31 Aug EB-5 Investment Opportunities: Spotlight On Senior Housing Facilities, Part 2
This post is part of e-Council Inc.’s new “Spotlight” series, in which we feature successful EB-5 projects across different industries and business types. Some of the spotlighted businesses may be our clients while others are not, but all have one theme in common: SUCCESS using EB-5 capital.
Our previous blog post described the booming senior housing industry and the increased use of EB-5 funding by developers. We also discussed the cost-saving and other financial benefits of using EB-5 capital as part of the initial capital stack of a venture or to repay higher-interest bridge loans. (The full article can be found here).
In this post, e-Council Inc. provides readers with real-life snapshots of senior housing projects across the country that are effectively leveraging EB-5 capital. In all of these examples, developers are using EB-5 funding to finance at least 30% of project costs.
RockBridge Senior Living Group, Southeastern United States
RockBridge Senior Living Group’s current South Carolina-based assisted living facility was founded to provide high quality service to seniors and their families, while maintaining the traditional southern experience. Using EB-5 capital, the Florida-based company plans to develop several more assisted living communities in the next five years, particularly in the Southeast. According to COO Jeff Carmichael, most new developments range between 72-80 units with project costs of $12-15 million. Depending on the actual project, EB-5 funding accounts for 30-50% of the total capital stack, along with other equity and bank debt. RockBridge is working with NES Financial, a San Jose, CA-headquartered company that will administer the EB-5 funds associated with the senior living developer’s current and future projects.[1]
AAA Florida Senior Living Regional Center (“AAAFSLRC”) – works with Town n’ Country Assisted Living to fund Florida senior living opportunities throughout Florida. Joseph Grace (Managing Member of AAAFSLRC) has over twenty years experience in the development of senior living in Florida. The new developments will introduce many cutting edge design concepts to meet the needs of the ever-evolving senior living customer. The current project in Tampa, Florida is a 75-unit Memory Care facility with a total budget of $13 Million. Future facilities will either be standalone Memory Care facilities (56-75 unit purpose-built facilities with $10-$13 Million development budgets) or full-sized mixed-use facilities combining assisted living and Alzheimer Care (100-150 unit facilities with $22-$28 Million development budgets).
Linden Village Assisted Living, Washington State
Currently under construction, Linden Village is an assisted living facility located in north Seattle. It will feature 79 units of assisted-living housing in studios, as well as one- and two- bedroom configurations. Linden Village will also offer memory care services in its memory care wing for those needing assistance due to dementia and brain trauma. A total of 21 units will be devoted to memory care patients. Amenities will include a rooftop deck, an entertainment center, medication management, and full meal plans. Linden Village will break ground in June of 2016, with an expected opening in September 2017.
Total funding for the project is $22,000,000, with almost half of the amount—$10,500,000—being financed by EB-5 investors. Seattle-based Zenith Capital is overseeing development and financing for Linden Village. Village Concepts, a senior housing developer and operator based in nearby Federal Way, WA will operate the community. The project is sponsored by the Western Washington Regional Center. Incidentally, the Western Washington Regional Center has also facilitated several other assisted living projects, all in the Seattle area.[2]
PDC Capital Group, all regions of the United States
Over the next couple of years, PDC Capital Group, a firm based in Costa Mesa, CA, will develop 25 SummerPlace Assisted Living & Memory Care communities throughout its home state as well as Arizona, Florida, Illinois, Texas, and the Carolinas. For the planned pipeline of projects, the typical senior housing development will cost PDC Capital an average $30 million per facility, with EB-5 funds representing approximately 20-30% of the capital stack—or $10 million. Last year, the firm began construction on SummerPlace Lincoln, a $26 million community located 25 miles northeast of Sacramento. The development, which is expected to open in fall 2016, will add 228 beds to the region and will create at least 135 jobs in the area.[3]
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These are just a few of the many senior housing facilities being built today with EB-5 capital. Indeed, the use of EB-5 funding by senior housing developers is likely to become more common over time. This is the result of increased interest among foreign investors and, with more and more successful EB-5 ventures nearing completion, greater confidence from traditional lenders in EB-5’s ability to finance such projects. Like any business venture, selecting the right professionals on both the legal and economic research sides is a key to success in financing any project through EB-5.[4] As Joseph Grace, Managing Member of AAAFSLRC, stated “PPM Offerings will be SEC-compliant and include experienced and recognized EB5 professionals covering all areas of expertise, including attorneys and broker-dealers”.
e-Council Inc. is an experienced, full-service company with a long track record of successfully guiding its clients through the complex EB-5 process. e-Council Inc.’s team includes attorneys, researchers, and other professionals who specialize in providing due diligence services that will equip senior housing developers with the information needed to assess the viability and feasibility of opening a new senior living facility, as well as the likelihood that the project will pass USCIS scrutiny. Senior housing developers seeking EB-5 capital should conduct a thorough due diligence assessment at the outset of the venture to determine whether the particular project is marketable to investors and consumers, financially feasible, and EB-5 ready. Conducting an in-depth due diligence assessment prior to the development of a business plan can save developers and business owners both time and money. e-Council Inc. assists senior living developers to assess whether prospective projects are suitable for the EB-5 program i.e.: whether they “pass muster”.
If the business is EB-5 ready, e-Council Inc. can create a Matter of Ho-compliant business plan and provide a wide range of complementary services designed to support the EB-5 application. Working with e-Council Inc. to complete all of your EB-5 documents minimizes the need for outside services from unrelated sources; all of our diverse service providers have been fully vetted and are immediately available.
To inquire about our wide range EB-5 services such as our pre- and post-project due diligence assessments and best-in-class Matter of Ho-compliant business plans, please contact us at info@ecouncilinc.com.
e-Council Inc.’s website, newsletter and other forms of communication contain general information about legal matters. The information is not legal advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.
[1] http://seniorhousingnews.com/2014/05/04/eb-5-funding-booms-for-senior-living-development/; http://nesfinancial.com/rockbridge-senior-living-group-selects-nes-financials-eb-5-escrow-solution/
[2] https://zenithcap.net/smwp/wp-content/uploads/Linden-Village-Case-Study-5.pdf; http://www.shorelineareanews.com/2015/08/new-senior-housing-community-in-north.html; http://www.eb5wwrc.com/lindenvillageseniorcommunity
[3] http://seniorhousingnews.com/2014/08/14/private-equity-group-taps-eb-5-fund-750-million-assisted-living-pipeline/; http://pdccapitalgroup.com/projects/
[4] http://innovation.seniorhousingnews.com/developers-get-creative-to-fund-the-next-generation-of-senior-living/