Europeans Agree to Use Bailout Fund to Aid Banks

BRUSSELS — In the face of pressure from the embattled euro zone countries Italy and Spain, European leaders agreed early Friday to use the Continent’s bailout funds to recapitalize struggling banks directly, cheering financial markets but prompting unease in Germany, whose taxpayers may face more risk.

Jose Barroso, president of the European Commission, after leaders of the 17-nation euro zone agreed on a deal that would help banks without adding directly to the sovereign debt of countries.

Stocks and the euro opened strongly higher in Europe and were still rising through mid-afternoon — a clear suggestion that the summit, by breaking new ground, had exceeded expectations. Analysts cautioned that earlier summit agreements had prompted market rallies that proved short-lived.

The decision, by leaders of the 17-nation euro zone, would allow help to banks without adding directly to the sovereign debt of countries, which has been a problem for Spain and potentially for Italy. Both countries have seen the interest rates on their debt rise to levels that would be unsustainable in the long term, and the Italian and Spanish prime ministers, Mario Monti and Mariano Rajoy, came here to push their colleagues to help.

Though the German chancellor, Angela Merkel, made concessions, they came with conditions, and some of the detail remained unclear Friday, prompting calls for more clarity to be provided quickly.

The deal was struck after the Italian and Spanish leaders said they would block all other agreements — on a 130 billion euro or $163 billlion growth pact, for example — until their colleagues did something to help take the pressure off the third- and fourth-largest economies in the euro zone.

If their countries could not go to the markets to roll over their debt, Mr. Monti and Mr. Rajoy argued, there would be an existential threat to the euro in the short to medium term.

Spain is seeking 100 billion euros to recapitalize its banks, damaged by a property bubble.

Mr. Van Rompuy called the agreement a “breakthrough that banks can be recapitalized directly,” which represents a concession by northern European countries, including Germany.

As a condition, though, the leaders agreed that the euro zone’s permanent bailout fund, the 500 billion euro European Stability Mechanism, due to come into being next month, could act only after a banking supervisory body overseen by the European Central Bank had been set up. That should happen by the end of the year, Mr. Van Rompuy said.

François Hollande, the French president, said Friday that the agreement offered a number ways to give troubled economies the rapid assistance that they had been seeking.

“It’s very important that we put into motion procedures for immediate action — that was something much hoped for,” he said. “Bank supervision for a recapitalization of the banks will take a bit more time, but this is a move in the right direction.”

“To have defined a vision for the economic and monetary union” was a fundamental step toward answering the question “what we do we want to do together,” Mr. Hollande said.

Graham Neilson, chief investment strategist at Cairn Capital, an asset management and investment company in London, noted that while the agreement represented progress, some fundamental issues were not addressed.

“The burden of future risk is being shared more widely, meaning the chances of a euro zone breakup have been lowered for the short term,” he said. “But at the same time, the longer-term ante is higher for all involved and the root causes of the structural imbalances remain.”

Ms. Merkel has argued that risks could only be pooled among euro nations if decision-making on key issues were also shared. She insisted that the decisions in Brussels were based on Germany’s basic philosophy of how to solve the crisis, through a series of checks and balances, with rewards for meeting conditions that are governed by a strict set of controls.

Unease emerged in Berlin, however, over the extent to which the principles of the euro zone bailout fund, the E.S.M., had been altered from the original agreement that is to be put to vote in Parliament later Friday.

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Obama Care Supreme Court Vote Was 5 to 4 Winston Rowe & Associates

WASHINGTON — The Supreme Court on Thursday upheld President Obama’s health care overhaul law, saying its requirement that most Americans obtain insurance or pay a penalty was authorized by Congress’s power to levy taxes. The vote was 5 to 4, with Chief Justice John G. Roberts Jr. joining the court’s four more liberal members.

What’s Next for Health Care?

Watch a video roundtable, via Google+, about the Supreme Court’s decision on the Affordable Care Act.

The decision was a victory for Mr. Obama and Congressional Democrats, affirming the central legislative achievement of Mr. Obama’s presidency.

“The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,” Chief Justice Roberts wrote in the majority opinion. “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

At the same time, the court rejected the argument that the administration had pressed most vigorously in support of the law, that its individual mandate was justified by Congress’s power to regulate interstate commerce. The vote was again 5 to 4, but in this instance Chief Justice Roberts and the court’s four more conservative members were in agreement.

The court also substantially limited the law’s expansion of Medicaid, the joint federal-state program that provides health care to poor and disabled people. Seven justices agreed that Congress had exceeded its constitutional authority by coercing states into participating in the expansion by threatening them with the loss of existing federal payments.

Justice Anthony M. Kennedy, who had been thought to be the administration’s best hope to provide a fifth vote to uphold the law, joined three more conservative members in an unusual jointly written dissent that said the court should have struck down the entire law. The majority’s approach, he said from the bench, “amounts to a vast judicial overreaching.”

The court’s ruling was the most significant federalism decision since the New Deal and the most closely watched case since Bush v. Gore in 2000. It was a crucial milestone for the law, the Patient Protection and Affordable Care Act of 2010, allowing almost all — and perhaps, in the end, all — of its far-reaching changes to roll forward.

Mr. Obama welcomed the court’s decision on the health care law, which has inspired fierce protests, legal challenges and vows of repeal since it was passed. “Whatever the politics, today’s decision was a victory for people all over this country whose lives are more secure because of this law,” he said at the White House.

Republicans, though, used the occasion to attack it again.

“Obamacare was bad policy yesterday; it’s bad policy today,” Mitt Romney, the presumptive Republican presidential nominee, said in remarks near the Capitol. “Obamacare was bad law yesterday; it’s bad law today.” He, like Congressional Republicans, renewed his pledge to undo the law.

The historic decision, coming after three days of lively oral arguments in March and in the midst of a presidential campaign, drew intense attention across the nation. Outside the court, more than 1,000 people gathered — packing the sidewalk, playing music, chanting slogans — and a loud cheer went up as word spread that the law had been largely upheld. Chants of “Yes we can!” rang out, but the ruling also provoked disappointment among Tea Party supporters.  

In Loudoun County, Va., Angela Laws, 58, the owner of a cleaning service, said she and her fiancé were relieved at the news. “We laughed, and we shouted with joy and hugged each other,” she said, explaining that she had been unable to get insurance because of her diabetes and back problems until a provision in the health care law went into effect.

After months of uncertainty about the law’s fate, the court’s ruling provides some clarity — and perhaps an alert — to states, insurers, employers and consumers about what they are required to do by 2014, when much of the law comes into force.

The Obama administration had argued that the mandate was necessary because it allowed other provisions of the law to function: those overhauling the way insurance is sold and those preventing sick people from being denied or charged extra for insurance. The mandate’s supporters had said it was necessary to ensure that not only sick people but also healthy individuals would sign up for coverage, keeping insurance premiums more affordable.

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U.S first-quarter GDP growth stays at 1.9%

The U.S. economy’s growth rate was unchanged in the first quarter at 1.9%, but corporate profits fell for the first time in four years while expansion in exports was much smaller than originally estimated, the government said Thursday.

For the most part, the Commerce Department’s third and final review of first-quarter gross domestic product was little changed. The data show an economy that slowed noticeably from the 3.0% growth rate at the end of 2011, with few signs of momentum heading into the second quarter of an election year.

The biggest revisions took place in corporate profits, exports and imports.

The economy is in an “unfortunate place” and the Fed is likely to have to take more steps to boost activity, says Chicago Fed chief Charles Evans.

U.S. orders for durable goods up

Orders for long-lasting U.S. goods bounced back in May after two straight declines, as demand for aircraft and heavy machinery increased.

• Deal near on student loans, highway bill

• Fewer delinquent mortgages in first quarter

• Pending home sales climb to two-year high

• Confidence fades as outlooks dim

• Kellner: Fed, Treasury at cross purposes

• U.S. economic calendar

• Global economic calendar

• Columns: Nutting | Delamaide | Kellner

By contrast, corporate profits rose $16.8 billion in the fourth quarter.

Companies paid sharply higher taxes in the first quarter compared to the fourth quarter owing to the expiration of a investment-tax credit. Corporate taxes surged by $83.3 billion in the first quarter, compared with a decline of $700 million in the final three months of 2011.

Meanwhile, exports rose at a slower 4.2% rate in the first three months of 2012, in contrast to the government’s prior estimate of 7.2%. And imports climbed a smaller 2.7%, less than the earlier reading of 6.1%.

Also in the revised report, the Commerce Department said personal consumption expenditures rose by 2.5% in the first quarter instead of by 2.7% as previously reported. Disposable income climbed a faster 0.7%, outpacing a 0.4% prior estimate.

Economists surveyed by MarketWatch had been expecting GDP to be unchanged at 1.9%.

In a separate report Thursday, the Labor Department said initial claims for jobless benefits were little changed at 386,000 in the week ended June 23..

JPMorgan stock hit by report that loss could balloon to $9B – USA Today

NEW YORK (AP) – Shares of JPMorgan Chase (JPM) tumbled Thursday as a published report said the bank’s losses on a bad trade may reach as much as $9 billion — far higher than the estimated $2 billion loss disclosed last month.

JPMorgan Chase Chairman and CEO Jamie Dimon testifies at a congressional hearing in Washington, on June 19, 2012, about the firm’s trading loss.

JPMorgan Chase Chairman and CEO Jamie Dimon testifies at a congressional hearing in Washington, on June 19, 2012, about the firm’s trading loss.

Sponsored LinksThe company’s stock dropped $1.26, or 3.4%, to $35.52 in early trading. Its shares are down more than 12% since the bank disclosed the trading losses.

The New York Times story cites an internal report that JPMorgan made in April that showed the losses could reach $8 billion to $9 billion in a worst-case scenario. The newspaper went on to say that because JPMorgan has already been unwinding its positions, some expect the losses will not be more than $6 billion to $7 billion.

A JPMorgan representative declined to comment.

In May, JPMorgan said the loss came from trading in credit derivatives designed to hedge against financial risk, and not to make a profit for the New York bank.

The New York Times, citing sources it did not identify by name, said the losses have grown recently as JPMorgan has been unwinding its positions. The newspaper said its sources were current and former traders and executives at JPMorgan, which is the largest bank in the U.S. by assets.

At the time of the loss, JPMorgan CEO Jamie Dimon apologized to shareholders. And just days after the loss was disclosed, Chief Investment Officer Ina Drew left the company. Drew oversaw the trading group responsible for the trade.

