Falling interest rates may have a positive impact on the construction finance industry, said Jonathan Lee, principal/managing director of George Smith Partners, as banks show more willingness to lend. Lee recently spoke with Loretta Clodfelter, editor of Institutional Real Estate Americas, about the latest construction trends.
“This is a positive development on multiple fronts for the construction industry,” said Lee. “In the last 12 months, the debt side lenders have continued to get more conservative by constraining their advance rates with debt coverage tests on exit NOI. It becomes more difficult for them to push exit underwriting rates as a precaution when the treasuries are dropping precipitously. From the perspective of debt, I foresee leverage holding firm.”
See the full article: Construction trends — lower interest rates, labor shortages (IREI)
