Lending to senior living and care operators appears to be picking up as the country opens up, according to respondents to a survey by specialty investment bank Ziegler and the National Investment Center for Seniors Housing & Care. Results were released Wednesday.
The first quarter of 2021 was “robust,” according to one respondent. “Activity is slowly picking up, but we are being highly selective and working with existing clients,” another lender told the bank.
By property type, majority assisted living/memory care communities were the most active with lenders in the first quarter, continuing a trend seen since at least the second quarter of 2020. Majority independent living represented the second most active segment supported by loans in the first quarter. Active adult-rental/55+ senior apartments were the least active for lending, behind nursing homes and rental and entrance-fee life plan communities.
Deal size appears to be increasing over prior quarters, too, with more lenders indicating loan sizes in the $16 million to $40 million range, which could be one signal of the market bouncing back, Ziegler said. Stabilized senior bridge lending and new construction lending continue to be the leading types of loans, according to the respondents to the survey.
Since the early 2000s, almost half of all banks that were large players in the senior housing and care industry have been acquired or have gone out of business, according to the report.
The majority of senior housing loans come from approximately 115 different banks and lending institutions across the country. Since 2019, 25 unique institutions have consolidated into 12 lenders. In the short term, according to Ziegler, this means a reduction in the total available bank lending universe and dollars available to the industry.
