Sims Mortgage Funding Completes Metairie Manor Refinancing in Louisiana

Sims Mortgage Funding, Inc.

by Anthony Luzzi

From the Jersey Meadowlands to the Bayou – Sims Mortgage Funding Has It Covered!

Although it is headquartered in New Jersey, Sims Mortgage Funding seems to have a second home in Louisiana – we have closed close to $530 million in HUD-insured loans in the Pelican State. We returned there last month to complete a $10,814,900 refinancing for Metairie Manor, a 287-unit, Section 8 funded, affordable senior housing community owned and managed by affiliates of the Archdiocese of New Orleans.

The backstory? We originally refinanced Metairie Manor in 2012 when it paid off its HUD Section 202 Direct Loan; that refinancing produced about $250,000 in annual debt service savings that have been used to fund wellness and affordable nutrition programs, resident units deep-cleaning services, and enhanced transportation options. Interest rates for HUD-insured loans have dropped since the 2012 refinancing, so the Archdiocese brought us back to evaluate options to generate more debt service savings.

Our solution? We originated a new HUD-insured loan under the Section 222(a)7 program, an expedited review option that does not require an appraisal and has a pared-down application and underwriting format. This minimized the time it took us to develop the application and loan underwriting, and the time it took for HUD to review and approve the deal.

The result? The 223(a)(7) loan reduced the project’s interest rate by 33% and produced debt service savings of $118,000 annually. Moreover, in order to maximize annual debt service savings, we negotiated an extension of the loan term of almost 10 years. The additional savings from the new 223(a)(7) loan materially expands Metairie Manor’s capacity to provide services and programs to its residents, enhancing it already-solid reputation in the community. We also built approximately $700,000 into the new loan to supplement the existing Reserve for Replacements fund, so there is a stable platform to provide for Metairie’s physical needs in the future.

The takeaway? The new 223(a)(7) loan will enable Metairie Manor to expand its programs and services and increase its capital reserves – all to be accomplished without an increase in the existing Section 8 funding.

An encore? The Metairie Manor refinancing is the eleventh HUD-insured loan we have closed for the Archdiocese and its management affiliate, Christopher Homes, Inc.

For more information, please contact Andrew Patykula at [email protected].

Sims Mortgage Funding, Inc. originates, underwrites, and funds loans for Healthcare, Multifamily and Hospital projects. We have completed over $2 billion in HUD-insured transactions and are an approved LEAN (healthcare) and MAP (multifamily) lender.

Sims Mortgage Funding, Inc. is a wholly owned subsidiary of HJ Sims.

HJ Sims Secures $41.9M of Bank Financing for Expansion Project and Refinancing

FOR IMMEDIATE RELEASE

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

HJ Sims Secures $41.9M of Bank Financing for Expansion Project and Refinancing

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing of a May 2021 financing in the amount of $41.89MM for Sunset Retirement Communities (Sunset), a multi-campus not-for-profit senior living provider located in Michigan.

In 2009, Sunset embarked on development of Waterford Place, completing the campus in 2015. In 2020, Sunset pursued phase three, including the addition of 62 independent living apartments, 20 villas and amenity spaces. Sims was engaged to identify the optimal capital structure for Sunset’s project financing, while reviewing existing bank debt.

The market study for phase three (completed in March 2020) supported the need for the expansion. COVID-19 slowed down pre-sales and created a need for management to focus on existing operations. After approaching potential lenders in May 2020, Sunset’s management team delayed the financing. However, Sims continued to work with Sunset, exploring capital structures. With its strong balance sheet and foundation support, Sunset moved forward with development of the 20 villas and self-funded construction costs.

During Autumn 2020, Sims re-analyzed financing options for Sunset’s apartment expansion and existing debt. Hefty termination costs associated with an existing long-term swap limited the number of viable refinancing options. Sims identified a new commercial banking partner that would finance the apartment project and replace one of the lenders.

