The issuance of new permanent debt for senior living increased during the third quarter of 2023, according to a lending trends report released by NIC Analytics. 

Data for the report came from 17 lenders, including bank holding companies and banks, commercial real estate services, financial services companies, government-related sources, investment management firms, and real estate investment trusts surveyed by NIC Analytics.

Loan volume for the quarter increased significantly, to $1.43 billion, marking a 150% increase from the previous quarter. Lending for skilled nursing remained relatively unchanged, at $791.8 million quarter over quarter, reflecting a 1.4% increase.

“This increase suggests that some lenders and borrowers are likely adjusting to changing capital market and credit conditions and locking in long-term interest rates,” Omar Zahraoui, principal at the National Investment Center for Seniors Housing & Care, wrote in a blog post. “However, the levels remained relatively low compared to the high volumes observed pre-2020.”

The Fed raised interest rates 11 times between March 2022 and July 2023, and lenders are uncertain whether rates will continue to plateau or perhaps lower interest rates sometime this year.

“The goal is to recalibrate and align interest rates with inflation to support overall economic health and mitigate inflationary pressures or deflationary risks,” Zahraoui said.

Those higher interest rates no doubt affected lending trends, he noted, “creating challenges for many and distress in certain others.”

“While some may endure the repercussions of high interest rates, more stability is anticipated in 2025 for those that can weather the current conditions, with an expected improvement in capital market conditions, occupancy, and [net operating income] outlook,” he added.

Mini-perm/bridge debt issuance for senior housing reached its lowest point since 2016, marking a 46% decrease from the second quarter and 87% from late 2022, according to the data.

“Similarly, nursing care mini-perm/bridge loan closings, while slightly higher than those in senior housing for the past two consecutive quarters, remained relatively low and on par with pre-pandemic levels,” Zahraoui said.

New loans for senior living construction hit a record low in the third quarter.

“This is evident in construction starts which remained relatively feeble in the third quarter of 2023, and the number of senior housing units under construction in the 31 NIC MAP Primary Markets which remained near its lowest level since 2015, according to data released by NIC MAP Vision,” Zahraoui said.

According to NIC Analytics, it’s going to get worse before it gets better. Construction starts are likely to reach their lowest point by mid-year, according to the organization.


Delinquencies in senior housing increased by 50% in the third quarter of 2023, the data show. At the same time, delinquencies in nursing care declined by 38% from the prior quarter.

“Delinquencies as a share of total loans rose to 4.3% for senior housing, up from 2.9% in the second quarter of 2023 and 1.3% in late 2022. For nursing care, the delinquency rate edged down to 0.6% from 1.1% in late 2022,” according to NIC analytics. “Foreclosures were reported for the sample in third quarter 2023 for both senior housing and nursing care, $20.2M and $14M, respectively.”

Also, a trend toward increasing long-term relationships between lenders and borrowers is evident, according to Zahraoui. Many lenders are extending loans, predominantly to existing clients, he said.