Skilled Nursing Feasibility Study in Texas

Texas ranks third for skilled nursing loans yet the class is low in the state

Across FY2017 to FY2026, 46 skilled nursing loans worth $52.5 million rank Texas 3 of 48 among states, though inside Texas the class holds just 27 of 39 and the location quotient is 0.88x. Texas is a big state, so a modest share still makes it a top state by count. The median loan of $701,500 is 1.05x the national figure, with most requests from $278,750 to $1.3 million, which for this class mostly means small facility purchases, renovations or working capital, not new construction.

Cancellation is the signal

Texas approvals dated FY2017 to FY2024 were later cancelled at a rate of at least 18.9%, and counting loans still undisbursed brings the ceiling to 24.3%. The gap between those figures, wider than for most classes, means a notable number of Texas approvals remained undisbursed when the data were drawn. Borrowers and lenders alike should plan on roughly one approval in five failing to close as approved, often because licensing, change of ownership approvals and reimbursement enrollment take longer than the commitment allows. The charge-off rate is withheld for Texas, as the disbursed cohort contains under 30 loans.

Programs, lenders and geography

SBA 7(a) carried 33 loans and SBA 504 carried 13, a larger 504 role than in many classes because facilities are real estate heavy. Franchise affiliation is 4.3%. On the debenture side Capital Certified Development Corporation has 6 loans worth $10.1 million. Harris and Travis counties have 5 loans each, Fort Bend 4, and Collin and Montgomery 3. The approval calendar is uneven: 9 loans and $17.0 million in FY2022, 10 loans in FY2024, and only 1 loan worth $695,000 in FY2026.

What a Texas nursing facility study must test

Demand rests on bed need in the county, existing licensed capacity and occupancy, and payer mix between Medicaid, Medicare and private pay. Reimbursement rates and staffing costs decide margins, so the study should model them with a downside case. Change-of-ownership timing should be built into the schedule. Coverage should be shown at a stabilised census, and the appraisal should set out how a lender values a facility that cannot easily be repurposed.

Hospice beds and assisted living with nursing share an industry code with skilled nursing, so the data cannot pull them apart.