official Statement and, if given or made, such other information or representation should not be relied upon as having been authorized by the Issuer, the Borrower, or the Underwriters. The information set forth herein has been obtained from the Issuer, Borrower, and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not construed as a representation of, the Underwriters. The information contained herein is subject to change without notice. Under no circumstances shall this constitute an offer to sell or solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offering or solicitation will be made only to investors pursuant to the Preliminary Official Statement, which should be read in its entirety. Investments involve risk including the possible loss of principal. HJ Sims is a member of FINRA and SIPC, and is not affiliated with John Knox Village.

HJ Sims Secures $6.5 million Additional Debt Financing for Capital Improvements

FOR IMMEDIATE RELEASE

CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

HJ Sims Secures $6.5 million Additional Debt Financing for Capital Improvements

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful August 2020 transaction in the amount of $6.5 million additional debt financing for capital improvements for the Philadelphia Protestant Home (PPH). PPH operates a continuing care retirement community in northeast Philadelphia, featuring 266 independent living units, 175 personal-care units and 126-bed nursing facility.

PPH has been funding capital improvements from general fund revenues. To efficiently manage cash-flow, PPH elected to finance $6.5 million of upcoming capital improvements. Sims, as financial advisor, developed a financing plan that provided for the funding of the required capital improvements, while implementing a structure that maintained maximum flexibility to maintain their debt service at manageable levels.

Prior to engaging PPH’s existing banking partner, Citizens Bank (Citizens), Sims worked with the PPH Fiscal Oversight Committee to develop structuring options. Following engagement of Citizens, Sims led the effort in working with Citizens to finalize the debt structure, within the confines of the bank’s requirements. Due to impacts of COVID-19, Sims negotiated a modified Debt Service Coverage test to the benefit of PPH. The additional obligations were structured as parity debt with PPH’s outstanding Series 2015 obligations.

Citizens provided $6.5 million of senior debt financing, fully amortizing in ten-years, and a five-year interest-only period followed by monthly principal amortization. The obligations were structured with a five-year, PPH-owned par call provision, and were issued on a tax-exempt basis through the Philadelphia Authority for Industrial Development (PAID). This provision was paramount as PPH’s existing Series 2015 Obligations mature in seven years, while Citizens could only defer principal on the Series 2020 obligations for five years. This call feature will allow PPH to restructure future debt at minimal cost.

Following closing of the Series 2020 Bonds, PPH locked in a synthetic fixed-rate on the debt. Sims served as Swap Advisor for the swap transaction, which also bears a mirroring, PPH-owned par termination right in five years, to align with the Citizens’ loan.

Sims, Citizens, PAID and the financing team worked diligently with PPH to secure final approvals, including navigating through unanticipated delays followed by the onset of COVID-19, to successfully close the financing.

“The HJ Sims’ commitment to incomparable client services has once again served The Philadelphia Protestant Home well. Despite the unforeseen challenges and uncertainly resulting from the pandemic, the Sims’ team provided valuable insight and unwavering advocacy to assure our financing needs were achieved. We are thankful for our partnership, the integrity, and collaboration with Aaron Rulnick and Siamac Afshar, for always putting what is in the best interest of PPH, first,” said John Dubyk, CEO, PPH. Philadelphia Protestant Home

Financed Right® Solutions—Aaron Rulnick: [email protected] or 301-424-9135 | Siamac Afshar: [email protected] or 267-360-6250.

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, HJ Sims has nationwide investment banking, private client wealth management and trading locations. Member FINRA, SIPC. Facebook, LinkedIn, Twitter,  Instagram.

# # #

An Exclusive Investment Opportunity: Toby and Leon Cooperman Sinai Residences at Boca Raton

**This financing has been successfully closed. Please contact you advisor for any potential secondary market opportunities.**


$143,745,000*
Palm Beach County Health Facilities Authority
Series 2020A Long Term Fixed Rate Bonds $56,645,000
Series 2020B-1 Entrance Fee Principal Redemption BondsSM $29,030,000
Series 2020B-2 Entrance Fee Principal Redemption BondsSM $58,070,000
(SINAI RESIDENCES PHASE II EXPANSION)