JPMorgan has lost about $23 billion in market value since the losses came to light on May 10.

The loss has heightened concern that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis in the fall of 2008.

In a hearing before the House Financial Services Committee last week, Dimon was dismissive when asked if JPMorgan’s losses could total half a trillion or a trillion dollars. He replied bluntly: “Not unless the Earth is hit by the moon.”

While Dimon avoided putting an exact number on the bank’s trading loss, he did say JPMorgan will have a solidly profitable quarter. JPMorgan plans to give more details related to its losses when it reports second-quarter earnings on July 13..

Pensions weigh down automakers – and state Detroit News

Back when bankruptcy was considered a distant theoretical possibility for Detroit’s automakers and their promised pension payouts sacrosanct, Bill Ford Jr. frequently gigged his counterparts at General Motors Corp.

One line favored by the executive chairman of Ford Motor Co., usually delivered in the spirit of his trademark ribbing? That the world’s largest automaker was nothing more than a pension fund that happened to build cars and trucks on the side.

Turns out he was right — and a whole lot more. Because the dirty little secret of the promises undergirding the pensions expected by tens of thousands of retirees from the automakers, from municipalities and counties struggling to meet their obligations, is that times change, liabilities expand exponentially and the unthinkable becomes reality.

The struggle to match pension promises to millions of retirees amid times of soaring debt, intensifying competition, flatlining capital markets and, in the public sector, declining revenue is shaping up to be the inter-generational battle of our age. Arguably nowhere will that fight be more concentrated between pensioners and corporate executives, taxpayers and public-sector retirees, than here in southeast Michigan.

Everything has changed.

GM goes bankrupt and, with the help of American taxpayers, emerges with a lean balance sheet — not counting the $134 billion in pension liabilities to salaried and hourly employees around the world. Chrysler Group LLC goes bankrupt. Delphi Corp., the former GM parts unit, goes bankrupt, emerges and dumps its salaried pension plan on the quasi-governmental Pension Benefit Guaranty Corp., shafting thousands of retirees.

Even pensioners for Ford, who saw the Blue Oval stumble toward collapse before new leadership managed to avoid bankruptcy, now are faced with the kind of pension choices certain to generate heat, light, possible boycotts and a lot of potential lawsuits — proving that there are strict limits to the gauzy notion of the extended Ford family.

Ford is offering salaried pensioners a buyout or the option to stay within the Ford plan and expose themselves to all the risk, considering the past six years, that could imply. GM is offering 42,000 salaried retirees a choice between a lump-sum pension buyout or payments from an annuity administered by Prudential Insurance Co. in a bid to off-load $26 billion of its $36 billion salaried pension liability.

Automakers can generate cash by selling more cars and trucks, but public entities generally cannot without raising taxes or cutting services. Many cities, counties and school districts, technically barred by the state constitution from reneging on pension obligations, increasingly struggle to meet those obligations and provide decent services to taxpayers in an unsustainable balancing act.

This week, the city of Stockton, Calif., moved to become the largest city in the nation to file Chapter 9 bankruptcy because of the dismal California economy, punishing pension costs and other contractual obligations, the Associated Press reported. Wayne County’s pension fund is only 50 percent funded, and pension and health care obligations to Detroit’s public-sector retirees are north of $12 billion.

Those trends will not be easily reversed in a slow-growth economy plagued by global instability and weak leadership. Nor will public- and private-sector retirees idly accept any economic rationale that changes the rules after the game has been played.

That wasn’t part of the deal, they say, accurately. They planned their lives around the promise, however hollow it actually may have been. They looked forward to it, assumed it would be there, bargained that the trade-off for a working life of devotion would be repaid after the working was done.

That it may not be, at least not in the form they’d long expected, amounts to a maddening turn of betrayal that should be understandable on a human level. As easy as it may be for those outside the system looking in to ridicule an apparent sense of entitlement, the truth is that those folks and many before them were told repeatedly that they were entitled.

That was part of the deal — until it wasn’t. Retirees didn’t make the promises; union bargainers and company management did. Most retirees didn’t fail, at some grand strategic level, to see the changing competitive landscape or to understand clearly that exponentially expanding obligations would become impossible to honor; union bargainers and company management did.

In other words, people in authority on both sides of the tables public and private (willfully?) deceived themselves and the people who lived by their decisions. They made short-term decisions that could not be justified, financed or sustained over the medium and long term unless things stayed the same, which they seldom do.

On multiple occasions since 1995, GM pumped a total of $34 billion in cash and stock into its pension plans, spokesman Jim Cain said Wednesday. They include a $10.3 billion contribution in 1995; some $5 billion in Hughes Electronics tracking stock in 2000 and $3 billion more after the sale of Hughes in 2003; more than $13 billion in proceeds from a $17.6 billion bond issue, the largest ever at the time; and $2 billion in cash and stock over the last two years.

It wasn’t enough, and GM would need to pump another $25 billion into its pension plans — salaried, hourly and those outside the United States — to reach the elusive goal of being fully funded. Until they aren’t and the process begins again, which is why GM and Ford are trying to change the rules and sooner or later the public sector will have to try, too.

From The Detroit News: http://www.detroitnews.com/article/20120628/OPINION03/206280341#ixzz1z5y06fiG

Top 10 Predictions For The Global & US Economy Winston Rowe & Associates

1. The United States will probably avoid a recession. The good news is that US domestic risks have diminished somewhat, and growth momentum has picked up modestly. Consumers seem willing to spend and businesses are more disposed to hire—albeit cautiously. This means that over the next year US growth will average between 1.5% and 2.0%. In the near term, the Eurozone sovereign-debt crisis is the biggest threat to the US economy. The longer-term outlook is clouded by uncertainty over how America’s burgeoning sovereign-debt problem will be fixed.

2.  The Eurozone is headed for a second dip. All indications are that the Eurozone will suffer through a recession in 2012—a mild one if the region’s sovereign-debt problems are resolved, or a deep one if they are not. Fiscal austerity is in full swing, bank credit is tightening, and confidence is plummeting. With few exceptions, the Eurozone economies will see negative growth next year, with the region as whole contracting by about 0.7%—at best. Possible, though unlikely, is a much worse recession triggered by messy sovereign defaults or euro exits.

3. Asia will continue to outpace the rest of the world. While Asia will not be immune to a recession in the Eurozone, growth in the region will remain resilient and will continue to be the strongest in the world (around 5.5%), for a number of reasons. Japan’s post-earthquake rebound will help underpin the region’s exports, offsetting some of the weakness in sales to Europe. Chinese growth can be expected to hold up at around 8% and further bolster Asian growth prospects—provided China’s housing downturn does not evolve into something much worse. Last but not least, easing inflation will give all Asian governments more leeway to stimulate, if necessary.

4. Growth in other emerging markets will hold up, for the most part. The Eurozone crisis and recession will have a differential impact on the rest of the emerging world. Hardest hit will be Emerging Europe, because Western Europe is its most important export destination and also because the region is dominated by subsidiaries of Western European banks—all of which are tightening credit. Latin America and Africa are relatively more vulnerable to the United States and China. Barring a catastrophe in either economy or another plunge in commodity prices, the growth in these regions should hold up fairly well.

5. Commodity prices will (mostly) move sideways. During the coming year, commodity prices are likely to get pulled down by weaker global demand—and pushed up by limited excess capacity and continuing robust growth in key economies, such as China and India. The biggest demand-side risk is the possibility of a hard landing in China. Supply-side risks are commodity-specific. In the case of oil, markets are worried about an escalation of the conflict over Iran’s nuclear weapons program. That said, the most likely scenario is for the price of oil and other commodities to fluctuate around current levels.

6. Inflation will diminish almost everywhere. With world growth softening and commodity prices off their peaks, inflation in every region of the world will decline in 2012. The drop in inflation is likely to be the most pronounced in the developed world because of vast amounts of excess capacity in both labor and product markets. In the emerging world, the recent declines in food prices are having the biggest impact. Without a spike in oil or food prices—triggered by a geopolitical events or bad weather—the inflation picture in 2012 will be quite benign.

7. Monetary policy will either be on hold or ease further. Easing inflationary pressures and increasing anxiety about the growth outlook have changed the priorities of central banks worldwide. Central bank actions can be broadly categorized in three ways: 1) those with policy rates already near zero (e.g., the Federal Reserve, Bank of England and Bank of Japan) will stay there indefinitely (or at least for a couple more years), in some cases with further quantitative easing in 2012; 2) some central banks that had been raising interest rates have now stopped (e.g., the Reserve Bank of India); and 3) some that had been tightening are now easing (e.g., the European Central Bank and the People’s Bank of China).

8. Fiscal policy is set to become even tighter in the United States and Europe. Notwithstanding the standoff over deficit reduction in the US Congress, fiscal policy in the United States is already tightening. Federal government purchases will contract (after adjusting for inflation) over the next several years, acting as a major drag on growth. State and local spending is also expected to fall for at least another year. In Europe, not only are the most indebted countries (Greece, Ireland and Portugal) in the midst of tough austerity programs, but three of the four largest Eurozone countries (France, Italy and Spain) are being pressured to drastically cut budget deficits and sovereign-debt levels.

9. With the exception of the euro, the dollar will keep sliding. Economic fundamentals alone would suggest that the dollar should keep sliding against most currencies, especially those of emerging markets. Not only is the US current-account deficit still extremely large, but both growth and interest rate differentials favor emerging-market currencies. However, the dollar will likely appreciate against the euro in the near term—as long as the Eurozone crisis drags on—rising to around $1.25 by next spring. If the Eurozone suffers a financial meltdown, the euro could easily go to parity against the greenback. In such a scenario, the dollar would likely rise against most currencies, as it did in 2008.

10. Most of the risks to the outlook are on the downside. While there are many risks facing the global economy, two look particularly threatening over the next year. The first is the possibility of a financial meltdown in the Eurozone, with some countries exiting, or a messy default by one or more of the large Eurozone countries, especially Italy or Spain. Such a “Lehman moment” for Europe would likely push the global economy into recession. The second big risk is a sharp slowdown in China’s growth (say to 5%) triggered by a bursting of its real estate bubble. Such a scenario would have the biggest impact on the rest of Asia and commodity-exporting emerging markets.

