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Other continuing care retirement communities have been launched with presales at 70% or more, Fitch Ratings notes. The average $782,500 entrance fee is much higher than competing continuing care retirement communities in the area even though the Clare at Water Tower is being built in a neighborhood where condominiums can sell in the seven figures, according to the rating agency. The site at Rush and Pearson streets is two blocks west of Michigan Avenue.

While stopping short of declaring the five-layer financing investment-grade debt, Fitch Ratings predicts success for Greystone Communities' project. "The project's location, the favorable socioeconomic characteristics of the market, a lack of competition and the experience of the development, finance and construction team should allow the Clare to succeed," the agency adds. The project will be completed in 2007.

Greystone Communities expects to finance the project with $137.5 million in tax-exempt, variable-rate revenue bonds, $82.3 million in fixed-rate revenue bonds and $10 million in tax-exempt, extendable-rate adjustable securities. Cost of the 25,201-sf, 32-bed skilled care facility on the 10th and 11th floors is budgeted at $6.6 million, according to an application with the state's health facilities planning board. Ziegler Capital Markets Group is expected to price the bonds next week.