HJ Sims is pleased to serve as the sole underwriter for Toby and Leon Cooperman Sinai Residences of Boca Raton (Sinai) to fund an expansion via the sale of tax-exempt, long-term, fixed rate and tax-exempt Entrance-fee Principal RedemptionSM bonds. In 2014, HJ Sims served as senior managing underwriter for the municipal revenue for Phase I of Sinai, a continuing care retirement community located in Boca Raton, Florida. Federation CCRC Operations Corp. is a Florida 501(c)(3) located on the campus of the Jewish Federation of South Palm Beach County (The Federation) in Boca Raton, Florida. The site is known as/dba The Toby and Leon Cooperman Sinai Residences of Boca Raton. Sinai’s initial independent living units became available for occupancy in January 2016, and were almost fully occupied within six months, with 100% occupancy occurring 11 months after opening. Sinai’s currenlty consists of 234 independent living units, 48 assisted living units, 24 memory support units and 60 Skilled Nursing Rooms.

Artist's Rendering; subject to change

Virtual Site Visits/Tours

Please find links below to virtual tours of the existing campus, expansion project and floor plans:

About the Bonds

  • Series 2020A
    • $54,110,000
    • Non-rated, tax-exempt
    • Bonds are exempt from Federal Income Tax and exempt from State of Florida Income Tax
    • Denominations of $5,000
    • Interest will be payable on June 1 and December 1 of each year, commencing December 1, 2020
    • Final maturity: June 1 2055
  • Series 2020B-1
    • $29,030,000
    • Non-rated, tax-exempt Entrance-fee Principal RedemptionSM bonds
    • Bonds are exempt from Federal Income Tax and exempt from State of Florida Income Tax
    • Denominations of $5,000
    • Interest will be payable on June 1 and December 1 of each year, commencing December 1, 2020
    • Final Maturity: June 1, 2027
  • Series 2020B-2
    • $53,070,000
    • Non-rated, tax-exempt Entrance-fee Principal RedemptionSM
    • Bonds are exempt from Federal Income Tax and exempt from State of Florida Income Tax
    • Denominations: $5,000
    • Interest will be payable on June 1 and December 1 of each year, commencing on December 1, 2020
    • Final maturity: June 1, 2025
  • Series 2020C
      • $5,000,000
      • Non-rated, TAXABLE Entrance-fee Principal RedemptionSM
      • Exempt from State of Florida Income Tax
      • Denominations: $5,000
      • Interest will be payable on June 1 and December 1 of each year, commencing on December 1, 2020
      • Final maturity: June 1, 2024
    •  

 Use of Proceeds

  • Phase II Expansion Project
    • The new expansion project will be located on 4.6 acres of the southeast portion of Sinai’s existing 21-acre campus.
    • Low-rise buildings encompassing 111 new independent living units, common and green space, dining facilities and a resort-style pool.
    • The project will include approximately 240,000 in total square footage.
    • The expansion contains a variety of independent living configurations ranging from 880 square feet (one-bedroom) to 3,200 square feet (Valencia) with an average of 1,357 square feet.
    • Monthly service fees will average $5,381 and entrance fees will average $867,721 for all expansion units.
    • Currently, there are 73 depositors reflecting a pre-sale rate of 65.8%.
    • Of the 73 depositors, the average age is 85-years-old, depositor median annual income is $222,000, and depositor median net-worth is $4,593,000.

 Security

  • Interest in amounts of deposit, and gross revenue, including Entrance Fees and accounts receivable
  • Personal property and real estate lien
  • Interest in Debt Service Reserve Fund, Working Capital Fund, Coverage Support Fund and Entrance Fee Fund 

 Key Financial Covenants

  • Debt service coverage ratio of 1.20x (tested annually, reported quarterly)
  • Liquidity covenant of 150 days cash-on-hand (tested semi-annually

We are currently accepting indications of interest for these tax-exempt and taxable bonds with an expected pricing week of August 31, 2020, and anticipated settlement September 15, 2020. For more information including risks, please read the Preliminary Official Statement in its entirety. If you have interest in purchasing these bonds, please contact your HJ Sims financial advisor, as soon as possible.

