Case Studies

The Background: How one Texas operator leveraged improvements to create additional revenue and services

For seniors housing owners and operators who are in the enviable position of a facility that is close to, or at, full occupancy, there are still options for enhancing revenue streams and expanding services to seniors. In financial terms, a facility with this kind of opportunity is a Core Plus Investment/Property.

Core Plus properties are synonymous with growth and income. Experienced seniors housing owners and operators are optimal candidates for increasing cash flows through light property improvements or management efficiencies. As the world moves from a pandemic to an endemic, the seniors’ housing market is ripe with opportunity if you have the right vision and a strategic capital partner.

Core Plus Investment: A core plus investment is synonymous with growth and income. The property itself is of high-quality and well occupied. Core plus property owners/operators can increase cash flows through light property improvements, management efficiencies or by increasing the types of occupants.

At Wilshire Finance Partners (Wilshire) we are that strategic capital partner. We focus on providing bridge loans and capital strategies to finance strategic acquisitions and improvements in the $1 million to 10 million range, specifically when a core plus project may not meet traditional lending requirements.

The Challenge: Finding Financing

As a second-generation owner-operator of two assisted living memory care facilities in Texas with 95% occupancy and a zero-deficiency survey, it is hard to imagine a better position pre-pandemic. This experienced owner-operator had a waiting list coupled with a vision to expand his unit count to meet the growing demand in the marketplace. Additionally, he saw the potential to add other amenities for residents, including a recreation room and a hair salon.

The challenge? Unfortunately, local banks were not interested in financing this vision and other lenders saw the loan size as too small to finance. While these circumstances could have deterred him, the owner-operator remained undaunted and discovered the right capital partner in Wilshire. Wilshire intimately understands the nuances of financing property improvements and specializes in helping owners and operators in seniors housing achieve their goals.

Wilshire recognizes that being a strategic capital partner is more than just providing financial backing; that partnership is personal as it impacts the lives of owners and operators, as well as the seniors within their care. Knowing that, the first facility site visit is crucial to assessing whether the partnership can be successful.

For Wilshire’s Chief Executive Officer Don Pelgrim, site visits give him a chance to see a building come to life and the opportunity to interact directly with staff and residents.

“I remember driving up to the facility and seeing this owner-operator on his bobcat with his dog. The pride of ownership was evident from that very moment. I saw how he talked with the residents and how the residents talked with him. It was clear there was mutual love between them,” Pelgrim said.

Pride of ownership and dedication to serving seniors was apparent in every aspect of how the buildings and the people were cared for. That spirit of excellence coupled with Texan-tenacity, created an opportunity for Wilshire to help a thoughtful and respected owner-operator achieve his vision when other lenders would not give him the time of day. As a boutique firm with institutional sophistication and an entrepreneurial edge, Wilshire provides capital and sage advice to create opportunities just like this.