Press Room - 2007 NIC Press Releases
Key Financial Indicators Show Senior Housing and Care Loan Originations Slowed in Second Quarter
FOR IMMEDIATE RELEASE: October 9, 2007
Contact: Renee Tilton, (410) 626-0805 or rtilton@crosbymarketing.com
Annapolis, Md. – The second quarter showed a decline in loan originations, according to the NIC Key
Financial Indicators? released today by the National Investment Center for the Seniors Housing & Care
Industry (NIC). The amount of loans placed in the second quarter of 2007 was down 31 percent from the
first quarter and down 1 percent from the second quarter of 2006. This decline slowed the growth rate
of outstanding loans. Outstanding loan volume for the second quarter of 2007 was up 2.4 percent from
the first quarter of 2007 from $18.5 billion to $18.9 billion, which was up 19 percent over the second
quarter of 2006.
“Lending for the second quarter did not keep pace with the first quarter of 2007, and we would expect
that the third quarter will show downward movement as well,” stated Robert G. Kramer, president of NIC.
“This can be attributed to the credit crunch that the country is experiencing, which started in third
quarter of 2007.”
Performing loans during the second quarter of 2007 stayed near the highest percentage ever recorded
at 99.35 percent, up year-over-year compared to 99.25 percent in the second quarter of 2006.
Loan data represent the quarterly lending activity of major national lenders (non-REITs) that make permanent
and short-term debt investments in seniors housing and care, including Fannie Mae, Freddie Mac, and
several of the larger credit companies and banks.
Mean occupancy in independent living was 91.5 percent in this year’s second quarter, up slightly from
91 percent in the first quarter, but off slightly from the second quarter of 2006 (at 92.5 percent).
In comparison, the mean occupancy rate in continuing care retirement communities (CCRCs) remained at
91 percent in the second quarter of 2007, unchanged from the first quarter of 2007 and from the second
quarter of 2006.
Nationally, nursing homes experienced a drop in the mean occupancy rate from 87 percent in the first
quarter of 2007 to 85.5 percent in the second, while assisted living occupancy was off slightly at 87.5
percent from 88 percent in the first quarter.
Capitalization rates were up slightly for independent living in the second quarter and down slightly
for assisted living, skilled nursing and CCRCs. Mean capitalization rates – at 7.9 percent in independent
living, 8.5 percent in assisted living, 12.3 percent in nursing and 7.9 percent in CCRCs – remained
about 20-40 basis points below those of the second quarter of 2006.
“While there is significant discussion about the potential for softness in the seniors housing and care
industry, there is not strong evidence of this from the second quarter national metrics,” said Dr. Lawrence
Horan, financial research and analysis director for NIC. “Third quarter numbers could show more movement,
especially in loan volume. Some entrance-fee CCRCs have reported softness in sales and we will be closely
following third quarter data results.”
Each quarter, the nation’s leading senior living lenders, owners/operators and appraisal professionals
report their key financial and performance data to NIC. The results are posted free of charge as the
NIC Key Financial Indicators™ at www.NIC.org/research/kfi/.
About NIC: Founded in 1991, the National Investment Center for the Seniors Housing
& Care Industry is a nonprofit organization providing information about business strategy and capital
formation for the senior living industry. Proceeds from its annual conference – scheduled next for Sept.
10-12, 2008, in Chicago, Ill. – are used to fund research and data that lead to informed investment
decision-making to advance the seniors housing and care industry. For more information, visit
www.NIC.org or call (410) 267-0504.
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