CCIM L ess available capital is the result of overbuilding and profitability woes in today s seniors-housing market. However, several viable options remain, including government-backed financing. However, various seniors-housing segments have experienced turmoil since then, causing many lenders to limit financing options.
Evidence suggests assisted-living overbuilding nationwide.
Readily available capital produced too much supply in a short time period, far surpassing demand. Further, the implementation of the prospective payment system, the new Medicare reimbursement method, decreased profits at many nursing homes, and numerous publicly traded seniors-housing companies have declared bankruptcy. Alzheimer s properties remain private-pay facilities in most states, meaning they do not qualify for Medicare or Medicaid reimbursement. They, too, have seen a slump in occupancy from overdevelopment. In response, the CMBS market for seniors housing has all but dried up.