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VIUM Capital Exceeds $1B In Deals After ‘Wild Ride’, Adds Former NCAL Chief to Team

VIUM Capital launched at the outset of the Covid-19 pandemic in 2020, and Co-Founder and Executive Managing Director Steve Kennedy describes the last 18 months as a “wild ride.”

But the firm managed to recently pass $1 billion in closed senior housing and health care financings. And the company is up to 19 team members, including a high-profile hire in Scott Tittle, as managing director and head of government relations and external affairs.

Previously, Tittle led the National Center for Assisted Living (NCAL) as executive director for over six years.

VIUM has not only benefited from the experience of Kennedy and Co-Founder Kass Matt, but also from the experience of Brendan Healy, Chris Blanda, Scott Blount and Tony Ruberg. All six of the principals were leaders with Lancaster Pollard and boast a combined 60 plus years of experience.

While Lancaster Pollard is routinely the top lender in the FHA 232 program, Kennedy and Matt sought to expand their capabilities with VIUM. They did so by forging a joint venture with a “niche bank,” Kennedy said, enabling bridge lending targeting HUD, Fannie Mae and Freddie Mac takeouts.

“It’s just added rocket fuel to what we’ve been able to do,” he told Senior Housing News.

The majority of VIUM’s deals have been bridge loans, but in the last quarter, new HUD deals have also picked up, including Section 223(a)(7) refinancings.

Given their long tenure in senior housing and care, Kennedy and Matt have well-established relationships to draw on — including one with Tittle, which led to him joining the firm.

“Finance and regulatory practices are all intricately tied,” Tittle observed. “What I hope I bring the company is this lens of what’s happening in the marketplace, state capitals and D.C., and how that impacts operators, so they can make better financing decisions.”

In addition to advising clients, Tittle will take on an advocacy role at the state and national level “to help the sector grow,” he told SHN.

In terms of what is happening in the marketplace at the moment, the labor crisis is front and center, creating what Kennedy described as some “bizarre” scenarios.

For instance, VIUM is involved in a four-phase new construction deal, in which the rapid second-phase fill-up created labor pressures, particularly on the nursing staff.

“And so, they’re going to pump the brakes a little bit on this,” Kennedy said.

Tittle agreed that the workforce challenges are unprecedented.

“Operators are saying things you never thought you would hear — they would take one staff member over a new resident right now,” he said.

From a public policy standpoint, there is no silver bullet; comprehensive immigration reform is one promising avenue but Tittle does not believe that this is politically feasible.

“There are some things that could happen; they could speed up certain visa approvals for certain types of workers,” he said. “I know there’s some very interesting conversation right now about trying to work with Afghan refugees.”

State-level action could help alleviate some of the pressures; $200 billion to $300 billion in Covid relief has been allocated to the states, which are making decisions about how to allocate those dollars, Tittle pointed out. Texas already has earmarked funding to help senior living and care providers with escalating labor needs and costs.

Despite the disruptions of Covid-19, most of VIUM’s transactions are “covering out of the gates,” although there might be a value-add or revenue-enhancement component — but no “massive turnarounds,” Kennedy said.

In addition to smaller deals — usually $10 million to $15 million loans — VIUM has executed on a “few” portfolios over $75 million and is currently working on one that would exceed $100 million.

In Q4 2021, Kennedy anticipates closing over $400 million in loans if “everything shakes out.”

Lately, VIUM’s deals have been skewed toward skilled nursing, given HUD’s commitment to the sector and the greater financial certainty afforded by Provider Relief Fund distributions. But senior living is in the mix; the firm recently announced a $58 million bridge-to-HUD financing for five SNFs and an assisted living community; and a $21.2 million bridge-to-HUD loan that helped transition ownership of a rental CCRC property in Milwaukee.

Longer-term, Kennedy is targeting an even split between skilled nursing and senior housing transactions, and building on current momentum.

“I think we’ve created a pretty special thing,” he said.

The post VIUM Capital Exceeds $1B In Deals After ‘Wild Ride’, Adds Former NCAL Chief to Team appeared first on Senior Housing News.

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