LEARN MORE
888.978.1746

*Subject to change

No dealer, broker, salesperson, or other person has been authorized to give any information or to make any representation other than those contained in the Preliminary Official Statement and, if given or made, such other information or representation should not be relied upon as having been authorized by the Issuer, the Borrower, or the Underwriters. The information set forth herein has been obtained from the Issuer, Borrower, and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not construed as a representation of, the Underwriters. The information contained herein is subject to change without notice. Under no circumstances shall this constitute an offer to sell or solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offering or solicitation will be made only to investors pursuant to the Preliminary Official Statement, which should be read in its entirety. Investments involve risk including the possible loss of principal. HJ Sims is a member of FINRA and SIPC, and is not affiliated with Tony and Leon Cooperman Sinai Residences of Boca Raton.

HJ Sims 2020 Late Winter Conference Recap

Thank you!

On behalf of the entire HJ Sims Investment Banking team, we want to thank you for attending the 17th Annual HJ Sims Late Winter Conference at the InterContinenal San Diego in San Diego, California. We at HJ Sims are proud of our commitment to furthering conversation about financing methods & operating strategies in the Senior Living Industry. Bringing together a dynamic group of speakers from Non-Profit and Proprietary Senior Living Providers, as well as outside experts with thought-provoking views, it is our goal to have provided profound insight and an invaluable forum for exchanging ideas and information.

We also recognize that our conference was one of the last in-person events that was fortunate to take place. We appreciate those who attended, and we look forward to when we can get together in-person again.

Post-Conference Follow-Up

Our Conference Recap provides comprehensive coverage of the many sessions and event highlights from the 2020 HJ Sims Late Winter Conference.

Highlights include:

  • Keynote speakers from outside the senior living industry who shared valuable ideas from fields like Canyon Ranch® – the leader in luxury health and wellness introduced a potential new concept for senior living communities; Dr. Matthew Lieberman, a dedicated researcher on cognitive social neuroscience where we explored research indicating that we need to be connected socially to be physically and psychologically healthy; and Dr. Robert Genetski, an economist who led a discussion of the current financial markets where we explored principles vital to economic and political freedom.
  • Informal and memorable activities to bolster connection and conversation, included a glorious morning on the waters of San Diego Harbor for sailors and fishing enthusiasts; golfing at the world-renowned Torrey Pines; tasting a sample of San Diego’s best brewery and distillery products; and sharing an incredible evening with friends and a few new animal pals at the famed San Diego Zoo.
  • Educational sessions that covered topics such as: acute and post-acute care, medical and recreational cannabis, serving middle-income seniors, strategies to avoid moving from a stressed to distressed financial or operational situation, and a new approach to incorporating wellness in senior living.

In case you missed it, below are the details from our 17th Annual HJ Sims Late Winter Conference.

Agenda
Schedule and activities
Roster of conference speakers and their biographies

We invite you to watch the highlights of our conference in a recap video that features all the best parts of our conference. We also invite you to view the many beautiful photos from our conference.

Peruse the photo gallery and video montage below, and visit the HJ Sims Facebook, Instagram, LinkedIn or Twitter pages.

Taco Tuesday Dinner and Reception – LWC2020

San Diego Zoo Reception

Network Breaks

Corporate Social Responsibility: Gift of Life

The Gift of Life (GOL) team was thrilled to provide an update about the strong partnership between HJ Sims and GOL during the last two years, which has helped to promote the registry and subsequently add new donors, as well as supported numerous efforts to advance the GOL mission.

For more information on HJ Sims’ CSR program and Gift of Life, please visit: www.hjsims.com/servingourcommunitites.

Save the Date

Please save the date for next year, the 18th Annual Sims Late Winter Conference at the Sarasota Hyatt Regency, Sarasota, Florida. While we are still grappling with how we will hold our annual conference, rest assured, we will hold one… more to follow. Stay tuned, and stay healthy.

Thanks again!

HJ Sims Expands Investment Banking Team to West Coast, Midwest; Grows Private Client Team in Florida, Puerto Rico

HJ Sims Logo

CONTACT: Tara Perkins, AVP Marketing Communications | 203-418-9049 | [email protected]  

HJ Sims Expands Investment Banking Team to West Coast and Midwest; Grows Private Client Team in Florida and Puerto Rico 

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the addition of two senior bankers as the firm expands with the opening of new offices in the Midwest and on the west coast. 

