HJ Sims recently facilitated $213.8 million financing for a start-up continuing care retirement community (CCRC) in Florida.
Sinai Residences of Boca Raton in Boca Raton, Fla. has an overall budget of $250 million, and is expected to open in 2015. The community is sponsored by Federation CCRC Operations Corp., a nonprofit corporation organized to develop, own and manage the community. The day-to-day operations will be managed by Life Care Services.
Of the nearly $214 million financed through HJ Sims, $189.7 million will be financed through Palm Beach County Health Facilities Authority revenue bonds. Series 2014A bonds will provide $120.7 million; Series 2014B, entrance fee principal redemption bonds will provide $14 million; and Series 2014C, entrance fee principal redemption bonds will provide $55 million for the Sinai Residences of Boca Ration Project.
The additional $24 million will be provided through Palm Beach County Health Facilities Authority draw-down bonds, and have been purchased by a single investor who committed to purchase the full $24 million in bonds upfront, says Aaron M. Rulnick, principal of HJ Sims.
“These bonds are being purchased over time to mitigate the negative arbitrage and reduce the amount of capitalized interest,” Rulnick says, adding that the additional funds not financed through HJ Sims will be provided by other sources.
The new CCRC was planned after a 2005 survey led by Jewish Federation of South Palm Beach County (the Federation) found there was a need for one in the area.
“There was a strong demand and need for senior housing,” Rulnick said of the study’s findings, adding that planning for the Sinai project took off in 2009. HJ Sims began working with the Federation in 2010, along with other CCRC development experts.
Sinai Residences, a resort-style CCRC, is located on the campus of the Federation. The CCRC will host over 500 residents in 237 independent living units, 48 assisted living units, 24 memory-support units and 60 skilled-nursing suites.
When evaluating the amount of financing the new CCRC will receive, Rulnick said it is not unlike other retirement communities it has financed above $200 million.
Sinai Residences is the latest major CCRC financing in Florida, following Santa Fe Senior Living. The development of CCRCs point to new growth in an area that was one of the hardest hit following the housing crash and subsequent recession.
Written by Cassandra Dowell