The seniors housing and care lending environment clearly became more competitive as 2021 wore on, according to new survey findings.
The latest industry-wide study polled 131 seniors housing and care lenders and found that the 2021 lending environment picked up “meaningfully” from 2020, particularly during the second half of the year.
Also, lenders closed on $700 million in deals during 2021, versus the $600 million closed in 2020, according to the study commissioned by Ziegler and the National Investment Center for Seniors Housing & Care.
That 16% rise was welcomed but the most surprising outcome was how differently lenders are underwriting COVID-related revenues and expenses, according to Ziegler managing director Donald Husi.
The survey found that there are essentially three different options for underwriting revenues and expenses: exclude all COVID-related revenues and expenses; exclude all COVID-related revenues, but include all COVID-related expenses; and include all COVID-related revenues and expenses.
“[The underwriting differences] will be a challenge for the next 18 to 24 months and definitely a question [providers] need to be asking their lenders,” Husi told McKnight’s Long-Term Care News on Friday.
Findings from the survey also revealed that a lot of skilled facilities are going from not-for-profit to for profit and a lot of SNFs have also changed hands within the last year.
Full survey findings are available here.
