It’s a good strategy to look at financing options long before a loan matures, according to Cambridge Realty Capital Managing Director Tony Marino.
“Many conventional lenders are choosing not to offer extensions, putting borrowers in a crunch to find alternatives in a timely manner,” he wrote Wednesday in a blog post.
In the current market, Marino said, it is foolish to expect a lender to continue to work with a borrower post-maturity, even if the borrower has had a good relationship with the lender in the past. Borrowers could find themselves looking for new financing options on the fly, he added.
“The problem in this situation is that it forces a borrower to make a decision based on how quickly a new lender can close, rather than what option is best for the facility and meets all the borrower’s goals,” Marino said.
It’s never too early to start shopping around, he said, counseling that borrowers should know their options and look for a lender that is a good fit.
“Borrowers often only look at their current financing when their existing lender informs them their maturity date is approaching,” the expert said.
Keep an eye on the maturity date, and don’t expect that the lender will automatically inform you when the date is nigh, Marino said, adding that it would be a mistake to assume that the lender will give a borrower a year’s notice of an upcoming maturity date.
“Beginning the process of evaluating the current financing and what options for future financing are available should be started yesterday! The more time a borrower allows for this decision to be made, the more options that are available to achieve the desired outcome,” he said.
Marino advised borrowers to seek lenders who understand the senior living industry and are familiar with the needs of operators.
“Access to capital is still available, but it does depend upon a lot of variables and boxes that have to be checked,” Sarah Dugan, manager of the senior housing group at Synovus, said Tuesday at an unrelated webinar hosted by the National Investment Center for Seniors Housing & Care. Synovus is a $60 billion regional bank headquartered in Columbus, GA.