2012 Inflation Report Winston Rowe & Associates

Consumer prices will increase slowly this year — by about 2%, measuring December 2012 over December 2011. With oil prices likely to rebound this fall, figure on a slightly higher pace of inflation in the second half of the year than in the first.

The 0.3% fall in the Consumer Price Index in May — the first monthly drop in two years — was due entirely to lower energy prices. Gasoline prices sank 6.8% during that month, and all energy was down 4.3%. Excluding energy prices, which can move sharply up or down from month to month, prices rose 0.2% in May, as consumers paid more for rent, autos, health care and clothing.

Though overall inflation is down sharply so far this year, core inflation, which excludes the two volatile components of energy and food prices, hasn’t fallen at all. Over the past 12 months, core inflation has risen 2.3% — the same yearly pace as in January. That’s a bit higher than the Federal Reserve likes to see, and will weigh on any decision the Fed makes about launching a new round of bond purchases to try to lower interest rates and spur economic growth. We look for core inflation to drop a bit over the summer, as lower energy prices lower production costs and filter through to other items, then to strengthen in the fall when energy prices rise again, ending the year at roughly 2.3%.

Nudging inflation up this year: Apparel prices, which will increase by 4%, and food prices, rising by about 3%. Price hikes will be modest for most groceries in 2012, except for peanut butter — retail prices for that school lunch staple will be up 30% or more this year after a poor peanut harvest in 2011. However, gasoline prices will fall further in the next few months before rising later in the year, ending 2012 down about 5% from December 2011. Natural gas prices, down 14% in the last year, will stay low, then rise a bit toward the heating season.

Interest Rate Report 2012 Winston Rowe & Associates

Extraordinarily low interest rates will continue until the end of 2012, then rise about half a percentage point in 2013. Slow economic growth in the U.S. and months more of uncertainty about the euro crisis will make Treasury debt a safe haven for investors, and their purchases will keep most U.S. interest rates from rising much above recent record lows for the rest of the year. Faster growth next year and inflationary pressure from America’s growing debt burden will raise rates moderately in 2013.

The Federal Reserve’s move to extend until the end of the year its efforts to lower interest rates won’t have much effect, with 30-year home mortgages already below 4% and near all-time record lows. But the Fed’s plan to continue replacing shorter-term debt with long-term debt will probably head off the rate increase we had expected later this year, pushing it into 2013. Faced with a slowing economy, the Fed opted to continue the more cautious course of bond swaps, rather than purchasing more debt, to assuage concerns that the central bank’s growing debt risks triggering runaway inflation.

The rate on 10-year Treasury bonds, a benchmark for mortgages, will remain at 2% or below in 2012 and then rise to 2.5% by mid-2013. Rates for 30-year home mortgages, which fell below 3.7% in June, will rise to about 4% by year-end and 4.5% in 2013. Mortgage rates will rise due to a modest recovery in the housing market, as demand for new home loans increases later this year.

Global Energy Outlook Winston Rowe & Associates

Keep an eye on Egypt. Oil prices are a good bet to spike as disputes over the election to replace former President Hosni Mubarak likely erupt into violence. Egypt isn’t a big oil seller but it controls the Suez Canal, the passageway for much of the region’s oil.

Beyond spikes in the near term, we look for West Texas Intermediate (WTI) crude oil — the benchmark for U.S. oil pricing — to get back to $90 to $95 per barrel early this fall.

Motorists this summer can expect a national average gasoline price of $3.50 or less a gallon as oil’s recent drop feeds through to refiners. In fact, regular unleaded could slip as far as $3.30 in the next few weeks. West Coast drivers, however, will continue to pay somewhat higher prices in the wake of refinery woes there.

Truckers and other consumers of diesel fuel can expect more relief, too. At $3.74 per gallon, diesel has edged down from its recent high. Again, prices should ease a bit more in coming weeks, though the decline will be milder than for gasoline because of tight global markets for distillate fuels such as diesel.

Meanwhile, natural gas will stay relatively low, despite production cutbacks by drillers — good news for consumers and businesses that rely on it for cooking or for the production of chemicals and other goods. Attempts by gas producers to whittle down the huge oversupply have perked up gas prices to about $2.53 per million British thermal units, from a recent low of $1.87. Rising demand from electric utilities that are switching from coal to gas to generate power should help prop up prices this summer, but abundant supplies should keep natural gas under $3.

The increased consumption by utilities also should trim stocks enough by fall to set the stage for modestly higher gas prices during the 2012-2013 heating season.

Winston Rowe & Associates Trade Deficit Report

The trade deficit will continue to rise in 2012, although at a slower pace than last year as the recent modest U.S. growth limits the rise in imports and a global slowdown cuts into gains for exporters. An expected 11% increase in this year’s trade deficit, after a 13.6% rise in 2011, reflects continued growth in consumer spending and a likely second-half slowdown in exports.

Despite the 5% drop in the monthly trade deficit for April, import and export levels for the month were the second highest on record. The trade deficit will grow again in coming months as the U.S. economy accelerates faster than some of its largest trading partners. The annual trade deficit will climb above the $600-billion mark at the end of the year, and is likely to be a drag on economic growth for the rest of the year.

We expect exports to increase by about 8% this year, despite a 0.8% drop in April. That’s slower than the 14% gain last year as recession in Europe zaps demand for U.S. goods. Exports to the 27-nation European Union — the U.S.’ largest trading partner — fell 11% in April. Europe is the destination for about one-fifth of U.S. exports.

Imports will grow about 9% this year, less than the 14% gain last year, led by strong demand for consumer goods and foreign autos. Largely a correction from record-high imports in March, declines in capital goods, computers and industrial supplies contributed to the $4.1 billion in imports from March to April. A decline in pharmaceutical imports, which are often volatile, also contributed to April’s result. The value of oil imports, down in April as prices fell, will pick up again as prices recover and gasoline demand ticks up in the summer driving season.

Energy Outlook 2012 Winston Rowe & Associates

Job growth isn’t likely to stall, despite the anemic 69,000-job increase in May — the third straight month of weak employment gains after solid job growth in January and February. But business managers are increasingly wary that financial turmoil in Europe will contribute to a global economic slowdown, leading them to cut back their hiring plans.

We now expect about 2 million net new jobs this year, or an average of 165,000 a month for the rest of 2012, only slightly better than the net gain of 1.8 million jobs in 2011. But with the economy growing around 2%, there’s no prospect for a more robust pickup. Moreover, with so much slack in the labor market, wages are stagnant and will rise less than 2% this year, probably lagging inflation. Less income means less money to spend, which translates into slower growth.

Two million new jobs might seem high, based on what happened in May, but even that disappointing month showed some strength in the labor market. Service sector hiring surged by 93,000, including 33,000 in health care, and manufacturers added 12,000 workers. What hurt were losses of 28,000 in construction, 9,000 in restaurants and bars, and 13,000 in government.

Looking at the second half of this year, we think construction and hospitality will show modest increases. What’s more, although business leaders are cautious about adding more workers, they’re not worried enough to halt hiring or reduce payrolls, and low growth in productivity since 2010 means that many businesses that expand will need to hire.

Unemployment, now 8.2%, will likely end the year near 8%. The jobless rate won’t fall much because the improving economy will lure more people into the workforce after the past several very tough years for would-be workers. U.S. GDP, which will grow about 2% this year, needs to grow at least 2.5% a year to work down the ranks of the unemployed.

And so it will remain a tough market for job seekers. More than two years after the end of the Great Recession, the number of workers unemployed for more than 27 weeks is 5.3 million, or 42.8% of the jobless. Though down recently, that share is much higher than it ever was before 2009.

Employment Numbers 2012

Job growth isn’t likely to stall, despite the anemic 69,000-job increase in May — the third straight month of weak employment gains after solid job growth in January and February. But business managers are increasingly wary that financial turmoil in Europe will contribute to a global economic slowdown, leading them to cut back their hiring plans.

We now expect about 2 million net new jobs this year, or an average of 165,000 a month for the rest of 2012, only slightly better than the net gain of 1.8 million jobs in 2011. But with the economy growing around 2%, there’s no prospect for a more robust pickup. Moreover, with so much slack in the labor market, wages are stagnant and will rise less than 2% this year, probably lagging inflation. Less income means less money to spend, which translates into slower growth.

Two million new jobs might seem high, based on what happened in May, but even that disappointing month showed some strength in the labor market. Service sector hiring surged by 93,000, including 33,000 in health care, and manufacturers added 12,000 workers. What hurt were losses of 28,000 in construction, 9,000 in restaurants and bars, and 13,000 in government. Looking at the second half of this year, we think construction and hospitality will show modest increases. What’s more, although business leaders are cautious about adding more workers, they’re not worried enough to halt hiring or reduce payrolls, and low growth in productivity since 2010 means that many businesses that expand will need to hire.

Unemployment, now 8.2%, will likely end the year near 8%. The jobless rate won’t fall much because the improving economy will lure more people into the workforce after the past several very tough years for would-be workers. U.S. GDP, which will grow about 2% this year, needs to grow at least 2.5% a year to work down the ranks of the unemployed.

And so it will remain a tough market for job seekers. More than two years after the end of the Great Recession, the number of workers unemployed for more than 27 weeks is 5.3 million, or 42.8% of the jobless. Though down recently, that share is much higher than it ever was before 2009.

2012 Economic Outlook Kiplinger Report

The disappointing 2% increase in GDP we expect for 2012 will mark the third straight year that a solid rebound from the Great Recession has run out of steam. Growth will improve slightly in the second half of this year after a springtime slowdown, as job creation picks up, Europe embraces sweeping reforms to avert a financial crisis, and some of the fundamental strengths in U.S. economic prospects overcome the caution that is discouraging spending, hiring and investment.

The economy started slowing significantly in March after ending 2011 with a surge of growth and adding jobs at solid pace in January and February. March job creation fell sharply, while consumer spending and industrial output were flat and orders sank for big-ticket durable goods (those lasting three years or more), a signal of waning business investment. Though most of those measures improved in April, the news in May turned negative, especially the report that job creation slowed again for the third month in a row.

Still, there’s no serious risk of falling into another recession. Absent a major financial crisis or a new war in the Middle East that drives gasoline prices over $5 a gallon, the U.S. economy should continue growing slowly this year and a bit faster in 2013. Though consumers, business managers and investors are cautious about current conditions, they’re more positive about future economic prospects. Moreover, despite a recent drop, consumer confidence is up sharply from 2011 and at a level associated with moderate growth. Corporate CEOs and small business owners expect expanding sales and more hiring later in the year. An up-and-down stock market so far in 2012 doesn’t reflect the fact that corporate profits are strong and expected to keep rising.

