No Cost Senior Housing Development on Church Property

Senior Housing Development on Church Property

THEMINISTRYCHALLENGE

A New Normal

FACT: There are historic demographic and financial shifts occurring today that threaten to fundamentally alter the very social, political and economic landscapes upon which America operates.

With it come huge moral implications along with financial burdens and opportunities for the Evangelical ChristianCommunity.

Historical Shift 1

The Baby Boomer Generation is Aging.

Each day over ten thousand people are turning 65 and will grow to total over 20 million… for the next 20 years. In less than 6 years, the number of Americans aged 85 or older will increase by 33%, which is 3 times faster than any other age group. And of those over 75, 40% must contend with some form of dementia. In short, seniors are living longer, physically healthier lives.

Historical Shift 2

A Financial Crisis…

The general economic climate, decreased giving, and vanishing credit markets have had a devastating effect on churches and their ability to meet the increasing ministry needs of our day.

Excess church land and properties, once a valuable asset to financial health and expansion, now sits idle with diminished value and little prospect of ever being developed for it intended ministry use.

How Big Is The Coming FloodOf Senior Adults?

Age 65 Age 85 Dementia

TURNING 65 YEARS OLDEach day over 10,000 people are turning 65… and that number will continue to over 20 million for the next 20 years. That’s over 3.5 million new seniors every year.

TURNING 85 YEARS OLDIn less than 6 years, the number of Americas aged 85 or older will increase by 33%, which is 3X faster than any other age group.

DEMENTIAOf those over 75 years of age, 40% must contend with some form of dementia.

A MORAL CRISIS

HOUSINGIt presents a moral crisis for this country as it demonstrates that we willleave our elders without decent and caring places to live.

SENIORSA new report by the Center for Housing Policy titled “Housing an AgingPopulation” puts facts to the instincts all of us working on senior issues have, “We know we are not adequately preparing for this demographic tsunami”.

The dramatic growth of seniors will have important consequences for the church as it prepares for ministry in the twenty-first century.

The Church must not let the tsunami of senior adults catch it unprepared. The wise pastor and congregation will begin praying; planning and putting people and projects into place that can address the physical, spiritual and emotional needs of their senior adults. Only then will we be ready to care for, minister and reap the great harvest of senior souls.

This large wave of senior retirees is creating a growing need for senior housing.

This creates both a market opportunity and a ministry opportunity (If) …

Financial Resource & Design Expertise are available. CorEquity can provide BOTH!

And here is where a unique kind of business-ministry partnership can fill both of these two great needs. Here is where the senior boom meets the budget gap of the church and creates a tremendous ministry opportunity of its own.

Seniors Need Safe Quality Housing

Ministry Has Excess Land & Needs Greater

Cash Flow

CorEquity Has Financial

Resources & Development

Expertise

MarketDriven

Ministry Opportunity

Market NeedMarket Need Ministry NeedMinistry Need Resources / ExpertiseResources / Expertise OPPORTUNITY

COREQUITY plans, finances, builds, and operates high quality Senior Care Facilitiesand we are now seeking Partnerships with churches that have a desire to fill this vital role.

SENIOR HOUSING STRATEGYSENIOR HOUSING STRATEGY

THE COREQUITY SENIOR HOUSING MODELWe work specifically with Faith Based Organizations and provide a Business-Church business model for the purpose of creating optimal senior care housing facilities.

This model delivers turn-key project development and construction; and provides complete solutions from market and feasibility analysis, planning and design, both construction and long term financing, and total day-to-day operations.

Selected qualified church partners will have an opportunity to share and grow their senior ministry programs with residents, resident’s families and their community.

Revenue is generated through industry standard fees from the senior housing project. Church partners share in project revenues and have equity ownership in the projects, based on their contribution of land for the project’s location.

EXAMPLE TEXTGo ahead and replace it with your own text.

2.Memory Care

3.Independent

Living

1.Assisted Living

WHAT WE BUILD

All combinations of Independent Living, Assisted Living and Memory Care are considered initially and objectively. The final determination of the development unit mix is the result of a market studies, demographics, capital availability and timing.

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A Sincere Commitment

1 A sincere commitment by the leadership of the organization to this type of project. The Church will formally engage CorEquity (at no cost to the church) to conduct it's required due diligence and market studies to determine project viability.

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Congregation of 500+

A congregational size of at least 500 active members.

HOW IT ALL WORKSWHAT THE CHURCH PROVIDES

Excess Land For Development

2 The availability of unencumbered land suitable for the development of senior living facilities. (In certain instances we may be able to use encumbered land if known in advance).

