Kansas CCRC Repositioning With $85 Million Refinance

A Kansas continuing care retirement community is looking to stay competitive going forward by using an $85 million refinance to reposition its campus and prepare for the future.

Presbyterian Manors of Mid-America, Inc. (PMI), a not-for-profit organization, owns and operates 16 senior living communities in Kansas and Missouri and will use a portion of the proceeds of the Series 2013 Bonds to reposition its Wichita Presbyterian Manor campus as part of a two-phase redevelopment plan.

Ziegler announced the closing of the $85,055,000 unrated, taxable and tax-empt, fixed-rate Series 2013 Bonds for PMI in early September. As part of the financing, PMI and its affiliate, Aberdeen Village, Inc., will form an Obligated Group. Aberdeen Village owns and operates a senior living community in Olathe, Kansas.


“Despite a challenging capital markets environment, the Presbyterian Manors, Inc. (PMI) bond issue was well-received by both retail and institutional investors. PMI’s strong market reputation, high occupancy levels and quality of care reputation all contributed to a successful underwriting,” said Will Carney, managing director in Ziegler’s senior living practice.

Greystone is functioning as PMI’s development consultant for the Wichita project. The current campus was designed in the late 1960s.

“The purpose of the two-phase redevelopment plan for the Wichita community is to refresh the community and enable [it] to better service its residents and increase the community’s ability to compete with other senior living facilities,” says Ziegler.


The Series 2013 financing will be used for Phase I of the redevelopment plan, which includes replacing the existing assisted living and nursing beds and related common areas with new residential-style assisted living apartments, memory care suites, and a new skilled nursing facility, a portion of which PMI intends to have dedicated to post-acute-to-home rehabilitation (called PATH units).

Phase I will essentially reposition rather than expand Wichita Presbyterian Manor, as the total number of units and beds will be reduced from 173 to 162 after redevelopment is completed.

“The new units will be more attractive to residents and the monthly fees will be higher than prior to the redevelopment,” says Ziegler.

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Phase II of the project includes the community’s entrance fee independent living units and is slated to occur in 2014. Wichita Presbyterian Manor intends to begin all necessary pre-construction requirements for the new independent living apartments while the health center is being constructed during Phase I; once a substantial number of 90 planned units have been reserved, PMI plans to secure construction financing and begin building.

The entire repositioning project is expected to eventually have a positive impact on PMI’s financial success.

“Today’s older adults certainly have different wants and needs than previous generations of seniors,” said Bruce Shogren, president and CEO of Presbyterian Manors of Mid-America, in a statement. “We are responding to these demands with the redevelopment of the campus. It will give a completely different appearance and feel to our campus, making it one of the most desirable senior living communities in the region.”

The refinancing will ask be used to finance and reimburse PMI for approximately $11.3 million of capital improvements to some of its other Kansas senior living communities.  Bond proceeds will also be used to refund and advance refund PMI’s Series 2004 and Series 2007 Bonds, with outstanding amounts of $17.87 million and $18.97 million, respectively.

Funds from the refinancing will additionally go toward funding two debt service reserve funds, interest on the repositioning portion of Phase I of the Wichita project for one year, and the costs of issuance.

A portion of the Series 2007 Bonds were ineligible for advance refunding with tax-exempt bonds, so $7 million of taxable bonds were issued for that purpose. The Series 2013 Bonds were structured to coordinate with existing debt of PMI and Aberdeen Village to create a primarily fixed-rate capital structure.

The Obligated Group’s primary reason for refunding the Series 2004 and 2007 Bonds with the Series 2013 Bonds was to create a long-term capital structure with annual debt-service payments that are well-matched with the forecasted revenue stream, says Ziegler.

Written by Alyssa Gerace

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