Chilling out

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Last week's NIC Western Regional Symposium in Las Vegas was as good a place as any to take the market's current temperature. Unfortunately, one didn't need to step outside to notice a chill in the air.

In almost any other year, the current state of the nation's seniors housing and health sector would be cause for unbridled celebration. Occupancy rates are high across the board, innovation is taking hold as never before, and capital is available at extremely favorable rates and terms. Unfortunately, we're no longer in 2007, when the reverse of Murphy's Law was in place. Last year it seemed, everything that could go right did go right.

To be sure, lenders and operators were hardly in panic mode. Capital remains in play. And if the stakes were not as high, there were still deals being pitched and many that were struck. Yet many discussions about current conditions in the marketplace were laced with qualifiers such as "but," "if" and "however."

The reasons for the more tempered conversations were not difficult to discern. One is the general downturn in the nation's economy. Those in the know are pointing toward a recession in play if not in place. Then there's one of the reasons for the economy's downturn: the collapse of sub-prime mortgage loans -- and the resulting carnage. And it hardly went unnoticed that many of the capital providers were handing out fresh business cards paid for by new employers.

So it came as a relief to many when Arnold Whitman chose to praise the market rather than bury it.

"The long-term fundamentals are fantastic,” said Whitman, who is CEO of Formation Capital, a private equity firm. Whitman, a running and wave-theory enthusiast, reminded those tempted by fear and loathing to wait out whatever downturn occurs. Good times don't last forever, but neither do the bad ones, the self-proclaimed deal junkie insisted.

The NIC's major meeting will be held in Chicago this September. Here's hoping the registrants will only need heavy coats when they venture outside.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.