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Army Residence Community

Army Residence Community

The Situation

Army Residence Community (ARC) is a 25-year-old full-service, Type A continuing care retirement community (CCRC) in San Antonio, Texas, that serves retired military officers exclusively.

Unlike other military CCRCs, the ARC requires residents to have 20 years of military service. After a decade of full occupancy, the ARC bought 80 acres of adjacent vacant land but wrestled with how to develop it.
Army Residence

The Challenge

Many for-profit developers suggested a “build-it-all-at-once” approach, based on the perceived demand.

The ARC did not want to put either its mission or its residents at financial risk by utilizing this industry-standard approach.

Instead, the ARC wanted to proceed more slowly by financing a new assisted living facility, a common area and a modest number of independent living units, all built to demand. Subsequent phases of 20 to 30 cottages would be constructed as they were presold.

The Hamlin Solution

Hamlin, working through a broker-dealer, introduced the ARC to a financing source that would provide a long-term, tax-exempt line of credit, which enabled the construction of a “pods” of cottages over a long time-horizon. By using collected entrance fees to pay down this line, the ARC gained capital access for the next such pod.

Working with the ARC, we also examined bank financing but determined that the banks’ timeframe did not accommodate the 15- to 30-year view of the project.

As a result of Hamlin’s approach, the ARC enjoyed access to low-cost, tax-exempt variable rate debt that met its long-term needs.