Table is Set for More ‘Mega’ Refinancing in Senior Housing

The time may be ripe for more “mega” refinancing transactions in the senior housing industry as borrowers with large portfolios consider their options in the current, relatively stable market.

That’s according to Walker & Dunlop Vice President Russell Dey. Along with Vice President Laura Beaton, Dey headed the team that originated Holiday Retirement’s $1.27 billion refinancing that closed last week. It was the largest transaction in the company’s history. Previously, the record had been a $670 million Freddie Mac financing for New Senior Investment Group Inc. (NYSE: SNR), which closed last spring.

The two massive recent transactions raise the question: Are there more to come in senior housing?


There are signs suggesting it’s a strong possibility, according to Dey.

“It’s a great time,” he told Senior Housing News.

Despite recent moves by the Federal Reserve to hike the benchmark interest rate for the first time in almost 10 years, rates remain historically low, Dey said.


While the Fed has raised short-term interest rates, the long-term bond market already had the increase priced in, he said. Still, the Fed is poised now to pursue further rate hikes, and these could create more volatility. It’s a consideration that could push debt holders to refinance sooner rather than later.

What’s more, current, relatively stable market conditions could be fleeting.

“Look at what’s going on with China,” Dey said. “There’s concern about health of the capital markets.”

In addition to these large-scale market factors, timing is an issue: Senior housing owners are also beginning to confront maturing debt they secured during the boom years a decade ago, and following the financial crisis in 2008 and 2009, pushing them to consider refinancing options. 

“2015, 2016 and 2017 are huge years in maturing debt,” Dey said. “I see this having a big impact on the senior housing market,” he added.

Written by Mary Kate Nelson


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