WhiteStone: A Masonic and Eastern Star Community $73,295,000 Financing (Series 2020)
October 16, 2020
|Cain Brothers, is pleased to announce a successful closing of the $73.3 million tax-exempt bond financing for WhiteStone: A Masonic and Eastern Star Community (“WhiteStone”). Located in Greensboro, North Carolina, WhiteStone is a non-profit CCRC managed by Life Care Services (LCS) that opened its doors in 1913 and is the oldest life plan community in North Carolina.
WhiteStone historically maintained high occupancy in all service lines due to its excellent location, market positioning with an attractive residential price point and reputation for high quality skilled nursing care. Beginning in in 2007, Cain Brothers began proactively working with WhiteStone, LCS and LCS Development to formulate and fund a multi-phase long-term campus master plan to address three critical issues. First, their lack of assisted living limited their ability to provide the most clinically appropriate resident care and for existing residents and was an impediment to attracting couples in need of differing levels of care. Second, 66% of SNF admissions were outside admits, yet less than 20% of their rooms were private. Lastly, the average size of their apartments was 739 square feet and only 22% of apartment inventory was two-bedroom units, both of which put WhiteStone at a competitive disadvantage.
The Series 2020 bonds were the third completed by Cain Brothers as part of the master plan and proceeds funded a transformational repositioning and expansion project that addressed all of their critical issues, including: (1) adding 67 new apartments – an increase of 85% — that raised average unit size to 1,115 square feet and improved inventory of 2 BR units to 37% of total (2) adding 24 AL units and (3) renovating the SNF to improve the mix to 55% semi-private and 45% private rooms. to better attract rehab patients and private payers.
With pre-sales stalled due to COVID, a second wave of COVID cases spreading in WhiteStone’s market area and a rapidly growing forward bond issuance calendar due to election anxieties, Cain Brothers was able to successfully bring the offering to market with only 52% pre-sales at the time of pricing. The issue was structured with three series of non-rated bonds and a highly effective bond marketing plan that resulted in nearly 200 POS downloads and more than 50 downloads of a virtual roadshow presentation. The $60.1 million Series 2020A fixed rate bonds were 3.5x oversubscribed and resulted in a 35-year yield of 4.56%. The $4 million Series 2020 B-1 (85%) have a yield of 3.50% and the $9.2 million Series 2020 B-2 (50%) Bonds have a yield of 3.50%.