Why Small Businesses Matter: HJ Sims

HJ Sims ‘ Managing Principal, Bil Sims, was recently interviewed by the Fairfield Hamlethub. In the article, he discusses HJ Sims’ history, investment banking, bond and wealth management expertise. Read more.

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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Aging Redefined

How old "we feel" is changing our expectations about retirement

The world is preparing to welcome a new generational powerhouse in that of “seniors” and those considered of “retirement age.” A transition is occurring, establishing the largest projected population of retirees and senior citizens in human history. This trend can be attributed to various factors, including the reduced physical demands of many jobs today, advancements in healthcare, a greater focus on healthy living, and technological advances, which are expanding global lifespans and the median age of adults.

Dr. Joseph Coughlin, Director of the MIT AgeLab, (also keynote speaker of this year’s HJ Sims Annual Late Winter Conference), discusses the trends of aging and longevity. Drawing upon his extensive and varied experience in academia and advising global firms, Dr. Coughlin shares insight gained from his position as instructor in MIT’s Department of Urban Studies and Planning and Sloan School’s Advanced Management Program. Dr. Coughlin is also the author of The Longevity Economy: Inside the World’s Fastest Growing, Most Misunderstood Market.

 

Dr. Coughlin cites the leading indicators of the pattern of retirees and consequent implications for product and service providers in countries throughout the world.

 

  • In Germany: the country is recognizing the trending population of older adults and creating an anti-aging beer
  • In Japan: the sale of adult diapers has surpassed those sold for infants
  • In the U.S.: an adult turns the age of 75 every seven seconds and 13% of all online dating services are being utilized by persons aged 65+ and older

With the population aging as whole, in the U.S., the baby boomers will redefine the standards of retirement. These standards are being driven by educated consumers and corporations recognizing the demand of this growing population with expectations and wants that differ markedly from prior generations. If combined into an aggregate economy, the “aging population” would create the world’s third largest driver of global spending. Furthermore, adults above the age of sixty have the highest concentration of wealth in the world, and are living longer now.

 

Not only are adults living longer, they are staying active. A growing majority of these aging adults are the baby boomers who grew up in a counter-culture era soaked in rebellion and quasi-revolution. Dr. Coughlin amusingly quotes the musician Jimmy Buffet describing baby boomers as, “the people our parents warned us about.” This “warning” is being increasingly heeded by consumers and producers. The stereotypical parent of a baby boomer was polite, hardworking, patient and easily appeased, explains Dr. Coughlin. These generational qualities helped shape many of the current products and services for seniors.

 

For context, Dr. Coughlin draws a parallel to product offerings, between the two age groups, using coffee, as an example. The current population in their mid-70’s and older most likely had two options for coffee growing-up: decaffeinated and caffeinated. The younger generation has experienced a multitude of options from which to choose: frappuccinos, lattes, espressos and even white chocolate caramel macchiatos served hot, warm, chilled and iced. “They (baby boomers] are creating a new generational gap, a gap of expectations,” exclaims Dr. Coughlin. That gap is what will drive innovation and pave the way for what Coughlin defines as the Longevity Economy.

 

Dr. Coughlin notes that, in fact, even the word “retirement” has changed meaning throughout time. Originated as a word to describe the stage when a person ran out of “vital life” and ability to perform physical labor, retirement meant one could no longer function as a member of the working economy and likely would result in a person falling victim to poverty. The modern definition of retirement could not be further from its root of origin. Today, people will live almost one third of their adult lives as retirees. With this extended period of time, Dr. Coughlin characterizes retirement as having four phases:

 

  • Ambiguity: Should one keep working or not?
  • Big Decisions: Does one downsize, move or travel?
  • Complexity: Should decisions like housing, healthcare, etc. be  managed by a third party?
  • End of life: When does one begin preparing for the final chapter of life?

