Sims Funds Capital Commitment for Active Adult Fund
Partnered Right®
After a 20+ year history of industry partnership, SRM Development and Black Dog Capital Advisors co-sponsored the Fund to align SRM’s deep real estate development and construction expertise with Black Dog’s leading management and operational capabilities in senior housing. Black Dog Capital Advisors was co-founded by Bill Pettit, former CEO of Merrill Gardens, which under Bill’s leadership and through strategic partnership with SRM, grew to become one of the largest senior living providers in the United States. Bill is joined by his co-founder and son, Billy Pettit, who co-founded Pillar Properties, an award-winning subsidiary of R.D. Merrill, which develops, owns, and operates high-end urban infill mixed-use multifamily projects. SRM Development is a fully integrated real estate development and construction company specializing in the development and construction of mixed-use, multifamily and senior living projects in high barrier-to-entry markets throughout the western U.S. While at Merrill, Bill and Billy partnered with SRM Development on a number of successful and award-winning developments.
Active Adult is a unique product type that fills a gap in the existing housing continuum between traditional residential options and senior housing. Active Adult communities are constructed to specifically target the Baby Boomer generation, a large and underserved demographic, by presenting a rental model that provides ideal lifestyle options in ideal locations at an ideal cost. The attractiveness of this product is evident in the lower turnover rate and longer tenancy relative to senior living and multifamily.
Sims has a longstanding personal and professional relationship with the principals through their prior roles, having partnered together on investments in four Merrill funds, starting in 2006, that targeted the development of seniors housing and multifamily assets.
Structured Right®
HJ Sims committed to investing $10 million in SRMBD Fund I, LP (the “Fund”) through the purchase of Class A Interests. The Fund was formed by to develop, own, and operate active adult communities in suburban West Coast markets. At the time of the first capital call, the Fund had plans for initial investments in seven properties, all in the pre-development stage. In order to participate in the Fund, the Sims investment needed to be structured with the flexibility to fund future capital calls as needed by the Fund.
Executed Right®
A Sims controlled investment company, SRMBD Funding I, LLC (“Sims Issuer”), was formed to invest in the Fund, with plans to issue multiple series of securities to capitalize Sims’ investment in the fund. To meet initial capitals from the Fund, Sims issued $3,045,000 of Series I Bonds in March 2024, fulfilling the first portion of its $10 million commitment to the Fund. This portion of the capital commitment will be used to fund various development and pre-development expenses for the Fund. To meet additional capital calls in the future, Sims plans to issue additional series of bonds in 2025 and 2026.
Financed Right®
Utilizing its extensive investor base and industry expertise, Sims was able to underwrite and implement an efficient investment structure meeting the capital objectives and needs of the Fund, Black Dog, SRM, and their affiliates. Through its Private Client Group, Sims secured capital from its high-net-worth investors to fulfill its investment while meeting the timing needs of the Fund.
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.
For more information, please contact:
Curtis King
512.519.5003
Brett Edwards
512.519.5001