HJ Sims and JLL Execute on $239.68 Million of Bonds to Finance a Three Property, Rental Senior Living Portfolio, Including Two Development Projects and One Fully Stabilized Community
“HJ Sims brought creativity, structure, and deep market insight to a complex, multi-state, multi-asset financing. Their thoughtful approach to deal structuring helped mitigate risk and significantly improved execution certainty — a true value-add partner.”
Partnered Right®
A strategic partnership between for-profit developer Link Senior Development and the non-profit entity Integrated Senior Foundation (“ISF”) came together to develop and acquire the ISF Ativo Portfolio, a three property, rental senior living portfolio located in Arizona and California. This includes the acquisition of an existing, stabilized community along with not one, but two ground-up development projects.
Recognizing the challenges of securing sufficient capital for a multi-state senior living portfolio, HJ Sims and JLL worked together to structure a financing solution that aligned the interests of all stakeholders.
ISF serves as the non-profit owner, ISF Management acts as the operator, and Link Senior Development leads the development efforts. The financing of these projects represents the 3rd and 4th development projects for Link that Sims has financed under a longstanding relationship that dates back more than a decade.
The Ativo portfolio will include two new senior living communities—Ativo of Santa Clarita and Ativo of Sundance. Ativo of Santa Clarita, located in Santa Clarita, CA, will consist of 144 total units, including 51 independent living units, 65 assisted living units, and 28 memory care units. Ativo of Sundance, located in Buckeye, AZ, will feature 207 total units, including 102 independent living units, 75 assisted living units, and 30 memory care units. Additionally, the portfolio includes Ativo of Yuma – an existing senior living community acquired through the financing. Located in Yuma, AZ, Ativo of Yuma has 79 total units, comprising of 55 assisted living units and 24 memory care units.
Structured Right®
Given the overall objective of financing two new development projects along with an acquisition, the structure of the financing was crucial in achieving a successful execution. The complexity included a multi-site financing in two different states and working with two separate issuing authorities for the bond financing. Aligning the interests of all parties was also critical in establishing the pathway to achieving and maintaining long-term success for all three communities. This structure was implemented through several key strategies:
• Subordinate bonds were purchased by affiliated parties and structured in a way to best support the development, lease up and stabilization of the two projects, also the ongoing stabilization of the existing community
• The acquisition of an existing, stabilized community was included to provide a contribution to cash flow from day one
• Strategic alignment of interest between the project and bond investors was achieved through careful structuring, timing, and the subordination of certain fees
• Liquidity support agreements were structured to release funds in increments upon the achievement of specific milestones, further aligning incentives and ensuring financial stability and progress at each key stage
Executed Right®
Through thoughtful preparation, HJ Sims was able to position the financing as an opportunity for bond investors to establish a relationship with an experienced seniors housing team with a new and growing non-profit organization. Integrated Senior Foundation intends to grow their portfolio not only with the financing of these three communities but with plans for additional development and acquisition projects in other markets across the country.
HJ Sims and JLL successfully highlighted the credibility and long-time seniors housing experience of the project team. Ultimately, this description contributed to increased investor demand for the Ativo bonds. In addition, by coordinating one-on-one meetings, prospective investors had the opportunity to see first hand the strength of each market, understand the quality of each project and learn of the expertise of the development and management teams.
In addition, the comparison of rental senior living vs. the traditional entrance fee model, typical in the tax-exempt bond market, was an important component of bringing investors up to speed on the rental senior living model of the portfolio. Drawing on the specific for-profit financing experience of HJ Sims along with JLL’s depth in the for-profit, rental senior living space, the team provided investors with accurate comparables and up-to-date information supporting the portfolio’s projections and plans to achieve stabilization.
Financed Right®
On March 17, 2025, Sims successfully closed on the $239.68 million financing, with JLL Securities serving as co-manager. The total financing included $224.18 million of senior tax-exempt and taxable bonds and $15.5 million of tax-exempt subordinate bonds. The yields on the Arizona (AZIDA) senior tax-exempt bonds ranged from 5.75% for the 10-year maturity to 7.05% for the bonds maturing in 2065. The yields on the California (CALPFA) senior tax-exempt bonds ranged from 5.625% for the 10-year maturity to 6.90% for the bonds maturing in 2065. Both senior bond issuances will be optionally callable in 7 years at a 103% premium, providing flexibility to refinance shortly after each community is filled and stabilized.
In an ever-changing capital market environment, staggering metrics of an aging demographic and limited new supply of senior living communities, the financing of the Ativo Portfolio is an effective capitalization strategy for senior living development projects. The collaboration between HJ Sims and JLL demonstrates innovative financing solutions that provide non-profit borrowers and for-profit developers a way forward, together, in delivering quality seniors housing in the right markets.