Can we believe what the Liberal media is telling us about our economy?

The media is clearly pushing for a second term for President Obama. Every day we hear them alluding to signs of an improving economy. Obama has been touting “we are on the verge of a slow recovery.” But is the American economy really getting better?

Important Question we need to ask our Leaders

Let me start off on the defensive. I am a conservative, hard working, Republican woman. If you are hoping for a Liberal take on our economy there are plenty of other outlets for you to find it. My purpose is to make you think and to provide a true look at what is happening in our country.

Our National Debt is significantly more than what it was when Obama took office. In 2007 our National Debt was $9,007,653,372,262.48 – a very disturbing number. Then candidate Obama, selling “Hope & Change” promised if he was elected he would cut our debt greatly. Well that didn’t happen, three years into his term and our current National Debt, according to our National Treasury Department, is more than $13,561,623,030,891.79, what do we have to show for this increased spending? More debt and a struggling economy.

Gas prices are more than doubled. When Obama took office gas was averaging $1.80 per gallon. Unfortunately, Obama’s man in charge, Secretary of Energy Steven Chu, has stated he wants prices to go up to unbeleivable levels. Chu’s stated goal is to ” decrease our dependance on oil.” My question to Mr. Chu would be, “is now the time to do that?” We are in the midst of a terrible economy, many Americans are still out of work, and these numbers are not improving regardless of what the big news medias may be trying to convince us of.

Unemployment is at almost 15% up 7% higher than Obama promised it would be by now. Media and Liberals are trying to convince us that the job market is improving and unemployment is decreasing – the facts state otherwise.

If you are going to vote for another term for President Obama, please check out all the facts first, especially if a stable economy is important to you.

Is The Economy Improving On Obama’s Watch

The release of the April unemployment numbers gives everyone in Washington something to crow about. The president will pump his chest up as “ non-farm payrolls” grew for the third consecutive month by 244,000 (the largest single month increase in five years). On the other hand, Republicans will tout the fact that the unemployment rate inched back up to 9.0 percent signals that the economy is still fundamentally weak and incapable of sustaining steady employment growth.

The key statistic to focus on is the number of employed persons, which remains under 140 million. The unemployment rate is a less meaningful statistic than the number of persons employed because the unemployment rate does not measure, among other data, discouraged workers who have given up looking for work.

In the last month before President Obama took office, over 145.3 million Americans were employed. Today, that number stands at 139.7 million. As the private sector boasts an increase in the number of people who found work, the uptick in the unemployment rate indicates an increase in the number of people who have started looking for work again. But the real story is this: the number of people working remains way down. Nor has President Obama’s policies helped much. Not only did the number of people working decline in his first year, 2009, they dropped in 2010 as well.

The politics of jobs and growing the economy will drive much of the debate over the next year. Every day, another American will pull him or herself up to get back into the market in the hope that a job is there for them. But until this administration and Capitol Hill make job creation priority number one, every day another American will simply give up and go uncounted — that is, until Nov. 6, 2012.

National Association of Realtors Economic Outlook

According to the National Association of Realtors® quarterly commercial real estate forecast, all of the major commercial real estate sectors are seeing improved fundamentals, but multifamily housing is becoming a landlord’s market commanding bigger rent increases. These trends also are confirmed in NAR’s recent quarterly Commercial Real Estate Market Survey.

Lawrence Yun, NAR chief economist, said vacancy rates are improving in all of the major commercial real estate sectors. “Sustained job creation is benefiting commercial real estate sectors by increasing demand for space,” he said. “Vacancy rates are steadily falling. Leasing is on the rise and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest.”

NAR forecasts commercial vacancy rates over the next year to decline 0.4 percentage point in the office sector, 0.8 point in industrial real estate, 0.9 point in the retail sector and 0.2 percentage point in the multifamily rental market.

“Household formation appears to be rising from pent-up demand,” Yun said. “The tight apartment market should encourage more apartment construction. Otherwise, rent increases could further accelerate in the near-to-intermediate term.”

The Society of Industrial and Office Realtors® shows a notable gain in its SIOR Commercial Real Estate Index, an attitudinal survey of 297 local market experts.1

The SIOR index, measuring the impact of 10 variables, jumped 8.3 percentage points to 63.8 in the fourth quarter, following a gain of 0.6 percentage point in the third quarter. The index remains well below the level of 100 that represents a balanced marketplace, which was last seen in the third quarter of 2007.

Most market indicators posted advances in the fourth quarter, but 71 percent of respondents said leasing activity is below historic levels in their market – an improvement from 83 percent in the third quarter. Only 29 percent report there is ample sublease space available.

Office and industrial space remains a tenant’s market – 87 percent of participants feel that tenants are getting a range of benefits ranging from moderate concessions to deep rent discounts.

Construction activity is still low, with 95 percent of experts reporting it is below normal, and 83 percent said it is a buyers’ market for development acquisitions; prices are below construction costs in 78 percent of markets.

Participants are broadly expecting stronger conditions for the current quarter, with two out of three expecting market improvement.

NAR’s latest Commercial Real Estate Outlook2 offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc.,3 a source of commercial real estate performance information.

Office Markets

Vacancy rates in the office sector are projected to fall from 16.4 percent in the current quarter to 16.0 percent in the first quarter of 2013.

The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.5 percent; New York City, at 10.0 percent; and New Orleans, 12.4 percent.

After rising 1.6 percent in 2011, office rents should increase another 1.9 percent this year and 2.4 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 20.1 million square feet in 2012 and 28.1 million next year.

Industrial Markets

Industrial vacancy rates are likely to decline from 11.7 percent in the first quarter of this year to 10.9 percent in the first quarter of 2013.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.8 percent; Los Angeles, 4.9 percent; and Miami at 7.6 percent.

Annual industrial rent is expected to rise 1.8 percent in 2012 and 2.3 percent next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.

Retail Markets

Retail vacancy rates are forecast to decline from 11.9 percent in the current quarter to 11.0 percent in the first quarter of 2013.

Presently, markets with the lowest retail vacancy rates include San Francisco, 3.6 percent; Fairfield County, Conn., at 5.1 percent; and Long Island, N.Y., at 5.4 percent.

Average retail rent should rise 0.7 percent this year and 1.2 percent in 2013. Net absorption of retail space is projected at 9.9 million square feet this year and 23.9 million in 2013.

Multifamily Markets

The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.7 percent in the first quarter to 4.5 percent in the first quarter of 2013; multifamily vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.

Areas with the lowest multifamily vacancy rates currently are New York City, 1.8 percent; Minneapolis and Portland, Ore., each at 2.5 percent; and San Jose, Calif., at 2.7 percent.

After rising 2.2 percent last year, average apartment rent is expected to increase 3.8 percent in 2012 and another 4.0 percent next year. Multifamily net absorption is forecast at 209,900 units this year and 223,600 in 2013.

The Commercial Real Estate Outlook is published by the NAR Research Division for the commercial community. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Commercial Real Estate Outlook Improves Winston Rowe & Associates

Optimism over corporations’ rising profit expectations is contributing to an improved outlook for commercial real estate, according to PwC and Urban Land Institute’s 2012 Emerging Trends Mid-Year Update. The 195 industry executives who responded to the survey indicated that profitability, lending, and investor markets are looking up through year-end.

Foreign investors and private equity will remain the top purchasers of commercial real estate through the remainder of the year, according to the survey. However, private local investors and public equity real estate investment trusts buyers acquired an increasing share of properties in 1Q12, according to Real Capital Analytics.

The value of debt capital sources is showing positive signs, with insurance companies occupying the No. 1 spot and government-sponsored entities’ value increasing more than 11 percent since November 2011. Commercial mortgage-backed securities, commercial banks, and mezzanine lenders also posted positive gains.

All five major commercial real estate property sectors also reported higher values, according to the survey. Apartments continue to rank first, followed by the industrial/distribution sector, which posted a significant value increase. Hotels ranked third and logged the biggest gain overall as corporate and individual travel show signs of improvement.

2012 Commercial Real Estate Outlook Report Winston Rowe & Associates

Hard on the heels of the United States’ economic recession and the simultaneous strengthening of emerging Asian and Latin American markets, the Commercial Real Estate (CRE) industry is seeing an increased focus on diversification into global CRE. While Asia Pacific (APAC) has emerged as a strong driver of global CRE growth, the U.S. continues to attract investments based on size and favorable risk-reward.

In general, the U.S. CRE market appears to be on a gradual but uneven path to recovery, with increased capital availability, transactions, and improved fundamentals

Apartment Loan Refinance No Upfront Fees Winston Rowe & Associates

With more apartment loan programs than any other apartment finance firm, Winston Rowe & Associates provides borrowers the most competitive refinancing programs to meet both personal and investment objectives.

They offer conventional, hard money, and CMBS Programs, each designed to provide the most competitive financing terms based on a combination of property constraints, borrower investment and personal goals.

Apartment investors that need additional information about Winston Rowe & Associates, they can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Why Consider Winston Rowe & Associates:

No upfront or advance fees
Streamlined submission process
National coverage
Loan amounts start at One Million with no limit
Purchase, Refinance & Construction Loans

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

At Winston Rowe & Associates they focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve our customers’ goals. Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Gas Prices May Drop Under $3 By Fall Winston Rowe & Associates

Have drivers seen the worst? Analysts say the latest oil prices indicate that gas prices may settle below $3 by the fall.

With gas prices down 6 percent in the last month alone and down $0.49 since prices hit their peak in April, oil speculators like Tom Kloza expect to see the trend continue. “The market is suggesting gas below $3 by Halloween and certainly by Thanksgiving,” he told USA Today.

Lower prices at the pump come just in time for summer’s peak driving season. AAA projects 42.3 million Americans will travel 50 miles or more over the Fourth of July weekend — nearly a 5 percent increase in travel from last year — with 35 million choosing to travel by car.

According to AAA’s daily fuel gauge report, the current national average gas price is $3.45 per gallon, and crude oil prices have fallen to $78 a barrel, the lowest since late winter, according to market reports from West Texas Intermediate.

