D.A. Davidson added strength to its senior living and structured housing team by wooing away four bankers from Piper Sandler’s senior living group.
The firm wants to capitalize on the growth in the sector as the U.S. population ages.
Older Americans are among the fastest-growing demographics in the country, according to the U.S. Department of Health and Human Services. The number of people age 65 and older is projected to reach 80.8 million by 2040, compared to 54.1 million people in 2019, DHHS reported.
D.A. Davidson
“There has never been a greater demand and need for senior living facilities. They are expensive to build and with the market, funding sources are tough to find,” said Marc Dispense, president of the firm’s fixed income capital markets group, who works out of the firm’s Denver office.
The complexities mean borrowers are looking for skilled bankers, and D.A. Davidson deepens its bench with the new hires, who have a unique depth of expertise, Dispense said.
The team has completed over 250 financings in excess of $10 billion for senior living and structured housing clients, according to the firm.
The bankers will work out of offices in Texas and the Midwest and report to Dispense.
Richard Lohr joins as a managing director and head of senior living and structured housing; Amy Hayman and Romy McCarthy were named managing directors; and Ogieva Guobadia, CFA joins as a senior vice president. Lohr and Guobadia are in Houston, McCarthy is in Milwaukee and Hayman joins the Chicago office.
Though the firm acknowledged that the sector has seen a fair amount of distress, the focus is more on the growth in demand for senior living, Lohr said.
The senior-living sector comprised 24% of the 675 disclosures reporting a principal/interest payment delinquency and non-payment related defaults between April 2020 and March 2022, according to Moody’s Investors Service.
“First, the financial crisis [in 2008], and now the pandemic, have affected the sector’s ability to expand,” Lohr said. “But demand hasn’t been stronger.”
He sees the sector at the beginning of a new investment cycle that could result in mergers and acquisitions to drive costs down and/or increased supply to meet demand.
“Ultimately we will add additional staff and analyst resources as we become integrated into the firm,” Lohr said. “Whether we expand in the offices the new team members are located in, or others, remains to be seen.”
The expansion is part of a broader multi-year growth plan in fixed-income investing, Dispense said. The firm currently has 58 bankers working on its fixed income team, he said. It added two people to its special districts group in February.
Lohr and his colleagues made the decision to jump to D.A. Davidson because the firm’s corporate culture and the capabilities of existing bankers and others they will be working with “just fit us perfectly,” he said.