Latest NIC Key Financial Indicators show decrease in lending volume

Nursing Homes, Dec, 2004 by Todd Hutlock

Loan volume placed in the second quarter of 2004 was down 33% from the previous quarter, and 42% from the second quarter of 2003, according to the National Investment Center for the Seniors Housing & Care Industries' (NIC) Key Financial Indicators[TM] released at the 14th Annual NIC Conference in Chicago on October 6-8. This loan volume figure represents the quarterly lending activity of the top 12 lenders (non-REITs) that make permanent debt or short-term debt investments in seniors housing and care, including Fannie Mae, Freddie Mac, and several large banks.

For his part, NIC Research Director Anthony J. Mullen speculates that at least part of this decline can be blamed on increased competition between lenders, with more banks (especially regional and smaller ones) entering the market. "Since we track only 12 of the largest non-REIT lenders, my opinion is that the REITs and banks that we don't track have picked up the difference in volume. But we will want to track several more quarters of data first, before we can see if this is truly the case," Mullen also adds.

In other areas, loan performance remained steady in the second quarter, as did median occupancy rates for assisted living. Occupancy rates for freestanding skilled nursing improved to 88.5%; occupancy rates for skilled nursing within CCRCs, however, declined from 87% to 84.5%. Overall median occupancy for CCRCs dropped from 90% to 88%.

The NIC Key Financial Indicators are reported quarterly by NIC to the nation's leading lenders, owners/operators, and appraisal professionals in the senior living industry. For more detailed breakdowns on the second quarter 2004 Key Financial Indicators, visit www.NIC.org.

--Todd Hutlock, Assistant Editor