Capital Markets Roundtable

Historic Tax Credit Developer’s ConferenceFriday, February 6, 2009

Miami Beach, Florida

General Economic Conditions

• GDP contracts at an approximate 6% annual rate in the fourth quarter of 2008

• 2008 sees the highest job loss since World War II

• Both the U.S economy and the job market fell off a cliff in 2008

General Economic Conditions

• The Fed has now cut interest rates to virtually zero

• The CBO estimates that the US economy will be in recession through 2009

• The stimulus package – too little, too late?

Markets• Burst Bubbles -- Home prices – Case Schiller index

shows 18%+ declines in November for 20 major metro markets.

• What does this mean for the apartment sector? Commercial real estate in general?

• Is the bottom in sight?

• Workout activity – even some experienced HTC developers have been affected

The Financial Sector

• Many of the largest and most established financial institutions have suffered huge losses or no longer exist independently. Some of these companies are (or were) investors in and lenders to HTC deals.

• The market for LIHTC has been severely disrupted. How will demand for HTC be affected?

• How have pricing, terms and underwriting been affected?

The Credit Crunch

• Some lenders are conserving capital, perhaps in case the worst is yet to come.

• Some deals have stalled due to lack of financing

• Tighter underwriting

• What property types are lenders/investors staying away from? What geographic areas?

• FHA Insured Loans – use with lease structure possible but not assured

Things are very rough out there – but deals are still getting done.