Donjek Project: Picturing Value in Walkable Neighborhoods

Over the last several months, I have been working with developer and consultant Michael Lander (Lander Group) and urban designer Peter Musty (Peter Musty LLC) to develop a concise, visual statement about the prospective impact that transportation investments can stimulate. Hopefully, you’ll find the graphic product below clear and persuasive – and you can download a pdf version here if you prefer.

TOD_Graphic

Low Interest Rates, High Anxiety Borrowing

Money is cheap today. In a conversation yesterday with developers, low rates seemed to make it only more aggravating that lending remains a challenge to procure for new construction or rehabilitation. 

Measures to gauge risk as perceived by banks (such as the “TED spread,” shown, and swaps spread) suggest that lenders are currently charging interest rates much closer to the risk-free Treasury yield than they have since the spring of 2007. That ought to mean that lending is flowing more readily for projects with strong fundamentals. Still, looking at interest rate graphs ignores multiple issues that confound borrowers – namely, underwriting criteria put in place in crisis.

TED_Spread

One developer described yesterday, difficulty finding a lender to underwrite a 70% pre-leased commercial development in a prime location – soon to be less than 200 feet from a new light rail station, in a growing metro area with a diverse economy. It could be that banks’ perception of risk as illustrated by interest rate spreads has changed – in which case underwriting criteria need to follow suit.