Lynn Daly joins Sims as Executive Vice President in its new Chicago location with 30+ years of experience working with non–profit organizations in financing. Daly was acting head of Senior Living Investment Banking at BB&T Capital Markets, where she managed BB&T’s senior living relationships in the Midwest, facilitating financings of $1.3+ billion. Prior to BB&T Capital Markets, Daly spearheaded the Catholic Initiative within senior living investment banking for Ziegler, and served as Head of Allied Irish Bank’s Midwest region. Daly earned a BS in economics from Kalamazoo College, and an MBA from Northwestern University’s Kellogg Graduate School of Management.  

“We are so thrilled to welcome Lynn Daly to the HJ Sims family. Lynn is a well-respected and nationally recognized thought leader in the senior living sector and the perfect leader to grow our presence in the Midwest and to work with our team as we continue to expand throughout the US. Lynn’s extensive experience as both a senior commercial and investment banker, along with her integrity, deep knowledge, and client-centered approach, are vital characteristics and values that will guide our clients and business partners through these challenging times,” said Aaron Rulnick, Managing Principal, Sims. 

Brady Johnson joins Sims as Senior Vice President in its new west coast office, in Orange County, CA. Previously with Hunt Real Estate Capital, Johnson was responsible for real estate debt originations for seniors housing and healthcare properties. He helped establish the firm’s seniors housing real estate lending platform, including a proprietary bridge loan program and expansion of the firm’s agency and HUD financing capabilities. Johnson closed the firm’s first Fannie Mae seniors housing loan, followed by its first seniors housing Freddie Mac loan. Prior to joining Hunt, Johnson served as Director of Seniors Housing & Healthcare at RED Capital Group, and served with GE Capital in various commercial finance roles. Johnson earned an MBA from Thunderbird School of Global Management and Bachelor’s degrees (Economics and Spanish) from the University of Utah.  

“We are excited to welcome Brady Johnson to the Sims family. Brady will help establish our west coast presence serving for-profit and non-profit senior living clients. Brady’s broad experience in FHA, Fannie Mae, Freddie Mac, mezzanine and senior housing finance, and his focus on achieving the best solutions for his clients make him a great asset,” said Jeffrey Sands, Managing Principal, Sims. 

In late 2019, Sims expanded its Private Client team, adding an office in Jupiter, FL, housing a three-person advisory team, as well as a senior partner of Sims Energy. HJ Sims’ Puerto Rico private client office moved its Guaynabo headquarters to a larger space in Metro Office Park. The spacious quarters enable the team to better host clients, while the expansion reinforces Sims’ established presence and growth on the island. 

HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm, headquartered in Fairfield, CT, with nationwide locations. www.hjsims.com. Investments involve risk, including loss of principal. This is not an offer to sell or buy any investment. Past performance is no guarantee of future results. Member FINRA, SIPC. Facebook, LinkedIn, Instagram Twitter. 

Gift of Life: Recap from 17th Annual Late Winter Conference

Gift of Life (GOL) joined our 17th Annual HJ Sims Late Winter Conference February 25-27 in San Diego. GOL was represented by Alicia Lorio, a leader of their Young Professionals Committee in Orange County; and GOL blood stem cell donor, Alec Nadelle.

Alicia shared GOL’s history and spoke about the importance of growing the GOL stem cell registry to give second chances to those afflicted by blood and bone cancer. Before introducing Alec, Alicia shared how individuals can get involved with GOL and increase the number of those within the registry by encouraging individuals to swab their community and swab at their workplace.

Next, Alec shared his experience with GOL. He donated blood stem cells in November 2012 to a (then 71-year-old) woman battling a fast-moving form of Leukemia. The presentation left attendees feeling truly moved.

The team was excited to share an update about the amazing CSR partnership that HJ Sims and GOL have shared during the last two years.

From running fundraising drives to sponsoring the Steps for Life events to helping underwrite equipment for a
new state-of-the-art Stem Cell Collection Center located in Boca Raton, HJ Sims continues to be honored to support GOL and their mission to cure blood cancer through marrow and stem cell donations. GOL has facilitated nearly 3,600 transplants since its inception.

For more information, visit www.giftoflife.org

HJ Sims Leads Largest Refinancing for a Single Site Life Plan Community

FOR IMMEDIATE RELEASE

JANUARY 17, 2018

CONTACT: Tara Perkins, PR & Marketing Specialist | 203-418-9049 | [email protected]

HJ Sims Leads Largest Refinancing for a Single Site Life Plan Community

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, announced the closing of a financing for NewBridge on the Charles (NewBridge), located in Dedham, MA. The $236,300,000 financing, which closed on December 19, 2017, marked the largest fixed rate public bond issue in 2017 for the refinancing of a single site Life Plan Community.