In order to minimize Sunset’s long-term cost of capital and avoid large forward starting swap premiums, Sims worked with the lending partner to allow for the new money long-term bond proceeds to be drawn first such that the forward swap could take effect in just five months. By drawing the long-term proceeds first, Sunset has time to secure proceeds from strategic initiatives, which will be applied to project costs before any draws on the short-term bond proceeds. This allows Sunset to further minimize its funded interest costs during construction. 

On May 12, 2021, Sims closed the Series 2021 financing for Sunset, which included three unique tranches of debt:

  • $13.40M of Series 2021A Bonds, partially refunding Series 2014 debt and enabling Sunset to avoid any disruption or incurring a greater cost of capital.
  • Up to $9.90M of Series 2021B Bonds, funding construction costs associated with the project and minimizing annual debt service burden.
  • Up to $18.59M of Series 2021C Bonds, funding construction costs associated with the project and enabling Sunset to deliver and minimize the overall debt service.

The Series 2021 financing, coupled with management’s prudent strategic decisions, positions Sunset for operational success and growth.

“Pursuing debt financing for an expansion and bank replacement during COVID-19 was challenging, but Sims made it happen. With Lynn Daly and Kerry Moynihan on point, Sims relentlessly pursued every avenue to ensure Sunset was Financed Right®. Sunset is very grateful for the Sims team’s expertise, industry connections and ability to close a deal with the right terms on an aggressive schedule. Sunset could not have picked a better partner. There is no question who our partner will be on future financings,” said Steven Bossenbroek, CFO, Sunset Retirement Communities.

Financed Right® Solutions—Lynn Daly: [email protected] or Kerry Moynihan: [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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HUD’s Three-Year Waiver – One Year Later

Sims Mortgage Funding, Inc.

by Anthony Luzzi

It has been slightly over one year since HUD waived its “three-year requirement” for multifamily projects to be eligible for mortgage insurance under the Section 223(f) refinancing and acquisition program.  Prior to that, a multifamily property could not benefit from obtaining a 223(f) loan until it was in service for three years, an eternity, especially when current rates for HUD-insured loans have been at historically low levels.  Developers unwilling to wait three years have typically used HUD’s Section 221(d)(4) program to finance new projects. 

However, the three-year waiver has given multifamily developers an opportunity to finance new projects with the best of both worlds – short-term bank financing for construction followed by a HUD take-out once the project has reached a modest level of stabilization.  How modest?  HUD will accept an application for 223(f) mortgage insurance after the property has reached one month of 1.176 debt service coverage and will close on the loan after three consecutive months at that same coverage has been achieved.  

However, developers considering bank financing for multifamily construction instead of a 221(d)(4) loan, then using a 223(f) loan to take out the bank debt should consider the advantages and disadvantages of that approach.

The Advantages:

  • The time to complete the bank financing will be shorter, enabling construction to start sooner.
  • Davis-Bacon “prevailing” wages for construction will not be required with a bank loan.
  • The construction contract and architect agreement can be structured with more flexibility.
  • The bank’s application will be less complicated and esoteric.

The Disadvantages:

  • Bank loan-to-cost ratios are lower, which means more equity will be needed to complete a bank deal. Some of this additional equity can be recovered with the 223(f) loan, as cash-outs at 80% loan-to-value underwriting are permitted.
  • Banks require recourse and personal guarantees.
  • There is interest rate risk on the 223(f) loan since it will not close until after construction is completed and there has been at least three months of stabilized debt service coverage.
  • Construction lending by banks has been somewhat curtailed during the COVID-19 pandemic.

We recently assisted a prospective client evaluate these options for a market-rate multifamily development in Florida and would be pleased to do the same for you.  What was his decision? For more information, please contact Anthony Luzzi at [email protected].

Sims Mortgage Funding, Inc., a wholly owned subsidiary of HJ Sims, originates, underwrites, and funds loans for Healthcare, Multifamily and Hospital projects. We have completed over $2 billion in HUD-insured transactions and are an approved LEAN (healthcare) and MAP (multifamily) lender.

