Jim Doyle, senior vice president at Cleveland-based Bellwether Enterprise Real Estate Capital, has some good news for developers looking for bank financing to support their projects this year: That financing is getting easier to earn.
Doyle, during a recent interview with Midwest Real Estate News, said that multi-family projects are still receiving the most financing. But Doyle has also seen an increase in financing for industrial, hotel, self-storage, parking-garage and retail projects.
“Multi-family, of course, is still the hot asset class,” Doyle said. “That will probably remain the case until new homes start to rebound and renting becomes less important again. But for this year multi-family will remain a huge part of the equation.”
An increase in lending activity, though, doesn’t mean that lenders aren’t still taking a close look at projects before commiting their dollars.
Doyle said that lenders today are focusing on actual historical numbers when making their decisions. They are not relying on future rents predicted by developers, something that lenders based many lending decisions — often getting burned on them — on during the height of the commercial real estate boom.
“When the market started underwriting out to future rents, that is where we ran into problems,” Doyle said. “Now it is focused again on historicals, on what has been there and what is in place today. I think that is a positive change.”
© 2016 Real Estate Communications Group. Duplication or reproduction of this article not permitted without authorization from the Real Estate Publishing Group. For information on reprint or electronic pdf of this article contact Mark Menzies at 312-644-4610 or email@example.com