NewBridge is managed by Hebrew SeniorLife (HSL), one of Massachusetts’ largest not-for-profit healthcare organizations, with nine campuses in metro-Boston, conducting aging research and providing geriatric care education via its affiliation with Harvard Medical School. NewBridge consists of independent and assisted living, and a health care facility.

NewBridge was developed in 2007 with a $457 million tax exempt bond issue underwritten by Sims, the largest issue of its kind. Despite opening during the 2009 recession, NewBridge reached 96% independent living occupancy within 25 months. Sims is privileged to have partnered with HSL for 25 years, financing NewBridge and a sister community, Orchard Cove, in Canton, MA.

Long-term capital stability was a vital objective for NewBridge. With existing debt held by a consortium of commercial banks and a maturity in 2019 there was inherent refinancing risk and future interest rate uncertainty. Achieving the lowest possible debt service was critical to NewBridge.

Sims worked with HSL management to achieve an initial credit rating of BB+ (Stable) from Fitch. This rating, along with HSL’s commitment to NewBridge through the contribution of $6 million toward the debt service reserve fund plus the ability to issue bonds with a 40-year maturity, substantially lowered the annual debt service.

With considerable uncertainty in the tax exempt bond market regarding tax reform and a likely future prohibition on advance refundings, Sims included a five-year call provision in the bond structure, providing maximum flexibility to NewBridge.

Despite distribution restrictions ($100,000 minimum purchase) by the issuer for below-investment-grade rated bonds, $16+ million in bonds were sold to individual investors with  40 institutions purchasing the remaining bonds. Sims’ distribution strength provided lower than anticipated interest rates, from 1.85% (one-year maturity) to 4.125% (40-year maturity).

“The Sims team led a near seamless process for NewBridge’s $236.3 million public bond issuance. Sims’ deep knowledge of the tax exempt market and CCRC business model enabled HSL to obtain a favorable credit rating for NewBridge on a non-recourse basis. They did an excellent job as the book-runner, staging the co-manager to complement its own investor base to achieve a significant over-subscription and lower cost of capital for NewBridge. Sims’ quality of execution exceeded our expectations,” said James Hart, Chief Financial Officer, HSL.

For Financed Right® solutions please contact Andrew Nesi at 203-418-9057 | [email protected]. For more information including risks, read the Preliminary Official Statement.

ABOUT HJ SIMS: Founded in 1935 on Wall Street, Sims is a privately held investment bank and wealth management firm with $2.2 billion of assets under management. Sims is one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $22 billion for projects throughout the US. The firm is headquartered in Fairfield, CT, with investment banking, private client wealth management and trading offices nation-wide. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, is custodian of all client assets. Sims is not affiliated with NewBridge on the Charles or Hebrew Senior Life. www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Member FINRA, SIPC. Follow us on LinkedIn, Facebook and Twitter.

HJ Sims Provides Seed Capital for New University Related Life Plan Community

FOR IMMEDIATE RELEASE

DECEMBER 19, 2018

CONTACT: Tara Perkins, Assistant Vice President | 203-418-9049 | [email protected]

HJ Sims Provides Seed Capital for New University Related Life Plan Community

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful $15,000,000 financing in October 2018 for Broadview Senior Living at Purchase College, a Life Plan Community under development in Purchase New York. Broadview will be located on the campus of Purchase College, a public four-year college of visual and performing arts, liberal arts and sciences, founded in 1967 and one of the 13 colleges of the State University of New York (SUNY) system.

Known for its arts programs and home of the Neuberger Museum of Art and The Performing Arts Center, Purchase continually attracts the local community to its campus. In 2003, the President of Purchase assembled a task force to determine how to best fulfill the college’s commitment to lifelong learning. A plan was formulated for the development of a senior residential community to be located on a 40-acre leased parcel of the campus and focused on intergenerational and lifelong learning. Broadview will initially consist of 220 independent living apartments and villas, 18 assisted living beds, 16 memory care beds and amenity space with room for potential expansion in later years. Twenty percent of the units will be set aside for residents earning below 80% of the local median income.