HJ Sims arranges $4M PACE financing for StoneCreek

HJ Sims completed a $3.8 million retroactive Property Assessed Clean Energy (PACE) financing package on behalf of StoneCreek Real Estate Partners and Civitas Senior Living, for StoneCreek Littleton, a 92-unit assisted living and memory care facility in Littleton, Colorado that opened in January 2020. Please read more in Senior Housing News.

HJ Sims Partners with StoneCreek Real Estate Partners to Facilitate $3.8 million in Retroactive PACE Financing

FOR IMMEDIATE RELEASE

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

HJ Sims Partners with StoneCreek Real Estate Partners to Facilitate $3.8 million in Retroactive PACE Financing

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce a successful April 2021 Retroactive Property Assessed Clean Energy (PACE) financing in the amount of $3.8 million for StoneCreek Real Estate Partners (StoneCreek).

StoneCreek, a Dallas based developer, is a collaboration of professionals with 50+ years of combined experience in the operations, development and ownership of successful senior living communities in TX, CO and AZ. The operator, Civitas Senior Living (Civitas), is a Fort Worth, TX based for-profit owner/operator of senior living communities in TX, FL, OK, NM, KY and AZ. Founded in 2012, Civitas has 100+ corporate employees and manages 45+ senior living communities.

The StoneCreek Littleton development is new construction of a 92-unit senior housing community with 70 assisted living units and 22 memory care units. The community opened in January of 2020 and provides local access to quality senior housing and care in the Littleton area of Denver. With occupancy and operational challenges related to the COVID-19 pandemic, StoneCreek was exploring alternative capital sources to provide additional operational leverage when Sims proposed exploring retroactive PACE financing.

PACE is a Public/Private partnership that allows property owners to finance projects through voluntary assessments placed on the property by a state economic development agency. The program finances 100% of the energy efficiency, renewable energy, water conservation, resilience improvements and the related costs for construction and renovations/retrofits up to about 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 over the useful life of the project (15-25 years). The PACE program is typically considered an alternative source of financing to mezzanine debt where interest rates average between 12%-15%. In many states, PACE is allowed to be applied retroactively post-certificate of occupancy for qualified costs for a determinate amount of time.

Sims coordinated with StoneCreek, Civitas, the PACE loan provider and the Colorado PACE Authority for approval for PACE financing from the senior construction lender. Despite the atypical nature of the program, the financing team satisfied the concerns of the senior construction lender while also navigating the various regulatory challenges associated with multi-party financings.

StoneCreek, with the guidance of Sims, was able to borrow $3.8 million in PACE financing at 5.85% to finance necessary operating expenses related to an early 2020 opening and the ensuing impact of the Pandemic.

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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What Do the Suez Canal and HUD Multifamily Mortgage Insurance Have in Common

Sims Mortgage Funding, Inc.

by Anthony Luzzi

At first glance, that is an odd pairing, but stay with us, please.

The Suez Canal has recently been prominent in the news when a container ship became stuck, blocking the Canal and creating a massive logjam of ships at both ends.

There has been unprecedented demand for HUD’s multifamily mortgage insurance, creating logjams of applications waiting in queues across the five Regional Centers.

Demand has been fueled by historic low interest rates, notwithstanding their recent spike; more favorable loan-to-value, loan-to-cost, and debt service coverage ratios than conventional sources; non-recourse provisions that are a rarity elsewhere in the capital markets; and long-term (up to 40 years), fully amortizing structures.

In addition, there has been an increase in the popularity of the Section 223(f) refinance program since HUD eliminated the three-year rule last March that required a property to be in service for that long before it was eligible. (Special note to healthcare facility owners and operators: a similar waiver to the three-year rule may be in the offing under the LEAN program. Stay tuned for more details.)

HUD has taken several positive steps to address the situation, ensuring transparency and consistency to the application process.

