sims provides mezzanine loan for an equity ccrc

Herbert J. Sims provided a mezzanine loan to Rainbow Vision Santa Fe to help construct and equip a new facility in Santa Fe, New Mexico. Bruce Cannon, Executive Vice President of CRSA, the development and management consultant to Rainbow Vision Santa Fe, noted at the Sims Late Winter Conference that mezzanine debt has several advantages: less equity needs to be raised by the owner; the cost of capital is significantly less than equity; and the mezzanine debt can be refinanced at lower rates upon occupancy.

The founders of Rainbow Vision Santa Fe wanted to appeal to as broad a market as possible with both an equity ownership and a rental program. The project includes 60 residential condominium units, 60 rental independent living units, 26 assisted living units and a community center.

Equity models are here to stay. At the Sims Late Winter Conference, Avery Rockefeller of Retirement Living Services noted that equity models are in higher demand in high cost markets. Jay Pope of Sunrise described his company’s experience with the condo model and their future plans. Mark Puntereri of Cypress Group stressed equity ownership as a financial tool for residents with his company’s communities having no long-term debt.