First National Financial LP

Client journey: 20 years in seniors housing

Dec 19, 2016

Successive renewals help to build family legacy
First National helps client steward growth and expansion in seniors housing throughout two-decade relationship

Key idea: relationship, consistency, transparency, expertise
First National establishes enduring partnership with a family looking to grow and maximize its portfolio and build a strong legacy for the next generation.

What was the client trying to achieve?
Growth and expansion in the seniors housing market was the ultimate goal for this family business. Starting with one site, the client was consistently looking for expert advice about financing expansion and succession planning, so that growth didn’t exceed its borrowing capability.

“With this client, the philosophy centered on controlled growth supported by the success of its real estate asset,” says Jamie McCallum, Assistant VP, Commercial Financing. “It was my role to keep the client realistic about the possibilities and offer the best options to maximize those possibilities.”

Putting the deal together
The relationship with this client began prior to McCallum’s arrival at First National in 1997. In fact, the initial deal first came to CMHC during McCallum’s tenure at CMHC.

In 1998, McCallum worked with the client on the first refinance for $6 million. In 2000, the client planned to acquire an adjacent site and build a second tower. McCallum helped the client secure a $22 million CMHC construction loan for that project.

Complexity entered the equation in 2005 when the client wanted to source additional funds. When CMHC was unable to get to the amount of leverage that the client requested, McCallum tapped First National’s private source of funds to meet the loan amount of $31 million.

“As a family business, most of the client’s net worth is tied up in that business,” says McCallum. “CMHC expertise was critical, but even more important was being able to offer alternatives when we couldn’t maximize loan dollars through CMHC.”

In anticipation of the 2005 loan renewal and looking at further expansion, the client came to McCallum in 2013 seeking $2.3 million to finance the purchase of another adjacent site.

Why First National?
For McCallum, consistency is key. With this client, McCallum saw the family through its biggest growth periods to date. Dealing with one person for successive renewals is rare in an industry where people move around frequently.

“There was no re-education required for each deal. There was trust, built during many years, in my CMHC expertise, construction knowledge, understanding of the retirement business, and most importantly, understanding of the client’s business.”

Agility and ingenuity also played an important role in building a 20-year relationship. For example, in 2005, when CMHC couldn’t deliver on the client’s financing requirements, McCallum was able to forge on and explore alternatives.

“I had to switch gears fairly quickly but I was confident in my ability to do so. When one option fell through, I had First National’s broad product portfolio and our commitment to being inventive and resourceful on my side. I leveraged both to deliver exactly what the client needed,” says McCallum.