HJ Sims Provides $5.6 Million Mezzanine Loan for Portfolio of Intermediate Care Facilities
A national recognized owner and operator of healthcare properties and services (the “Sponsor”) was pursuing the acquisition of a portfolio four Intermediate Care Facilities for Individuals with Intellectual Disabilities (“ICF-IID”). The Sponsor owns a substantial portfolio of healthcare properties across several states with multiple operating partners. Outside of its healthcare portfolio, the Sponsor invests in a wide range of healthcare products and services, as well as other strategic real estate and business opportunities.
HJ Sims was approached to provide mezzanine financing to fund the acquisition of the portfolio. Providing a vital service, the portfolio benefitted from stable cash flow and occupancy, while providing additional upside through improvements in operational performance. As part of a larger transaction, and given the consistent performance of the portfolio, the Sponsor was seeking a high-leverage financing solution.
HJ Sims provided a $5.6 million mezzanine loan, which in combination with a senior loan and equity from the Sponsor was used to fund the acquisition. HJ Sims structured the mezzanine loan with a two-year interest only period and a five-year term, matching the term of the senior loan. Through an affiliate of Herbert J. Sims Investments, LLC (“HJSI”), HJ Sims sold securities through its Private Client Group to fund the mezzanine loan.
The HJ Sims’ mezzanine loan fit the needs of client, providing a high-leverage solution allowing the Sponsor to, (a) better allocate capital for other acquisition targets and support of existing assets, and to (b) avoid diluting ownership in the portfolio from taking on additional equity partners.
HJ Sims excels in providing customized debt and equity capital for senior living providers utilizing a variety of direct financing solutions including equity, preferred equity, mezzanine debt, and high leverage first mortgage loans, tailored to meet the unique financing needs of valued partners.
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