Track Record 2019

At HJ Sims, we live and breathe the bond market. And we have the track record to prove it. Through bull markets and bear; through booms, bubbles and busts, we’ve demonstrated our exceptional expertise. For our clients, that means the ability to build wealth without riding the Wall Street roller coaster.

Through the years, we’ve compiled an impressive track record:

COVID-19 Response

March 18, 2020:

Dear Valued Client,

As you are likely closely monitoring the developments and impact of COVID-19, we are doing the same at HJ Sims. Our primary focus is the safety and well-being of our employees, our clients and their families.

We would like to update you on important preparations currently in place, and our ability to respond to your needs during this unprecedented time.

  • We have enacted a comprehensive COVID-19 business response plan and remain confident that as a nimble and resilient organization, we will maintain business continuity. We are prepared in the event the situation continues to escalate.
  • During this extraordinary time, we recognize that you rely on access to our financial professionals and representatives. As such, we have prepared plans for employees to work from different locations, as well as remotely from home. Alternate site work arrangements are intended to balance and diversify our resources to minimize risk for an extended period, if required, while using today’s technology to be ever-present for our clients.
  • Our employees are being kept fully aware of the situation by our Executive Committee. We have established access to online company resources to help them manage during this unparalleled time.

Please be sure to keep us updated with your contact information so we may stay in touch with you.

We are confident that we are taking proper steps to ensure the continued operation of our business, and continue to follow guidance from official local, state and Federal Government and public health agencies, including the Centers for Disease Control (CDC). We will monitor and evaluate the situation and determine whether additional steps are needed to support our clients and communities.

We have strong financial talent who have the experience to weather all market cycles. We appreciate your trust and confidence in us. Please let us know if we can help in any way.

We wish you, your communities and your family all the very best.

Thank you,

William Sims
Managing Principal
HJ Sims

HJ Sims Closes Financings for Lenbrook, MRC Manalapan; Partners with Voralto for Acquisition

CONTACT: Tara Perkins, AVP Marketing Communications | 203-418-9049 | tperkins@hjsims.com

HJ Sims Closes Financings for Lenbrook, MRC Manalapan; Partners with Voralto for Acquisition

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 three transactions.

Lenbrook, a life plan community in Atlanta, GA, pursued financing for its recent Kingsboro at Lenbrook expansion. After a successful 2016 refinancing and a 2018 pre-development financing, Lenbrook again retained Sims to manage the financing process for the $107 million project. A priority  of Lenbrook’s was to maximize the ability to deleverage the debt of the financing without penalty. The entrance fee debt was maximized and the long-term debt amortized while permitting early repayment from turnover entrance fees.

 Sims coordinated a request for proposals to gauge interest in both the entrance fee and long-term debt. Due to the COVID-19 impact on bond markets and conduit bond issuers, Sims coordinated with the board and management of Lenbrook to pivot the transaction from tax-exempt financing consisting of bank short-term debt and long-term fixed rate bonds to taxable all-bank financing while closing early and achieving Lenbrook’s goal of maximizing deleveraging while maintaining flexibility. Fitch assigned a BBB- rating with stable outlook.

In Monmouth County, New Jersey, MRC Manalapan (MRC) is developing an assisted living and memory care community. MRC principals (and LV Development) collaborated with Springpoint Senior Living (Springpoint) to arrange the project and contracted with Springpoint to operate the community (Springpoint at Manalapan) under a long-term lease. Sims was engaged to implement debt financing supplemented by equity provided by the MRC principals.

Following a Sims-led solicitation, Peoples United Bank was selected to provide $14.3 million of taxable senior debt financing, incorporating a construction/mini-perm structure with a five-year balloon maturity. The loan includes tiered-interest rate pricing with reductions in loan credit spread following progression from construction, opening and stabilization. Primary security includes a revenue pledge and property mortgage. Supplemental security includes dual guarantees provided by the MRC principals and succeeded at completion by a limited tenant guaranty. Sims, Peoples and the financing team worked diligently with the MRC principals to secure final approvals, successfully closing in mid-May 2020.   

Established in 1977 and headquartered in Houston and Dallas, TX, Voralto is a 42-year-old senior housing owner/operator with a combined 120+ years of experience in the senior housing industry. Committed to growing the company through strategic acquisitions and new developments, Voralto currently owns/operates 8 assets totaling 590 beds in TX and GA. Sims was approached by Voralto to provide equity for the acquisition of an assisted living and memory care community in northern TX. Voralto’s business plan included the implementation of operational changes.

