From The Magazine

DevelopmentFrom The Magazine

Interior Designers Seek Perfect Balance

by Jeff Shaw

Seniors housing specialists must consider physical and aesthetic needs of many parties, and design choices can even help with infection control. By Jeff Shaw Interior design for seniors housing is a tricky proposition. A room’s layout, lighting, colors and furniture must be both aesthetically pleasing and functional for a wide range of users. That list includes the residents, care staff and visiting family — all while still at a price and style that pleases the building’s owners. “There are a lot of cooks in this kitchen,” says Melissa Banko, principal …

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FinanceFrom The Magazine

HUD Lenders Feel Effects of COVID-19

by Jeff Shaw

Occupancy issues create underwriting headaches, slower approval process, but pipeline remains active. By Matt Valley The emerging consensus among lenders in HUD’s Section 232 mortgage insurance program for healthcare properties is that total deal volume in fiscal year (FY) 2021 will fall short of the nearly $4.4 billion in loan closings recorded the prior year. In fact, some lenders expect the total dollar amount of loans closed will decrease 10 to 20 percent on a year-over-year basis.   Despite low interest rates, lenders cite an extremely challenging operating environment for …

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FinanceFrom The Magazine

Fannie, Freddie Undeterred

by Jeff Shaw

Despite a pandemic-induced pullback in lending volume, the agencies remain committed for the long term to borrowers in need of debt financing. By Jeff Shaw Many parts of the seniors housing industry slowed as a result of the COVID-19 pandemic, including the lending market. Fannie Mae and Freddie Mac, the two giant government-sponsored enterprises (GSEs), experienced a significant pullback in deal volume in 2020, but remained two of the larger capital sources in the sector. “We are the predominant lender in the space,” says Steve Schmidt, national director of seniors …

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FinanceFrom The Magazine

Capital Stack Shifts

by Jeff Shaw

Seniors housing lending isn’t dormant, but lenders and borrowers alike rethink their strategies as the pandemic continues. By Jeff Shaw The COVID-19 pandemic has been a shock to the entire seniors housing industry at every level, and capital providers in the sector are no exception.  With occupancy at record lows, lenders and investors understandably have changed strategies to protect their investments. Occupancy continued its free-fall in first-quarter 2021, falling 870 basis points year-over-year to 78.8 percent for private-pay seniors housing, according to the National Investment Center for Seniors Housing & …

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DevelopmentFrom The Magazine

Company Profile: Alliance Residential Breaks New Ground

by Jeff Shaw

The largest developer of multifamily communities in the United States tries to bring fresh ideas to seniors housing. By Jeff Shaw While seniors housing carries more operational risk and complexity than other commercial real estate asset classes, the property sector is enticing investors because it offers comparatively higher capitalization rates, meaning a higher annual return on investment. In 2019 before the pandemic struck, the average cap rate for garden-style apartment communities was 5.6 percent compared with 6.4 percent for private-pay seniors housing, according to Real Capital Analytics. In 2019, Alliance …

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FinanceFrom The Magazine

Debt-Financing Trends Encouraging for Borrowers

by Jeff Shaw

By Matt Valley With mass vaccination efforts in the fight against COVID-19 well underway across the country and the economic clouds beginning to lift, the lending outlook for seniors housing has brightened considerably in recent months, say industry professionals. “If you are comparing today to pre-pandemic [market conditions], we think the lending environment is actually pretty good,” says Chuck Hastings vice president of finance and business development for Juniper Communities, an owner and/or operator of 25 seniors housing communities in New Jersey, Pennsylvania, Colorado and Texas. The portfolio’s total resident …

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AcquisitionsFrom The Magazine

Waiting on an M&A Rebound

by Jeff Shaw

COVID-19 pandemic froze property sales in 2020, and experts say the big thaw likely won’t occur until occupancy improves. By Jeff Shaw U.S. seniors housing property and portfolio sales ground to a halt in 2020, with a total transaction volume of $9.9 billion, down 48 percent from $17.9 billion the prior year, according to Real Capital Analytics (RCA).  The last time annual property sales for the sector were below $10 billion was in 2010, when the economy was still recovering from the Great Recession and total volume registered $6.2 billion. …

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From The Magazine

Marketing Culture Shock

by Jeff Shaw

Sales teams are forced to rework the way they do everything in the light of pandemic lockdowns and restrictions. By Jeff Shaw When outbreaks of COVID-19 rocked the United States starting in early 2020, Americans were hit with a barrage of frightening news reports. Since the virus is much more likely to kill older adults, every day the news was filled with reports of mass deaths in seniors housing communities, particularly skilled nursing facilities. The disease has driven occupancy to a record-low rate of 80.7 percent for private-pay seniors housing …

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From The MagazineTechnology

New Technologies Help Blunt Impact of Pandemic

by Jeff Shaw

Operators leverage advancements in COVID-19 testing, telehealth and social media to protect mental and physical well-being of residents. By Eric Taub While the COVID-19 pandemic forced the nation to institute physical isolation to save lives, it’s a tragic irony that the strategy actually worsened the health of many of our most-vulnerable citizens — our seniors — as researchers have discovered. Forced to spend their days mostly alone behind closed doors, senior living residents have largely lost the actual in-person contact of their family and friends, which is vitally important to …

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FinanceFrom The Magazine

Lending and Equity Sources Begin to Open Up

by Jeff Shaw

Although underwriting is more stringent than before the pandemic, lenders and investors are still showing a strong interest in seniors housing. By Jeff Shaw Seniors housing has clearly endured a rough ride as a result of the COVID-19 pandemic. But that doesn’t mean that investors, lenders, developers and owners don’t see value in it. “Value is the worth of all benefits arising from ownership,” said JP LoMonaco, president of Valuation & Information Group. “It is by nature a long-term concept. The value isn’t determined by benefits derived today or over …

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