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Tables and Figures

The Financing Formula

Susan Brecht, Steve Brown, AIA, and David Passero


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Table 1: Underwriting Issues
Market Management Collateral Structure
Demographics Direct Industry Experience Physical Plan Financing Requirements
Competition Depth & Reputation Marketability Liquidity & Default Risk
Project Positioning Adaptability Location Recourses
Regulatory Environment Historic Operating Performance External Forces Upfront & Annual Costs
table/courtesy David Passero

Table 2: Senior Housing Financing Alternatives
Financing Loan Size Equity Req. Recourse Interest Rate Other
Conventional Flexible 20%-30% Yes Average May not understand assisted living
Credit Company Prefer Large 10%-25% Varies Risk Based Construction loan for opportunity to do permanent  
REIT Prefer Large 5%-20% Varies High Sale/Leaseback with equity participation
HUD Flexible 5%-15% No Low High insurance cost
Public Issue Underwriting threshold 20%-30% No Low High insurance cost
table/courtesy David Passero



 
 

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