GlobeSt.com recently sat down with Cary Tremper, who was recently brought on to expand KeyBank Real Estate Capital’s Seniors Housing Agency Lending Group.
During the last two years, Tremper said the lack of new construction has increased occupancies to 87% industry wide, with four consecutive quarters of occupancy increases.
“Overbuilding will always be a concern because it’s happened once – in the late ‘90s into early 2000’s, and people have the mindset that it could happen again,” he said.
However, he doesn’t expect it to happen with financing so tough to come by these days. The majority of financing is still being provided by Fannie Mae, Freddie Mac, and the Federal Housing Administration, which continues to perform well he says.
“The appetite from the agency side for seniors housing has always been there, whether or not people realize that,” he says. “The agencies understand the sector, and their appetite is still huge for new product. But they have not comprised underwriting. In fact, default rates are well less than multifamily for both agencies, and during this time when it has taken projects longer to get filled and stabilized, production has come down because that credit quality hasn’t been compromised.”
Read to the rest of the interview at the link below.