The senior living sector no doubt has seen pandemic-related challenges, but “the fundamentals of the business are sound,” according to Matthew Ruark, senior vice president of commercial and healthcare mortgage production at KeyBank Real Estate Capital Group.
“We are bullish on senior housing and care,” Ruark wrote in a blog for the National Investment Center for Seniors Housing & Care.
Borrowers are looking for more flexible financing as the economy continues to recover from the pandemic, so short-term bridge financing is a popular option now, Ruark said. Occupancy still is lagging behind the traditional 90% threshold at which point borrowers likely will transition to permanent loan structures, he added.
“There is a lot of capital on the sidelines,” the lender said.
According to Ruark, the two biggest challenges facing senior living are the need for a middle-market option and the national labor shortage.
But senior living is needs-driven, Ruark said, and therefore, he is optimistic about its future. The sector that has weathered the Great Recession and, so far, the COVID-19 public health crisis, and demographics are on the side of providers as the population ages, he added.
“We are true believers in the sector,” Ruark said.