As it relates to the first three phases, observed trends indicate that when aging or retired baby boomers move-out of their current homes, they are often down-sizing into smaller townhomes or apartments in the community-at-large or in “active adult” communities. A meaningful component is also relocating, whether to warmer/more hospitable climates, locales that offer amenities of interest and to be closer to children/grandchildren, which may include smaller communal towns throughout the country.

 

A key desire among retirees is for a sense of community. This latter observation is coupled with the fact that advancing technology enables aging adults to remain in their homes longer. Dr. Coughlin cites numerous technologies; for example, utensils that indicate nutritional value of the food people consume, mirrors that can measure blood pressure, and, even a toilet that can gauge nutrient deficiencies. All of these tools possess the capability to upload information to a healthcare database for use by a product/services provider. Brands like Amazon, Walgreens, Best Buy and Walmart are developing in-home platforms for aging seniors that will likely enable adults to remain in their current homes for a longer period of time.

 

To conclude, the experience of retirement, like the approaching baby boomers, will not conform to the past. The notion of retirement or aging, as we have known it, has taken on a new definition with today’s more active and demanding adult consumer.

 

On your own terms

At HJ Sims, we recognize that retirement is neither traditional, nor is it dictated by a calendar or specific age – it’s a mindset, a second-act and an opportunity for a new journey. You are more interested in pursuing passions and creating a lifestyle to match your mindset. This is about your personal growth, identity, freedom and flexibility. Whether your investment goal is to save for milestones or retirement, our wealth experts take our entirement® approach, looking at your entire wealth picture, along with your lifestyle goals and needs. We work tirelessly to construct a portfolio that helps to enrich your life and the lives of your family members for years to come.

 

It’s your adventure: Planning for your journey should be exciting, freeing and empowering. Contact an HJ Sims’ Financial Professional today.  

Is Your Organization Poised for Growth

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To grow or not to grow is a familiar topic of conversation heard around boardroom tables, at conference sessions, and from business pundits. HJ Sims recently surveyed LeadingAge LifePlan Community (LPC) members to uncover the motivation behind member organizations’ own growth initiatives and reveal the potential barriers impeding growth.

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If I Could Do It Over: The Senior Living Community Sentiment Reports

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Knowing what we know now after 10 months of living with the pandemic, if we now could magically blink our way back to February, what would we have changed about where we live and work? Who would we want to have closest to us for peace of mind and for help when needed? What items would we have procured ahead of time to make our homes more comfortable and secure? How differently would we have structured our days and finances to better cope with the long, uncertain period ahead?

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Financing the Perception of Safety

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In the summer of 2020, HJ Sims participated in the Senior Living COVID-19 Sentiment Report, which surveyed over 4,000 current and prospective senior living community residents to assess their thoughts and feelings at the beginning of and during the COVID-19 pandemic. The old saying of “You don’t know what you’re missing until you try it” is something that rang true in the results.

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An Exclusive Investment Opportunity: Fountaingate Gardens

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

$103,245,000*
THE TOWN OF HUNTINGTON LOCAL DEVELOPMENT CORPORATION

Series 2021A Long Term Fixed Rate Bonds $39,745,000
Series 2021B Entrance Fee Principal Redemption BondsSM $32,500,000
Series 2021C Entrance Fee Principal Redemption BondsSM $31,000,000
(Gurwin Independent Housing, Inc. / Fountaingate Gardens Project)

HJ Sims is pleased to serve as sole underwriter for Fountaingate Gardens, a Gurwin Community, located on Long Island in Commack, New York. A not-for-profit life plan community, Fountaingate Gardens consists of 129 independent living apartments, common areas and a range of services and amenities. Residents will have access to the current offerings of Gurwin Healthcare System, which include assisted living, skilled nursing and short-term rehabilitation, among other services.

The Series 2021 bonds will provide (1) financing or refinancing of the construction, equipping, and furnishing of Fountaingate Gardens; (2) funding of a debt service reserve fund with respect to the Series 2021 Bonds; (3) funding of initial working capital needs directly related to the community and funding of capitalized interest with respect to the Series 2021 Bonds; and (4) paying of certain costs of issuing the Series 2021 Bonds (collectively, the “Project”).

