Despite recent COVID-19-related struggles, there’s still a decent appetite for new construction in the seniors housing market, CBRE Capital Markets’ Austin Sacco told attendees of a BisNow webinar last week.
Sacco noted that any construction to break ground today would not be ready until 2022 — when pandemic-related problems are likely to be under control.
“There are certain lenders out there already — 35% to 40% of the lender pool is out there and active today,” said Sacco, who is first vice president and co-production lead for CBRE’s National Senior Housing Debt & Structured Finance Practice.
Sacco noted that CBRE had seen more conservative loan-to-cost ratios during the pandemic, but interest rates for construction loans have not risen in a substantial way. He added that much of the new construction capital is coming from regional banks.
“Most lenders, on the refinance side, understand the situation that we’re in today, and we’ve seen a lot of extensions, generally in the six- to 12-month range on their existing loans,” he said.
