EXPERT OPINION: A Conversation with Imran Javaid

May 22, 2012

In this “ Expert Opinion” interview, Imran Javaid, Managing Director of Health Care Real Estate at Capital One, discusses company size, CCRCs, competition, internal goals, and more.
 

Imran JavaidWatch the video      Read the transcript

Mr. Javaid is Managing Director of the Healthcare Real Estate Group, lending practice within Capital One Bank’s Commercial and Specialty Finance business. In this role, Mr. Javaid leads the team which provides financing to companies in the senior housing and care industries.

Imran Javaid joined Capital One in July 2011 to lead its efforts in Healthcare Real Estate within the Commercial and Specialty Finance division of Capital One. Prior to joining Capital One, he was a Director in the Healthcare Real Estate Group of CapitalSource, Inc. a commercial lending and banking, investment and asset management company. He led loan transactions and direct real estate investments including acquisitions and dispositions for long-term care facilities including Skilled Nursing Facilities and Assisted Living Facilities. Since 2001, Mr. Javaid has been involved with over $3.0 billion in capital transactions. Mr. Javaid worked for the Carlyle Group, a nationally renowned private equity firm. Mr. Javaid has led large acquisitions and dispositions between CapitalSource and Omega Healthcare Investors, Inc and CapitalSource and Healthcare Property Investors, Inc. 

In 2008, Mr. Javaid served as the Chief Accounting Officer for CapitalSource’s efforts to spin off its owned healthcare assets into a new publicly owned real estate investment trust (“REIT”). Mr. Javaid holds a BA in Accounting from Franklin and Marshall College in Lancaster, Pennsylvania, is a non-practicing licensed Certified Public Accountant (CPA) in the State of New York and a Chartered Financial Analyst (CFA) charterholder.

Contact Information:

Imran Javaid
Managing Director
Healthcare Real Estate
Commercial and Specialty Finance
4445 Willard Ave., 6th Floor
Chevy Chase, MD 20815
301-280-0212 (office)
301-280-0298 (fax)
703-216-6939 (mobile)
imran.javaid@capitalone.com

 

Watch the video of the interview: 

 

Read the interview transcript:

Steve Monroe
Commercial banks have been getting back into the senior housing business and it’s obviously welcomed news for everyone who needs capital. So with that, Capital One became Capital One Bank. I’m here with Imran Javaid. He is the managing director of health care real estate with Capital One. Imran, we spoke last year when Capital One Bank was just getting into the business as a lender in the industry. You were in the middle of getting all the procedures done, and internal protocols. How has the lending been going at Capital One Bank?

Imran Javaid
It’s been going great. We’ve been seeing a lot of transactions. We’ve been very, very selective, but we are seeing, I think, a lot of transactions, in the space that we want to serve, which is the middle market for assisted living and skilled nursing facilities.

Steve Monroe
You’re marketing loans to the middle market. Does that give me a company size? 

Imran Javaid
Company size in our industry ends up being kind of odd because I think a lot of people measure them through revenue sometimes. That can vary quite a bit and be a little bit misleading sometimes. So, middle market, not the big public companies that are out there in our space. We all know who those are, but we’re serving the larger regional guys. I go in terms of size a lot of times to try and clarify things. I would say we’re not marketing to the very small mom and pop shops, and we’re not marketing to the large public institutions. But everybody in-between is fair game. So the large regionals are definitely our bread and butter.

Steve Monroe
Can you tell me a little bit about any of the loans you’ve closed? 

Imran Javaid
Sure. I think you know about one of them—Mariner Health Care, which we closed at the end of December. That was our first large transaction. We’ve also closed a CCRC in New Jersey since we’ve been there. We have participated on transactions as well, with institutions—some post-closing and a couple at closing.

Steve Monroe
So they’ll come to you—either they need help to put the whole package together, or have you take out a piece after the fact?

Imran Javaid
Exactly, both of those instances. So we’ve focused on senior housing and on the skill care space.

Steve Monroe
That’s what I was just saying. Is it pretty even, the loan requests coming in—assisted living, senior housing versus skilled nursing, or is it one way more than the other? 

