An agency of Palm Beach County, Florida, plans to issue $190 million of revenue bonds for a nonprofit developer to build a retirement community.
The securities, originally scheduled to be issued this week by the county’s Health Facilities Authority, will instead be sold after the county approves a pending building permit, said Robert Gall, senior vice president for bond underwriter Herbert J. Sims & Co, in an interview today. A new sale date hasn’t been set, he said.
The debt will be repaid by revenue generated from Sinai Residences of Boca Raton, according to the offering documents. Senior citizens will pay an average of $594,000 to become tenants, followed by monthly fees. The facility’s business model relies on new tenants paying and replacing tenants who die or leave.
More than 200 of the 237 independent-living units at Sinai Residences have been reserved with 10 percent deposits, according to Federation CCRC Operations Corp., the project’s nonprofit developer, created by the Jewish Federation of South Palm Beach County. Among those reserving units, the average age is 83 and the median net worth is $2.4 million, according to a feasibility study referenced in the offering documents.
The tax-exempt bonds aren’t backed by Palm Beach County and aren’t rated. Yields are expected to range from 6 percent to 8 percent, according to an online description by Herbert J. Sims & Co. Sinai Residences is scheduled to open in November 2015.