Senior living communities will be among the targeted investment areas of a new health care finance venture between Great Elm Capital Corp. and Berkadia.
The venture, announced Monday, will target a variety of senior housing product types across the care continuum, ranging from independent living to skilled nursing and post-acute care.
Though the venture’s backers haven’t determined how much capital they will ultimately allocate for senior living, a representative for Nashville, Tennessee-based Great Elm told Senior Housing News it is planned to be a significant portion.
Under the venture, Great Elm is providing capital for operators to use in a variety of ways, including for working capital, refinancing, acquisition and recapitalization. The company also will offer asset-based revolving loans, mortgage financing, secured debt and capital for health care companies in transition.
An affiliate of Berkadia Commercial Mortgage will serve as strategic minority partner to the new venture. Great Elm CEO Michael Gervais is slated to lead the venture, with help from Ray Zilke as vice president of portfolio and Chad Kerr as vice president of credit.
“This is an exciting time to be launching a health care finance vehicle as we are seeing a significant number of health care investment opportunities,” Gervais said in a statement about the new venture. “I have known the Great Elm Specialty Finance team for over 20 years, and believe we will build a great health care franchise.”
Berkadia is a joint venture of Berkshire Hathaway and Jefferies Financial Group, offering services that include mortgage banking, investment sales and a servicing platform. The firm recently announced $177 million in senior housing and health care deals completed between July 15 and the end of October.
Great Elm Capital is an externally managed business development company, which in February 2022 purchased a majority equity stake in asset-based lender Sterling Commercial Credit.
“We are in the process of identifying assets and potential finance partners as well as building out the operations for the health care initiative, supported by our experienced team at Sterling,” Great Elm Capital Corp. CEO Matt Kaplan said on the company’s recent Q3 2022 earnings call.