Certus Financial, LLC, was engaged as Financial Advisor by the Indenture Trustee regarding a 66-unit senior living community, recently built in Grand Junction, Colorado.
As financial advisor, Certus assessed the financial performance, market position, capital needs, assist in the development of various go-forward strategies, and coordinated with professionals in an effort to stabilize the financial profile of the overall community and bond investment.
Highlights include:
· Representation of Trustee: Represented Trustee in $21.2MM of defaulted tax-exempt bonds on a 66-unit senior living community.
· Comprehensive Facility Assessment: Performed onsite assessment of the facility, operations, financial condition, and outlook of the Project.
· Comprehensive Market Assessment: Performed market study including meeting with administrators of all direct market competitors to assess market position. Identification of an overbuilt soft market as a primary contributor to financial underperformance.
· Comprehensive Management Assessment: Interviewed key corporate personnel involved with the marketing, management, and financial reporting of the project.
· Review historical audits: assured loan covenants and provisions per indenture were adhered to
· Budget Oversight: worked consensually with management to push for changes to drive profitability for the 2024 Budget.
· Negotiation of Forbearance and Extensions: Negotiated forbearance, avoiding a rushed sale at depressed operating performance levels. Conditions included:
o Consensual support of sponsor/management to replenish DSRF
o Forbearance agreement tailored to promote growth, oversight and stabilization to benefit the long-term financial position of the community
· Transparent Communication: Provided consistent assessment and operational updates to Trustee and bondholder committee, ensuring transparency and informed decision-making.
· Operational Improvement and Debt Coverage: increased occupancy from the high 60s% occupancy to the low/mid 90% and improved operating margins have greatly increased the property’s ability to cover its annual debt service