Judging from the cranes now dotting the horizon, it’s tempting to believe that things are back to normal—at least in the real estate world. But in reality, developers, investors and lenders are living in a “new normal” of challenging and tough new real estate regulations and practices. For real estate players, this new normal creates as many pitfalls as possibilities.
What’s Attracting Lenders
While the market continues to improve, lenders are still cautious and are easing credit for certain types of projects and borrowers. For example, lenders are still aggressively seeking to finance good projects in primary markets or trophy buildings. At the same time, low cost of capital borrowers, Real Estate Investment Trusts and Master Limited Partnerships have been able to obtain financing because they have significant equity to invest in the financing.