While the earlier fears of $5 per gallon pricing have been called “apocalyptic,” many consumers are still feeling pain at the pump. Patrons of stations in the South may have been seeing magic numbers like $2.99, but motorists on the west coast are seeing gas price averages hovering above $4.

Employment Situation Summary Winston Rowe & Associates

Nonfarm payroll employment changed little in May (+69,000), and the unemployment rate

was essentially unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported

today. Employment increased in health care, transportation and warehousing, and wholesale

trade but declined in construction. Employment was little changed in most other major

industries.

 

Household Survey Data

 

Both the number of unemployed persons (12.7 million) and the unemployment rate (8.2

percent) changed little in May. (See table A-1.)

 

Among the major worker groups, the unemployment rates for adult men (7.8 percent) and

Hispanics (11.0 percent) edged up in May, while the rates for adult women (7.4 percent),

teenagers (24.6 percent), whites (7.4 percent), and blacks (13.6 percent) showed little

or no change. The jobless rate for Asians was 5.2 percent in May (not seasonally

adjusted), down from 7.0 percent a year earlier. (See tables A-1, A-2, and A-3.)

 

The number of long-term unemployed (those jobless for 27 weeks and over) rose from 5.1

to 5.4 million in May. These individuals accounted for 42.8 percent of the unemployed.

(See table A-12.)

 

The civilian labor force participation rate increased in May by 0.2 percentage point

to 63.8 percent, offsetting a decline of the same amount in April. The employment-

population ratio edged up to 58.6 percent in May. (See table A-1.)

 

The number of persons employed part time for economic reasons (sometimes referred to

as involuntary part-time workers) edged up to 8.1 million over the month. These

individuals were working part time because their hours had been cut back or because

they were unable to find a full-time job. (See table A-8.)

 

In May, 2.4 million persons were marginally attached to the labor force, up from 2.2

million a year earlier. (The data are not seasonally adjusted.) These individuals were

not in the labor force, wanted and were available for work, and had looked for a job

sometime in the prior 12 months. They were not counted as unemployed because they had

not searched for work in the 4 weeks preceding the survey. (See table A-16.)

 

Among the marginally attached, there were 830,000 discouraged workers in May, about the

same as a year earlier. (The data are not seasonally adjusted.)  Discouraged workers are

persons not currently looking for work because they believe no jobs are available for

them. The remaining 1.6 million persons marginally attached to the labor force in May

had not searched for work in the 4 weeks preceding the survey for reasons such as school

attendance or family responsibilities. (See table A-16.)

 

Establishment Survey Data

 

Total nonfarm payroll employment changed little in May (+69,000), following a similar

change in April (+77,000). In comparison, the average monthly gain was 226,000 in the

first quarter of the year. In May, employment rose in health care, transportation and

warehousing, and wholesale trade, while construction lost jobs. (See table B-1.)

 

Health care employment continued to increase in May (+33,000). Within the industry,

employment in ambulatory health care services, which includes offices of physicians

and outpatient care centers, rose by 23,000 over the month. Over the year, health care

employment has risen by 340,000.

 

Transportation and warehousing added 36,000 jobs over the month. Employment gains in

transit and ground passenger transportation (+20,000) and in couriers and messengers

(+5,000) followed job losses in those industries in April. Employment in both industries

has shown little net change over the year. In May, truck transportation added 7,000 jobs.

 

Employment in wholesale trade rose by 16,000 over the month. Since reaching an employment

low in May 2010, this industry has added 184,000 jobs.

 

Manufacturing employment continued to trend up in May (+12,000) following a similar

change in April (+9,000). Job gains averaged 41,000 per month in the first quarter of

this year. In May, employment rose in fabricated metal products (+6,000) and in primary

metals (+4,000). Since its most recent low in January 2010, manufacturing employment has

increased by 495,000.

 

Construction employment declined by 28,000 in May, with job losses occurring in specialty

trade contractors (-18,000) and in heavy and civil engineering construction (-11,000).

Since reaching a low in January 2011, employment in construction has shown little change

on net.

 

Employment in professional and business services was essentially unchanged in May. Since

the most recent low point in September 2009, employment in this industry has grown by

1.4 million. In May, job losses in accounting and bookkeeping services (-14,000) and in

services to buildings and dwellings (-14,000) were offset by small gains elsewhere in

the industry.

 

Employment in other major industries, including mining and logging, retail trade,

information, financial activities, leisure and hospitality, and government, changed

little in May.

 

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour

to 34.4 hours in May. The manufacturing workweek declined by 0.3 hour to 40.5 hours, and

factory overtime declined by 0.1 hour to 3.2 hours. The average workweek for production

and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

 

In May, average hourly earnings for all employees on private nonfarm payrolls edged up

by 2 cents to $23.41. Over the past 12 months, average hourly earnings have increased

by 1.7 percent. In May, average hourly earnings of private-sector production and

nonsupervisory employees edged down by 1 cent to $19.70. (See tables B-3 and B-8.)

 

The change in total nonfarm payroll employment for March was revised from +154,000 to

+143,000, and the change for April was revised from +115,000 to +77,000.

 

Distressed Commercial Real Estate Market

Approximately $1.4 trillion of commercial mortgage-backed security (CMBS) transactions are coming due over the next three years, creating an excellent climate for real estate financing. Since many lenders are saddled with large portfolios and a number of European banks are experiencing funding issues, there is a need for financing for new construction or financing to add value to existing properties in the middle market space, according to Matt Galligan, Group Head of CIT Real Estate Finance at CIT Group Inc. /quotes/zigman/579893/quotes/nls/cit CIT +1.17% cit.com, a leading provider of financing to small businesses and middle market companies. Galligan discusses the current trends and financing opportunities in the 2012 U.S. Commercial Real Estate Financing Outlook, the latest in a series of in-depth executive Q&As featured in CIT’s Executive Spotlight series (cit.com/executivespotlight).

Opportunities in Retail and Office Sectors

The cost of financing across most segments has increased because of the weak economic recovery both in Europe and the United States. “We think that the spreads are very attractive in today’s market and see significant opportunities on the retail side and select opportunities in the office sector,” says Galligan. “Multi-family properties, however, remain very competitive because of the government’s role with Fannie Mae and Freddie Mac.”

24-Hour Cities Remain Attractive

“We see opportunities in the Boston, New York City and Washington, DC, corridor and nationally in selective markets for low leveraged financing for office, retail, multi-family and industrial properties,” says Galligan. “We also view these locations as being 24-hour cities with a constant influx of people around the clock. These cities are secure, vibrant and contribute not only to the office dynamic but also to the retail and multi-family dynamic.”

US Commercial Real Estate Outlook for 2012 Winston Rowe & Associates

As jobs are created over the next three years, pent-up households will form, with almost 55% (1.1 million) owning and 45% (865,000) renting. The rental proportion for the pent-up households is relatively high, due to the relatively young age of pent-up households.

This is on top of the 3.95 million households that will form as the result of population growth of 9 million over the next three years (based upon the historical marginal household size of 2.28 people per household). Of these households, about two thirds (2.6 million households) will be single-family buyers and one third (1.3 million) will rent. Hence, over the next three years, we anticipate 3.8 million new single family households and 2.3 million renter households.

Based upon our statistical forecasts, we anticipate that about 1.8 million (~600,000 per year) single-family and about 800,000 (~270,000 per year) multifamily home starts will occur over the next three years.

The net result will be that we burn through the excess inventory, even if household formation rates remain muted. Low single-family inventory levels will create strong upward pressure on home values, restoring some lost confidence in homes as an investment. In fact, a crazy but true research result is that many people use the past year’s home price increase to estimate future annual appreciation. This means that as home prices stabilize, so too will the belief in long-term appreciation.

Commercial Real Estate Outlook Brightens Winston Rowe & Associates

Real estate executives at last Friday’s Akerman U.S. Real Estate Summit in Miami are more optimistic about the commercial real estate market than in the recent past. In a survey of participants, 82 percent of respondents expressed greater confidence and an improved outlook for the industry, a 6 percent increase over last year, with 50 percent citing the improving U.S. economy as the primary driver for their optimism.

There was broad consensus among survey respondents that the multifamily sector would be the most active in terms of the number of real estate transactions, foreign investment and return to pre-recession development levels in 2012, the organizers said.

“The outlook for the commercial real estate industry in 2012 is bright, but the recent recovery is still tenuous, and could be dampened by a range of factors, including the continued uncertainty in Europe, persistent restraints on debt and equity financing and the threats to the health of the U.S. economy due to rising energy costs,” said Richard Bezold, chaiman of the Akerman National Real Estate Practice Group.

Respondents cited the policies of the current administration (38 percent) and global economic uncertainty (30 percent) as reasons for a lack of confidence in the industry’s outlook for 2012.

Most respondents (43 percent) cited availability of credit as the most pressing issue facing the real estate industry right now. However, that number is down 10 percent from 2011. The belief that uncertainty of government policy is the number one concern for the industry has doubled to 25 percent this year.

NATIONAL EMPLOYMENT DATA FROM WINSTON ROWE & ASSOCIATES

Job growth isn’t likely to stall, despite the anemic 69,000-job increase in May — the third straight month of weak employment gains after solid job growth in January and February. But business managers are increasingly wary that financial turmoil in Europe will contribute to a global economic slowdown, leading them to cut back their hiring plans.

 

We now expect about 2 million net new jobs this year, or an average of 165,000 a month for the rest of 2012, only slightly better than the net gain of 1.8 million jobs in 2011. But with the economy growing around 2%, there’s no prospect for a more robust pickup. Moreover, with so much slack in the labor market, wages are stagnant and will rise less than 2% this year, probably lagging inflation. Less income means less money to spend, which translates into slower growth.

 

Two million new jobs might seem high, based on what happened in May, but even that disappointing month showed some strength in the labor market. Service sector hiring surged by 93,000, including 33,000 in health care, and manufacturers added 12,000 workers. What hurt were losses of 28,000 in construction, 9,000 in restaurants and bars, and 13,000 in government. Looking at the second half of this year, we think construction and hospitality will show modest increases. What’s more, although business leaders are cautious about adding more workers, they’re not worried enough to halt hiring or reduce payrolls, and low growth in productivity since 2010 means that many businesses that expand will need to hire.

 

Unemployment, now 8.2%, will likely end the year near 8%. The jobless rate won’t fall much because the improving economy will lure more people into the workforce after the past several very tough years for would-be workers. U.S. GDP, which will grow about 2% this year, needs to grow at least 2.5% a year to work down the ranks of the unemployed.