The Purchase College Foundation Housing Corporation provided $5 million to fund initial costs. An estimated $15 million will be required before permanent financing, anticipated to occur within three years. As a community under development with no operating history, financing was a challenge. Sims structured a five-year, $15 million Bond Anticipation Note (BAN) issue to fund the remaining costs. In a BANs issue, interest payments are not paid currently but with proceeds of the permanent financing.

With little collateral and repayment contingent on obtaining permanent financing, these are speculative bonds which limits potential investors. Following close cooperation with management and development teams, Sims secured the required financing commitment with an experienced institutional investment fund. Sims’ Private Client Group sold approximately $4 million to individual investors, despite a $100,000 minimum investment. Sims closed on the $15 million tax-exempt BAN issue with an interest rate 11%. Sims expects to provide up to $325 million for the construction and permanent financing of Broadview.

“The Sims team, especially Andrew Nesi, has been like a partner since we started this venture and guided us along the way. Importantly, they’ve really believed in us and the vision of creating a unique senior learning community at Purchase. We’re grateful for their hard work and professionalism in successfully securing our pre-development funding and looking forward to continuing to work with them through permanent financing,” said Wayne Rush, Vice President and Project Manager, Purchase Senior Learning Corporation.

For Financed Right® solutions, contact: Andrew Nesi at 203-418-9057 | [email protected].

ABOUT HJ SIMS: Founded in 1935 on Wall Street, HJ Sims is a privately held investment bank and wealth management firm with $2.2 billion of assets under management. HJ Sims is known as one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $25+ billion for projects throughout the US. The firm is headquartered in Fairfield, Connecticut, with nationwide investment banking, private client wealth management and trading locations. HJ Sims is not affiliated with Purchase College, Broadview or Purchase Senior Living Corporation. Visit www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Member FINRA, SIPC. Follow HJ Sims on Facebook, LinkedIn and Twitter.

HJ Sims Partners with Duncan-Williams to Finance Start-up Construction of The Farms at Bailey Station, an RCA Community

CONTACT: Tara Perkins, Assistant Vice President, Marketing Communications, HJ Sims | 203-418-9049 | [email protected]

Michelle Vincent, Retirement Companies of America | 901-794-2598 | [email protected]

Gary Lendermon, Duncan-Williams, Inc. | 901-260-6847 | [email protected]

 HJ Sims Partners with Duncan-Williams to Finance Start-up Construction of The Farms at Bailey Station, an RCA Community

FAIRFIELD, CT—HJ Sims (Sims) is pleased to announce the completion of a $219,250,000 financing for the new construction of The Farms at Bailey Station (The Farms), a Life Plan Community (LPC), located in Collierville, TN. The Farms is a sister community of Kirby Pines Estates (Kirby), located in Memphis, TN, which was voted Best Retirement Community in Memphis and the Mid-South. The Farms is designed to offer city and country living within a luxurious setting. With customizable homes, a menu of amenities, and the security of covered long-term care, The Farms will offer residents effortless, elegant living. Kirby and The Farms are run by Retirement Communities of America (RCA), a mission-driven organization with a 35+-year legacy of faith-based caring.

Duncan-Williams, Inc. (Duncan) served as co-manager on the financing. Founded in 1969, Duncan is a full-service broker dealer and nationally recognized investment banking firm headquartered in TN. The Farms is 70% pre-sold. Rees Architects and Renaissance Group served as architects; Dalhoff Thomas design studio of Memphis assisted as landscape architect. Linkous served as general contractor.

“The Farms has been a labor of love. RCA assembled a team that worked tirelessly toward a successful closing. The Sims team brought expertise, creativity, commitment and flawless execution with Duncan-Williams, and Greystone Communities. The team took a personal interest, and was sensitive and responsive to the complexities of the project and the desires of our Board Members. They successfully facilitated the financing and delivered a favorable rate structure, while with the Sims and Duncan-Williams team executed placement of the bonds masterfully,” Michelle Trammell-Vincent, Senior Vice President, RCA.

Sims structured a 40-year financing to lower annual debt service (the only 2019 senior living financing with this amortization length). The financing included non-rated, fixed rate bonds and bank purchased draw-down bonds for the independent living apartments, assisted living, memory care and skilled nursing portion of the project. The Community also obtained a bank revolving credit facility for the garden home portion of the community. Involving banks saved the project $6+ million in carried interest. Sims structured a Liquidity Support Agreement and Coverage Support Agreement to enhance credit and security for investors. Sims and Duncan placed the bonds with 20 institutional investors and $17+ million with accredited individual investors.

