Several factors are contributing to the increase in acquisition loans, according to the experts at Cambridge Senior Housing & Healthcare Capital.
“Circumstances are favorable for senior housing and skilled nursing owners who wish to sell their properties to the operators,” Senior Vice President Brent Holman-Gomez said in a blog post.
Among those circumstances, he said, occupancy has increased across the sectors, “creating a steadier and more reliable income stream.” Normalization of Medicaid rates also is helping, Holman-Gomez noted. Additionally, he said, staffing challenges are waning, and agency and overtime costs are declining, driving a rise in acquisition loans as operators focus on other aspects of the business.
“The current skilled nursing and senior housing market is showing that a lot of property owners are ready to sell their properties to the operating tenant or management company and will negotiate payment structures to make it happen,” Holman-Gomez said.
Increasing interest rates could be problematic for some borrowers he noted, but a variety of underwriting options exist. Bridge loans, for example, are practical for some buyers, as well as financing long-term debt with fixed rates. The latter option, Holman-Gomez said, “can be surprisingly beneficial in the current environment.”
