Welcome to the Winter 2009 edition of The Capital Issue. While the markets remain turbulent, borrowers are still closing on financings using strategies such as HUD loans and letters of credit backed by the Federal Home Loan Bank. This edition features commentary to help explain what the market shifts might mean to you, and how you can react. We also are glad to include a guest article from the National PACE Association.
If you would like to contact us, we are available to answer any questions you may have about the market's impact on your current or future financing or investment strategies.
Thomas R. Green, CEO
Day to day, minute to minute focus on the capital markets can make it harder to see where we are compared to where we were a few months ago at the height of (one hopes) the market fallout. The markets have obviously not stabilized. Yet there has been some improvement since a low point in October, when investors were playing hot potato with variable-rate bonds, and some banks turned away depositors and borrowers and closed their doors – permanently.
It can be argued that a combination of “little things” dragged the economy from a lofty high where nearly every individual and every business could borrow money. Now, “big things” in the forms of stimulus bills and bank restructures are attempting to stabilize the credit markets. Hospitals, however, are stuck in a meantime that hasn’t been generous to their “big thing” projects. Lack of liquidity in the current market has forced many to postpone projects or shrink their scopes, limiting the constant progress required of modern hospitals.
The recent growth of Programs of All-Inclusive Care for the Elderly (PACE) indicates that this senior care model is building on its experience while continuing to adapt to new challenges. This growth is running parallel to the culture change movement, to increasing demand for community-based senior care services, and to an economy that is keeping more elderly residents in their homes, whether they intended to age in place or not. Implementing or contracting with PACE programs can extend a senior care facility into the community, furthering the care mission and diversifying services and sources of income.
Ginger McGuire and Carl Wagner gathered developer sentiment and explored legislative options at the January Council for Affordable and Rural Housing conference. They offer a summary of their experiences and learnings from the developers and owners in attendance.
The Council for Affordable and Rural Housing (CARH) is a nonprofit trade organization that brings rural owners, developers, service providers and lenders together to discuss the rural market. CARH is active in the battles for legislative remedies to help rural developers and owners finance their projects.
The flexibility to prudently manage an investment portfolio and its spending policy is crucial when the markets are down, and nonprofits in states that have adopted the Uniform Prudent Management of Institutional Funds Act into law may find it easier to weather the current volatility.