First, they have established a fairly uniform screening protocol for applications before they are placed into the queue. Once an application is screened for deficiencies, a lender has five business days to respond; if the response is acceptable, the application is formally placed into the queue.

Second, once the application is in the queue, it is given a targeted date to be assigned to a HUD underwriter. The queue is generally updated weekly, so lenders and borrowers can track the progress of their deal and manage expectations along the way.

Third, HUD has revised loan priorities for assignment in the queue. They now are:

  1. Low Income Housing Tax Credit (LIHTC) deals for new construction.
  2. LIHTC deals involving new credits.
  3. Opportunity Zone transactions with a qualified investment fund.
  4. Second-stage applications involving new construction.
  5. Other affordable or broadly affordable transactions.

Applications that do not meet the priorities are assigned on a first-in, first-out basis.

The new priorities took effect on March 18. We have seen immediate benefits as one of our applications became a Priority 4 and moved up to the top of the queue, gaining about three weeks in the schedule.

For more information, please contact Anthony Luzzi at [email protected].

Sims Mortgage Funding, Inc. originates, underwrites, and funds loans for Healthcare, Multifamily and Hospital projects. We have completed over $2 billion in HUD-insured transactions and are an approved LEAN (healthcare) and MAP (multifamily) lender.

HJ Sims Partners with Gurwin Healthcare System to Finance New Community with 55% Pre-sales

FOR IMMEDIATE RELEASE

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

HJ Sims Partners with Gurwin Healthcare System to Finance New Community with 55% Pre-sales

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing in March 2021 of a $102.1 million financing for Fountaingate Gardens, an independent living community to be located in Commack, NY.

The Gurwin Healthcare System has been providing healthcare services to Long Island residents since 1988, through the Gurwin Jewish Nursing and Rehabilitation Center and the Fay J. Lindner Assisted Living Residences.  Gurwin Jewish Healthcare Foundation acquired land adjacent Fay J. Lindner Residences with the goal of completing the continuum of care through development of an independent living community to be known as Fountaingate Gardens. Working with Eventus Strategic Partners and Perkins Eastman, Fountaingate Gardens will initially add 129 independent living apartments and offer various services/amenities to its residents. Healthcare services will be provided at the Gurwin facilities contiguous to the community.

The Foundation donated $4 million to cover early expenses and loaned nearly $16 million for pre-development capital. It also donated the 10.5-acre site, appraised at $4.675 million. Total development costs, including the tax-exempt bonds, is approximately $113.8 million. The Foundation has committed $25.5 million to the project, providing confidence to investors and enabling the bonds to be issued with only 55% of the independent living units reserved with deposits from future residents.

The Foundation agreed to an Entrance Fee Guaranty Agreement, whereby it would advance up to $2.85 million, equal the entrance fees on six independent living units, in the event occupancy did not meet expectations upon opening. It also committed $10 million in the form of a Liquidity Support Agreement.

The $102,115,000 tax-exempt bond issue was divided into two short-term Entrance Fee Principal Redemption BondsTM series and a long-term bond series. The Series 2021C bonds ($31,000,000) will be repaid when occupancy reaches 48%. The Series 2021B bonds ($32,500,000) will be repaid when occupancy reaches 86%, expected to occur in 2023. The Series 2021A ($38,615,000) has a final maturity of 2056.

Sims closed on the Series 2021 Bonds with $10.5 million of the issue purchased by Sims’ Private Wealth Management clients and the remainder purchased by 28 institutional firms. The yield on the Series C bonds is 3.125%, the yield on the Series B bonds is 4.125% and the yield on the Series A bonds maturing in 2056 is 5.375%, demonstrating demand for the project and strength of the Gurwin name in the local market.

“With tremendous support from the Sims’ team, we successfully secured bond financing for Fountaingate, Gurwin Health’s new independent living community. Despite the challenges we faced the past year, with the impact of the pandemic, Sims found creative solutions, with a firm determination to bring this project to completion. Sims not only serves as a lender; they are a model for senior housing and development. They embrace the same goals that we have as a healthcare provider: caring, quality and excellence. Thank you, Sims for all you have done to help secure the future for our community,” said Stuart Almer, CEO, Gurwin Healthcare System.

