Developers Can't Find The Money
"The banking crisis 'pretty much stopped the majority of commercial development dead in their tracks, except non-leveraged projects, smaller investments and owner-occupied deals, and institutional projects that were already in progress,' [Developer Rick] DeKam said. 'I think you will see institutional, medical and even multifamily development as the steady-performing real estate over the next few years.'
Michael Cagen, associate broker specializing in multifamily investment at Marcus & Millichap's Grand Rapids office, has seen the same financing challenges of late as other real estate categories.
'Only several months ago, we were able to find financing, but at higher interest rates and at lower loan to values,' Cagen said. 'Today, lenders tell you they need to have the complete banking relationship with you, that the buyer needs to be local and that it needs to be newer property. In essence, this means the number of lenders who are available to finance a given deal has continued to shrink.'"