HJ Sims Partners with Clark Lindsey Village as the Structuring Agent and Investment Bank to Help Phase I of a Repositioning
Clark Lindsey Village (“Clark Lindsey”) is a not-for-profit Life Plan Community located in Urbana, Illinois. Today, the campus encompasses all levels of care throughout its continuum. The Community is one of eight communities in the nation to have earned the designation as a “Center for Successful Aging.” Currently, the campus offers 147 units of Independent Living; 12 units of Memory Care and Assisted Living; as well as 105 beds dedicated to Skilled Nursing. Those aforementioned Memory Case, Assisted Living, and Skilled Nursing beds include two Green House homes.
Clark Lindsey has continued to foster progressive solutions for its campus. Examples include the implementation of medical technology, innovative staffing roles and the use of Green House homes. Management had the desire to continue to push the bounds of creativity and pursue the vision of a campus repositioning. Seeking partners to assist with the strategic capital plan as well as the subsequent phases of financing, Clark Lindsey selected HJ Sims through a competitive process as the organization’s investment bank. With several financings planned, HJ Sims crafted creative solutions for each phase of the repositioning to result in low cost of capital, yet accomplish the full vision of the master plan.
After presenting various plans of finance, HJ Sims and Clark Lindsey decided it was time to kick off the first phase. The repositioning includes several phases to be completed over a five-year period. Phase I includes the construction of eight Independent Living Villas; in addition to site work dedicated to the next planned phase.
Within a relatively short timeframe, HJ Sims provided a financing solution that could be quickly implemented for construction to begin while not burdening existing operations before subsequent phases came online. All of these considerations led HJ Sims to act as the Structuring Agent for a taxable bridge financing via a draw-down bank note. The note is cash-secured via a pledge agreement to ensure the lowest cost of capital. This solution permitted a fast closing, a low cost of capital, and can be refinanced at a later phase using tax-exempt debt. The draw-down feature allows Clark Lindsey to materialize interest savings during construction. Additionally, the extended term will provide Clark Lindsey with the flexibility to refinance the note using several contemplated financings for subsequent phases.
Following an abbreviated bank solicitation, HJ Sims, in conjunction with the incumbent banking partner, structured the $8,781,000 short-term note with favorable terms for Clark Lindsey. HJ Sims obtained a lengthier 24-month term, despite the market standard being 12-months for similar financing vehicles. The longer term benefited Clark Lindsey by allowing them to have flexibility when refinancing the note in later phases and allowing operations to service the debt with additional projects, outside the scope of the financing, being constructed during that timeline.
On September 9, 2021, HJ Sims closed the $8.781 million taxable note with Clark Lindsey’s incumbent bank. After negotiations with the bank and a brief solicitation to lower the incumbent’s original proposal, HJ Sims captured a taxable interest rate of 2.15%. The credit spread for the refinancing portion was 20 bps lower and the final term was 12 months longer than the incumbent bank’s original proposal. The project funds use a draw-down feature that will allow Clark Lindsey to materialize interest savings during construction. Additionally, the extended term will provide Clark Lindsey with the flexibility to refinance the note using several contemplated financings for subsequent phases. HJ Sims was excited to deliver the first phase of Clark Lindsey Village and is looking forward to partnering with the organization as the vision of the campus repositioning becomes a reality.
For more information, please contact: