Doylestown Health agrees to sell Pine Run to Presbyterian Senior Living, a not-for-profit

Doylestown Health announced Tuesday that it had reached a definitive agreement to sell Pine Run, its nearby continuing-care retirement community, to Presbyterian Senior Living, a not-for-profit that owns Cathedral Village in the Andorra section of Philadelphia.

The price was not disclosed, but will likely be shared in reports to Doylestown’s municipal bondholders after the sale is completed. Doylestown decided this year to sell the retirement community it has owned since 1992 as part of a plan to recover from deep losses during the coronavirus pandemic.

Doylestown’s latest results, for the nine months ended March 31, showed some improvement. Its nine-month operating loss was $18 million, down slightly from $20 million the year before. Doylestown improved to a $1.9 million operating gain in the first three months of the calendar year, compared to a $12.7 million loss a year ago.

Still, Doylestown’s cash reserves remained significantly below the level required by its bank agreements. The organization reported that it had 74 days worth of cash on hand. It’s supposed to have enough cash to keep operating for at least 100 days without any new revenue.

Doylestown’s profitability also remained below the level required by its loan agreements, according to its latest financial report to bondholders.

Moody’s Investors Service and Standard & Poor’s Global Ratings have put extremely low credit ratings on Doylestown. “Given severity of current circumstances, an upgrade is not likely in the near term,” Moody’s said in March, even as it acknowledged improvements in operations.

Both ratings agencies said the Pine Run sale, expected to be completed by September, could aid the turnaround effort at Doylestown by adding to cash reserves and potentially trimming some of the system’s more than $200 million in debt.

The buyer, Presbyterian Senior Living, based in Dillsburg, Pa., already has 10 continuing-care retirement communities in Pennsylvania, and one each in Delaware and Maryland. It sold Westminster Village in Allentown two years ago. The organization also owns personal-care homes and apartments for seniors, including some that are classified as affordable housing.

Pine Run has 272 independent living cottages and 24 apartments on a 43-acre campus. It also includes a 90-bed nursing home and a 106-bed personal-care home nearby. Presbyterian said it will honor the contracts of current residents.

“We’re really excited about this acquisition. It fits beautifully within our operational footprint,” Presbyterian Senior Living’s president and CEO said during a presentation for investors last week.