A Demographic Fit

5 Market data demonstrating a need for a facility of this type, which CorEquity will gather and determine at it’s own expense.

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Prelease Survey Data

Prelease market information and data from the church.

Land Conveyance

6 Once market viability is determined and the church and CorEquity agree to move forward, a single purpose LLC will be created to hold both the land and the newly formed senior housing project for the benefit of both the sponsoring church, CorEquity and it's development partners.

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Special Committee

The creation of a special committee within the organization to work cooperatively with the CorEquity team.

PLEASE NOTE:

In reality, not every community is a candidate for a senior living facility. This may be the result of demographic patterns, lack of commitment on the part of the church sponsor, difficult zoning laws, existing troubled projects in the area or problems in securing permanent financing.

To address these uncertainties, the Senior Living Development Program is specifically designed in incremental steps. This strategy limits our financial investment; particularly early in the process in the event that market conditions indicate that a project is simply not feasible. This Senior Living Development Program includes a series of “go” – “no go” decision points at which time the process can end with no further obligations from either the church or CorEquity.

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Market Feasibility Analysis

1 A critical first step for a project of this type is determining if there are a sufficient number of “age and income qualified” individuals within the community who are likely to become residents of a senior housing. independent living, assisted living or memory care facility.

HOW IT ALL WORKSWHAT COREQUITY PROVIDES

Development Expertise

2 With the involvement of development partners contracted with CorEquity, each project will receive a high level of guidance and oversight insuring that the entire development process flows in an efficient and successful manner.

Planning and Design

3 Senior housing and assisted living facilities are very different from traditional multifamily housing and must address the unique needs of older residents. For that reason, it is important to have an experienced firm designing both the exterior and interior of the facility. The CorEquity development team will use regionally based firms with extensive senior living experience to provide the planning, architecture and interior design disciplines resulting in distinctive and functional facilities.

Construction Experience

4 In order to maintain the affordability of the project, it will be imperative to ensure that the facility is built within budget, which is why CorEquity utilizes Equity, Inc., the 16th largest health care facility developer and contractor in the country.

Financing

5 The program uses experienced mortgage bankers, investment bankers and private equity to finance the project resulting in the very lowest capital costs available.

Facility Management

6 A well conceived and properly designed facility is only as successful as the management component. Projects completed under the Senior Living Development Program will be managed by regional or national organizations to insure that they will be operated in a financially prudent and caring manner.

CorEquity Senior Housing Development Program…SUMMARY of Benefits & Responsibilities

Sponsoring Church

Provides

Receives• Shares in Operating Revenues

• Ownership Equity

• Has NO Financial or Operational Risk

Provides• Turnkey Development Plan

• Market Feasibility and Analysis

• Project Development

• Project Planning and Design

• Project Construction

•Complete Financing

• Facility Management

• Assumes ALL Financial and Operational Risk

Senior Housing Development Project Flow

COREQUITY

Due Diligence & Market Feasibility Phase2 Months

CHURCHTo participate, a church must meet certain fundamental

criteria including: Have a vision to minister to seniors adults

• Be able to contribute unencumbered excess land for development

• Engage CorEquity to conduct due diligence and market feasibility• Have at least 500 active members

• Create a special committee to work with CorEquity• Provide CorEquity with Prelease market data

If Market ResearchDoes not confirm viability

If Market Researchconfirms viability

Development Phase2 to 3 Months

If No Major Zoning Issues

Project Released Project moves to Development Stage

PROJECT LLC FormedChurch Contributes Land

CorEquity Begins Development PlanFinancing Plan

Construction PlanManagement Plan

ConstructionUp To 14 Months

Project StabilizationUp To 24 Months

Project Exit (if desired)36 to 84 Months

Example of How the Sponsoring Church Participates in Project Equity & Revenues

10%

SENIOR HOUSING PROJECT EXAMPLE: 60 Unit Assisted Living Facility on 5 Acres of Church Contributed Land

Land Value of Church Contributed 5 Acres – CHURCH EQUITY

Total Development Cost of Proposed Facility

$300,000

$10,000,000

$1,000,000

Contributed Equity of CorEquity Partners – COREQUITY EQUITY

Amount Financed by Institutional Debt – COREQUITY DEBT

$3,000,000

$7,000,000

Church Ownership as a % of Contributed Equity - $300,000/$3,000,000

If the Annual Net Operating Income (NOI) after Debt Service is Paid =

$100,000The Church Would Receive an Annual Income Distribution of:

If the Facility is Sold in the Future for $17,000,000 – the Church would Receive: $1,700,000

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Set Up A Call With CorEquityOur first step together will be to get to know each other in more depth, discuss your ministry vision and how or if our senior housing strategy matches with your ministry goals.

