Development has slowed, but we all know it has not stopped. One of the main barriers to getting development projects off the ground these days has been securing financing for them, considering the risks of funding a project amid soaring construction costs and an uncertain stabilization period. But certain projects are going ahead, and National Health Investors, Inc. announced that it will fund a $28.5 million construction loan to build The Courtyard of Fitchburg, a 108-unit assisted living/memory care community in Fitchburg, Wisconsin (Madison area). The four-year loan comes with an annual interest rate of 8.5% and two one-year extensions. Plus, NHI has a purchase option on the property once it has stabilized.
The community will be operated by Encore Senior Living (formerly 41 Management), a growing partnership of NHI’s that now includes nine properties. So, this project has a couple of key things going for it: it’s located near a major university where seniors can theoretically benefit from educational experiences and entertainment, and it will be operated by a regionally-concentrated, high-quality operating partner. Of all the reasons for investors to justify new construction projects these days, we hear those quite often.
