REFINANCING COULD HELP SENIOR HOUSING/HEALTHCARE BORROWERS IMPROVE BUSINESS OUTLOOK, EXPERT SAYS

When its time to finance or refinance senior housing/healthcare properties, borrowers have been known to experience an identity crisis.

Its not always clear whether they are financing the business or funding a commercial real estate investment, funding expert Jeffrey A. Davis observes.

Davis is Chairman of Cambridge Realty Capital Companies, one of the nations leading senior housing/healthcare lenders with more than $2.75 billion in closed senior housing/healthcare transactions since the mid-1990s. The company is an FHA/MAP-approved HUD lender and has an integrated debt/equity financing strategy that includes direct property acquisitions and joint ventures, sale/lease-backs, conventional and mezzanine debt financing and the acquisition of distressed debt.

When underwriting healthcare property loans, lenders must evaluate and scrutinize a great deal more than land, bricks and mortar. So healthcare property loans dont comfortably fit in the commercial real estate category.

But the current credit and liquidity crisis is creating a very unusual time for senior housing. With borrowing rates for five- or 10-year fixed rate loans in many instances lower than rates that change every day, borrowers need to carefully consider the impact todays low interest rates can have in a low margin, high fixed-cost business environment, he said.

Davis points out that interest rates for popular HUD funding products tend to mirror directional trends observed with 10-year U.S. Treasury notes. In January, yields on 10-year Treasuries moved modestly higher to 4.12 percent from 4.04 percent in December, but remained substantially lower than the 4.71 percent yields in January of last year.

Rates for conventional loans reflect declines in the Prime rate as well as declines in the one-month LIBOR index, which is down about 50 basis points from this time last year.

In other words, theres ample incentive for borrowers to attempt to improve the outlook for their business by refinancing at this time, Davis believes.

Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nations leading senior housing and healthcare debt and equity capital providers, closing more than 300 such transactions totaling more than $2.75 billion since then.

The company is one of the nation's leading HUD 232 FHA / MAP-approved lenders and also has an integrated debt / equity financing strategy that includes direct property acquisitions and joint ventures; sale / leasebacks for clients; conventional and mezzanine debt financing; and acquisition of distressed debt. Additionally, Cambridge offers a wide array of conventional lending options for senior housing / healthcare owners, including permanent construction and interim loans on either a floating or variable rate basis.

Cambridge is the creator of The Signature Experience, a four-step process designed to transform the traditional lender / borrower relationship and identify ideal capital solutions for worthy projects. The company has created four separate processes for customer groups that are designed to build and enhance long-term relationship potential and speed the way loans are processed and closed. Programs include The Key To Capital for senior housing owners, The Navigator Experience for senior housing brokers and mortgage bankers, The Principal Lender Network for lenders who refer loans to Cambridge, and The Relationship Building Experience for various industry-related consultants, including lawyers and accountants.

The company has a regional office in New York, affiliate office in Los Angeles, and correspondent relationships nationwide. The firm also has established key origination relationships and a dozen or more Internet-based strategies.

Cambridges award-winning Web site, www.cambridgecap.com, provides monthly rate updates for its debt and equity capital programs. The company also publishes the bi-monthly e-PULSE electronic newsletter, which delivers company news and feature stories via e-mail to corporate friends and clients. For additional information, contact Cambridge at (312) 357-1601 or via e-mail at info@cambridgecap.com.