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Lack of financing hasnbt stopped all construction

September 30, 2010

Even despite a dearth of financing for new construction, some developers remain optimistic.

Letbs not underestimate the lack of financing. As Anthony Westreich, chief executive of landlord Monday Properties, told The Wall Street Journal,

“It’s a bit of a cart-and-horse situation. You have tenants saying, ‘I don’t want to commit to a lease in your building until I know the financing is there,’ and lenders saying, ‘I don’t want to commit to financing your building until I know the tenants are there.’ “

Nevertheless, the halting of new construction could mean demand for newer buildings may be greater than the supply in the next few years. In addition, a few construction projects are moving forward, just not nearly as many as during the boom, as developers seek financing beyond the banks. Extell Development Co., for example, still hasnbt gotten a bank construction loan, but is moving forward on a building in Manhattan with a little help from partners in the Middle East.

To learn more, check out bHigh Hopes as Builders Bet on Skyscrapersb from The WSJ. What do you think of this situation? Webd love to hear your thoughts.

Photo credit: Monday Properties via The Wall Street Journal

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