Real Insight. Real Estate.

Posts Tagged ‘construction financing’

The Week of November 21-27

- Could a new kind of stress test be looming for CRE?

- With the future for CRE unknown, one expert advises banks to raise equity now.

- Regulators are pushing small banks to cut back CRE lending.

- Morgan Stanley admitted defeat, handing back Crescent Real Estate Equities to lender Barclay’s.

- A Hong Kong IPO brought in $2.5B for the Sands China…the low end of the range.
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Developers of ground-up construction in today’s economic climate are piling up horror stories of projects they are working on that have stopped dead in their tracks due to short falls in financing. In some instances, developers have had to ask their contractors to immediately halt progress on a site just after laying the foundation for a new building.

However, these developers need not worry as they can still secure financing for completion of their projects. All they need to do is go to their local or regional bank and prove to the lender that they are in such great shape that they don’t require any capital whatsoever. The bank will then be happy to let them borrow. Yes, I realize that this makes no sense at all–it’s a classic Catch-22. But such is the current availability of financing for ground-up construction.
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