A Guide to Managing Risk in Seniors Housing Investments

Navigating the complexities of seniors housing and healthcare investments requires a trusted partner who understands the industry's unique challenges. VIUM Capital has emerged as a leading lender dedicated exclusively to serving owners and operators in this specialized field. From providing tailored financing solutions to mitigating risks like fluctuating interest rates, execution hurdles, and compliance challenges, VIUM is committed to supporting its clients' growth and success.

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In this article, we explore insights from Michael Braun, VIUM Director, who shares how the company empowers clients through innovative financing options, expertise in regulatory landscapes, and seamless transitions from bridge loans to permanent financing. Discover how VIUM helps investors achieve stability and long-term value in an ever-evolving market.

What are the common risks within seniors housing investments that a finance partner can help mitigate?

From a financing perspective, three key risks facing seniors housing investors are:

1. Interest Rate Risk – The potential for investment losses or cash flow disruptions due to rising interest rates. This is especially pronounced in transitional or development projects that rely on floating-rate debt.
2. Execution Risk – The risk that a strategic initiative, such as an acquisition or refinance, fails to meet expectations due to issues during execution. In seniors housing, the financing component is often a critical variable in execution success.
3. Regulatory & Compliance Risk – Seniors housing is a highly regulated space. Shifting state requirements around restrictions on licensure and Medicaid waivers can affect operations and financial viability. Financing partners like VIUM help sponsors navigate this complexity by aligning capital structure with the local regulatory environment.

How does VIUM think about mitigating interest rate risk?

One of the most effective ways to mitigate interest rate risk is to obtain long-term, fixed-rate financing. That’s why permanent financing is typically the ultimate goal for long-term owners and operators in seniors housing. As a licensed HUD lender, we may be biased, but we believe the HUD 232 program offers the most compelling solution for accessing fixed-rate, non-recourse, long-term capital. In addition to HUD, our correspondent relationship with one of the largest Fannie Mae and Freddie Mac lenders in the country enables us to offer a broad menu of permanent financing options. This flexibility allows us to tailor fixed-rate, long-term financing solutions to meet the unique needs of each project and borrower.

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For acquisitions or unstabilized assets, where bridge financing is common and usually variable-rate, we proactively incorporate interest rate protections. All our bridge loans offer the ability to purchase interest rate caps, which act as synthetic fixed-rate tools by limiting the upside risk in exchange for an upfront premium. In certain transactions, particularly where lease-up or turnaround risk is high, we may also structure a debt service reserve to provide additional protection against rate volatility.

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How does VIUM help its clients mitigate execution risk?

Our approach to mitigating execution risk begins on day one. Our initial deal review process is both efficient and thorough, which allows us to move quickly while maintaining a high degree of certainty when we issue a formal term sheet.

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Importantly, we take a dual-lens approach—evaluating projects not just for bridge eligibility, but also for long-term takeout through HUD or agency programs. This proactive strategy allows us to anticipate potential issues early, saving valuable time during the acquisition or refinance process and avoiding missteps that could derail the long-term financing plan.

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Once a bridge loan closes, we remain fully engaged. One of the hallmarks of VIUM’s platform is our ability to seamlessly transition clients from bridge to permanent financing. The same deal team that structured the bridge loan leads the permanent execution, ensuring familiarity with the project and continuity across the working group. Additionally, we leverage existing underwriting materials and legal documentation from the bridge transaction to streamline the takeout process.

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This consistency, paired with our deep seniors housing expertise, allows us to significantly reduce friction and uncertainty, helping our clients stay focused on delivering operational success and long-term value.

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How does VIUM support clients in navigating regulatory and compliance risk?

While seniors housing is less regulated than seniors healthcare, it remains one of the most compliance-driven sectors within real estate. Navigating these requirements effectively is critical to long-term project success. VIUM brings deep expertise in seniors housing and healthcare real estate finance, allowing us to anticipate regulatory challenges early and incorporate solutions directly into the capital structure.

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With over $5 billion in transaction volume across 30+ states, our team has gained extensive, hands-on experience dealing with the nuances of varying state regulatory environments. Each of our originators focuses on just a handful of states, enabling them to become true subject matter experts in areas such as licensing requirements and Medicaid waiver programs.

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This localized knowledge, combined with our proactive and detail-oriented transaction analysis, positions us to provide tailored guidance, whether a sponsor is expanding within a familiar market or entering a new one. Our goal is to help clients move forward confidently, fully informed of the regulatory landscape ahead.to our clients.

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Investing in seniors housing and healthcare requires more than capital; it demands a financing partner with industry expertise, a proactive approach to risk management, and a commitment to your long-term success. VIUM Capital delivers all that and more, offering tailored solutions that address the unique challenges of this dynamic sector. Ready to take your investment strategy to the next level? Contact VIUM Capital today to learn how we can help you secure the right financing solutions for your seniors housing and healthcare projects. Let’s build a better future together.