sims raises $28.85 million in equity and debt for a start-up senior living community in bozeman, montana

The Bozeman Lodge (the “Project”) is being developed by Farmington Centers, Inc. (“Farmington”). The Project will consist of 12 duplex cottages containing 24 independent living units and a stand-alone rental independent living building comprised of 100 independent living and congregate care apartments.

Bozeman Lodge Site Plan

challenge

Sims was approached by Farmington, a successful Oregon-based senior housing developer and operator, to finance the Bozeman Lodge. Farmington currently operates 16 campuses in Oregon, Washington and Idaho, consisting of 1469 beds/units.

The challenges were: (1) create a multi-property platform allowing Farmington to grow its development pipeline; (2) design a flexible debt structure; and (3) provide a single source of financing, including equity and mezzanine debt for the development projects.

solution

First, Sims worked with Farmington to develop a structure to minimize its equity requirement for the Project. Second, the use of Herbert J. Sims & Co., Inc.’s extensive accredited, retail investor base to fund equity and mezzanine debt; and second, negotiation and placement of senior debt with a first mortgage lender. HJ Sims Investments, LLC (“HJSI”) created a single-purpose entity which was capitalized by Herbert J. Sims & Co.’s placement of second mortgage bonds and equity to its high-net-worth client base.

Sims’ structure was attractive to Farmington for several reasons: (1) since the investment is made directly by a HJSI controlled entity, Farmington benefited from Herbert J. Sims & Co.,’s extensive highnet-worth client base without having to communicate with a number of third-party investors; (2) it allowed Farmington to establish a platform to provide debt and equity financing for future developments over the next several years; and (3) Farmington could have development and a long-term management agreement for each Project.

result

The equity and subordinated debt contributed by Sims, together with equity provided by Farmington, will satisfy the loan-to-value requirements of the senior lender on the Project. Sims’ creativity and flexibility were as important as the capital it delivered, which differentiates it from other sources of capital.