Detroit Property Investment: Acquisition Of Detroit Medical Centre

Detroit Property Investment: Acquisition of Detroit Medical Centre

March 19, 2010

Detroit Property Investment: The monthly index of US properties showed an improvement in the sale of bank owned foreclosed properties. The foreclosed properties are offered at a very low price and Clear Capital was on rise in small cities because of cheap price. Detroit clear capital was up by 21.8 % as compared to last year.

The announcement of the acquisition of Detroit Medical Centre (DMC) by Vanguard Health Systems is another positive development in the Detroit property horizons. The local leaders in Detroit and nearby counties said they are planning to get approvals of some plans, which will allow a tax free Renaissance Zone close to DMC.

In a renaissance zone, the taxes such as single business taxes, state income tax, property taxes etc are waived. The people who live in the zone are given exemption in taxes and there are certain tax free zones in Wayne County.

Commissioner Burton Leland said For the development of the region, it should not be a big deal to allow the region to be a Renaissance Zone because it will help in creating new jobs and it will also provide economic improvement.

The acquisition may result in creation of more jobs in the area and it is expected to generate more than thousands of jobs. Vanguard will be spending $850 million in the Detroit Medical Centre in the next five years and more than $800 million will be invested in Detroit. The company is planning to invest $500 for the improvement of Detroit campus and for the development of the Childrens hospital.

The company will also invest for the construction of new Physician office building that is proposed to be made at the Harper and Sinai Grace and further, $350 million will be invested in the repairs and for acquiring capitals in Detroit Medical Centre. In the press release, the company informed that the mission of the Vanguard is to keep up with the ten years commitment of keeping the hospitals open and to have a charity care policy.

Research at University of Michigan shows a growth in jobs

The research seminar in Quantitative Economics released a U.S. economic outlook for the year 2010-2011 in the week and the report said that the economy will generate more jobs in the year.

As per the report, the job losses have reduced to an average of 30,000 per month in the first two months of the year and the number of temporary jobs has increased since September .The increase in temporary jobs indicates a better scenario. The unemployment rate is expected to be at an average of 9.5% in 2010 and it will be slightly lower than the current unemployment rate of 9.7% .The rate will increase to 9.1% from 2011.


Federal Reserve removes the bank exemption

(Source: Bloomberg) March 19, 2010

Federal Reserve has removed the 23-A exemption, it had given to some banks at the start of mortgage crisis. The exemption was given to six banks which included Bank of America Corp., Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co., Barclays Bank Plc and Royal Bank of Scotland Plc.

The exemption of 23-A was given to protect bank depositors and it was given after the discount rate was reduced by half a percent in August, 2007.The decision was made by Fed to reduce the mortgage related disruptions and to prevent further degradation of financial system.

The Managing director of Portales Partners LLC, Dino Kos said the problem was basically solvency and Fed recognized it later. The aim of giving the exemption was to give backstop liquidity to the market and to provide investors with loans. Removal of 23 A exemptions indicted that federal wanted to get back to normal as the market was improving.



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