Sims formed a joint venture with Voralto to acquire the community. Sims’ equity provided liquidity to overcome any short-term performance issues resulting from COVID-19 and time to implement the business plan.

Scheduled to close in March, Sims and Voralto overcame challenges from COVID-19. Drawing from expertise of its bankers and investors, Sims underwrote Voralto’s business plan and provided a customized solution.

Financed Right®:

Non-profit: Aaron Rulnick: arulnick@hjsims.com | For-profit: Jeff Sands: jsands@hjsims.com

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. HJ Sims is not affiliated with Lenbrook, MRC Manalapan, Voralto Funding I. Facebook, LinkedIn, Instagram Twitter.

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 FacebookInstagramLinkedIn 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!

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

Axxcess Platform Announces Partnership with HJ Sims

HJ SIMS: Tara Perkins, AVP Marketing Communications, tperkins@hjsims.com | 203-418-9049

AXXCESS PLATFORM: Alexis Brock, Marketing and Communications, alexis@axxcesswealth.com | 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 FacebookLinkedInInstagram 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.

Special Credit Considerations for Seniors

There is a reason that seniors often have the best credit scores, according to Experian. By the time people retire or reach senior status, they have likely been focusing on credit scores and building or maintaining good credit for a significant span of time, with often-impressive results.

While some people believe that they can relax their credit concerns once they retire, that is not necessarily the case. You will still want – and need – good credit if you decide to move or make updates to your current home, enter an assisted-living facility, or apply for a new credit card that offers great rewards points and perks.

In addition, solid credit scores will enable you to qualify for the best rates when it comes to mortgages and insurance, and can help if you decide to return to the job market, since employers are increasingly checking on applicants’ credit histories before making an offer.

How to earn extra credit

First of all, make a note on your calendar to check your credit report annually to ensure that you are not a victim or fraud – credit reports can also contain costly errors. AnnualCreditReport.com offers a free report once a year. No matter your age or stage, everyone should remain vigilant, particularly in the wake of recent serious data breaches.

Even a stellar credit report can decline if payment history, the biggest portion of your credit score, suddenly dwindles. It is important to keep your credit record active by using your current credit card(s) to pay for groceries, gas, travel and entertainment. You can earn rewards points, organize your bill paying and continue to bolster your credit score by using your cards.

Finally, continue to pay your bills on time, keep credit card balances low and think twice before opening any new accounts. Good payment history, and the longevity of your accounts, should continue to keep your credit score high.

Even if you are relatively debt-free, your credit score still matters.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

Breaking Bad Online Habits

By Megan Morrow

January is the month of New Year’s resolutions – exercise more, stop smoking, eat more vegetables, try something new – yet “break bad online habits” is probably not a top 10 resolution, even though it likely should be. As we perform more life tasks online, such as paying bills, downloading new apps, keeping in touch with old friends and sharing funny videos, we do not always pause to think of the best ways to keep our personal data secure and private.

Following are three steps you can take to break your bad online habits and set the stage for a safe and secure 2020:

  1. Avoid using the same passwords over and over again. Granted, it is easier to remember your passwords when they are all a variation of your kids’ names, your address or your birthday, for example. However, when you recycle passwords, a hacker who uncovers one password will have much easier access into the rest of your accounts. You can save your most robust, complicated passwords for financial sites.
  2. Resist the temptation to say “yes” without more careful examination. Scam emails are getting more sophisticated, so it is always wise to verify online requests for money or account access, while many apps will ask for your location or the ability to access other account features. Offer the bare minimum of information when you launch a new app or website and say “no” to most location requests (other than maps, which need to know where you are so they can get you to your next destination).
  3. Lock your devices. Many people assume work laptops are safe and that their phones are usually nearby, thus choosing not to use “lock screen” protections. It only takes a few moments for someone to install spyware or malware on your device or to see confidential information that you have left up regarding clients or your own personal information. This is a simple step that can protect you at work and at home.

Other simple changes you can make to protect yourself include: never check your bank accounts over public wi-fi, pay attention to anti-virus updates, do not click on links or download files from suspicious or strange email addresses, and always take advantage of the free annual opportunity to check your credit report.

