Following three years of volatility, the capital markets have proven to be relatively steady this year, according to the experts on the capital markets panel at the recent Interface Seniors Housing Southeast conference in Atlanta. That stability has led to an increase in financing across the seniors housing and care landscape, with more good news likely on the way.
“The Fed has been holding steady for several months in terms of short-term rates,” said Lument Head of Seniors Housing and Healthcare Production Aaron Becker during the panel session. “But it looks now—based on what Fed Chairman Jerome Powell said last week in his Jackson Hole speech—that the Fed is getting ready to lower rates. The market is pricing in two cuts this year, a total of 50 basis points before the end of the year.”
Most deals, from agency financing to value-add transactions, have become very competitive, panelists added, as more capital is coming to the industry, attracted by the strong demographics.
Construction financing, however, remains stalled, as costs of a new build often make new development too daunting. As such, adaptive reuses continue to rue the day, however at some point there will have to be movement on development as the current supply simply will not be enough for the pending demand.
Read more insights from the Interface capital markets panel
