A recent article today suggested an upcoming shortage in the apartment market. Industry experts have predicted that because of limited resources for development financing, the demand for apartments will exceed supply by 2011. They also mentioned that shortage of rental and condo properties will continue to increase throughout 2014.
80,000 units will be built this year, 220,000 short of what is needed for the increase in demand. As a result of the shortage, NAHB (National Association Home Builders) is forecasting market rents to rise 8% – 10% through 2012 and 4% – 7% through 2015.
Due to the lack of development financing, some developers are shifting their focus from developing to now buying. For developers that are seeking debt and equity financing, for development or acquisition, The Fernandez Group is still funding.
Here are some general guidelines:
- Normal construction loans to 65% loan to cost (LTC) for most commercial projects up to $10 Million
- Hotel construction loans to 70% LTC in major metro markets to $8 Million
- Strong development loans above $10 Million with a combination of debt, equity and mezzanine can get up over 80% LTC
- A Trade Program that is sourced and vetted which can net a project up to $40 Million for $10 Million on deposit that never leaves the clients’ control
- Rural development construction financing out West up to 85% LTC up to $5 Million
- FHA construction financing up to 90% LTC from $2 Million to $5 Million
- And, SBA build out financing nationwide
To send your project financing scenario contact The Fernandez Group at info@thefernandezgroup.com or visit us online at http://thefernandezgroup.com
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