From KeyBank Real Estate Capital: What’s Coming Next in Seniors Housing

From Oct. 17-19, seniors housing real estate leaders will gather at the 2018 NIC Fall Conference. Experts like Morgin Morris and Lee Delaveris from KeyBank Real Estate Capital will shed light on the future challenges and opportunities ahead in senior care and skilled nursing. Get a sneak peek below: 

What are the upcoming opportunities in skilled nursing? 

Lee Delaveris: There are different opportunities depending on local markets, but generally, the biggest opportunity lies in finding ways to align with hospital systems to be their preferred provider of post-acute care. Skilled nursing facilities have the potential to demonstrate that they are the best setting in terms of quality control and cost efficiency for post-acute care.

What challenges are facing the skilled nursing industry? 

Lee Delaveris: Managed care programs for Medicare and Medicaid have been a significant challenge for some operators. As these programs have become more prevalent, these programs typically result in lower revenue per resident. Nationally, skilled nursing facilities are experiencing record-low occupancies, and some operators have approached bankruptcy. With these issues, the industry is separating in terms of the capital sources and participants. Many diversified investors such as healthcare REITs have spun off skilled nursing facilities assets or are choosing not to invest.

What, if any, challenges are changing interest rates imposing on seniors housing?

Morgin Morris: In the immediate future, we will continue to see pressure on spreads and loan structure. Debt funds and private equity groups may have pressure to get dollars out the door, leading to aggressive prices on purchasing and aggressive pricing for lending. During the last year, the debt funds impacted loan structures by providing light loan covenants and low spreads. It’s caused banks to sharpen the pencil on pricing to stay competitive. Another impact of the rise in the fed funds rate is looking to book long-term loans before Treasury rates rise further. While we don’t anticipate Treasury to go much higher than 3.15%, most clients would prefer to not face interest rate risk and are pushing to go ahead and book under 5%.

How important are partnerships to the future of skilled nursing? 

Lee Delaveris: Focusing on quality and establishing partnerships with other healthcare providers such as local hospitals are key to success. There are various extents of partnerships being utilized and explored, ranging from simple referral relationships to joint ventures – and now recently, major acquisitions of skilled nursing facilities and other senior care facilities by hospital systems. Implementing these strategies may also require a capital investment of some kind, whether that is constructing a new facility, renovating or adding on to an existing facility, or investing in new equipment and technology.

To learn more about what to expect for the future of seniors housing, you can attend the following sessions at the 2018 NIC Fall Conference in Chicago from Oct. 17-19.

Thriving in Skilled Nursing

Friday, Oct. 19, 9:45 a.m.-10:45 a.m. Central

Lee S. Delaveris is a vice president at KeyBank Real Estate Capital where he focuses on providing capital solutions for seniors housing and healthcare real estate, with specialization in arranging financing through FHA/HUD, Fannie Mae, Freddie Mac and other capital sources. Mr. Delaveris has extensive transaction experience, including construction projects, refinances, recapitalizations and acquisitions for skilled nursing, assisted living, independent living facilities and other healthcare real estate. Prior to joining KeyBank in November 2017, he held similar positions at RED Capital Group for over 11 years, most recently as a director in the firm’s Seniors Housing & Healthcare group. Mr. Delaveris is a current member of the Future Leaders Council of the National Investment Center for Seniors Housing and Care (NIC). He has a Master of Business Administration degree from The Ohio State University Fisher College of Business, undergraduate degrees in finance and English from Ohio University, and holds a FINRA Series 7 General Securities Representative license.

Investing in Senior Care: Past, Present and Future

Wednesday, Oct. 17, 2:30 p.m.-3:45 p.m. Central

Morgin Morris is a vice president and mortgage banker based in KeyBank’s Seattle office and focuses on seniors housing commercial mortgage origination in the West. Morgin has been in the seniors housing industry for 15 years, with over $1 billion in loan closings in the last five years across all senior asset classes, including independent, assisted living, memory care and skilled nursing. Before joining KeyBank in 2011, she was a senior housing underwriter at Guaranty Bank and BBVA Compass. She is a former NIC Future Leader’s Council Chair and is a graduate with honors from the University of Oklahoma. Morgin is currently enrolled in the Pacific Coast Banking School graduate program at the University of Washington.