The increasing number of coronavirus disease 2019 (COVID-19) outbreaks at nursing homes and retirement communities across the nation has lenders worried about the financial health of these facilities, according to an article in American Banker.
“In view of the outbreak, we need to pay close attention to occupancy trends across the senior living and care sector in general, and independent living facilities especially,” Henry Alonso, a senior banker at the $145 billion asset KeyCorp, told the publication.
He noted that negative headlines about the virus may spur some to flee senior communities or delay decisions to move in, adding that the expected “silver wave” of new baby boomer residents remains at least another seven years away.
That expected age wave has led investors — so far — to put considerable resources into the senior living and care sector. Argentum estimates that the industry’s direct and indirect financial effect was $247 billion in 2019. Loans for senior housing projects, made under a popular Department of Housing and Urban Development program, increased by almost 3% in fiscal 2019 from a year earlier, to $3.7 billion.