Case Study:Roland Park Place

830 W. 40th Street Baltimore, MD 21211

Roland Park Place (RPP) is a premiere, non-profit continuing care retirement community located on an 8 acre campus in the Roland Park neighborhood of Baltimore, Maryland. Opened in 1984, RPP currently comprises 156 Independent Living units, 40 Assisted Living suites and 60 Skilled Nursing private rooms.

Project Overview

RPP has initiated a two phase repositioning strategy to serve more effectively its existing and prospective new residents. Phase 1, which began in 2017, entails renovations and improvements to RPP’s existing mid-rise tower to optimize the unit mix and improve the continuum of care, including the addition of a assisted living memory support specialty care area. The total Phase 1 cost is approximately $30 million.  Phase 2 involves the construction of a new tower containing 58 Independent Living units. The total cost of Phase 2 is estimated to be approximately $52 million.

Financing Overview

As the plans for its repositioning project began to materialize, it was clear that RPP could secure the permits and approvals necessary to proceed with Phase 1, but the viability of Phase 2 was still uncertain.  Accordingly, RPP worked with Wye River to assess its financing options for both phases and, taking into consideration a number of factors, including the prospect of rising interest rates, RPP elected to pursue a financing structure that would allow it to secure a long-term fixed cost of capital for Phase 1 and to retain the flexibility to issue additional debt for Phase 2 if and when the feasibility of Phase 2 became certain.  Through a competitive solicitation, RPP secured 15 year commitment for $30 million of tax-exempt bank financing with a 25 year amortization term.  The transaction was structured as a variable-rate draw down bond, which reduced the interest cost during construction, with a forward-starting interest rate swap to produce a “synthetic” fixed rate once the project was completed.

Wye River Group’s Role

Wye River has had the pleasure of serving as RPP’s financial advisor since 2012, when it assisted with the refinancing of its then outstanding Series 1999 Bonds.  In connection with the planning and execution of the financing for Phase 1, our services included:

  • Preliminary planning for Phases 1 and 2, including debt capacity analysis, development and assessment of financing alternatives and presentations to RPP leadership
  • Development of a definitive finance plan for Phase 1
  • Competitive solicitation of prospective lenders
  • Negotiation of final terms with RPP’s preferred lender, including a favorable “additional debt test” for Phase 2, and optimization of financing structure
  • Documentation and execution of interest rate swaps
  • Ongoing advisory work in connection with financing for Phase 2 of project

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