Over $ 1 billion in senior housing loans past due, but things are improving
Out of 15 different lenders, there were over $ 1 billion in retirement home loans in arrears for more than 60 days in the first quarter of 2021. And foreclosures totaled nearly $ 54 million over the course of the year. of this period.
But the pace of loan arrears has declined significantly from its peak in Q3 2020, according to a new loan trends report released Thursday by the National Investment Center for Seniors Housing & Care (NIC).
In addition, new closed permanent and construction loans remained relatively low during the quarter and were at their lowest level since the industry group began recording activity in mid-2016. And the same-store growth rate of permanent and construction loan issuance has trended negative for four consecutive quarters.
The 15 organizations that contributed to the report included banks, commercial real estate companies and other lenders.
Total delinquencies on senior home loans totaled $ 1.087 billion in the first quarter of 2021 – a decrease of 50% from $ 2.2 billion in the third quarter of 2020 and a decrease of 30.6% on a year-over-year basis. sequential basis, from when the second big wave of positive Covid-19 cases swept across the country.
Same-store new construction loan growth has been negative throughout the duration of the pandemic.
Total loan balances among report participants amounted to $ 57.4 billion; bad debts represented 1.9%. First quarter foreclosures totaled $ 53.8 million, marking the first time that foreclosures have been recorded in the study since the first quarter of 2019.
This may reflect growing distress during Covid-19 among small operators who were already grappling with operations and financial performance before the start of the pandemic.
Overall, new loans in the first quarter of 2021 were weak, with a total of $ 1.2 billion in loans closed. New construction loans, in particular, have been hit by postponement of projects due to pandemic uncertainties: Report participants reported $ 153.1 million in new construction loan volume during the quarter.
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Participants reported $ 789.2 million in new permanent loan closings in the first quarter of 2021, down 45.6% from the previous quarter and the lowest volume since the third quarter of 2016.
There are, however, signs of optimism. The study authors cite anecdotal evidence among participants of an increased interest by lenders in senior housing, coinciding with the vaccine rollout, which could be reflected in the quarters to come.