During the first quarter the U.S. economy grew at a negligible .1%. This was far below projections and seemingly would have caused some alarm amongst economists. However, this did not occur as the consensus opinion was that the unusually harsh winter that the country experienced was a significant drag on the economy, and that once it ended, the economy would quickly begin to grow at a much faster rate; according to anecdotal evidence from the Federal Reserve’s June Beige Book, this is exactly what happened. A growing economy will generate additional income and wealth for consumers across the country, including consumers of senior housing services. This will make it easier for seniors to transition into senior housing and will boost demand for these services. Accordingly, senior housing owners and operators should be encouraged by the positive picture that is painted by June’s Beige Book. Moreover, as the economy continues to improve, helping to fuel increased demand for their services, industry participants who are interested in obtaining capital for growth or other needs should also continue to look to Cambridge Realty Capital for these purposes as it offers many different financing programs for industry participants.
Details from the Beige Book
The Federal Reserve’s Beige Book was prepared by the New York Federal Reserve Bank and is based on information that was collected by the Federal Reserve’s 12 District banks before May 23. According to the Beige Book, all 12 Districts reported economic growth since the release of the last Beige Book in April. The pace of growth was described as modest to moderate with the Boston, New York, Chicago, Minneapolis, Dallas, Richmond, and San Francisco Districts reporting the most growth. Growth also picked up in the St. Louis and Cleveland Districts, but did slow down a little in Kansas City’s District.
In analyzing the Beige Book, economists will be certain to take note that consumer spending, which accounts for roughly two-thirds of the economy, expanded in varying degrees in almost all of the Districts. This was driven in part by improved weather conditions as people who had hunkered down during the winter were now able to go out and do some shopping, which helped spur the economy. For example, people took advantage of the warmer weather to visit auto showrooms as evidenced by an increase in new vehicle sales that was reported by more than half of the Districts. Also, because of the importance of a healthy banking system in a functioning economy, economists will also be happy to learn that all 12 Districts reported increased lending activity in the banking and financial services sector. The New York and San Francisco Districts each reported strong loan demand and modest growth was reported by the Philadelphia, Chicago, Richmond, Kansas City, St. Louis, and Dallas Districts.
Senior housing owners, operators, and investors should all be buoyed by the latest Beige Book as it points to a growing economy that will help generate additional demand for senior housing services and assets. Accordingly, industry participants who are interested in taking advantage of this environment by obtaining capital for growth, acquisitions, or other needs, should contact Cambridge Realty Capital to learn more about the many differentfinancing programs that it offers for these and other purposes.
