Philadelphia Presbytery Homes and Services for the Aging, d/b/a Presby’s Inspired Life (“Presby”) is a regional leader in senior living in the greater Philadelphia area that has been serving the area since 1955 with communities in Montgomery County and Delaware County Pennsylvania. In June 2019, Presby affiliated with HumanGood, California’s largest non-profit provider of senior housing and services creating the sixth largest national non-profit senior living provider. Thus, the entity formerly known as Philadelphia Presbytery Homes, Inc. is now known as HumanGood Pennsylvania (“PPHI”). PPHI owns and operates three market rate senior living communities, Rydal Park, Rosemont Presbyterian Village, and Spring Mill Presbyterian Village, which comprise PPHI’s Obligated Group. These communities provide services to seniors ranging from independent living accommodations to personal care to skilled nursing care. PPHI also provides comprehensive management services to all of the PPHI communities and other Presby subsidiaries. PPHI is Presby’s largest subsidiary. PPHI also manages 19 affordable housing communities that are sponsored by other entities. HumanGood is not part of the Obligated Group.
HJ Sims’ first financing for Presby dates back to 2009 when HJ Sims secured $55 million in bank financing for a three-phased repositioning of its Rydal Park campus. Since then, HJ Sims helped PPHI secure its initial investment grade rating from Fitch in 2010, served as financial advisor to Presby on a bank financing in 2013, and acted as underwriter and sole manager in 2017 on PPHI’s $88.145 million “BBB” (Fitch) rated fixed rate bond issue, which refinanced the bank financing and financed capital improvements. The 2017 fixed rate bond financing was consummated with the intent to preserve the bank’s lending capacity for the Rydal Waters expansion project. The Rydal Waters expansion project is a new branch of the Rydal Park Life Plan Community located in Abington Township that is expected to include 84 two-bedroom cottages on 33 acres adjacent to the Rydal Park community. Beyond the cottages, the community is expected to include a club house with numerous amenities, dog park, walking trails and more.
Given a strong history with its existing commercial bank, PPHI elected not to undergo a full bank solicitation process. Instead, PPHI retained HJ Sims to act as financial advisor and utilized its experience in conducting bank solicitations and negotiating with commercial lending institutions to review the proposal originally submitted and benchmark the proposal. As a result of the ensuing negotiations, PPHI was able to obtain a draw down bank held tax-exempt loan with a 3 year interest only period during which $41 million of initial entrance fees are expected to be collected and utilized to repay the outstanding balance with the remaining balance being amortized over a 30 year period with call options every 10 years during the term of the credit facility.
HJ Sims worked alongside PPHI, its lender and their respective legal counsel during the financing process, facilitating the financing to its ultimate closing in May 2019. When it appeared as though Rydal Waters presales would not reach the lender-required presales requirement of 70%, HJ Sims coordinated with PPHI and its lender to establish a PPHI-funded reserve for the construction costs of the unsold cottages to enable PPHI to close the loan transaction and commence construction in a rising construction cost environment.
HJ Sims facilitated the ultimate closing of the Rydal Waters expansion loan, which was the culmination of over a decade of planning – commencing with HJ Sims’ assistance in acquiring the property for the expansion, weathering significant fluctuations in the financial and real estate markets, continuing through negotiations on the master trust indenture in 2017 to exclude the Rydal Waters property from the master trust indenture until such time as the expansion project was fully approved and moving ahead, and concluding with the $61.567 million bank loan and the inclusion of the Rydal Waters property in the Obligated Group. Through HJ Sims’ review and assistance, PPHI was able to obtain a long-term, tax-exempt financing for the Rydal Waters expansion on terms that increased PPHI’s maximum annual debt service by a little over $1 million to $7,229,101, which resulted in PPHI maintaining its current “BBB” Rating from Fitch Ratings.
For more information on how PPHI was Financed Right® by HJ Sims, please contact Aaron Rulnick at (301) 424-9135 or email@example.com, Melissa Messina at (203) 418-9015 firstname.lastname@example.org or Patrick Mallen at (203) 418-9009 or email@example.com.