Imran Javaid
It seems like there’s a lot of requests for CCRCs and skilled nursing that seems too come our way. We don’t necessarily do all of them, but that seems to be the one that’s the most prevalent.

Steve Monroe
Is it for-profit CCRCs? 

Imran Javaid
For-profit CCRCs, yes.

Steve Monroe
Is this just refinancing, or expansion financing, or construction financing?

Imran Javaid
We are not doing any construction financing, so we’re not focused at all on construction. So it’s refinancing. A couple is recapitalizations. And one that was expanding, but we had an existing relationship.

Steve Monroe
What’s been the biggest challenge for Capital One Bank in terms of growing your loan business? 

Imran Javaid
I think a lot of people know us as a credit card company. So I think getting the message out there and getting people to recognize that we are in this space, we are focused on the health care middle market. That’s been probably—I wouldn’t say a challenge. I think that getting people to know us as that, as opposed to just a credit card company, has been the hardest part.

Steve Monroe
What’s the easiest part? 

Imran Javaid
The easiest part, I think, is just getting transactions in the door. I never thought that would be the case. I wouldn’t have sat here and said that before, but I think that is definitely true. Getting transactions in the door—we’ve been very, very selective. Maybe that’s part of the reason that I’ve been seeing a lot of transactions, but not focused as much on the stuff that I used to be able to do in the past in my prior life.

Steve Monroe
I thought you were going to say the easiest part is everyone knows your name: Capital One.

Imran Javaid
Part of that’s true, actually. That’s funny you say that, but they know us, and it’s been true at these conferences as well, that we’ve attended, that everybody knows Capital One. So the brand recognition definitely is there. Getting them to understand that we are in the commercial space is bridging the gap.

Steve Monroe
You are a deposit-based bank, so that gives you a low cost of capital. How does that put you vis-à-vis, HUD, Fannie Mae, Freddie Mac, and their lending programs in terms of competitiveness?

Imran Javaid
We’re not really going to compete, obviously. I don’t know too many people who could compete, with 30-year fixed-rate models. But I think we fill a lot of different niches that’s out there. We can do the bridge. We can fulfill the bridge product need, if that’s what you want to do, but we also offer something that’s a mini perm/perm type of transaction, because on newer transactions—newer facilities, I should say, we do up to a 10-year deal, which is, I think, different from a lot of lenders. It differentiates us from a lot of different lenders in the industry.

Steve Monroe
Do you have a loan production goal for this year? 

Imran Javaid
We don’t think of it in those terms. I think, for this year and beyond, we want to grow a big book of business. We want to be very, very selective in who we are aligning with, because we want to do it with great operators. And of course we have internal goals that are out there, but they’re not something that we are focused on in that way. We just want to grow selectively and make good loans to good operators. That’s the key for us.

Steve Monroe
What could happen for you to beat your internal goals? 

Imran Javaid
I think the traction that’s there in the marketplace is definitely—we’re on track to beat our internal goals. Because there’s a lot of—that whole brand recognition that we just talked about with the credit card business, everybody, sort of, is very curious, about what we are doing in the industry, and wants to know, why are we here?  Why are we at the conferences we are attending?  And so that’s leading to a lot of good conversations with great operators, which we’re on track to do.

Steve Monroe
What would cause you to not meet your internal goals?  What would happen in the industry or whatever? 

Imran Javaid
There are obviously all the black swan events that could happen. If there’s a catastrophic cut in the industry, all the things that you would be concerned about as writing about skilled nursing’s future, we would be concerned about as well. Those are things that might get us to pull back. But, you know, the way we look at it, we know skilled nursing and assisted living, which is what we’re focused on in CCRCs, are industries that are needs-based. And that’s I think, proven through the recession a little bit—they’re a needs-based industry, and not just an industry that is driven by people’s desire to be in some places. So actually they have to be there. So we have comfort that these are industries that are going to be around for a long time. We’ll just have to tweak on the edges as to how they get actually reimbursed. We’ll be keeping track of that as, well, I’m sure, as everybody else.

Steve Monroe
All right. Well, good luck in growing your platform this year and next year.

Imran Javaid
Thanks. Look forward to it.

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