As a healthcare real estate company, we understand that the healthcare industry is constantly evolving and growing. One way for health systems to keep up with this growth and expansion is through the use of portfolio borrowing.
Portfolio borrowing, also known as a blanket loan, is a financing option that allows a borrower to secure one loan to cover multiple properties. This type of loan can be beneficial for health systems looking to expand their real estate portfolio, as it allows them to streamline their financing and reduce the administrative burden of managing multiple loans.
One of the key benefits of portfolio borrowing is that it can provide more flexibility in terms of loan terms and interest rates. Health systems have the option of choosing between fixed and variable rate loans, which can help them manage interest rate risk. This is important because interest rates can fluctuate and having a mix of fixed and variable rate loans can help to mitigate that risk. Additionally, some health systems may also consider using non-recourse financing, which limits their liability in the event of default to the value of the property being financed.
Another advantage of portfolio borrowing is that it can help to improve cash flow and liquidity. By consolidating multiple loans into one, health systems can free up cash that would otherwise be tied up in multiple loan payments. This can be especially beneficial for health systems that are looking to expand their real estate portfolio, as it can provide them with the necessary funds to acquire additional properties.
In summary, portfolio borrowing can be a valuable tool for health systems looking to expand their real estate portfolio. It can provide more flexibility in terms of loan terms and interest rates, help to manage interest rate risk and improve cash flow and liquidity. As a healthcare real estate company, we can help you to understand this strategy and how it can be beneficial for you.