Fill out our Ministry ProfileOnce your ministry has expressed a desire to take a deeper look into the program, we ask that you complete a short ministry profile form that gives us a more in-depth view of the suitability of your excess land for development.

Site Visit & Engagement After a review of your Ministry Profile we will be able to determine if it makes sense to visit your ministry and view your property. If both the Ministry & CorEquity desire to move forward, the ministry will be asked to formally engage CorEquity to conduct its due diligence and market studies.

NEXT STEPS

The Development Process Begins

David has over 30 years of experience in Corporate Financial Planning, Commercial Real Estate Lending, Commercial & Municipal Credit Analysis & Underwriting, Strategic Planning & Corporate Development, Stewardship Planning & Non Profit Financial Consulting. He has advised and funded over $350 million of Christian Ministry based projects, $350 million of Municipal Bond Issues and sold over $200 million of Investment, Insurance and Pension products to high net worth individuals and corporate clients.

Before launching CorEquity Capital Strategies, David was the Vice-President of Faith Based Lending and Underwriting for the Church Mortgage Acceptance Corporation (CMAC). Prior to CMAC, David served as a Ministry Development Officer for the Evangelical Christian Credit Union. He has also served as an Associate Director of Planned Giving for the Salvation Army, Director of Financial Planning and Chief Financial Officer for several ministries with annual revenue exceeding $5 million dollars.

He has a BS Degree in Investment Finance from Franklin University in Columbus, Ohio and has earned Series 6, 7 and 63 Securities Licenses as well as Ohio Life and Health Insurance Licenses.

Ryan Housekeeper - Development Coordinator - Ryan has led over $176 million in real estate closings for two distinctly different companies, in the capacities of a Director of Acquisitions and a Vice President of Acquisitions and Development. His past experience includes the acquisition of existing distressed and stabilized communities, overseeing land development of seniors housing communities and brokering sales between buyers and seller for seniors housing properties. He specializes in coordinating senior housing acquisitions from property discovery to closing for investors, developers and operators. Ryan has Bachelors Degree form the University of Oregon in Sociology and is a Certified General Appraiser.

COREQUITY MANAGEMENT TEAM

REFERENCE INFORMATION

Timothy R. StokesSenior PastorFamily Worship Center Church of Flint

I would strongly encourage any business endeavor with David Kuhn. David recently orchestrated a financial miracle for Family Worship Center Church Intl. David demonstrated extraordinary wisdom and people skills as he negotiated the repurchase of our church facility. It was a very sensitive situation in that our mortgager had foreclosed on us. David showed extraordinary creativity and faith in getting them to agree not only to resell it to us but, at over a $3.1 million discount! In addition, he secured the necessary financing to complete the deal, and he has a great working knowledge of how churches function.

David Kuhn’s integrity along with his extraordinary business acumen causes me to have great confidence in him. I am looking forward to working with David in the future and would recommend him to any pastor without reservation.

Reverend Ed AkersSenior Pastor/FounderVictorious Living Christian Center

I want to heartily endorse and recommend the professional services of David Kuhn. Mr. Kuhn is a highly experienced and intuitive professional who conducts himself with excellence and a high degree of insight in his field.

Our church traversed some very difficult financial circumstances, Mr. Kuhn was invaluable to helping us work our way out of a very difficult situation and he was always very responsive to our needs and very sensitive to the nature of the possible solutions that presented themselves. He went above and beyond any and all agreements we had to ensure that our church was getting the best possible road to success. He communicated openly and honestly with us on every aspect of business we engaged in.

On a personal level I consider David a friend, one who is very committed to his work, his clients and to his God. His understanding of ministry and of the world of “Church” is a tremendous asset for those engaged in the business of the church. David was always available to me, and helped me as a leader navigate and understand the complexities of the investment world. I would not hesitate to call on him as our ministry moves forward. I highly recommend Mr. David Kuhn to you, your ministry and or business. You will be tremendously satisfied with his efforts, excellence and competency. I am certain he will work for you as diligently as he did for us. If I can be of further assistance, please do not hesitate to contact me.

CONTACT INFORMATIONDavid G. KuhnManaging DirectorPhone: 614-203-7695Email: [email protected] 3891 Ridgewood DriveHilliard, Ohio 43026 Web Address: www.CorEquity.com

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