As the economic data continues to paint a bleak picture, the the National Investment Center for the Seniors Housing & Care Industry (NIC) released its third quarter 2008 data which tracks loan performance and capitalization rates in seniors housing and care appears to be weakening. According to NIC, loan volume in the third quarter of 2008 was $1.01 billion compared to $1.55 billion in the second quarter.
Capitalization rates for independent living hit a low of 7.3 percent in 2007 and rose to 8.7 percent in the third quarter of 2008. The spread for the sector in the third quarter of 2008 ranged from a low of 6.5 percent to a high of 13 percent. Assisted living’s low was 8.5 percent in 2007 and in the third quarter of 2008 it was 9.2 percent. The mean capitalization rate for skilled nursing hit a low of 12.0 percent in 2007 and was at 12.75 percent in the third quarter of 2008. The reported number of transactions for the third quarter of 2008 dropped by almost 50 percent from the second quarter
NIC collects data from major national lenders (non-REITs) that make permanent and short-term debt investments in seniors housing and care. This includes data provided by Fannie Mae, Freddie Mac, and several of the larger commercial credit companies and banks.
For more information on NIC’s data, click here.