Gurwin Independent Housing Inc., dba Fountaingate Gardens, is a New York not-for-profit corporation incorporated in 2014 to develop, construct and own Fountaingate Gardens. The Gurwin organization is dedicated to delivering a multi-faceted healthcare system committed to providing quality health care and services to Long Island residents, which include Gurwin Jewish Nursing & Rehabilitation Center, a 460-bed skilled nursing and rehabilitation center providing short and long term care, a memory care unit, ventilator care, infusion center and dialysis center; and Gurwin Jewish-Fay J. Lindner Residences, an assisted living community with 201 assisted living apartments including a memory care unit; and two home care agencies.

Artist's Rendering; subject to change

Virtual Site Visits/Tours

Tour the planned campus and project:

About the Bonds

  • Series 2021A
    • $39,745,000
    • Non-rated, tax-exempt
    • Bonds are exempt from Federal Income Tax and exempt from State of New York Income Tax
    • Denominations of $5,000
    • Interest will be payable on January 1 and July 1 of each year, commencing July 1, 2021
    • First principal payment: July 1, 2026
    • Call Feature: 104% on July 1, 2026, decreasing annually to 100% on July 1, 2030
    • Final maturity: July 1, 2056
  • Series 2021B
    • $32,500,000
    • Non-rated, tax-exempt Entrance-fee Principal RedemptionSM bonds
    • Bonds are exempt from Federal Income Tax and exempt from State of New York Income Tax
    • Denominations of $5,000
    • Interest will be payable on January 1 and July 1 of each year, commencing July 1, 2021
    • Principal redemptions made with initial Entrance Fees after funding working capital and full redemption of the Series C bonds (no sinking fund payments – anticipated to occur 23 months after initial occupancy at approximately 86.1% occupancy)
    • Final maturity: July 1, 2027
  • Series 2021C
    • $31,000,000
    • Non-rated, tax-exempt Entrance-fee Principal RedemptionSM bonds
    • Bonds are exempt from Federal Income Tax and exempt from State of New York Income Tax
    • Denominations: $5,000
    • Interest will be payable on January 1 and July 1 of each year, commencing July 1, 2021
    • Principal redemptions made with initial Entrance Fees after funding working capital (no sinking fund payments – anticipated to occur 11 months after initial occupancy at approximately 47.8% occupancy)
    • Final maturity: July 1, 2025

 Use of Proceeds

Project

  • Fountaingate Gardens will be located on 10.47 acres of land in Commack, NY, adjacent to the Lindner Residences.
  • It is a Life Plan Community consisting of 129 one- and two-bedroom independent living apartments, common areas and a range of on-campus services and amenities including: fitness and exercise areas, an indoor pool area, locker room space, accessory/storage space, library, kitchen, marketplace, and dining spaces, business area, assembly space, art studio, salon and day spa, game room and multi-purpose room.
  • As of February 12, 2021, 71 of the Independent Living units, representing approximately 55% of the total Independent Living Units, were reserved by prospective residents.

 Security

  • First mortgage lien
  • Debt service reserve funds
  • Capitalized interest funded for 22 months during construction
  • $2.85 million Entrance Fee Payment Guaranty from Gurwin Jewish Healthcare Foundation
  • $10.00 million Liquidity Support Agreement from Gurwin Jewish Healthcare Foundation

 Key Financial Covenants

  • Cumulative cash loss covenant (until Series B and Series C bonds redeemed)
  • Debt service coverage ratio of 1.20x (tested quarterly commencing with redemption of Series B and Series C bonds)
  • Liquidity covenant of 200 days cash-on-hand (tested semi-annually)

We are currently accepting indications of interest for these tax-exempt bonds with an expected pricing the week of March 1, 2021, and anticipated settlement during the week of March 15, 2021. For more information including risks, please read the Preliminary Official Statement in its entirety. If you have interest in purchasing these bonds, please contact your HJ Sims financial professional as soon as possible.

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888.650.0871

*Subject to change

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