The Ohio Masonic Home Partners with HJ Sims to Finance Initial Phase of Multi-Campus Repositioning Plan
“This particular financing was monumental for our organization as we look to add a new Independent Living Apartment building and also replace our Skilled Nursing unit. Lynn Daly and Nick Roberts guided us through the entire process always having our best interest in mind. They are professional, extremely knowledgeable, and are truly a valued partner of The Ohio Masonic Home. We look forward to working with them in the future as we continue down the path of strategic redevelopment and growth.”
– Scott Buchanan, CEO, The Ohio Masonic Home
The Ohio Masonic Home (“OMH”) owns and operates three life plan communities across Ohio, including Browning Masonic Community (Waterville, OH), Springfield Masonic Community (Springfield, OH), and Western Reserve Masonic Community (Medina, OH), as well as a foundation outside of the Obligated Group. The community in Springfield opened in the late 1800’s, with Browning and Western Reserve opening in 1999 and 2001, respectively, following a commitment from OMH to providing high-quality senior living options open to the public.
In 2020, OMH had undertaken strategic planning efforts to expand and/or reposition each of its three communities, with two key goals: 1) reinvestment into its communities to maintain and advance its market position, and 2) transform its communities to become more financially self-sustaining. The Western Reserve project is the initial step towards accomplishing this vision, with a 56-unit rental apartment building, new amenity spaces, and a replacement of its 50-bed skilled nursing unit. The new independent living units will be offered at middle-market price points, with the new common areas including dining venues, wellness and fitness area, and underground parking, in addition to the existing amenities already at the Western Reserve.
Recognizing that OMH has two other communities with significant expansion and redevelopment needs in the near future, it was critical that decisions made during this financing did not adversely impact ability for OMH to execute on future financings over the next several years. To that end, Sims served as financial advisor for the transaction and worked with US Bank, the incumbent lender for OMH, to provide for on-market terms and covenants along with structuring options that contemplated these future plans.
OMH, HJ Sims, and US Bank closed the $38.0 million financing on August 25, 2021, structured as tax-exempt direct placement draw-down bonds, with an interest rate at closing of approximately 1.30% and 30-year amortization following an up to 3-year interest-only period. Combined with the decision to leave the interest rate floating, as OMH’s substantial foundation assets naturally hedge against interest rate increases, OMH retains maximum capital structure flexibility for future capital needs as the organization’s expansion and repositioning plans continue to progress.
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