HJ Sims Arranges $201.1M Financing for CCRC Expansion in Virginia

NORFOLK, Va. — HJ Sims has arranged $201.1 million in financing for the construction of a new residential tower at Harbor’s Edge, a continuing care retirement community in Norfolk.

The CCRC was originally developed in 2002 in cooperation with the City of Norfolk as part of a master development plan called “Fort Norfolk Neighborhood.” Sims has partnered with Harbor’s Edge since the early 2000s, structuring, placing and underwriting the initial seed capital transaction, first phase of development financing, a refinancing in 2014 that contained predevelopment capital for the River Tower Phase II construction and the development financing for the River Tower.

Harbor’s Edge accepted 10 percent deposits for future residents of River Tower starting October 2017 and was 70 percent pre-sold by September 2018. Sims concurrently ran a bank request for a proposals process for a portion of the costs, while developing the terms and offering documents for the fixed-rate bonds. The strong balance sheet and operational history of Harbor’s Edge garnered a number of proposals for bank financing that would be repaid first from initial entrance fee proceeds received from River Tower residents.

Sims coordinated with two commercial banks, including SunTrust Bank and TD Bank, to arrange a $100 million draw-down bank loan. SunTrust served as administrative agent and provided $65 million in financing to support the transaction. Sims underwrote $101.1 million of fixed-rate bonds, achieving $500,000 in savings on annual debt service from the feasibility study assumptions. The hybrid financing structure saved Harbor’s Edge $20 million in net debt service and reduced projected maximum annual debt service by approximately $1.5 million, according to Sims.

The bonds were distributed among a diverse pool of institutional and private client investors.