Nursing care saw a sixfold quarter-over-quarter increase in construction loan closings in the first quarter, according to the most recent lending trends report published Thursday by the National Investment Center for Seniors Housing & Care.
This was the second strongest quarter going back to results in the third quarter of 2016, NIC said. According to the authors of the report, this strength partially is due to a weak fourth quarter last year.
Senior living construction loans increased by 39.4% on a same-store quarter-over-quarter basis. Still, the authors noted, this level was but below the peak seen in the third quarter of 2021.
Skilled nursing and senior living both saw declines in new mini-perm/bridge loans closed from their peaks in the first quarter. Still, the numbers were fairly strong, according to NIC. In senior living, mini-perm/bridge loans remained elevated compared with the levels from mid-2020 through mid-2021. Skilled nursing mini-perm bridge loans also remained elevated, and the quarter-over-quarter decline was a “modest” 7.2% on a same-store basis, NIC said.
According to the lender survey, new permanent loan volumes closed in the first quarter increased for senior living (38.2%) but decreased for skilled nursing (33.2%). New permanent loans closed for skilled nursing, at $628 million, were less than half of the amount for senior living.
The $1.3 billion in new permanent loans marked the highest amount of new permanent loans closed for senior living since fourth quarter of 2020, when the amount was $1.5 billion, the data show.
Total loan balances were fairly stable for both senior living and skilled nursing, NIC said After two quarters of declining balances, senior living loan balances increased 90 basis points (0.9%) from the fourth quarter of 2021. After three quarters of growth in total loan balances for skilled nursing, loan balances declined 80 basis points (0.8%). NIC attributed the decline to some loans coming off the books.