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 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.

Download Your HJ Sims Documents into TurboTax

 

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 Provides Financing for Expansion for Jefferson’s Ferry; Completes Forward Delivery Bond Issue for Peconic Landing

FOR IMMEDIATE RELEASE

December 10, 2020

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

HJ Sims Provides Financing for Expansion for Jefferson’s Ferry; Completes Forward Delivery Bond Issue for Peconic Landing

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing of a November 2020 financing in the amount of $88,975,000 for Jefferson’s Ferry, a CCRC (continued care retirement community) in Brookhaven, NY. In November 2020, Sims also closed a $22.3 million forward delivery bond issue as part of a December 2019 financing for Peconic Landing, a CCRC located in Peconic, NY.

Sims underwrote the initial construction bond financing in 1999 for Jefferson’s Ferry, followed by a refunding of this financing in 2006. For 2020, Jefferson’s Ferry’s Journey Toward Renewal project includes a comprehensive improvement and expansion of the residential and healthcare space. The project incorporates construction of a 20-unit building dedicated to assisted living residents with dementia, construction of 60 additional independent living apartments as extensions to the existing apartment buildings, and numerous improvements to the Community Center to enhance the residents’ lifestyle.

The financing was structured as two series of tax-exempt bonds with the long-term bond series featuring a 35-year final maturity and a 5-year call feature, providing future refunding flexibility. The short-term Entrance Fee Principal Redemption Bonds® (EFPRBs) are expected to be repaid within 3 years from entrance fees paid by new independent living residents. Principal amortization on the long-term bonds is deferred until after the existing debt matures in 2036. The bonds were rated BBB (Stable) by Fitch. The yield on the EFPRB’s was 1.75%, while the long-term bonds maturing in 2055 have a yield of 3.75%.

“We are so pleased to secure bond financing for our Journey Toward Renewal expansion and renovation project. The Sims’ team, led by Andrew Nesi, did an outstanding job of executing the transaction quickly in an uncertain market due to the COVID-19 pandemic and presidential election. Our long-term debt service costs came in under what we had projected and funds secured will provide the capital needs to reposition our community for the future. Job well done,” said Bob Caulfield, President/CEO of Jefferson’s Ferry.

HJ Sims Successfully Completes Forward Delivery Bond Issue for Peconic Landing

As part of a $24.3 million bond issue in December 2019 HJ Sims issued Forward Delivery bonds to secure favorable interest rates and debt service savings for long-standing client Peconic Landing. While Peconic Landing had a series of high interest rate bonds outstanding, tax law precluded a refunding of those bonds until the call date in 2020. Sims structured a series of bonds whereby the interest rate was fixed in 2019, but not “delivered” or closed until eleven months later.

Peconic Landing was one of the first CCRCs in the country to experience COVID-19. Sims worked with management on a robust disclosure plan to keep investors apprised of developments. The management team was at the forefront of implementing strict protocols to minimize the impact of the virus on residents and the organization benefitted from strong capital reserves and government assistance programs to weather the challenges.

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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Giving Tuesday

Join the Movement– It’s GivingTuesday, the global day of giving. Please consider contributing to HJ Sims’ Corporate Social Responsibility partner, Gift of Life, to help find stem cell donors like Sterling who flew 5,000 miles mid-pandemic to save the life of someone she never met! Help Gift of Life reach their goal. Thank you.

HJ Sims Successfully Underwrites Pavilion Project and Refinancing for John Knox Village in Pompano Beach

FOR IMMEDIATE RELEASE             

November 23, 2020

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

HJ Sims Successfully Underwrites Pavilion Project and Refinancing for John Knox Village in Pompano Beach

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing of an October 2020 refinancing and capital projects financing in the amount of $77,605,000 for John Knox Village (JKV), a life plan community for age- and income-qualified residents in Pompano Beach, FL.

