Evans Senior Investments (ESI) and Carnegie Capital on Monday announced a joint venture aimed at expanding business solutions for clients in the senior housing capital markets and acquisitions landscape still disrupted by the coronavirus pandemic.
The venture gives ESI, a sell-side brokerage with offices in Chicago and Denver, access to a wider range of lenders through Carnegie, a capital markets practice based in Austin, Texas, ESI CEO Jeremy Stroiman told Senior Housing News.
The JV also formalizes a longstanding relationship between the two boutique firms, and will leverage existing relationships and increase data sharing to facilitate deals. Stroiman and Carnegie Capital Managing Partner JD Stettin believe the time is right for this alignment, as senior living owners are struggling to sell buildings or find financing in a lending environment still disrupted from Covid-19.
“This is creating a robust new platform for capital events,” Stettin said. “Everything in the lifecycle of a building from construction, acquisition, refinance, cash-outs, repairs — this is your one-stop shop.”
ESI is particularly intrigued at bringing in a capital markets specialist with access to a wider range of lenders for its clients. Carnegie has arranged financing for over 30 facilities during the pandemic, which Stroiman cites as a testament to the firm’s institutional knowledge of senior housing, as well as the strength of its relationships with lenders.
“There is so much opportunity, especially today, for [operators] to go to the market and refinance,” he said. “Given how tight [lenders] are, from a lending perspective, it opens up a great opportunity, given the timing right now, to take our clients to a broader capital market.”
ESI and Carnegie have had an informal relationship for nearly three years, arranging nearly $200 million in deal volume. The two firms first approached the idea of a joint venture three years ago, but the retreat of the debt markets during the pandemic led them to solidify a working agreement.
Other boutique brokerages are launching capital markets practices as a result of Covid-19 market disruption. Last month, Blueprint Healthcare Real Estate Advisors launched a capital markets practice. Doing so, however, comes with risks that ESI and Carnegie believe can be avoided, as a result of their longstanding working relationship and focusing on what each firm does best.
“We’ve proven that the marketplace is missing this niche of taking a boutique brokerage on the M&A side and partnering with a boutique debt shop,” Stroiman said. “The joint venture allows us to invest resources, time and money to scale it.”
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