Coverage floors, not leverage, separate asset classes

Almost everything in our credit box sits near 65% LTV. What actually separates one asset class from another is the coverage floor, and seniors housing runs an entire ladder by itself.

THE CORLAN DESK · UPDATED 31 AUGUST 2026 · 5 MIN READ

KEY TAKEAWAYS

Coverage floors run from 1.25x on industrial to 1.40x on hospitality, a wider spread than most leverage grids show.
Seniors housing runs an acuity ladder: 1.45x independent living, 1.55x assisted living, 1.60x AL with skilled nursing beds, 1.75x stand-alone memory care.
Sponsors negotiate leverage. Lenders decide on coverage, and coverage is the number that actually kills a marginal deal.
A memory care facility priced like multi-family will get a proceeds number that’s simply wrong, not just tight.

The number sponsors argue over isn’t the number that governs

Most acquisition conversations start with LTV, and most CRE assets in our box land somewhere close to 65% regardless of type. What actually differs, sharply, by asset class is the coverage floor, and that’s the number a lender won’t move on.

THE SENIORS HOUSING ACUITY LADDER

INDEPENDENT LIVING

1.45x

ASSISTED LIVING

1.55x

AL + SKILLED NURSING BEDS

1.60x

STAND-ALONE MEMORY CARE

1.75x

Freddie Mac seniors housing program floors. Skilled nursing capped at 20% of NOI; deep memory care constrained near 60% LTV, where sponsors typically move to HUD 232.

Compare that to industrial at roughly 1.25x and hospitality at roughly 1.40x, and the leverage headline (all sitting near 65-70% LTV) stops telling you anything useful about how much loan the income will actually support.

"Sponsors argue leverage because leverage is the number they can negotiate. Coverage is the number the lender decided months before your call, and it’s the one that actually kills a marginal deal."

The mismatch that costs sponsors real money

The most common version of this mistake: a memory care facility priced and shopped as multi-family. It clears a clean 75% LTV, 1.25x DSCR solve on paper, and every number in that solve is wrong, because memory care actually clears at 1.75x and a different lender set entirely. That’s not a tight number, it’s the wrong number, and it shows up as a lender pass rather than a lower proceeds figure.