A Comprehensive Look at Capital & Lending Resources
SCOTTSDALE, AZ—At a time when capital markets volatility remains top-of-mind for many real estate sectors, panelists at the GlobeSt. Healthcare Real Estate Conference offered a strikingly optimistic view of the lending climate for healthcare properties. During the session, A Comprehensive Look at Capital & Lending Resources, industry leaders broke down where liquidity is flowing, which players are most active and how healthcare borrowers can best navigate today's rapidly shifting capital environment.
“Every Bucket of Debt Is Active”
Moderator Steve Leathers, senior managing director at Transwestern, opened the discussion by asking what’s hottest in today’s capital markets. According to Andrew Twito, senior vice president of capital markets at Ryan Companies, the answer is simple: credit and lots of it.
“Debt is very plentiful right now,” he said.
“There is a ton of liquidity in the debt markets, not just in healthcare. Anything that pencils, there is debt for it… that isn’t an issue.” Twito said that major banks are healthy, while regional banks are “super hungry” for healthcare deals and private credit funds have surged into the sector.
“Every bucket of debt is active. Spreads are coming in. Debt is not a bottleneck for financing projects.”
Justin Shepherd, vice chairman at Newmark, echoed that momentum. He noted increasing competition, even from foreign institutions. “We are seeing groups from Canada and elsewhere coming in. Spreads are condensing very quickly.”
What Assets Are Lenders Targeting?
The short answer, according to panelists, is “all of them.”
When Leathers asked whether certain healthcare asset types are attracting more lender interest, Twito didn’t hesitate to answer.
“Everything is getting attention. Everyone you call is going to want to give you a term sheet. Whether you have investment-grade credit or private credit, if you’re putting together a decent-looking deal, banks are happy to finance it.”
That breadth of demand is a notable contrast to sectors facing tighter underwriting or reduced lender appetite.
Refinancing Challenges
Despite the abundant liquidity, the panel pointed out that the picture is more nuanced on the refinancing side.
Elizabeth Randall, president and director of healthcare sale-leaseback at Randall Commercial Group, highlighted a growing concern: the gap between today’s property valuations and those from five years ago.
“There has been so much focus on interest rates, but valuations are often coming in lower than when the asset was purchased,” she said.
“If it isn’t a triple-net deal, more of the operating costs hit the NOI. Many owners facing a refinance over the next year will need to have some tough conversations.”
Alternative Structures Gain Ground
Shepherd noted a shift for the better in lending.
“Banks are no longer putting syndication risk on the borrower, which used to happen,” he said.
He also pointed to a wave of new entrants with diverse motivations, leading to innovation in healthcare financing.
“You have to look at what asset classes are investable, and medical office is attractive to anyone,” Shepherd said.
“What that has also led to is alternative structures—ABS, CTLs, and other vehicles—that add competition to the overall market, which ultimately increases borrower power.”
A Market Rich with Capital, But Not Without Complexity
While liquidity is abundant and lender enthusiasm is strong across asset types, challenges remain around refinancing, valuations and navigating emerging financing structures. Still, the panel’s overarching message was clear compared with other CRE sectors: healthcare real estate is enjoying a rare moment of broad, deep and highly competitive capital availability.
For investors and developers, that combination represents both opportunity and responsibility because it requires more strategic thinking, more lender comparison and a clear-eyed view of where valuations stand today versus the last cycle.
Check back with GlobeSt.com for more from the conference.
Source: GlobeSt/ALM