CHARLOTTE, NC - Wells Fargo is meeting the growing need for senior housing facilities nationwide with the creation of a specialty business group, Senior Housing Finance, which provides a dedicated, comprehensive suite of traditional banking and credit services for senior housing developers, investors, and operators. This new, fully staffed, specialty business, which is housed in Wells Fargo’s Commercial Real Estate group, provides expanded support for balance sheet lending, working with Wells Fargo’s Healthcare Corporate Banking and Multifamily Capital businesses.
As a larger percentage of the U.S. Baby Boomer population becomes senior citizens, there has already been a major impact to the healthcare and real estate sectors, including the need for additional senior housing. Over the next 25 years, the population of 65‐year‐olds and up is expected to grow 67 percent, from 48 million today to approximately 80 million in 2040.1 Over 21 percent of the current population age 75 and up reside in senior housing or care facilities, and that percentage will continue to grow. 2
“An estimated 20,000 senior housing units per year will be needed over the next 25 years to meet peak demand,” said Mark Cotsakis, who has been named the head of the company’s Senior Housing Finance division. “Wells Fargo has been providing financing to the senior housing industry for quite some time, but in order to best serve the existing and emerging senior housing client base, we saw the opportunity to create a specialty focus on the sector. The formation of our new Senior Housing Finance division, in partnership with existing Wells Fargo businesses, is a natural fit to position Wells Fargo as a leader in providing financial solutions in this rapidly growing market.”
Activity for the Senior Housing Finance group is already robust. In March 2015, the group closed financing for several projects across the country, including $17.45 million for the construction of an independent living, assisted living and memory care facility in Albany, OR; $21.2 million for the construction of an assisted living and memory care facility in Ft. Lauderdale, FL; $49.2 million for the construction of an independent living, assisted living and memory care facility in Foster City, CA; and $53.5 million for the acquisition and construction of an independent living, assisted living and memory care facility in Ft. Myers, FL.
The Department of Health and Human Services estimates that nearly 70 percent of people who reach age 65 will ultimately need some form of long-term care. Wells Fargo’s various business units, detailed below, support this growth and the financial needs of the entire senior housing sector.
Wells Fargo Senior Housing Finance provides balance sheet based acquisition, re-position, renovation and construction financing to senior housing properties with a focus on private-pay rental independent living, assisted living and memory care facilities.
Wells Fargo Multifamily Capital provides balance sheet bridge financing for the refinance, acquisition, repositioning, and moderate renovation of age-restricted apartments, independent living, assisted living, and memory‐care facilities along with permanent financing through Fannie Mae and Freddie Mac and also provides bridge and Federal Housing Administration‐insured construction and permanent loans for assisted living and skilled nursing facilities.
Wells Fargo Healthcare Corporate Banking provides capital, traditional banking solutions, and investment banking services (in partnership with Wells Fargo Securities) for profit, multiregional healthcare companies. Within the senior housing sector, this team provides its breadth of banking products to senior housing owners and operators, including healthcare real estate housing trusts.