Overview
- Zest Communities (“Zest”) owns The Village at St. Elizabeth Mills, the only large-scale seniors’-oriented community in Canada
- Zest developed a 10-year plan for the community and tried for several years to implement this plan and refinance the asset in order to unlock the significant development value (~ 1.5M buildable ft2 of new development opportunity), but the company’s complicated corporate structure impeded the process
- Several institutional lenders and capital groups had attempted to underwrite the opportunity without success
MPA’s Role and Key Considerations
- MPA was engaged as an Advisor to assess how best to reorganize the company’s capital and legal structure and refinance its primary asset. Zest’s capital structure at that time prevented the company from developing its land assets
- Zest ultimately decided to proceed with MPA’s restructuring recommendations, and this culminated in subsequent mandates:
- Engaged to restructure the company
- Engaged to assist with segregating three business divisions into separate entities
- Engaged to assist in arranging $75 million in strategic debt to finance its business divisions
Outcome
- The nature of the company’s legal and financial structure necessitated a non-traditional capital structure and plan which included converting from declining balance life leases to market equity life leases
- Successful restructuring unlocked over $75 million in additional value for Zest Communities and allowed them to execute their master development plan