VIUM Capital's Bridge Loan Program for Seniors Housing

When it comes to navigating the complexities of financing in seniors housing, VIUM Capital stands out as a trusted ally in the industry. To help explain our innovative approaches to lending and how we are helping to shape the future of seniors housing, Grant Blosser, Managing Director at VIUM, shares insights. Here's a closer look at what makes us unique, our perspective on market trends, and our vision for 2025 and beyond.

How Has VIUM Pivoted to Work in The Current Economic State?

Grant:

Despite a challenging economy, VIUM has maintained productivity, helping our partners execute transactions across the industry. 2020 was probably the toughest year to be an owner-operator of senior living assets in history, and we still were able to close transactions whereas many other banks were stepping away from the industry. We stepped up and closed transactions that were sometimes literally left at the closing table by another financial firm. One reason we were able to respond is due to our firm’s structure of being agile and available to make decisions efficiently.

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So even when economic conditions were tough and other participants in the market were stepping away, we've shown our commitment to the industry. VIUM has done that by getting creative on transactions. An example is the latest round of interest rate hikes that created a tough situation for seniors housing deals. One solution we employed was in an event where we might have had the value there on a deal to close, but we did not have the cash flow coverage. We have funded mechanisms to buy down the rate for our clients. We have provided loan dollars to our clients so they could buy a rate cap to bring their interest rate down to a level where they could secure more loan dollars on aggregate to buy, build, or renovate their asset – despite the high interest rate environment. Those were not part of the plan in 2020, but as the market changed, we had to react. As the market changes, we are constantly talking as a partnership group to react to those changes positively.

How Will VIUM’s Bridge Loan Program Impact the Industry’s Optimistic Future?

Grant:

A key consideration is that most bridge loans are priced off of SOFR, a short-term variable rate. SOFR has been historically high for the last 12 to 18 months, and we are seeing that rate decrease as the Fed makes cuts to their target rate – SOFR moves in tandem with that. For senior living communities, over that same timeframe, their loan sizing was generally capped based on debt service coverage ratios because they have a lower capitalization rate (cap rate) than a skilled nursing facility (SNF). So there might have been value in transactions but they did not have the cash flow coverage. As rates come down, we will see cash flow coverage improve and, therefore, an increase in loan proceeds borrowers can secure. Those owner-operators have had to get by with lower leverage and they have done that through either lower sales prices on a merger or an acquisition transaction, or they have done it through creative solutions like a seller note, where the seller executes the transaction but takes an IOU back that they get paid on later once the new owner stabilizes the community. We should see a return to more traditional financing arrangements, and you will need less creativity now that the rates have come down. With that said, it highlights the need to constantly be thinking creatively for our clients.

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How Does VIUM Build Relationships with Partners to Help Clients Save Cash?

Grant:

Part of that comes from the volume we execute which allows us to capture economies of scale and be efficient with our clients’ time. VIUM has grown consistently since inception in 2020. In 2024, we were the number two HUD LEAN lender. From the little things, like making sure third party vendors are priced accurately, to the bigger structural items, like helping our clients lock interest rates with flexible prepay structures, our scale means we know the market and what is possible and that results in best-execution for our clients.

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What Does it Mean to Have a National Presence and Local Partnerships?

Grant:

At VIUM, we split up geographic territories which allows us to strategize based on certain states and learn the state by state regulatory practices and variety of reimbursements such as Medicaid waiver programs or government reimbursement. It is important to not just be a salesperson, but be plugged into that state, know the state associations, know the players from the smallest to the largest, and understand what the dynamics are in that state. Each state has different labor requirements and markets, reimbursement regimes, and different kinds of economic trends that are going to filter into the different transaction experiences based on location.

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We have provided financing solutions for small, family-owned companies all the way up corporate, national clients. There is value in smaller deals, as well as looking for larger transactions. Our team invests in local partnerships nationally which allows us to have scale without losing the personal touch that differentiates us.

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What is VIUM Excited About Headed into 2025?

Grant:

Since 2020, the industry has experienced consistent headwinds to business and for our clients, and those seem to all be subsiding at the same time. With interest rates decreasing, it makes borrowing less expensive. The labor market is softening after some tough years when it was extremely challenging to hire and retain employees. Reimbursement rates on the government reimbursable side, which typically lag inflation by about one year. Those rates have finally caught up after some periods of pretty tough inflation. Our clients had costs going up on the expense side, but they were waiting on that higher reimbursement. A lot of those reimbursement rates have come through. Many operators have been able to push through rental increases to make up for that inflationary effect on the expense side of the income statement. It feels like the atmosphere at the conferences and client calls is that we are finally at a place where we feel like we can operate in a normal environment.

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Final Thoughts

Grant:

Another of VIUM’s differentiators is that we approach transactions as relational. We want to partner with people to make an impact. We aim to support our partners, advocate on their behalf, and be a valued resource. Scott Blount calls it “putting water in the well” for our clients and our industry colleagues. Building the reputation of providing support for the greater industry will be a long-term plan.

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VIUM is a specialty finance company focused solely on seniors housing and skilled nursing, serving parents coast to coast. We are partner-owned which allows decisions to be made quickly. We are entrepreneurial and do not have a corporate bureaucracy to wade through when we are looking to say yes or no to a deal. VIUM displays efficiency with a bottom-up culture. We serve borrowers all across the United States who own or operate independent living, assisted living, memory care, and skilled nursing facilities (SNFs). In addition to the continuum of care, we are opportunistic with hospital financing solutions as well. 

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Since VIUM’s inception in 2020, we have seen the market begin to recover. There have been a lot of headwinds to the industry over the last 12 to 18 months, and a lot of that is starting to subside. It is projected to be a positive year for mergers and acquisitions for organizations who have been on variable rate debt, and who want to get to permanent markets. Occupancy, reimbursement rates, and rental rates are all trending in the right direction. So it’s good news for the industry.

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At VIUM Capital, we are more than a financing partner—we are a trusted ally committed to helping seniors housing navigate today’s challenges and seize tomorrow’s opportunities. Whether you’re exploring bridge loans, seeking creative solutions to complex transactions, or simply need expert advice, we are here to provide the resources, relationships, and expertise you need for successful financing solutions. Connect with us today to discover how VIUM Capital is building a brighter future for seniors housing.