 

And so it will remain a tough market for job seekers. More than two years after the end of the Great Recession, the number of workers unemployed for more than 27 weeks is 5.3 million, or 42.8% of the jobless. Though down recently, that share is much higher than it ever was before 2009.

Global Economic Outlook 2012 Winston Rowe & Associates

Until at least the middle of the next decade, global growth is likely to slow to approximately 3 percent per year on average–a rate somewhat below the average of the last two decades. A recovery in advanced economies will be more than offset by a gradual slowdown in emerging ones as they mature, with the net result that global growth will slow. But the biggest risk ahead for the global economy is not this slower overall growth in output but a slowdown in average output per capita, which will determine how fast living standards can be supported and raised.

Advanced economy growth is expected to slow down from an already meager 1.6 percent in 2011 to 1.3 percent in 2012. For 2013-2016, the outlook suggests some recovery in advanced economies, bringing these countries back to the pre-recession growth trend of a little more than 2 percent.

In 2012 emerging economies will slow in growth by 0.7 percentage points on average, going from 6.3 percent growth in 2011 to 5.6 percent in 2012, partly as a result of slower export growth and partly because several of them have been growing above trend. From 2017-2025 emerging and developing countries are projected to grow at 3.3 percent. Many economies will begin to show signs of maturing, at which point the rapid catch-up growth abates.

The greatest challenge for the global economy in this slow growth environment is to raise productivity without losing job opportunities for the millions who are looking for reasonably paid jobs to support their living standards. The growth rate of per capita income globally has been around 2.5 percent since the beginning of the century but sometime between 2017 and 2025, this rate will fall below 2 percent. In contrast to the past half century, that slowdown will also be accompanied by slower growth in population.

Economic Outlook For 2012 Winston Rowe & Associates

Since last summer, the financial markets have been on a European roller coaster ride. We could call it the “Beast” but at least we know that ride ends safely. This ride depends on whether the Europeans can figure out how to keep funding the debt of nations that have promised more than they can afford. When the situation looks as if it will be resolved, the markets climb higher. When the agreements collapse, the markets plunge with frightening speed.

Sooner or later, the situation will stabilize and then fundamentals like earnings, leverage and risk will return to the market. At that point we can get off the ride. When we exit, we expect that the financial markets and the U.S. economy will move closer together with the markets showing positive but below average growth.

In the 12 months ending November 2011, the S&P 500 rose about 3 percent. While the return was positive, it was dramatically lower than for the same period last year. The markets peaked in April, but the drumbeat from Europe and the tepid performance of the U.S. economy has erased most of those gains. Short-term interest rates have remained close to zero throughout 2011, and the long-term bond rates are very close to historical lows. As expected, the Federal Open Market Committee (FOMC) decided to continue with the current program of asset sales and purchases (“Operation Twist”). This strategy is designed to lower long-term rates and promote investments in housing and business equipment. The FOMC reiterated its expectation that current economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”1

Economic FundamentalsStock prices are a very good indicator of future economic activity: investors buy stocks anticipating the real economy will pick up in the near future. There are many positive reasons to believe this story now:

•Corporate earnings have been remarkably resilient. Earnings for S&P 500 companies rose about 11 percent in 2011 and are expected to rise 9 percent in 2012.

•Price/Earnings (PE) ratios are close to historic averages. Shiller’s long-term PE ratio is above average, but the current and forward PEs are below average values.

•Major banks, although still weak, have weathered the storm and are slowly rebuilding their balance sheets.

•The Federal Reserve is continuing to keep interest rates low to fuel the economy. The Fed Funds target rate of 0 percent to 0.25 percent will probably be maintained throughout 2012, and the 10-year bond rate will likely maintain its current rate of 2 percent.

•The weak dollar will help companies grow their exports. The euro has fluctuated around $1.37 in spite of the problems with European debt.

•The value of U.S. commercial real estate rose in August compared to the previous month. Bloomberg BusinessWeek reported that the Moody’s/REAL Commercial Property Price Index shows commercial property prices in the nation climbed by 2.4 percent on a monthly basis. This also represented a hike of 7.2 percent over the same month in 2010.

However, there are negative issues that could make the market recovery short-lived:

•The euro zone political economy.

•The decline in residential housing prices appears to be continuing in most parts of the country. The national Case-Shiller Index has fallen about 3 percent from September 2010 until August 2011. Of the 20 metro areas in the index, year-to-year price declines occurred in 17 of the 20 markets.

•The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.2 percent in September to 116.4 (2004 = 100), following a 0.3 percent increase in August and a 0.6 percent increase in July. September data show moderating growth in the LEI, according to Ataman Ozyildirim, economist at The Conference Board. “The weaknesses among the leading indicator components have become slightly more widespread in September. The slow pace in the LEI suggests a growing chance that this sluggish economy is going to be here for a while.”2

•Inflationary pressures have started to increase. The overall CPI rose 3.9 percent from its level a year ago. Commodity prices have been rising much faster. The PPI Commodity Price Index has increased 10.3 percent from year-ago levels. Eventually this will be reflected in higher production and transportation costs.

•In spite of the recent upturn, industrial output is still only 77 percent of capacity, well below the long-run average (including previous recessions) of 81 percent.

•The massive government deficits may lead to fears of higher interest rates and accelerating inflation. Both will have an adverse effect on business investment. The budget deficits for 2009, 2010 and 2011 totaled 30 percent of U.S. GDP. The federal government will need to borrow about $4.5 trillion to finance this spending. The projected budget for 2012 is somewhat lower, about 7 percent of GDP. If the 2012 deficit is financed by tax increases, the tax bill will average about $3,500 per person.

•The U.S. still faces a huge funding deficit in Social Security and Medicare payments. The present value shortfall is about $62 trillion. This is equivalent to $206,000 per person or $825,000 per U.S. household. These problems are not insurmountable, but they do require common sense and bipartisan leadership—something that appears to be in short supply in Washington, D.C.

ForecastLooking forward to 2012, the positives outweigh the negatives for the economy. We expect the recovery to continue, albeit at a rate much slower than a typical recovery with GDP growth in the 1 to 3 percent range and inflation in the 2 to 4 percent range. The pace of the recovery, however, will not improve until consumers have increased their savings and repaired their balance sheets. This process will extend beyond the end of 2012.

In this environment, we project the return to equities to be positive, but below the long-run average return of 9 percent. With Treasury bonds already at extremely low yields, there is little potential for gains with these investments. In addition, we think there are material long-term inflation risks which could make long-term bonds unattractive. In contrast, the low Treasury rates make mortgage rates extremely attractive, with 30-year fixed rates at 3.875 percent and 15-year fixed rates at 3.25 percent. Homeowners who are paying 5 percent or more on their mortgage and expect to stay in their home for several years would likely benefit from refinancing their mortgage.

Commercial Real Estate Outlook Improving Winston Rowe & Associates

Winston Rowe & Associates is beginning to see the commercial real estate market to be in the early phase of a cyclical recovery.

They are finding that real estate investment performance continues to display favorable conditions, a result of historically low borrowing rates and a modest inflationary outlook. Very limited new supply and rising demand is buoying real estate fundamentals for most property types.

CRE investors that would like additional information about Winston Rowe & Associates can contact them at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Recent activity at Winston Rowe & Associates is indicating that commercial real estate investor interest to date has been focused on top-tier assets in prime markets and is thus reflected in bifurcated cap rates, with rate compression in those select markets and assets. At this early phase of the real estate recovery, we believe the real estate asset class can provide very attractive return opportunities relative to other alternatives.

The strongest markets include New York City, San Francisco/San Jose, Seattle, Washington, D.C., Boston and Houston, with value-add and new development emerging as popular strategies in this sector. However, with this rapid increase in new development comes a moderate risk of excessive supply in the next two to three years.

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

At Winston Rowe & Associates they focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve our customers’ goals. Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

No Upfront Fee Commercial Real Estate Loans Nationwide

Winston Rowe & Associates a no advance fee national secondary market commercial finance firm that offers commercial real estate loans for all asset types and class.

They provide their clients with a private banking approach through specialized lending solutions to quickly and efficiently determine the best options for their clients.

Real estate investors seeking additional information about Winston Rowe & Associates can contact them at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Winston Rowe & Associates Financing Solutions:

Loan Amounts From $1,000,000 through $500,000,000
Hard Money Bridge Loans Fast 2 Week Closings
Private Equity Solutions
Small Business Administration (SBA) Loans
Purchase, Refinance & Portfolio Repositioning
Bank Discounted Note Financing (DPO)

Eligible Commercial Properties Include:

Multi-family
Single Family Residential
Office
Industrial
Mixed Use
Hotels
Special Purpose
Retail
Health Care

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

At Winston Rowe & Associates they focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve our customers’ goals. Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

SBA Guidelines For Hotel Financing & Refinancing Winston Rowe & Associates

SBA HOTEL LOANS

Winston Rowe & Associates, a national no upfront fee commercial real estate advisory and financing firm has prepared this matrix to provide prospective clients with the fundamentals of the Small Business Administration (SBA) loan programs.

For more information about Winston Rowe & Associates SBA loan programs. They can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

SBA 7a Program Overview:

SBA 504 or 7a financing can be used to purchase, remodel or refinance a hotel or motel and recent changes to SBA eligibility guidelines have made it possible to finance multiple properties as well as larger properties.

Winston Rowe & Associates is offering the SBA 7a program for experienced and new hoteliers interested in acquiring currently foreclosed or poorly performing properties.

The ensuing are the basics of the program.

Never an upfront or advance fee
Loan amounts range from $400,000 to $4,000,000.
Financing available nationwide
Buyers will need 25% down if they do not currently own any other hotel properties.
Borrowers will need 20% down if they currently own another hotel.
The borrower’s down payment can be reduced with a seller second mortgage of up to 15%.
There must be significant verifiable hotel management or ownership experience
Minor renovations that can be completed within roughly 3 to 4 months can be financed
FFE can be financed

Winston Rowe & Associates also provides a full range of commercial real estate financing solutions for all property types on a national basis that include.

