SunTrust Sees Upside to Increasing Skilled Nursing Regionalization

The Atlanta-based SunTrust Banks (NYSE: STI) last week announced a nationwide expansion of its Aging Services/Senior Living Practice group, with an eye on the emerging trends in the skilled nursing space.

First launched on a regional basis in the Southeast about four years ago, the senior-specific group has seen the increasing regionalization of the skilled nursing operation and investment spaces, according to senior vice president and aging practice leader Evelyn Lee.

“We have viewed [that] positively, because we’ve always been focused on regional and super-regional operators of skilled nursing who are sort of operator-focused, and not capital-focused,” Lee told Skilled Nursing News.

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Still, the senior-focused vertical at SunTrust has historically focused on a “balanced portfolio” with a combination of continuing care retirement community (CCRC), independent living, assisted living, and skilled nursing assets.

“We really prefer communities,” Lee said. “Skilled nursing is kind of its own animal.”

But the senior living practice has seen some areas of skilled nursing growth as it explored its nationwide expansion.

“The Midwest has been the most active for us on the skilled nursing side — Ohio, Michigan,” Lee told SNN.

As for a short-term outlook, Lee predicted that the current industry conditions — including rising interest rates — could soon shift the investment landscape in the seniors housing and care space.

“Rates are rising, so that’s changing the players that are willing to deploy capital into the space,” Lee said. “I think that’s created some opportunities in the space for our clients on the operating side, who have been on the sidelines on the acquisition front to get into more acquisition-type financing, aside from refinancing.”

SunTrust will offer its senior living and aging services products through both SunTrust Bank and SunTrust Robinson Humphrey, Inc., primarily using existing offices of those subsidiaries across the United States.

“We saw an opportunity to fulfill our purpose of advancing financial well-being by addressing the needs of many senior housing providers and communities nationwide who are underserved and require access to capabilities beyond just a traditional bank loan,” commercial banking leader Jason Cagle said in a statement announcing the expansion.

Written by Alex Spanko

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