“We were honored to work with The Farms to provide its complete financing. The LPC will be the most up-to-date in its market and will be a beautifully landscaped campus of garden homes, apartments, assisted living, memory care and skilled nursing,” William Sims, CEO and Managing Principal, Sims.

Chauncey Lever of Foley Lardner LLP, John Stevens of Iberia Bank, Charlie Trammell and Michelle of Retirement Companies of America, David Williams of Butler Snow LLP, Jimmy Rester of HJ Sims, Michael Bradshaw of Butler Snow LLP, and Abe Benavides of McCall, Parkhurst & Horton LLP.

Financed Right® solutions: James Rester at 214-558-7175 or [email protected]. 

ABOUT HJ SIMS: Founded in 1935 on Wall Street, HJ Sims is a privately held investment bank and wealth management firm. HJ Sims is known as one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $28+ billion for projects throughout the US. The firm is headquartered in Fairfield, CT, with nationwide investment banking, private wealth management and trading locations. Visit www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Past performance is no guarantee of future results. HJ Sims is not affiliated with Duncan-Williams, RCA or The Farms at Bailey Station. Member FINRA, SIPC. Follow HJ Sims: Facebook, LinkedIn, Instagram and Twitter.

HJ Sims Welcomes Tom Bowden as Vice President, Investment Banking, Bolsters Florida Banking Team

CONTACT: Tara Perkins, Assistant Vice President | 203-418-9049 | [email protected]

HJ Sims Welcomes Tom Bowden as Vice President, Investment Banking, Bolsters Florida Banking Team

FAIRFIELD, CT— HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce that Thomas “Tom” Bowden joins as Vice President, Investment Banking.  Located in Richmond, Virginia, Bowden leads business development efforts in Virginia, the Carolinas, and Georgia.

Prior to joining Sims, Bowden spent seven years as Vice President with BB&T Capital Markets, serving senior living clients in the Southeast region of the U.S. Prior to BB&T, he interned in the public finance investment banking group with Davenport & Company, LLC, and served as a Senate Page in the U.S. Congress.

Bowden is focused on raising capital for retirement communities, with a significant emphasis on those organized as non-profits. Well-versed in various aspects of senior living governance and operations, he strives to be a keen advocate for clients, colleagues and collaborators. Bowden is skilled in leading discussions focused on industry and capital markets education, which he views as a fundamental and necessary baseline of understanding for decision making.

Bowden earned a B.S. in accounting and business administration from Washington and Lee University, where he was elected to the Executive Committee of the Student Body, played on the Varsity Golf team, and was a member of the Sigma Chi Fraternity.

“I believe in an educational approach to serving the industry. The goal is to allow clients to make the decision regarding what is best for them, and the path to that goal is achieved through educating management teams and boards. I am excited to continue that work with the outstanding HJ Sims’ team, and am particularly optimistic about bringing the benefit of HJ Sims’ platforms to clients in the Southeast,” said Bowden.

“We are pleased to welcome Tom to our team; he is a highly respected investment banker dedicated to the senior living industry. Tom will lead efforts in Virginia, the Carolinas, and Georgia. Tom brings an established presence in an important region and we are thrilled to have someone of his experience and character joining our team. We are equally happy to announce that Senior Vice President, Kerry Moynihan will co-lead our client relationships and business development efforts in Florida, alongside Senior Vice President, Melissa Messina. Kerry is based in Orlando, FL, and has more than a decade of senior living banking experience. We are elated to have such strong leadership and expertise in the Southeast region,” said Aaron Rulnick, Managing Principal.

ABOUT HJ SIMS: Founded in 1935 on Wall Street, HJ Sims is a privately held investment bank and wealth management firm with $2.2 billion of assets under management. HJ Sims is known as one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $25+ billion for projects throughout the US. The firm is headquartered in Fairfield, Connecticut, with nationwide investment banking, private client wealth management and trading locations. Visit www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Past performance is no guarantee of future results. Member FINRA, SIPC. Follow HJ Sims on Facebook, LinkedIn, Instagram and Twitter.