Late Pays Rise for Seniors' Housing

Delinquencies on permanent mortgage debt backed by housing and care properties for senior citizens increased to 4.6% in the fourth quarter of 2003, according to the National Investment Center for the Seniors Housing & Care Industries, Annapolis, Md.The NIC, a nonprofit organization that provides senior-living industry information, also reported that loan volume placed in the sector fell to $763 million in the fourth quarter from $834 million a year earlier. However, citing a recent industry conference call, the NIC said it expects that traditional lenders will become more active and that loan volume in the sector will increase as the yields on these loans grow. "Because rates have dropped so dramatically, the extra yield makes it more compelling for traditional debt buyers to invest in seniors housing and care than in apartments or other real estate classes," said Arnold Whitman, chief executive officer of Formation Capital. "This, in turn, puts pressure on traditional mortgage lenders to lower their interest rates."