While online banking, shopping and communication can offer ease and convenience, they can also lead to identify theft and long-term issues: If you have not already, make online security one of your New Year’s resolutions.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

HUD Goes All-In on OZs

By Anthony Luzzi

The 2017 Tax Cuts and Jobs Act created a new tax incentive known as Qualified Opportunity Funds, to spur new investment in low-income communities located in certain Census Tracts that are designated by the Secretary of the Treasury as Opportunity Zones, or OZs. There are approximately 8,700 OZs nationwide and in the US Territories, including Puerto Rico, where approximately 94% of La Isla Encantada qualifies.

We’ll leave it up to the legions of lawyers and accumulation of accountants to describe the mechanics of investing in Opportunity Funds and how private investments in these OZs are eligible for potentially significant capital gains tax relief. But we can tell you about some of HUD’s recent initiatives to promote development and investment in OZs through its multifamily mortgage insurance programs.

HUD has designated specialized Senior Underwriters in each region of the country to process applications for mortgage insurance for properties in qualified OZs. This will ensure expert and expedient review of these applications by HUD underwriters.

Properties located in qualified OZs will be eligible for reduced mortgage insurance application fees. Market-rate and affordable deals will see their application fees reduced by 33%, from .3% to .2%. “Broadly affordable” deals will have a steeper 66% discount on its application fees, as they will be reduced from .30% to .10%. What’s a broadly affordable project? They have at least 90% of units covered by a Section 8 Project Based Rental Assistance (PBRA) contract; or at least 90% of its units covered by an affordability use restriction under the Low-Income Housing Tax Credit program.

Last summer, HUD Secretary Carson announced that the Section 220 mortgage insurance program, historically used to finance mixed-use rental projects in specially-designated “downtown” urban-renewal areas and other areas where local governments have undertaken designated revitalization activities, will now be available in all of the approximately 8,700 Opportunity Zones.

The introduction of Section 220 into all Opportunity Zones has the potential to be a game-changer, as HUD expects it will promote more economic activity, both commercial and residential, in low-income, economically distressed areas that have not experienced a great deal of growth in recent years.

Section 220 underwrites similarly to HUD’s “mainstream” Section 221(d)(4) program for multifamily new construction and substantial rehabilitation. Both have 40-year loan amortizations, loan-to-cost ratios ranging from 85% to 90%, and debt service coverage ratios from 1.11 to 1.17. Both programs limit the maximum amount of commercial space to 25% of the total project area, but under Section 220, the maximum amount of commercial income in a project can be 30% of the total income, double the Section 221(d)(4) limit. In addition, under Section 220, 20% of the cost of project’s non-residential components can be added to the calculation of the mortgage based on statutory unit limitations; the Section 221(d)(4) limit had been 15% until recently, when it was increased to 20%.

We applaud the intent of the Tax Cuts and Jobs Act to spur economic development in disadvantaged communities, and HUD’s efforts to maximize the impact of the Act through its multifamily mortgage insurance programs. We are currently developing a mortgage insurance application for a Louisiana rental project in an urban area that also is designated an OZ. Keep tuned to this space for updates on this deal.

What You Need to Know about Electronic Wills

By Megan Morrow

While most adults believe that wills are important, less than half of them actually have one, according to a recent survey, the chief reason being that “I have not gotten around to it yet.” Designed to make the process of creating a will easier and more accessible for all, electronic wills have previously required printing and signing on the dotted line in front of a witness. While e-signatures are common and widespread, e-notarization is not.

However, Indiana and Nevada have passed laws permitting e-signatures while Arizona and Florida are expected to adopt such legislation in 2020, with more states to follow. This sets the stage for expanded use of electronic wills that can be wholly completed online.

The Uniform Electronic Wills Act was adopted by the Uniform Law Commission to create a model for executing a will with online technology that other states can follow. In essence, those who wish to create an electronic will could do so online, then connect with a notary via video chat. The notary can talk with the individual and ask any pertinent questions before notarizing the will and returning it. The electronic will is constituted as valid, without the testator ever having to be in the physical presence of the notary.

Benefits of electronic wills include access, availability, convenience and simplicity. No matter where you live or what your schedule, you can create a valid will on your own time table.

Concerns with electronic wills center on fraud – particularly the possibility of undue influence or duress in the creation of the document. Likewise, without the advice of an attorney, individuals could use boilerplate wills that lack the details or specificity that their estate requires. A one-size-fits all will, naturally, will not work for everyone. Issues with revocation and storage also remain to be further determined.

At present, electronic wills might be ideal for younger people – only one in five Millennials have a will – or those with fewer assets and complications. With more states expected to adopt electronic will legislation in the coming years, options for online wills are anticipated to grow as well.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.