Despite lingering oversupply concerns, plenty of senior housing operators are still seeking construction financing, especially in the Southeastern U.S., according to a leader from SunTrust Banks (NYSE: STI).
After initially serving senior housing operators in the Southeast, the Aging Services practice at Atlanta-based SunTrust recently began offering financing options for providers nationwide.
The bank is seeing “quite a bit of demand” for new senior housing construction, particularly in certain states, Evelyn Lee, senior vice president of SunTrust’s Aging Services practice, told Senior Housing News. Lee cited Florida, Georgia and Texas as regions where construction financing is in particularly high demand.
This trend isn’t exactly new; back in April 2017, the National Investment Center for Seniors Housing & Care (NIC) named Dallas and Atlanta as the first- and third-busiest cities for senior housing development in the country.
At the same time, SunTrust has noticed that it has been doing “a lot more acquisition-type financing” in the senior housing space, according to Lee. Several of the operators the bank has been working with are entering new markets, she suggested.
“A fair number of operators had been priced out of some markets because there was so much institutional capital at play,” Lee explained. “Our operators are taking advantage of that circumstance.”
Going forward, SunTrust’s Aging Services practice will likely continue to work with for-profit senior housing providers that are operating continuing care retirement communities (CCRCs), some combination of independent living, assisted living and memory care, or just assisted living and memory care.
“Those food groups will stay the same for us,” Lee said.
Additionally, due to the nationwide expansion of the Aging Services practice group, the number of senior housing-focused team members at SunTrust will probably grow.
“We have a team of about 20 folks who are focused on the industry,” Lee said. “As we do a nationwide approach, that will obviously grow over time.”
Written by Mary Kate Nelson