Hard money bridge loans that can fund in 2 weeks
Bank discounted note financing
Portfolio repositioning
Institutional financing
Debt and equity financing

At Winston Rowe & Associates they focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve our customers’ goals. Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

How To Buy & Finance Assisted Living Facilities Winston Rowe & Associates No Upfront Fee Loans

Assisted Living Facility Loans

Winston Rowe & Associates is seeing the current and future demand for assisted living facilities (ALF) rapidly growing rapidly for the next decade. Mainly because of the very fact that the baby boomers are now getting close to the retirement age which are children born between 1945 through 1964.

Most of them have already retired. These facilities provide housing solutions and special need care for the elderly people and those who are physically disabled or have accessible problems.

However, unlike nursing homes, these facilities do not provide round-the-clock assistance to their residents. The facilities they provide include a moderate level of assistance in things where the residents need special care.

They also offer meals and private living areas for the residents. These facilities are best suited for those who are suffering from the pain of living alone.

The following are some of the steps that you need to consider if you are planning to finance and start an assisted living business.

Obtain License:

As per the laws of the state, every such facility needs to obtain a license first. Therefore, you can start by applying for the license. The process can be a bit complicated and lengthy, but if you are genuine in your efforts and are well prepared, you should not find much difficulty.

You will have to attend interviews with different authorities. Everything that you have mentioned in your application will be inspected thoroughly. In particular, the state will want to make sure that the kind of services you are promising are something that you are capable to provide.

Type Of Facility:

The next thing that you have to consider is the type of facility that you want to offer – whether you want to cater to a large number of residents or just a small number of people. You will have to choose the facility building accordingly. If it is a small scale business, you can probably go ahead with a single family home, but if you want to provide services to a large number of people, you will need a multi-story building.
Financing:

If you are going to start your assisted living business on a small scale, you can probably go with self financing, but if it is a large project, you will have to look out for other financing options as well, such as Winston Rowe & Associate.

Why Work With Winston Rowe & Associate:

No Upfront or Advance Fees
National Lending Platform
Loan Amounts Starting At $1,000,000 with no limit

Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

 

How To Finance Special Purpose Properties Winston Rowe & Associates

Unique properties are not easily understood by traditional lenders. Winston Rowe & Associates, a national no upfront fee commercial finance firm has solutions for non-traditional financing for funeral home financing as well as commercial financing for other special purpose properties.

Prospective clients can contact Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Funeral homes, assisted living facilities, campgrounds and other special purpose properties represent one of the most difficult commercial loan situations which will be confronted by a business owner

Why Are Special Purpose Commercial Properties So Hard To Finance?

By definition special purpose properties are not similar to other commercial properties. This makes many lenders uncomfortable due to the likely difficulty of finding another owner for a unique commercial property should it be necessary due to a loan default.

For funeral homes and many other special purpose commercial properties, most of the business value is represented by non-real estate assets. With traditional commercial lenders that focus on commercial real estate loans, it is almost impossible to get a loan based on the real estate value and the business value.

For example, it is not uncommon to have a situation in which the real estate for a funeral home is valued at less than one million dollars while the overall business value is in excess of three million dollars.

Because commercial financing is so difficult to arrange for special purpose properties such as funeral homes, assisted living facilities and campgrounds, sellers of such properties are generally willing to provide substantial seller financing to assist the buyer in acquiring the business.

However, many traditional lenders do not recognize or accept seller financing as a means of reducing down payment requirements for special purpose properties.

Many lenders simply do not understand the business complexities associated with a special purpose property. As a result, it is not uncommon for these lenders to attach onerous and expensive requirements such as business plans and environmental reviews.

In most cases such lenders do not even want to make the business loan but will use undesirable loan requirements as a means of appearing to approve a loan when in fact they have disapproved the loan by adding commercial loan terms that they do not expect a commercial borrower to accept.

Winston Rowe & Associates Commercial Loan Solutions:

For a business borrower facing the situation described above, the highest priority should be to locate a non-traditional commercial finance firm like Winston Rowe & Associates that engages in the following commercial loan practices:

Does not charge upfront fees to process or underwrite you loan
Openly welcomes special purpose properties and routinely finances such properties
Provides commercial financing for both the business and real estate
Accepts substantial seller financing

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

What Is Private Equity Winston Rowe & Associates

Winston Rowe & Associates, a no advance fee international commercial business financial advisory firm. They have developed this article to assist their prospective clients with the fundamentals of Private Equity.

For additional information concerning Winston Rowe & Associates financing solutions, they can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Overview:

Private equity investors (also called financial sponsors or buy-out firms) invest in non-public companies and typically hold their investments with the intent of realizing a return within 3 to 7 years. Generally, investments are realized through an initial public offering, sale, merger or recapitalization.

While venture capital firms tend to invest in earlier stage growth companies, private equity groups tend to focus on more mature businesses, often contributing both equity and debt (or some hybrid) to the transaction.

What Private Equity Firms Look For:

Strong management team.
Ability to generate cash.
Significant growth potential.
Ability to create value.
A clearly defined exit strategy.

The Value Proposition:

While private equity firms employ various strategies to create value in their investments (such as the consolidation of a fragmented industry), a common strategy is to acquire a “platform” company and grow the platform through further “add-on” acquisitions. Add-on acquisitions are typically smaller in size, but complementary to, the platform investment. Ideally, the synergies of the combined entity create a more efficient whole, both operationally and financially.

Leverage & Cash Flow:

Private equity groups typically use leverage (debt) to increase the return on the firm’s invested capital. The amount of leverage employed is normally determined by the target’s ability to service the debt with cash generated through operations.

The ability to generate cash allows the private equity investor to contribute more debt to the transaction. Because of the aggressive use of leverage, often, the cash flow a business generates in the early years following the acquisition is almost entirely consumed by the debt service. Furthermore, if the strategy is to grow the business, and it usually is, growth also consumes cash. For this reason, private equity investors are keenly focused on the cash flow of the business.

Because cash flow is the basis for valuation, the ability to improve operations to generate increased cash flow will also yield a greater return on investment upon exit.

Exit Strategy:

Private equity groups make money from both the cash flow of the acquired business and from the proceeds generated upon exiting the business. The exit provides the investor a mechanism to monetize the firm’s equity. This is also referred to as “a liquidity event”. The exit provides the financial sponsor with a finalization of the investment and an opportunity to distribute profits. In fact, a significant component of a private equity professional’s compensation is based on this profit distribution, called “carried interest”, or just “carry”. Profits upon exit go to back into the cash account to fund new acquisitions.

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

What Is Private Equity Winston Rowe & Associates

Winston Rowe & Associates, a no advance fee international commercial business financial advisory firm. They have developed this article to assist their prospective clients with the fundamentals of Private Equity.

For additional information concerning Winston Rowe & Associates financing solutions, they can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Overview:

Private equity investors (also called financial sponsors or buy-out firms) invest in non-public companies and typically hold their investments with the intent of realizing a return within 3 to 7 years. Generally, investments are realized through an initial public offering, sale, merger or recapitalization.

While venture capital firms tend to invest in earlier stage growth companies, private equity groups tend to focus on more mature businesses, often contributing both equity and debt (or some hybrid) to the transaction.

What Private Equity Firms Look For:

Strong management team.
Ability to generate cash.
Significant growth potential.
Ability to create value.
A clearly defined exit strategy.

The Value Proposition:

While private equity firms employ various strategies to create value in their investments (such as the consolidation of a fragmented industry), a common strategy is to acquire a “platform” company and grow the platform through further “add-on” acquisitions. Add-on acquisitions are typically smaller in size, but complementary to, the platform investment. Ideally, the synergies of the combined entity create a more efficient whole, both operationally and financially.

Leverage & Cash Flow:

Private equity groups typically use leverage (debt) to increase the return on the firm’s invested capital. The amount of leverage employed is normally determined by the target’s ability to service the debt with cash generated through operations.

The ability to generate cash allows the private equity investor to contribute more debt to the transaction. Because of the aggressive use of leverage, often, the cash flow a business generates in the early years following the acquisition is almost entirely consumed by the debt service. Furthermore, if the strategy is to grow the business, and it usually is, growth also consumes cash. For this reason, private equity investors are keenly focused on the cash flow of the business.

Because cash flow is the basis for valuation, the ability to improve operations to generate increased cash flow will also yield a greater return on investment upon exit.

Exit Strategy:

Private equity groups make money from both the cash flow of the acquired business and from the proceeds generated upon exiting the business. The exit provides the investor a mechanism to monetize the firm’s equity. This is also referred to as “a liquidity event”. The exit provides the financial sponsor with a finalization of the investment and an opportunity to distribute profits. In fact, a significant component of a private equity professional’s compensation is based on this profit distribution, called “carried interest”, or just “carry”. Profits upon exit go to back into the cash account to fund new acquisitions.

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

http://www.prlog.org/11900564-what-is-private-equity-winston-rowe-associates.html

SBA Loan Fundamentals Winston Rowe & Associates

Winston Rowe & Associates a no upfront fee national commercial real estate advisory firm has prepared this article to assist prospective clients in Small Business Administration (SBA) loans on what they are, how they work and the steps in getting the loan.

If you would like to speak to Winston Rowe & Associates directly concerning SBA financing, you can contact them at 248-246-2243 or visit them on line at http://www.winstonrowe.com

What are SBA Loans:

SBA loans are term loans from a bank or commercial lending institution of up to 10 years, with the Small Business Administration (SBA) guaranteeing as much as 80 percent of the loan principal.

Who can get a SBA Loan:

SBA loans are for established small businesses capable of repaying a loan from cash flow, but whose principals may be looking for a longer term to reduce payments or may have inadequate corporate or personal assets to collateralize the loan.

What Are SBA Loans Used For:

Purchasing equipment, financing the purchase of a business and in certain instances, working capital. The Small Business Administration guarantee can help borrowers overcome the problems of a weak loan application associated with inadequate collateral or limited operating history.

What are the Fees & Costs:

Comparatively inexpensive when looking at other loan sources. Maximum allowed interest rates range from highs of prime plus 6.5 percentage points to prime plus 2.75 percentage points, though lenders can and often do charge less. These rates may be higher or lower than rates on non-guaranteed loans. What’s more, banks making SBA loans cannot charge “commitment fees” for agreeing to make a loan, or prepayment fees on loans under 15 year (a prepayment penalty kicks in for longer loans), which means the effective rates for these loans may be, in some instances, superior to those for conventional loans.

Steps in Getting an SBA Loan:

While most banks, as well as select commercial finance companies, offer SBA loans, there are two specialized categories worth knowing about. These are Certified Lenders and Preferred Lenders, both of which have entered into contractual relationships with the SBA and officially participate in the Certified Lender/Preferred Lender programs (CLP/PLP).

