GE Capital, Healthcare Financial Services announced it has committed over $1.4 billion in financing for healthcare facilities year-to-date. This is an increase in volume over the same period in 2012, and reflects growing confidence and improving fundamentals within the industry. Financing was provided through forty-seven transactions across senior housing, skilled nursing and medical properties, and was used to support mergers and acquisitions, and portfolio and asset refinancings.
A GE Capital, Healthcare Financial Services survey released today – of over 100 financial executives primarily within the senior housing and care industry– also highlights the improving sentiment of the sector. The survey reveals that seventy-one percent of these executives expect their business performance to improve in the next 12 months. Acquisition financing is rated as the most important financing opportunity over the next year (52 percent), followed by construction (36 percent) and refinancing (12 percent).
"Industry executives are confident despite ongoing concerns around rising interest rates and reimbursement pressures," said James Seymour, senior managing director of GE Capital, Healthcare Financial Services' real estate financing team. "We’re optimistic about the senior housing and care market and see many areas of opportunity for customers.”
GE Capital, Healthcare Financial Services, one of the most active lenders in the U.S. healthcare middle market, conducted the survey ahead of the National Investment Center Conference (NIC) taking place this week in Chicago, IL, to gauge the sentiment of the industry, including challenges and opportunities.
Additional findings from the survey include:
Growth strategy: Seventy-two percent of respondents said buying or merging with existing properties or operators is their primary growth strategy over the next 12 months, while 19 percent plan to revitalize and upgrade existing properties to grow organically. Another nine percent plan to expand into other post-acute care businesses or services.
Areas for growth: Sixty-two percent of respondents anticipate assisted living will be a significant growth area in the next year, followed by memory care (41 percent). The least cited area for growth potential was skilled nursing (13 percent).
Challenges: Rising interest rates (42 percent), reimbursement pressures (33 percent) and regulatory scrutiny (30 percent) were cited as three primary concerns among senior housing and care executives.
"The outcome of the healthcare debate in Washington will certainly play a role in how the industry approaches growth over the next year, particularly in the post-acute space,” said Seymour. “As these executives look to secure financing for growth and other needs, it’s critical that they work with a financial partner who has a keen understanding for the nuances within the senior housing and care industry, and has the flexibility to support them through ongoing changes. We will continue to provide both capital and expertise to businesses across the sector who demonstrate strong fundamentals and a proven track record of adapting to change.”