Margin prophets

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Increasingly, lender are helping operators unearth new business opportunities
Increasingly, lender are helping operators unearth new business opportunities

Senior housing operators that assume the relationship with their lenders begins and ends with the loan are missing some big opportunities for growth and success. It's a message that lending experts routinely share with their existing and prospective customers, and one they hope more borrowers will take to heart. 

“We love it when our borrowers reach out to us. We're customer-oriented, not transaction-oriented, so whatever we can do to help, we want that opportunity,” says Jeffrey Stein, the executive managing director at Capital Finance LLC, a subsidiary of Capital Funding Group/CFG Community Bank. “We succeed when our customers succeed.”

Market masters

Depending on the lending shop, a lender may have strong capital market connections and keen knowledge of what's going on with deals. “If you want to know where rates are trading or how the market's looking, in general, we're able to share that information,” notes Latoria Thompson, a managing director at Housing & Healthcare Finance LLC. “We also live and breathe the HUD market and are happy to give an update on what's going on there.”

A lender with a finger on the market's pulse can go a long way toward helping senior housing operators determine their best growth and business strategy. According to Craig Jones, the president of Lancaster Pollard Fund Manager who also manages Lancaster Pollard's Prospero Seniors Housing Equity Fund and the Lancaster Pollard Finance Co. LLC, his firm has a good grasp on the market climate in various states across the country. 

“If an organization is pursuing a particular business, we often will know some of the challenges they may face,” Jones says. 

The company also may help clients find areas that allow a certain type of structure to be built within a particular community. 

Because many lenders are doing business with operators and developers across the country, those borrowers' experiences, trials and tribulations can help pave the way for success for others. “We want to know if a client has an interest in growing. We see so much going on in different regions of the country, so if someone is looking to expand into California, for example, we may know some opportunities and information we can pass along,” notes Jim Dwyer, the president of Capital Purchasing Group PPC, a subsidiary of Capital Funding Group/CFG Community Bank.

Those information-sharing opportunities can run even deeper. As Jones explains, broad client experiences and discussions can even make it possible to pass along word to another client on which questions the planning commission will likely ask. “We can also help someone who got out of the business years ago and is now wanting to get back in to better navigate the market changes,” Dwyer explains. 

Tim King, the managing director of the healthcare division for EverBank Business Credit, says the value of collaborative information-sharing across the client base is an advantage that can't be overestimated. “We view our existing clients as our best referral source for our business. We work in collaboration with them, with both sides providing market intelligence to each other.” Clients may contact him about his experience in a complementary business line they are contemplating, for example, or they may ask about reimbursement trends in a neighboring state where they plan to enter.

The information sharing goes both ways. As King stresses, he may ask a client what they're seeing in the marketplace or ask a client to help explain a deal that another client brought to the lender that King may not fully understand. 

“Clearly, we build these relationships over time,” he says.

Making connections

Another notable offering borrowers should be tapping is their lenders' ability to proactively pinpoint potential business offerings and growth potential. 

“Because we have a broad client base all across the country and really work to understand our clients' immediate and long-term needs and goals, we can connect one of our borrowers who is looking to sell a property with one who is looking to buy,” Thompson explains. “We may also know from experience working with an operator that they like to buy properties and turn them around. Who knows? That may be just the deal we're working on today, and we can pass it along to that prospective buyer. I don't think a lot of borrowers are fully aware that those types of opportunities exist with their lenders.” 

Having that connection especially pays big dividends in the healthcare segment, where reimbursement and regulatory changes happen regularly. 

“If we've heard one of our clients on the West Coast has had experience with a recovery audit contractor review, we can connect them with someone on the East Coast or another region to gain their perspective,” King says. “We're all in this boat together. If someone is going the managed care Medicaid route and is a late adopter, for example, we can try and connect them with an early adopter to help them gain that invaluable experience. The great news is many of our borrowers aren't direct competitors, so that information can be shared pretty freely.”  

Added leverage

Some lenders have subsidiary businesses aimed at analyzing a client's operations to improve the bottom line and positively affect real estate value. Capital Purchasing Group LLC, for example, helps clients that are seeking financing, but falling short on valuations. 

“We have just under 300 facilities now, so we have that leverage and experience to draw from,” says Dwyer. 

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