How much liquidity support will be required after opening?
For the CCRC to obtain long-term financing, current capital market conditions require that there is a liquidity support fund available following opening of the community. Creditors require this in case the community needs extra cash upon opening, or during the fill-up period (due to cost overruns, slow fill-up, etc) ideally, the liquidity support fund will not need to be accessed. For a community of this size, a liquidity support fund of approximately $6 million would be required. The liquidity support fund will be funded by investors who participate in the pre-finance capital investment (through a separate transaction). Investors will receive a similar return (11-12%) that is accrued until paid. The principal of the fund will be released to investors upon stabilized occupancy of the community. The return on investment will be paid as the community has available cash, currently projected to be the 2nd or 3rd year of stabilized operations. For example, an investor that provided $100,000
