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.

Axxcess Platform Announces Partnership with HJ Sims

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

AXXCESS PLATFORM: Alexis Brock, Marketing and Communications, [email protected] | 866-217-5607

AXXCESS PLATFORM ANNOUNCES PARTNERSHIP WITH HJ SIMS

FAIRFIELD, CT— Axxcess Platform (Axxcess), an enterprise turnkey asset management platform, announced today a partnership with HJ Sims, a privately held investment bank and wealth management firm headquartered in Fairfield, CT. HJ Sims and Axxcess have partnered  to deliver a suite of portfolio management technology for the HJ Sims private client wealth management team.

“We are thrilled about partnering with HJ Sims to equip their team with our asset management solution to help them continue to deliver a rich client experience. We are confident the HJ Sims team will find incredible value in our platform, which offers the tools and resources needed in one technology stack, further optimizing their client management approach,” says Michael Seid, CEO of Axxcess.

Founded in 1935 on Wall Street, HJ Sims is entrusted with $2.3 billion of assets under management. Herbert J. Sims, founder, was an innovative and revolutionary thinker with an imaginative and pioneering spirit. During the Great Depression, Herbert recognized opportunity to create jobs and support important infrastructure, such as county roads, natural gas systems, and bridges and causeways, through municipal financings. Today, HJ Sims supports individual investors, organizations, municipalities and institutions with expert wealth management, trading services and investment banking solutions.

HJ Sims will utilize the Axxcess platform as an end-to-end portfolio management tool, allowing their wealth management experts to serve their clients’ financial needs with a seamless and scalable approach–including aggregating accounts, identifying risk, analyzing holdings, modelling and blending investment strategies, and accessing third-party directed solutions.

“Partnering with Axxcess by incorporating their customized technology and sophisticated interface via a first-class portfolio management tool will help our advisory team deepen their client relationships. The comprehensive technology platform provided by Axxcess empowers us to revolutionize our client experience with open architecture and access to best in breed money managers,” said Dan Mullane, Managing Principal of HJ Sims.

ABOUT AXXCESS PLATFORM

Axxcess integrates third party investment managers alongside real estate, private equity, and hedged investments to create a unique UMA/TAMP Platform to transform your Wealth Management practice. The Axxcess Platform is built for the experienced Advisor looking to improve its current RIA Platform, or as an operational solution for a high caliber professional thinking of going independent and seeking a seamless transition. We offer Advisors open architecture, with a full array of wealth management and investment advisory services to move your practice upstream. Axxcess combines true alternatives like private equity, private credit, hedge funds and directed real estate alongside traditional SMA strategies.

Our focus is on 3c(1) and 3c(7) clients and the Advisors that serve them. If you are interested in providing a platform of services designed to move your business upscale, Axxcess is your solution. Contact: 866-217-5607 |https://axxcessplatform.com/

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. Visit www.hjsims.com/ourstory. Follow HJ Sims on Facebook, LinkedIn, Instagram and Twitter.

Investments involve risk, including the possible fluctuation of principal. Past performance is no guarantee of future results. HJ Sims is not affiliated with Axxcess Wealth Management. Member FINRA, SIPC.

Understanding TPAs-the Transfer of Physical Assets

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Originating and underwriting HUD-insured loans for multifamily and healthcare projects is Sims Mortgage Funding’s primary activity, but sometimes our experience and success in that space leads us to other business opportunities. Such was the case earlier this month when Sims Mortgage Funding, Inc. (“SMF”) completed two consulting assignments in connection with the sales by our clients of two nursing homes in New Jersey and a hospital in California.

Both transactions involved the assumption of six existing HUD-insured loans that we originated in 2009, 2011, 2012 and 2017 and are spread across the three properties. Yes, HUD has an acronym to describe that process – TPA, which stands for Transfer of Physical Assets.

Under a TPA, HUD and the lender servicing the loan effectively “underwrite” the purchaser who becomes the new borrower on the assumed debt. Part of that process is to analyze the background, qualifications, and experience of the purchaser; the financial and operational projections of the property after the sale; and, the transfer of assets and discharge of liabilities at closing. SMF provided technical assistance in the development of the TPA applications relating to the new borrowers and helped shepherd the proposals through the HUD approval process and on to closings.

With the TPAs now completed, HUD has two new and accomplished healthcare organizations in their insured loan portfolio, and the borrowers have assumed long-term, fixed rate, non-recourse loans at competitive interest rates.

Subsidiaries of Hackensack-Meridian Health, the largest hospital system in New Jersey, acquired interests in Prospect Heights Care Center, a 196-bed nursing home in Hackensack, New Jersey, and West Caldwell Care Center, a 180-bed nursing home in West Caldwell, New Jersey.

On the west coast, a subsidiary of AHMC Healthcare acquired Parkview Community Hospital Medical Center, a 193-bed acute care facility in Riverside, California. AHMC, a for-profit organization, owns and operates seven “safety net” hospitals in Southern California. The two loans AHMC is assuming on Parkview will be their first HUD-insured loans – we certainly hope that they will not be their last!

