As the seniors housing sector moves beyond the disruptions of the pandemic and the fallout from high-profile banking crises, optimism is cautiously returning to the market. According to panelists at a recent session on capital markets and valuations during the NIC Conference in Austin, debt availability is starting to pick up and the financing landscape for seniors housing is quickly evolving.
Morgin Morris, senior vice president at KeyBank, called the ongoing changes a game-changer for the industry. She noted that the “breakout” for seniors housing is having widespread effects on how deals are executed and capital is sourced. Speaking alongside fellow panelists—including Blueprint co-founder and CEO Ben Firestone, Omega Healthcare Investors President Matthew P. Gourmand and Focus Healthcare Partners Co-Managing Partner Curt Schaller—Morris described a dramatically improved lending environment. Just a short while ago, Morris said, federal oversight and regulatory pressures led to extended delays on deals, especially those involving HUD financing. It used to take as long as six to nine months to close a deal, with regulators demanding increased cash reserves from banks. Now, Morris explained, the market has shifted to “the express lane” on closing times, streamlining the process and helping to address U.S. housing demands.
She also pointed out that concerns over strict reserve ratio requirements this year ultimately did not materialize. As of 2025, the United States maintains no general reserve requirement, with the Federal Reserve continuing the zero percent ratio set in March 2020. Instead, only the FDIC’s Designated Reserve Ratio for the Deposit Insurance Fund remains, now targeted at two percent. With banks flush with liquidity and eager to make new loans, institutional lenders are increasingly syndicating deals. Morris said there is a healthy pipeline of low-leverage, strong-sponsor projects—and crucially, construction financing is being written again. Fixed-rate debt with five- to seven-year terms stands out as the “unicorn” in today’s market, occupying a dominant space as interest rates trend downward. Expectations are riding on a likely 25-basis-point Federal Reserve rate cut in September, with another reduction anticipated in 2025 as recent jobs data continues to signal a possible recession on the horizon. Still, Morris warned that a coming wave of loan maturities in 2030 could present challenges similar to those seen between 2020 and 2024.
For investors, the tides also appear to be changing. Curt Schaller, who is raising capital for Focus Healthcare Partners’ third seniors housing fund, described significant improvement in fund performance and a sea change in investor engagement. Schaller recalled that when he launched his first fund in 2017, only a quarter of prospective investors expressed interest in seniors housing. By 2023, that figure had risen to 90 percent, with many now reaching out proactively about new deals. As Schaller observed, investors are now focused on broader sector trends, such as demographic strength, rather than getting bogged down in operational details. He noted, however, that appetite varies by property type, with skilled nursing properties attracting greater scrutiny—especially regarding Medicaid exposure—while independent living remains more popular than higher-acuity assets. Schaller said he prefers converting active adult communities to independent living, anticipating further cap rate compression over the next year as top-quality assets become increasingly desirable.
Meanwhile, Gourmand outlined why real estate investment trusts continue to find strong opportunities in the seniors housing space. He emphasized that rising share prices provide flexibility for new deals, reducing the yield thresholds required by REITs and allowing for funding through equity rather than debt. Gourmand pointed out that even during periods of heavier reliance on debt financing, his company has always pursued strong deals and never shies away from attractive opportunities. Going forward, he indicated, the firm is focused primarily on skilled nursing, where partnerships with seasoned operators in both the United States and the United Kingdom are multiplying.
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