Healthcare Borrowers Emerge as Winners in Current Credit Crisis, Expert Believes
Chicago, IL, October 18, 2007 --(PR.com)-- Investors and consumers are still feeling pretty good about the Federal Reserve Board’s dramatic decision to lop half a percentage point off the federal funds rate in September, and aren’t likely to experience much of a mood swing even if the central bank chooses to not to slash rates even more when the Federal Open Market Committee meets at the end of October.
"The experts are evenly divided on whether or not the Fed will make any further cuts at its next meeting. But even if the Fed keeps a steady hand on the tiller and steers a course that does not include additional rate cuts any time soon, recent improvement in consumer and investor confidence levels should be sustainable," funding expert Jeffrey A. Davis believes.
“And the improved outlook for commercial mortgages should also remain in place,” he adds.
Davis is Chairman of Cambridge Realty Capital Companies, one of the nation’s leading senior housing/healthcare lenders with more than 280 loans totaling more than $2.5 billion closed since the mid-1990s. He points out that the Fed’s recent decision to aggressively address liquidity issues in the economy reflects the central bank’s growing concern that the current crisis in the subprime credit market, coupled with widespread weakness in the housing sector, could tip the economy into a recession.
“Some nagging concerns remain. But if the Fed’s strategy for avoiding a recession is successful, senior housing/healthcare owners and operators can look forward to healthier balance sheets and less expensive borrowing costs,” he observed.
Davis points out that interest rates on popular HUD loans actually declined as credit woes in the sub prime market worsened.
Interest rates for HUD loans usually rise or fall in concert with developments in the bond market, most typically reflecting what’s happening with 10-year Treasury notes. As the market for securities backed by sub prime mortgages collapsed, investor demand pushed yields on risk-averse Treasury notes lower.
“In September, 10-year Treasuries were yielding almost a full percentage point less than they were a year earlier,” he noted.
Following the Fed’s rate cut, yields on 10-year Treasury notes rose from 4.47 percent to 4.62 percent by the end of the month, a jump presumably precipitated by concerns that the Fed’s rate cut might negatively impact inflation at some point down the line. However, this trend reversed itself in early October with yields on 10-year Treasuries retreating slightly to 4.57 percent.
“The point is, HUD funding programs have emerged as clear winners in the current credit crisis. With the Prime rate down half a percentage point, conventional programs are more attractive as well,” he said.
Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nation’s leading senior housing and healthcare debt and equity capital providers, closing more than 280 such transactions totaling more than $2.5 billion since then.
The company is one of the nation's leading HUD 232 FHA / MAP-approved lenders and also has an integrated debt / equity financing strategy that includes direct property acquisitions and joint ventures; sale / leasebacks for clients; conventional and mezzanine debt financing; and acquisition of distressed debt. Additionally, Cambridge offers a wide array of conventional lending options for senior housing / healthcare owners, including permanent construction and interim loans on either a floating or variable rate basis.
Cambridge is the creator of The Signature Experience™, a four-step process designed to transform the traditional lender / borrower relationship and identify “ideal” capital solutions for worthy projects. The company has created four separate processes for customer groups that are designed to build and enhance long-term relationship potential and speed the way loans are processed and closed. Programs include The Key To Capital™ for senior housing owners, The Navigator Experience™ for senior housing brokers and mortgage bankers, The Principal Lender Network™ for lenders who refer loans to Cambridge, and The Relationship Building Experience™ for various industry-related consultants, including lawyers and accountants.
The company has a regional office in New York, affiliate office in Los Angeles, and correspondent relationships nationwide. The firm also has established key origination relationships and a dozen or more Internet-based strategies.
Cambridge’s award-winning Web site, www.cambridgecap.com, provides monthly rate updates for its debt and equity capital programs. The company also publishes the bi-monthly e-PULSE electronic newsletter, which delivers company news and feature stories via e-mail to corporate friends and clients. For additional information, contact Cambridge at (312) 357-1601 or via e-mail at info@cambridgecap.com.
###
"The experts are evenly divided on whether or not the Fed will make any further cuts at its next meeting. But even if the Fed keeps a steady hand on the tiller and steers a course that does not include additional rate cuts any time soon, recent improvement in consumer and investor confidence levels should be sustainable," funding expert Jeffrey A. Davis believes.
“And the improved outlook for commercial mortgages should also remain in place,” he adds.
Davis is Chairman of Cambridge Realty Capital Companies, one of the nation’s leading senior housing/healthcare lenders with more than 280 loans totaling more than $2.5 billion closed since the mid-1990s. He points out that the Fed’s recent decision to aggressively address liquidity issues in the economy reflects the central bank’s growing concern that the current crisis in the subprime credit market, coupled with widespread weakness in the housing sector, could tip the economy into a recession.
“Some nagging concerns remain. But if the Fed’s strategy for avoiding a recession is successful, senior housing/healthcare owners and operators can look forward to healthier balance sheets and less expensive borrowing costs,” he observed.
Davis points out that interest rates on popular HUD loans actually declined as credit woes in the sub prime market worsened.
Interest rates for HUD loans usually rise or fall in concert with developments in the bond market, most typically reflecting what’s happening with 10-year Treasury notes. As the market for securities backed by sub prime mortgages collapsed, investor demand pushed yields on risk-averse Treasury notes lower.
“In September, 10-year Treasuries were yielding almost a full percentage point less than they were a year earlier,” he noted.
Following the Fed’s rate cut, yields on 10-year Treasury notes rose from 4.47 percent to 4.62 percent by the end of the month, a jump presumably precipitated by concerns that the Fed’s rate cut might negatively impact inflation at some point down the line. However, this trend reversed itself in early October with yields on 10-year Treasuries retreating slightly to 4.57 percent.
“The point is, HUD funding programs have emerged as clear winners in the current credit crisis. With the Prime rate down half a percentage point, conventional programs are more attractive as well,” he said.
Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nation’s leading senior housing and healthcare debt and equity capital providers, closing more than 280 such transactions totaling more than $2.5 billion since then.
The company is one of the nation's leading HUD 232 FHA / MAP-approved lenders and also has an integrated debt / equity financing strategy that includes direct property acquisitions and joint ventures; sale / leasebacks for clients; conventional and mezzanine debt financing; and acquisition of distressed debt. Additionally, Cambridge offers a wide array of conventional lending options for senior housing / healthcare owners, including permanent construction and interim loans on either a floating or variable rate basis.
Cambridge is the creator of The Signature Experience™, a four-step process designed to transform the traditional lender / borrower relationship and identify “ideal” capital solutions for worthy projects. The company has created four separate processes for customer groups that are designed to build and enhance long-term relationship potential and speed the way loans are processed and closed. Programs include The Key To Capital™ for senior housing owners, The Navigator Experience™ for senior housing brokers and mortgage bankers, The Principal Lender Network™ for lenders who refer loans to Cambridge, and The Relationship Building Experience™ for various industry-related consultants, including lawyers and accountants.
The company has a regional office in New York, affiliate office in Los Angeles, and correspondent relationships nationwide. The firm also has established key origination relationships and a dozen or more Internet-based strategies.
Cambridge’s award-winning Web site, www.cambridgecap.com, provides monthly rate updates for its debt and equity capital programs. The company also publishes the bi-monthly e-PULSE electronic newsletter, which delivers company news and feature stories via e-mail to corporate friends and clients. For additional information, contact Cambridge at (312) 357-1601 or via e-mail at info@cambridgecap.com.
###
Contact
Cambridge Realty Capital Companies
Evan Washington
312-521-7603
www.cambridgecap.com
Evan Washington
312-521-7603
www.cambridgecap.com
Contact
Categories