Fixed Rate Bonds Placed with Single
Investor for First Phase of Critical
Repositioning Project
$13,000,000 | Pittsburgh, Pennsylvania | May 2025
“Aaron Rulnick and David Saustad at HJ Sims were instrumental in making the financing for this project possible. They led us every step of the way—connecting us with the right investor, negotiating a type of deal that we’d never undertaken before, and working with our partners at the Federation to build a strong foundation of support. Their expertise and critical guidance helped us navigate an incredibly complex process, and this project, which will benefit seniors in our community, would not have been possible without them.”
– Jay Sukernek, Chief Financial Officer
Jewish Association on Aging
Partnered Right®
The Jewish Association on Aging (“JAA”) is a not-for-profit senior living organization that provides personal care, memory care, and several home and community based services in Pittsburgh, Pennsylvania. JAA operates 29 memory care units and 191 affordable independent living units at its main campus, as well as 62 personal care units on a satellite campus. Prior to the COVID-19 pandemic, JAA operated both skilled nursing and personal care units at its main campus. Beginning in 2014, the organization embarked on a strategic planning process to explore further opportunities for growth through additional independent living units. Starting in 2015, JAA closed a portion of its skilled nursing facility and converted it to memory care. As a result of the difficult industry conditions, which were exacerbated by the COVID-19 pandemic, in 2020 the organization completely closed the 124-bed skilled nursing facility. Shortly thereafter, they closed its 33-year old personal care facility in 2022, which no longer met the needs of the community.
In 2023 and 2024, JAA ramped up its development process to convert the vacant space on its main campus into 30 new personal care units. They also identified an opportunity to add 60 independent living units on the site of the old personal care facility. By 2024, the organization was ready to begin the personal care expansion project. JAA engaged HJ Sims to serve as its investment banking partner to secure financing for the first phase of the development.
Structured Right®
JAA planned to begin the first phase of the development in the fall of 2024. The organization decided to solicit bank financing proposals over the summer to seek funding for the project. While JAA had significantly reduced operating expenses as a result of its downsizing efforts, the organization had limited liquidity coming out of the pandemic. In order to help attract financing proposals, JAA received support from the Jewish Federation of Greater Pittsburgh (the “Federation”), a long-time partner of JAA, to fund the project through a subordinate loan. In addition to soliciting bank proposals, HJ Sims shared the opportunity with several institutional investors that had expressed interest in providing financing for similar borrowers. Bank interest in the financing opportunity was ultimately limited despite the additional support and guarantees, in part due to the current financial performance of JAA. However, the organization received strong interest from an institutional investor to provide the funding. This proposal also appealed to JAA because they would be able to potentially partner with the investor on the second phase of the project that would add 60 independent living units.
HJ Sims worked to negotiate terms on behalf of JAA with the investor that would 1) ensure the project was fully funded, 2) provide the necessary flexibility to allow the organization to stabilize before testing covenants, and 3) work in conjunction with the Federation’s proposed support for the project. Once the main terms were agreed to between JAA and the investor, HJ Sims and JAA worked to finalize the Federation’s support structure. The Federation agreed to fund a $2.8 million subordinate construction loan, fund half of the debt service reserve fund requirement at closing, as well as provide a liquidity support agreement. Further, the Federation agreed to provide a partial guarantee on the senior bonds that would fade away over time. Based on this structure, both the JAA and the Federation voted to approve working with the investor to fund the expansion project.
Executed Right®
With the investor selected, HJ Sims pulled together the working group to begin preparing the legal documents necessary to close on the financing. While the documents were being drafted, JAA worked to finalize the terms of the liquidity support agreement (LSA) with the Federation. One of the key negotiating points was how the LSA would be structured. After discussing several options with the investor and the Federation, both parties agreed to utilize a letter of credit for the LSA. With the final terms of the Federation support agreed to, the working group worked quickly to finalize the legal documents and the sign the bond purchase agreement (BPA).
Financed Right®
Three days after signing the BPA, on May 15, 2025, JAA closed on the $13 million financing. If the financing were delayed another week, the investor would have had the right to increase the interest rate on the bonds due to the change in treasury rates. With the financing closed, the organization plans to finish the personal care project and eventually prepare for the independent living expansion on its main campus.
Aaron Rulnick
203.418.9008
David Saustad
240.207.1202
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