JKV sought assistance in restructuring its capital stack while issuing additional debt to develop amenity spaces to serve existing and attract new residents to the potential Westlake Tower expansion. JKV was seeking financing options for a new community pavilion, including dining facilities and related amenities, a new lake, various parking spaces and a new central energy plant (Pavilion Project). Sims was ultimately engaged by JKV as the COVID-19 pandemic was declared.

Sims provided multiple financing scenarios to analyze considering the volatility of the bond market and bank lending environment, which ultimately led to the selection of long-term fixed rate bonds for the 2020 financing. Working alongside JKV’s board, management and financial advisor, Sims prepared JKV for the Fitch-review process as they sought a material increase in their debt, ultimately retaining their Fitch A- credit rating with a negative outlook.

Sims priced the JKV Series 2020 Bonds during a week of near record volume, surpassing expectations and executing on a majority 4.000% or lower coupon structure to minimize the debt service burden. Sims also worked alongside JKV and its legal counsel to modernize certain aspects of JKV’s existing master trust indenture, providing additional flexibility for JKV in anticipation of the potential Westlake Tower expansion. The final pricing increased maximum annual debt service by just over $2.5 million for over $58 million in new long-term debt. The Series 2020 Bond issuance, as underwritten by Sims, is expected to provide a stable platform upon which JKV may continue to grow as it nears its fifth decade of service.

“Modernizing a Life Plan Community is a stressful endeavor on its own. Adding the stress of financial markets, budgets, forecasting and legal documents can be overwhelming for governance, management and residents. A good financing team is the key to wading through these waters. HJ Sims built a strong financing team, and broke down a complicated process into easily understood digestible parts. The results left this Community the ability to afford the facility, which will position John Knox Village as continued market leaders of senior lifestyle for generations. Working with Aaron and Melissa has been a pleasure; they are part of my team and I expect to continue to use their counsel in the future. I would recommend this firm highly,” said Bruce Chittenden, CFO, JKV.

Financed Right® Solutions—Aaron Rulnick: 301-424-9135, [email protected] |

Melissa Messina: 203.418.9014, [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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Difficulty Accessing NetXInvestor®

Dear Valued Client,

We have been notified by BNY Mellon Pershing, HJ Sims’ clearing agent, that as a result of a recent change to their technology platform, you may experience trouble accessing your HJ Sims account on NetXInvestor®. 

To ensure access to your account, please update your internet browser bookmark or shortcut to NetXInvestor with the following link www.netxinvestor.com. 

Accessing NetXInvestor via an internet search may also prove difficult. BNY Mellon Pershing is working to resolve this issue. In the interim, please manually enter www.netxinvestor.com to access the site and your HJ Sims account. 

We apologize for any inconvenience this may cause. 

Sincerely,
HJ Sims

HJ Sims Completes Third Financing for Client, Refinances Outstanding Debt, Generates Significant Interest Rate Savings

FOR IMMEDIATE RELEASE             

October 29, 2020

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

HJ Sims Completes Third Financing for Client, Refinances Outstanding Debt, Generates Significant Interest Rate Savings

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing of a September 2020 financing in the amount of $77,000,000 for Casa de las Campanas (Casa), a Life Plan Community in San Diego, CA. Casa is managed by Life Care Services, and LCS Development serves as the developer.

Casa has worked with Sims to secure financing for its multi-phased Master Plan, which included renovation and expansion of its facilities, including new skilled nursing facilities, independent living apartments and memory care beds.

In 2014, Sims secured bank financing through City National Bank (CNB) for Casa’s Phase I. Sims negotiated the Phase II financing terms with CNB in 2017. Structuring the financing with CNB and Cal Mortgage, Sims worked to secure $39 million in direct bank placement bonds from CNB for Casa’s Phase II expansion. Casa applied $7.1 million of equity and transferred $5.5 million of unused Phase I proceeds towards Phase II. Sims and Casa then explored refinancing options for the outstanding Series 2010 bonds and its outstanding bank debt to reduce Casa’s overall cost of capital. 

