HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the June 2020 closing of a $29.3 million financing for Presbyterian Senior Care's Encore on the Lake (Encore), a new independent living community in North Strabane Township, Washington County, PA.
Encore will include 80 independent living apartments with underground parking, in a four-story building and is positioned to be affordable to seniors of modest means. The project is being undertaken in partnership with Senior Housing Partners (SHP), a subsidiary of Presbyterian Homes & Services (MN). Encore is an affiliate of Presbyterian SeniorCare Network (PSCN) and parent organization Presbyterian SeniorCare (PSC). PSCN is a not-for-profit, faith-based, multi-site network serving 6,500+ older adults in Western PA, and offering a continuum of care to adults through 53 senior living communities, affordable housing facilities and at-home programs/services.
Sims has provided investment banking services to PSC and its affiliates, including financing in 2017 for construction of the Woodside Place memory care facility at PSC's Washington campus, and 2019 refinancing/financing at Shenango on the Green. PSC engaged Sims to provide services for Encore, including exploration of financing options.
For this financing, Sims ultimately identified commercial bank financing as the preferred option for the majority or the financing, with the need for supplemental/subordinate financing to be determined upon completion of a bank solicitation and appraisal. Following a bank solicitation process, PSC selected First National Bank of Pennsylvania (FNB) as the commercial banking partner.
Elements of plan of finance implementation included: i) confirmation of appraised value, potential need for supplemental financing and source of financing and ii) finalizing the financing structure, including application of entrance fees, interest rate mode and debt security, and covenant provisions. Based on appraised value and loan-to-value requirements, supplemental financing was required with several of the considered options. PSC utilized additional bank financing, provided by Washington Financial Bank (WFB) and credit-supported by PSC.
The $29.3 million financing was comprised of $26 million of senior debt financing from FNB with a 28- year maturity combined with $3.3 million of supplemental financing from WFB with a 10-year maturity. Both components of debt, totaling $3.5 million, included portions to be repaid with some residency membership deposits following project completion and resident move-in. While the outbreak of COVID created uncertainty, the financing was successfully completed on June 30, 2020.
"For the third time, the Sims team partnered with PSCN to achieve success with a financing and favorable terms for another mission–critical project, a new Independent Living rental model to serve moderate income older adults, which we hope to replicate. The Sims team did this in the midst of the disruptive COVID pandemic environment and a CFO transition. Our organization places great value on collaboration, and the Sims' philosophy and culture align extremely well with ours," said Paul Winkler, Chief Executive Officer, Presbyterian SeniorCare.