HJ Sims Partners with StoneCreek Real Estate Partners to facilitate $2.8 Million in Non-Recourse, Low-Interest Rate PACE Financing
Based in Dallas, Texas, StoneCreek Real Estate Partners (“StoneCreek”) is a collaboration of recognized and seasoned professionals with more than 50 years of combined experience in the operations, development and ownership of successful senior living communities in Texas, Colorado, and Arizona.
The operator, Civitas Senior Living (“Civitas”) is a Fort Worth, Texas-based for-profit owner/operator of senior living communities in Texas, Florida, Oklahoma, New Mexico, Kentucky and Arizona. Founded in 2012, Civitas has over 100 employees at its corporate office and manages over 45 senior living communities. In 2018, HJ Sims provided $5.85 million in preferred equity to Civitas for the development of a new community in Red Oak, Texas. In 2019, HJ Sims completed a $72.32 million all-bond acquisition financing of three communities in East Texas operated by Civitas.
The StoneCreek of Copperfield development is a new construction, 108-bed senior housing community that will include 74 assisted living units, 22 memory care units and 12 independent living cottages; providing local access to quality senior housing and care in the Copperfield area of Houston, Texas.
StoneCreek was exploring alternative capital sources to expensive mezzanine debt for a community in Houston when HJ Sims proposed exploring Property Assessed Clean Energy (“PACE”) financing.
PACE is a public/private partnership which allows property owners to finance projects through voluntary assessments placed on the property by a state economic development agency. The program finances 100% of the energy efficiency, renewable energy, water conservation, resilience improvements and the related costs for both ground-up new construction and renovations/retrofits up to about 20% of the property’s appraised value. The financing is collected with regular local real estate taxes and assessment payments which are amortized at a fixed-rate over the useful life of the project, usually 15-25 years.
HJ Sims coordinated with StoneCreek, Civitas, the PACE provider, and the Texas PACE Authority to get approval for PACE from the senior construction lender. Despite the atypical nature of the program, the financing team was able to assuage the concerns of the senior construction lender.
StoneCreek, with the guidance of HJ Sims was able to tap $2.8 million in Texas-PACE financing from Counterpointe Sustainable Real Estate to lower their total cost of capital and closed on November 20, 2020. The project is also supported by a $19.6 million construction loan from a traditional lending partner.
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