Capital Markets Snapshot: Capital markets look to be warming


As spring moves into summer, the thaw in the credit markets appears to be accelerating.

Expectations of economic improvement by mid- to late-2009, the government’s aggressive fiscal and monetary policies, improved access to capital by the financial sector, and strong core earnings by the banking sector appear to be driving the improved environment. In addition, the LIBOR-OIS spread continues to improve, and treasury yields are rising and credit spreads are narrowing.

Despite these positive signs, major challenges complicate a total return to stability in healthcare real estate capital markets: the real estate investment trusts’ (REITs’) difficulty in raising capital; the continued closure of the CMBS market; and numerous real estate debt maturities coming due in the next 24 months. Fortunately, the healthcare sector is faring better than other portions of the real estate capital markets.

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