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Presby’s Rydal Park Securing Construction Financing in a Tight Lending Environment description Presby’s Inspired Life ("Presby") is a regional leader in senior living in the greater Philadelphia area that has been providing continuing care and affordable housing since 1955. Presby currently operates five market rate communities containing a total of 500 independent living units, 205 assisted living units, 325 skilled nursing beds, 1,024 sponsored affordable housing units and 932 managed affordable housing units. Despite its sound financial performance, Presby wanted to reposition its Rydal Park campus to maintain its status as a premier CCRC in the northeastern Philadelphia township of North Abington. Rydal Park was seeking to redevelop its existing medical center and assisted living community, to not only meet the current market needs, but to meet the health care needs of seniors well into the future. The development plan consists of a three-phased repositioning of the campus including: (1) a new state-of-the-art medical center consisting of 90 private nursing residences and 24 private memory care supported assisted living suites, and renovations and improvements to the common areas and amenities. The improvements will increase Presby’s ability to enhance its offering to existing and future residents with new amenities such as another casual dining room and lounge, new spa and beauty boutique and wellness center; (2) a renovation of the existing medical center into a newer assisted living community; and (3) a renovation of the existing assisted living community into newer and larger independent living apartments. Presby’s development plan was to fund the costs of the expansion and redevelopment activities of all three phases through one financing.
 Rydal Park - North Abington, PA Medical Center challenge Presby’s $55 million construction financing faced two challenges. First, the financing had to navigate through the tight bank lending environment, where many banks were withdrawing from providing financing to senior living organizations or not extending capital to new customers. In addition, Presby’s existing lender had maximized its exposure to the organization. Second, the extended construction period of a three-phased project challenged Sims to create an efficient finance plan that minimized funded interest. Sims also worked closely with Presby’s development consultant, Greenbrier Development, to ensure that the financing provided the flexibility necessary for a complex, multi-phased construction project. solution Sims was able to assist Presby in putting together a syndicate of banks to provide a $55 million construction loan that included Citizens Bank as lead bank and participation by smaller regional and local banks. A construction loan was selected as the optimal plan of finance due to the fact that interest is paid only as the loan proceeds are drawn upon, thus minimizing the amount of capitalized interest required and saving millions of dollars over the extended construction period. Furthermore, Sims was able to find a new lending relationship for Presby at a time when banks were not issuing financing commitments for new relationships and new construction. This financing provides Presby the ability to move forward on its Rydal Park repositioning plan, which has been in the planning stages for many years. "Herbert J. Sims provided invaluable leadership and direction in the form of financial advisory services to Presby’s Inspired Life and our project team which led to a very successful financing structure."
Cynthia E. Hoffman |
