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Capital Markets Roundtable. Historic Tax Credit Developer’s Conference Friday, February 8, 2008 St. Petersburg Beach, Florida. General Economic Conditions . GDP slows to 0.6% in fourth quarter – nearly flat January 2008 nonfarm payrolls decline for the first time since August 2003
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Capital Markets Roundtable Historic Tax Credit Developer’s Conference Friday, February 8, 2008 St. Petersburg Beach, Florida
General Economic Conditions • GDP slows to 0.6% in fourth quarter – nearly flat • January 2008 nonfarm payrolls decline for the first time since August 2003 • Inflation rises at a 2.7% annual rate in the fourth quarter, the fastest pace of inflation in six quarters
General Economic Conditions • The Fed has now cut rates five times by a cumulative 2.25 percentage points. • Many economists think we face a potentially serious recession • The stimulus package – too little, too late?
Markets • Bursting Bubbles • Existing home sales at lowest levels in 9 years – down 13%. • Home prices – National median price declines for the first time in the 40-year history of survey. No hard data before that but probably the first decline since the Great Depression. • What does this mean for the apartment sector? Commercial real estate in general?
The Subprime Debacle • Many of these companies are investors in and lenders to HTC deals. • Will demand be affected? • How about pricing, terms and underwriting?
The Credit Crunch • How has it affected commercial real estate? • Tighter underwriting • What property types are lenders/investors staying away from? What geographic areas?
Thank You John H. Cornell III, Esq. Nixon Peabody LLP 100 Summer Street Boston, MA 02110 • (617) 345-1127; jcornell@nixonpeabody.com