IRVINE, CALIF. — JLL Capital Markets and HJ Sims have arranged $473 million in tax-exempt and taxable bond financing for the ground-up development of The James, a luxury rental, 350-bed seniors housing community in Irvine. The transaction is the largest tax-exempt senior living financing of the year and the largest nonprofit, single-site senior living bond issue in history, according to JLL.
JLL’s Seniors Housing Capital Markets team worked on behalf of Harbert South Bay Partners, LAMB Properties, P3 Foundation and Momentum Senior Living to secure the 35-year financing with HJ Sims hired as sole underwriter of the bonds.
The financing consisted of $442.1 million of publicly offered tax-exempt senior series 2024A bonds, $12.9 million in taxable senior series 2024B bonds, and $18 million in subordinate tax-exempt series 2024c and 2024d bonds. JLL also handled the land sale to the partnership on behalf of the seller.
The groundbreaking for The James — the first new senior living community in the Irvine market in 28 years — will take place later this month and the target date for completion is June 2027. The community will offer 210 independent living units, 110 assisted living units and 30 memory care units with a mix of studio, one- and two-bedroom luxury rental units, averaging 837 square feet.
An expansive amenity package will be available, including multiple dining venues, an indoor pool and spa, wellness gym and yoga studio, therapy rooms, hair salon, media lounge, golf simulator, dog park and pet washroom, and bocce ball.
The community is positioned on a three-acre site at 1001 Gates Ave., located across the street from The District at Tustin Legacy, an upscale retail center with 15.6 million visitors annually. The James site is highly visible from the major roadways and is close to the I-5 and I-405 freeways allowing for quick access to the Irvine Spectrum Center, Hoag Hospital Irvine, Orange County Great Park and John Wayne Airport.
Orange County’s 65-plus age cohort currently represents nearly 16 percent of the county’s total population base. That figure is expected to increase to 29 percent by 2060, creating a surge in demand for senior living options for years to come.
“While tax-exempt financing has been used to finance senior living in the past, this specific structure was innovative for both the clients involved and bond investors,” says Jay Wagner, head of JLL’s Seniors Housing Capital Markets team.
Aaron Rulnick, head of investment banking at HJ Sims, says the deal represents a future model for bond financing. “This transformational bond financing will serve as a template for partnerships between nonprofit borrowers and for-profit developers and operators.”