Partners in Weathering the Storm of the Great Recession

For Upstate Senior Living, the non-profit sponsor of The Woodlands at Furman, the road to financial stability was not easy. Having achieved a 65% presale threshold, this start-up CCRC located in Greenville, S.C., financed in October 2007, opening 17 months later in March 2009, the depths of the Great Recession. Due to the recession, The Woodlands at Furman suffered severe financial challenges that they could not have predicted.

Unexpected Obstacles

Similar to other CCRCs, the Woodlands team predicted that many of their depositors would use funds, like proceeds from the same of a home or from investment accounts, to pay the entrance fee. However, because of the recession, the depositors found themselves less confident in the economy, and many decided to relinquish the units they had on hold.

In addition to unforeseen competition entering the market, the community defaulted on various terms of its debt. The Woodlands, Greystone, the bondholders, and the ground lease leasor, The Furman Foundation, worked together in 2012 on a restructuring plan to extend the runway for The Woodlands to achieve stable occupancy.

Up to the Challenge

This restructuring provided relief from financial and operating covenants, but it also placed “handcuffs” on The Woodlands as all excess cash flow had to go toward paying down debt instead of reinvesting into the community. Even so, The Woodlands and Greystone worked together to operate and fill up the community.

When they achieved stabilization, The Woodlands refinanced the previously restructured debt in June 2017 and borrowed an additional $4M to reinvest in the community. At this time, The Woodlands and Greystone worked together to transition the community from Greystone’s third-party operational management self-management. The relationship has evolved over the years as The Woodlands has matured and stabilized, but they continue to partner with Greystone for the future success of the community.

Today at The Woodlands

The Woodlands used the $4M to begin construction and presale of the Villas, 28 single-family homes in a tree-lined, on-campus neighborhood with four different three-bedroom floorplans that include garages and luxury details. These construction of these villas were funded through progress payments from customers, rather than a one-time deposit to reserve the unit. The teams determined that this would not only be more efficient, but would also allow the community to avoid taking on more debt.

The combined expertise of both the Greystone and Woodlands teams helped the community to navigate and overcome those rough waters. Today, the community is not only thriving, but also growing. They received $35.7M in bond financing from Ziegler in February 2020, which will fund 44 new independent living apartments, and a 13,000 square-foot amenities building, as well as renovations to the existing dining facilities and common areas. We can’t wait to see the amazing things they accomplish next!

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