If you are seeking a loan, your best bet is to work with a certified or preferred lender. The SBA-guarantee process is tricky at best, and you want a lender who has been through it more than once

These lender programs were designed to provide better response to borrowers; they accomplish this goal by placing additional responsibilities on the lenders for analysis, structuring, approval, servicing and liquidation of loans, within The Small Business Administration’s guidelines. About 850 lenders qualify for the SBA’s Certified Lender Program, having met certain criteria, the most important of which, from the borrower’s perspective, is extensive experience in SBA loan-guarantee processing.

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Guide To Investing In Shopping Centers Winston Rowe & Associates

Winston Rowe & Associates is a no upfront fee national commercial real estate finance and advisory firm. A large area of their practice is Retail Financing Solutions for purchase, refinance and construction.

They have prepared this article of offer additional insight into shopping center and strip mall investing.

Prospective clients interested in learning more about Winston Rowe & Associates can contact them at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Retail property is a special market segment when it comes to property performance. Investors and Real Estate Agents alike should respect and gain the knowledge about this property type before they embark on entering this retail property market. Retail property is complex as an investment type.

Rents are generally higher in retail property given the way the property operates, however the operating costs are also higher. The property needs to perform more intensely for tenants, customers, retailers, and the community. This intense level of property performance pushes operating costs up in things like energy, cleaning, janitorial, lighting, and amenities.

When looking at a retail property for assessing its potential and its future, there are some critical points that should be looked at first before any further investigation occurs. Consider these:

Location of the property is highest on the agenda of investigation. Without a good location a retail property will fail. Given the current property location, are there any changes being considered locally that will impact property access or customer visitation. Most particularly you should look for changes to roads, highways, and the local community. Is the local community expanding or contracting and in what way?

Parking in a shopping centre is a key element to its success. The car park must firstly be large enough for the existing and future trade, and then it has to be easy to access. When customers access the shopping centre, they should feel good about the visit and not frustrated by getting to and from their car. In many locations, undercover car parking will be a priority in property design. Some older shopping centres where car parks are in the open should consider placing awnings in the car park to improve the customer experience.

Design of the property is a physical thing. It starts at the property entry points and then extends into the common areas and the tenant areas. Simply the customer wants to move through and in the property with the greatest of ease. This movement when efficiently handled will create the ‘ant track’ of customers, from which you can then design the tenancy mix and build higher points of rental. Most of the entry points and the corners in the common areas and mall of the property should be reserved for smaller tenancies of broad customer interest.

This will get you better rentals and also encourage more shoppers to move around the property. A retail property must also give a modern, clean, and functional appearance. The customer wants to feel good when they visit your property. You want them to come back. Quite a simple target really but it does take continual care and attention.

The tenancy mix should always be matched to the needs and wants of the customer and not the rental that the landlord desires. It should be said here that the landlord when negotiating leases with tenants should not randomly give away the right to an option on the lease. Certainly tenants will ask for it in many situations, but it does restrict the landlord’s options as the years pass. In retail property investment the landlord needs to preserve the right to move tenants around, remove the poorly performing tenants from the property, and renovate the property at the right time. It is of note that in many of the larger retail properties, the landlord will not normally or easily give an option for further occupancy, for this very reason.

Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Their professional staff is dedicated to streamlining the loan process and providing unsurpassed lines of communication.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Commercial Real Estate Investment Strategies 2012

Winston Rowe & Associates a national no upfront fee commercial real estate finance firm is finding the commercial property sector looking stronger with analysts and is predicting the sector to make a recovery in a few markets throughout the year and expecting positive growth in rent and capital values in Southern California, North Dakota, Dallas Texas, Chicago, Washington DC, Seattle and Denver.

For more information about commercial real estate loans, you can contact Winston Rowe & Associates at 248-246-2243 or visit them online at http://www.winstonrowe.com  

For investors considering buying commercial property as an investment, there are some things they need to know about investing in this sector.

Building Design

Unlike retail or residential property, commercial office space and industrial property respond more strongly to changes in building design. Compliance and standards can also add to the costs of maintenance of commercial property which can affect your balance sheet.

Location

Changes to the location can also greatly affect the value of your investment. The relocation of a prime industrial districts or retail closures could drastically change the capital value and potential rental return of your investment.

Liquidity

Commercial property has much less liquidity than other investments, including residential property. Commercial real estate is heavily reliant on investors, who make their decisions on the state of the market.

Risk

The risk involved in commercial real estate investment can vary. Investing directly means you are taking on all of the risk associated with the ownership of the property, and will be responsible for any maintenance costs and upgrades that need to be made. However, there are a number of financial incentives total ownership, including being able to claim depreciation against your income. Meanwhile, if your investment lies with a Real Estate Investment Trust, you will be sharing the risk with other investors.

Winston Rowe & Associates has an excellent knowledge based resource for valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals. Their preemptive problem-solving approach is perfect for clients with credit and time sensitive issues.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Why Banks Are Still Not Lending – Winston Rowe & Associates

Winston Rowe & Associates a no upfront fee commercial real estate financing advisory firm that is filling the gap for commercial real estate investors (CRE) nationwide.

Through their steadfast relationships Winston Rowe & Associates is providing comprehensive fast financing solutions for hospitality, retail, office buildings, medical and industrial properties.

They have prepared this article to provide some insight into why banks are not lending and to explore why many bankers seem unwilling to perform what is a crucial service to restarting the U.S. economy.

If you would like additional information about Winston Rowe & Associates they can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com

The White House, U.S. Treasury and the Federal Reserve have dramatically tried to stimulate bankers to start lending on U.S. commercial real estate. Yet most bankers have been reluctant to do so, even though many real property owners desperately need financial aid.

The cause is that bank balance sheets are already overloaded with all types of real estate loans. Real estate lending, including housing, represented around 40% of all U.S. lending from 1996 through 2001. As a result of the stock market crash of 2000, that share shot upward as many investors moved from stocks into real estate.

The total share of property-based loans held by banks jumped from 39.3% in 2001 to 56.3% in 2002, according to the FDIC. That share steadily rose to a peak of 62.8% in 2006. After home prices began to decline, that figure leveled off at 60% in both 2008 and 2009.

Since relationship lending is now in vogue again, many bankers are willing to make real estate loans to longtime customers who remain financially stable. New customers will have a tougher time securing financing.

This is where Winston Rowe & Associates bridges the gap for clients that can’t obtain financing from traditional retail banks. They have a core focus on building long-term relationships with new clients, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals. Their preemptive problem-solving approach is perfect for clients with credit and time sensitive issues.

Banks also hold complex collateralized debt obligations (CDOs) and other toxic assets that have greatly shrunk in value. Bankers hope such holdings will recover as the economy improves. But there are almost no current markets for those holdings. If bankers sell those assets now, they will take large capital write-offs and may become insolvent.

To prevent that outcome, the government is allowing banks not to mark such holdings to current market values, if there is any hope of future value recovery. But postponing sales means banks have less cash to make loans right now.

Winston Rowe & Associates capital groups do not have this problem and are poised to take advantage of the current market conditions to aggressively grow market share.

They have the experience and a deep understanding of complex commercial real estate transactions for the various vertical markets. This has helped Winston Rowe & Associates become one of the nation’s most trusted sources for CRE acquisition, refinance, construction and bridge loan solutions nationwide.

They also have an excellent knowledge based resource for valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

SBA Hotel Loans Buyers Best Option – Winston Rowe & Associates No Advance Fees

No Upfront Fee Hotel Motel Loans

Savvy hotel and hospitality investors have been turning to Winston Rowe & Associates for their commercial financing needs. They are a national no upfront fee full service commercial real estate finance and advisory firm with solutions for all commercial property types.

If you would like additional information about Winston Rowe & Associates, they can be reached at 248-246-2243 or check them out online at http://www.winstonrowe.com

Hotel investors seeking acquisition financing quickly discover banks are hyper concretive when it comes to financing these types of properties which means that unless the investor is planning on putting 35% down or more in cash and the hotel has a strong flag and great historical financials their only option will be either the SBA 504 or the SBA 7a loan.

Not all SBA lenders are the same and structure loans in the same way. Winston Rowe & Associates streamlines the process of an SBA loan which is no more cumbersome than any other commercial mortgage especially when you work within advisor that knows the process inside and out. With them it is very possible to close an SBA loan in 45 days. Much of the issues that caused the bad press that the SBA received have been resolved.

Generally speaking the SBA 7a is reserved for loan under $5,000,000, while the 504 can go up to $7,000,000. The SBA is a Prime plus rate which most of the time floats that offer a 5 year fixed 25 year amortization loan. The 504 program boasts long term fixed rate financing, like 5 or 10 years. However most importantly, both options provide 85% loan to cost and or loan to value financing which is becoming extremely rare in this market.

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals. Their preemptive problem-solving approach is perfect for clients with credit and time sensitive issues.

Winston Rowe & Associates has no upfront free hotel and motel loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Assisted Living Investors Turning To Winston Rowe & Associates No Upfront Fees

Winston Rowe & Associates a no upfront fee national commercial real estate advisory firm structuring complex financing solutions assisted living facilities. Healthcare real estate financing solutions include; assisted living facilities, independent care facilities, skilled nursing facilities, medical office buildings, surgery centers, not-for-profit hospitals, and proprietary hospitals.

They offer healthcare real estate loans from One Million up to Five Hundred Million Dollars. Winston Rowe & Associates financing solutions are not only competitive, but also best pricing for healthcare financing.

Borrowers, owners and investors can contact Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Winston Rowe & Associates offers the best in institutional and private money financing programs. When you call them with a loan scenario, they quickly assess what type of financing is appropriate for your situation.

Healthcare Financing Options:

Location: Nationwide
No Upfront or Advance Fees
Close in 30 Days With a Complete Submission
Loan Amounts $1,000,000 – $500,000,000
Loan Options: Fixed and Adjustable
Amortization: 20, 25, 30 Years.
Term: 5, 7, 10, 15, 25, 30 Years

Winston Rowe & Associates has an excellent knowledge based resource for commercial real estate valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning loan products that best achieve their client’s goals. Their preemptive problem-solving approach is perfect for clients with credit and time sensitive issues.

Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243

Winston Rowe & Associates has no upfront free assisted living facility financing in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming