Merrill Gardens and HJ Sims Partner Again
In 2016 Sims committed to co-invest $15 million in its third fund (“RDM V” or the “Fund”) with trusted partner Merrill Gardens, LLC (“Merrill Gardens”). RDM V was formed to acquire, develop and operate new senior housing and multifamily properties in the western and southern United States. Since the initial fund raise, through the issuance of the Series I Bonds, RDM V joint ventured with AEW to allow for the development of more high quality sites. Currently, RDM V has investments in 6 senior housing properties, of which 3 are under development and 3 are in operation, and has identified 3 other senior housing communities as potential investments. Sims successfully raised $3.390 million through the issuance of Series II Bonds to meet the ongoing capital needs of the Fund.
There were a number of challenges associated with this financing:
- Providing the flexibility to change the size and timing of Sims’ investments as needed by the Fund;
- Having the capital ready when capital calls are made and closing on the investment simultaneously with RDM V’s other investors;
- Explaining to investors the nature of a development fund – specifically, delayed returns and ongoing capital needs while convincing them to make an additional investment in the Fund.
Merrill Gardens V, LLC (the “Sims Issuer”), was formed to issue a series of bonds to meet the funding needs of RDM V. Series I Bonds were successfully sold to Sims’ high net worth accredited investors in August 2016. The second series of bonds were sold to meet the ongoing investment needs of the Fund. Proceeds from the bonds, together with funds invested by Merrill Gardens’ key principals, private investors and AEW were used to meet RDM V’s capital calls.
Sims was able to efficiently underwrite and implement an attractive structure that met the capital requirements of Merrill Gardens and its affiliates. Sims’ extensive investor base and industry expertise resulted in another creative solution to help senior housing providers finance new developments.
Sims excels in providing customized financing that allow a valued partner such as Merrill Gardens to focus on what it does best – develop, own and operate senior living communities.
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