Good News from HUD Multifamily and Hospital Programs

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HUD mortgage insurance covers a wide variety of real estate, ranging from multifamily housing to nursing homes and assisted living to acute care hospitals. Moreover, the programs cover construction, renovations, expansions, acquisitions, and refinancing. There are three separate mortgage insurance platforms to deliver all of this goodness: Multifamily Accelerated Processing (MAP); LEAN for senior care facilities; and the Office of Hospital Facilities (OHF). Each platform has its own underwriting requirements, eligibility standards and policy directives, so changes in one of the platforms does not necessarily affect the others. SMF is active across all three platforms, so we keep close tabs on new developments that might make the programs more competitive or enhance lending opportunities. We have good news to report!

In the multifamily space, HUD recently took a major step forward to enable grant-funded Section 202 elderly housing, commonly known as Project Rental Assistance Projects, or PRACs to access much-needed capital. There are approximately 2,800 PRACs nationwide that currently have limited, if any, means to finance capital improvements, and with many of the properties over 20 years old, the situation has become critical. HUD has been working on a solution, and recently released for public comment a draft notice that will amend its popular Rental Assistance Demonstration (RAD) program to include PRACs. The comment period ended in March, so we expect the final notice to be issued shortly. A key element to the RAD for PRAC program will be the issuance of long-term Section 8 Housing Assistance Payment (HAP) contracts that should provide a stable source of revenue to support debt incurred for capital repairs and building improvements. Will the Section 8 rents under these new contracts be sufficient for this purpose? As the saying goes, the devil is in the details. We can assist PRAC owners preliminarily estimate borrowing capacity based on the draft notice – contact us for additional information and a preliminary analysis.

The Office of Hospital Facilities (OHF) does not have the level of activity of its MAP and LEAN counterparts, but it provides an alternative source of capital for creditworthy hospitals who otherwise might not be able to access the tax-exempt bond markets or conventional financing with the same ease and cost of capital as their more-stronger competitors. HUD-insured hospital loans have 25-year, fully amortizing maturities, fixed-rates of interest and are assumable and pre-payable under a variety of structures. Moreover, loans can be up to 90% of a project’s replacement cost, and in cases involving rehabilitation or additions, 100% of the project costs can be financed. In an effort to attract more business, OHF recently announced some upcoming changes that will facilitate and expedite their review process, lessen burdensome application requirements for stronger credits and reduce the amount of escrows to be funded from operations post-closing. Hospitals who might be on the fence about considering HUD as a financing option should take note of these changes, as they are likely to enhance the competitiveness of the program. We expect to know more about how these improvements will be implemented when OHF holds its lender training in July.

There have been no new developments in the LEAN program, but as Meatloaf once sang, two out of three ain’t bad. However, next month is the annual meeting of the Healthcare Mortgagee Advisory Council (HMAC), which is LEAN-focused and will be attended by a number of senior HUD program officials, as well as the entire SMF team. Stay tuned in this space for potential updates from LEAN.

Sims Mortgage Funding Quarter-Year Review

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Sims Mortgage Funding (SMF) had a busy first quarter of 2019, as it added a new team member in late January and participated in national and regional lender conferences in February and March.

Meet the New Guy

Jonathan “Johnny” Sears joined SMF in January.  He has close to a decade of mortgage banking experience, including seven years working with Government Sponsored Enterprises (GSEs) and HUD multifamily programs.  Prior to joining SMF, Johnny assisted in the origination and underwriting of over $150 million in FHA-insured multifamily loans for affordable and Low Income Housing Tax Credit (LIHTC) projects at Bank of America/Merrill Lynch.

Conference Roundup – What Up With HUD?

The Mortgage Bankers Association 2019 Commercial Real Estate Finance (CREF) Conference and Eastern Lenders Association (ELA) Annual Meeting were held in February and March in San Diego and Baltimore respectively.  Anthony Luzzi, President of SMF, pulled rank and attended the San Diego conference; the trio of Kerrie Tomasiewicz, Andrew Patykula and Johnny Sears went to Baltimore. Senior HUD Executives presented at both conferences to discuss the state of the multifamily mortgage insurance programs.

Key take-aways:

  • HUD’s loan volume for new construction and substantial rehabilitation has been consistently growing over the past three years.  In 2016, HUD insured about $3.7 billion for these loans; by 2017, volume increased to $5.4 billion in 2017 and last year it increased to $6 billion.
  • Low Income Housing Tax Credit (LIHTC) transactions have remained consistent over the last three years at about 33% of HUD’s multifamily business.  This likely has been the result of HUD’s successful LIHTC pilot program for Section 223(f) insured loans for acquisitions and refinances.
  • HUD’s overall timeframes have been improving.  Yes, we said it!  Last year, HUD averaged 77 days for its reviews of Section 223(f) multifamily refinance and acquisition loans and 104 days for its review of Section 221(d)(4) new construction and substantial rehabilitation loans.  These timeframes are likely to continue to improve in the future as HUD intends to hire additional staff.  Our recent experience with Section 223(f) has been better than the average.
  • Current multifamily policy initiatives for 2019 include the “Single Underwriter Model” Best Practices; a revised Multifamily Accelerated Processing (MAP) Guide; financing projects in Opportunity Zones; and, improving the Closing Process and Environmental Reviews.

Stay tuned for future updates on these initiatives, as they have the potential to expand HUD’s business and make HUD-insured loans even more competitive in the future.