Seniors Housing Business

APR 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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www.seniorshousingbusiness.com 35 April 2018 n Seniors Housing Business Ari Dobkin | Managing Director 212.612.0165 | adobkin@meridiancapital.com Ari Adlerstein | Managing Director 212.612.0174 | aadlerstein@meridiancapital.com $48,000,000 Acquisition Skilled Nursing Portfolio 601 Beds Chicago, IL $34,120,000 Acquisition Skilled Nursing Facility 200 Beds Bronx, NY $21,300,000 Repositioning Assisted Living & Memory Care 190 Beds Lake Charles, LA $16,500,000 Acquisition Skilled Nursing Portfolio 240 Beds Connecticut $10,000,000 Acquisition Skilled Nursing Facility 97 Beds West Milford, NJ $39,000,000 Refinance Skilled Nursing Portfolio 355 Beds California $25,000,000 Refinance Skilled Nursing Portfolio 181 Beds Santa Rosa, CA $20,850,000 Acquisition Skilled Nursing Portfolio 356 Beds North Carolina $11,950,000 Acquisition Independent Living Facility 145 Beds Allen Park, MI $7,200,000 Refinance Skilled Nursing Facility 185 Beds Trenton, NJ $35,250,000 Refinance Skilled Nursing Portfolio 559 Beds CT & MD $23,885,000 Construction Assisted Living & Memory Care 118 Beds Delray Beach, FL $19,165,000 Construction Assisted Living & Memory Care 104 Beds Pooler, GA $11,500,000 Acquisition Skilled Nursing Portfolio 409 Beds KS & MO $5,300,000 Acquisition Assisted Living Portfolio 156 Beds Wisconsin $93,000,000 Acquisition Skilled Nursing Portfolio 900 Beds Pennsylvania LAST YEAR MERIDIAN'S HEALTHCARE TEAM CLOSED $ 1 BILLION I N S A L E S & F I N A N C I N G S E L E C T T R A N S A C T I O N S Thank you to our clients and lending partners for your trust and confidence in achieving this success together. Contact us for debt & equity financing and sales expertise in: ■ Skilled Nursing ■ Assisted Living ■ Memory Care ■ Independent Living Many state housing agencies have also lost much of their ability to help through state housing trust funds, which were cut in many cases after the Great Recession and have not been replenished. Some local governments are doing more to assist afford- able housing projects. Cities like Columbus, Ohio, are now creating programs to help finance afford- able housing development, usually with "soft financing" loans. These loans are effectively grants that don't need to be repaid unless the property fails to provide housing to low-income people. "The gap funding of the future is going to come from municipalities because they are the ones feeling the affordable housing crisis," says Norris. Closing these budget gaps can delay a project six months to a year, experts say. But many afford- able housing projects face unyield- ing deadlines. For example, apartment projects using LIHTC funding need to be ready to rent by a certain date in order to pre- serve funding for the developer. State officials may be able to help. In some states they can swap tax credits that require a project to be placed in service sooner with the same amount of tax credits that would give the developer more time to complete the project. They also help developers find ways to save money in the construction process or connect them with new sources of funding. Congress intervenes to help Going forward, developers will still plan new projects. Deals will get done, even with LIHTC prices at their new, lower level. For example, VOA is preparing to submit an application to receive low-income housing tax cred- its for Senior Residences at Three Springs, a proposed affordable seniors housing community in Durango, Colo. But projects like Three Springs will likely need more tax credits to raise the same amount of money to build. The program overall may not be able to create as much new housing. Congress has acted quickly to help, and expanded the LIHTC program in the newly approved federal budget for fiscal year 2019, but the changes won't make up for the dip in LIHTC prices caused by tax reform. Every year the LIHTC program finances more than 100,000 units of affordable housing. Roughly one-third of those new units are reserved for low-income seniors. No other program comes close. It's a lot, but not nearly enough for all of the low-income seniors who need housing today, let alone the aging population to come. Congress increased the amount of LIHTC funding available to affordable housing developers by 12.5 percent, plus some techni- cal improvements to the program, which could increase the number of affordable housing units cre- ated or preserved by the program by about 28,400 over ten years. But that's not enough to offset to impact of tax reform of about 235,000 units over ten years. A growing crisis The number of Americans age 65 and above is expected to balloon to 79 million by 2035, up from 48 million in 2016, according to the Harvard Joint Center for Housing. After the age of 80, seniors typi- cally become frailer and begin to require more health services. The number of seniors over 80 is also growing quickly, and is likely to double between 2015 and 2035 from 12 million to 24 million.

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