Cambridge Realty Capital Sees Growth Opportunity Amid Downturn

Sep 29, 2009 11:11 AM, Staff report
National Real Estate Investor

Cambridge Realty Capital Cos., which has completed more than $2.75 billion in seniors housing and healthcare debt and equity investments since the mid-1990s, sees no time like the present to expand its investment portfolio.

The Chicago-based firm traditionally has invested in existing properties with historical cash flow predictability and experienced owner/operators, explains Jeffrey Davis, chairman of Cambridge Realty Capital.

Going forward, the company will expand its investments to include the discounted debt of similar assets using strict investment criteria and screening.

The activity will be initiated through the company’s investment affiliate, Cambridge Investment & Finance Co., on a pre-commitment, opportunistic, transaction-by-transaction basis, adds Davis.

Cambridge specializes in three distinctive business lines: FHA-insured HUD loans, conventional financing and investments, and acquisitions. The company is one of the nation's leading HUD 232 healthcare lenders, offers a wide array of conventional lending options, and has been aggressively involved in direct property acquisitions, joint ventures and sale/leasebacks.

"The current credit crisis has significantly marginalized competitive factors, enabling Cambridge to become even more selective in identifying opportunities that meet the company's proprietary investment-screening model,” says Davis.

“Because the frozen capital markets have spread into all sectors, owner/operators are becoming more reliant on firms like Cambridge for their capital requirements," he adds.

Davis believes that the company's integrated debt financing and investment businesses complement each other. The company reviews more than $350 million in senior housing and healthcare financing origination requests on a monthly basis and maintains a large and proprietary database of real-time data.

"We understand the underlying property assumptions as well or better than any other operator or investor in this sector," says Davis.

There are a number of reasons investors might be drawn to the seniors housing/healthcare market segment at this time, he suggests.

"Most experts concur that senior housing has become a non-cyclical business and will not experience the economic recession at nearly the magnitude experienced by other segments of the commercial real estate market,” according to Davis. “Unlike other forms of residential and commercial real estate, seniors housing has not had any major construction or expansion of existing product since the major wave of overbuilding that took place in the late 1990s.”