After a slow start to the year, Cambridge Realty Capital is back to (almost) business as usual. Given the current global circumstances, the lag in business wasn’t surprising to Cambridge Realty Capital President Jeffrey Davis. “Everyone was in survival mode in early 2020,” Davis recalled. “Loans that were in process experienced delays, and everyone else was concentrating their efforts on keeping COVID-19 out of their facilities and dealing with staffing shortages.”
As doctors and scientists began to obtain a better grasp on how the virus spreads and the best methods of treating it, life began returning to normal, or at least a new definition of normal. “Of course, the way we do business has changed somewhat,” Davis noted. Business and staff meetings have become online conferences. Work with clients is often done by phone or Webcam instead of in person. Nevertheless, things are moving forward.
In spite of the fact that COVID-19 is still around, people are feeling more optimistic than they were in early 2020. Loan applications are on the rise again. Davis reported that more than $200,000,000 in 16 facilities was closed in the second quarter of 2020 and over $100,000,000 in nine facilities was closed in the third quarter. For the second quarter, these 16 closings represented 2,467 beds and for the third quarter, the nine closings represented 1,117 beds. Year to date, including the fourth quarter to date, saw closings of $37,993,000, bringing the total transaction volume to $360,000,000 totaling 33 separate facilities and 4,453 beds. “Operators are forging ahead, borrowing money and banking on a bright future, and the eradication of or a cure for COVID-19.”
Davis continued, “With many senior facilities across the US struggling with COVID-19 outbreaks, operators are more determined than ever to do what is necessary to protect patients and staff and keep their facilities safe.” Davis pointed out the heavy burden that has fallen onto senior living operators, noting that the loan activity that has transpired in more recent weeks and months is a positive sign of better things to come.
Davis attributes much of this momentum to the combination of low interest rates offered by HUD, fast processing of different transactions (especially IRR’s), and HUD’s willingness to continue to help operators move forward on a positive note to take care of America’s seniors and frailest population during the worldwide COVID-19 pandemic. “HUD rates have always been attractive. I think now, perhaps more than ever, they will play a significant role in moving the country forward, through the pandemic and beyond.” In addition to lower interest rates and efficient processing, Davis added that HUD also offers long terms, no personal recourse, and fixed rates. “It’s an ideal time to consider a HUD 232 loan, and Cambridge can make that happen.”