In 2017, the passage of the Tax Cuts and Jobs Act eliminated the ability for Casa to advance refund its outstanding Series 2010 bonds. Sims and CNB considered pricing a forward starting tax-exempt refinancing, helping Casa to lock in an interest rate to refinance its outstanding Series 2010 bonds, 2014 Bank Debt, the outstanding portion of the 2017 bonds and fund the remaining undrawn portion of the 2017 bonds. COVID-19 roiled markets and bank financing, therefore the financing plan evolved from a forward refunding to a current refunding, which was optimized at a $77 million credit commitment offered by CNB, realizing significant cash flow savings.

With the closing of the refinancing, Casa refinanced outstanding legacy debt, as well as debt related to their phased expansion. Casa anticipates annual cash flow savings on existing debt of $2.45 million through 2035, with net present value savings of $12 million and 18.3% of refunded debt over the 30-year amortization.

“Once again, working with the Sims’ team provided the best solution to meet our refinancing objectives. Sims continues to be our trusted financial advisor, helping us evaluate opportunities to improve upon our current debt structure while ensuring Casa is well-positioned to access future financings related to our Master Plan. Sims provided valuable insight and guidance on the refinancing scenarios to our Management Team and Board. The refinancing was successfully structured to eliminate the previously required Cal Mortgage insurance and related debt service reserve fund. With the new low interest rate, Casa is able to save millions and drastically improve our cash flow and future debt capacity. Sims went beyond the call of duty, and presented industry guidelines and insights at our Board Retreats to ensure we accomplish our goals and maintain our mission,” said Dave Johnson, CFO, Casa de las Campanas.

Financed Right® Solutions—Aaron Rulnick: 301-424-9135, [email protected] |

Brady Johnson: 949-558-8297, [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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Taxable Fixed-rate Advance Refunding and Tax-exempt Expansion Funding Allows for Streamlined Capital Structure and Continued Low-cost Growth

FOR IMMEDIATE RELEASE             

October 22, 2020

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

Taxable Fixed-rate Advance Refunding and Tax-exempt Expansion Funding Allows for Streamlined Capital Structure and Continued Low-cost Growth

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 $107,360,000 for Presbyterian Retirement Communities (PRC) d/b/a Westminster Communities of Florida, and its affiliates, which is comprised of ten life plan communities located throughout Florida.

With a history of successfully acquiring and turning around financially strained communities, PRC acquired Westminster St. Augustine (f/k/a Glenmoor) out of bankruptcy in October 2017. Under PRC’s leadership, Westminster St. Augustine achieved a successful rebound on an accelerated basis, and PRC sought options to release PRC from its support obligations, as well as to refinance its 2010B variable rate bonds and fund forthcoming capital projects.

Sims structured long-term taxable and tax-exempt bonds around the existing debt service, achieving a blended True Interest Cost of 3.87% and successfully underwriting the bonds without a funded Debt Service Reserve Fund. Sims also helped to eliminate interest-rate risk and LIBOR exposure, streamline PRC’s debt and organizational structure, and maintain an “A-” Fitch Rating.

By borrowing $50 million for forthcoming expansion projects at near historically low fixed interest rates, PRC is well-positioned for continued growth among its existing campuses. The ability to fund growth with low-cost debt, instead of cash, will enable PRC to strengthen its liquidity position in the months ahead, which is especially paramount in the recent COVID environment.

“Working with the Sims’ team on this bond issuance enabled us to achieve numerous financing objectives with ease. The low cost of capital far exceeded our expectations, while the unique and tailored structure enhances the stability and flexibility of our overall debt profile,” said Hank Keith, Chief Financial Officer, PRC.

Financed Right® Solutions—Melissa Messina: 203-418-9015, [email protected] | Kerry Moynihan: 407-313-1702, [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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