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.
“We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.” – John Hope III, Chairman, Whitney National Bank
“With that capital in hand, not only do we feel comfortable that we can ride out the recession, but we feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.” – Walter Pressey, President, Boston Private Wealth Management
“Adding $400 million in capital gives us a chance to really have a totally fortressed balance sheet in case things get a lot worse than we think. And if they don’t, we may end up just paying it back a little bit earlier.” – Christopher Carey, CFO, City National Bank
It’s been a week since I posted to the Cents of Place. I’ve wanted to contribute more in that time, but a number of projects have taken a turn for the more involved. Why? Chaos in the private lending market has placemakers thinking twice and three times about potential partnerships with the public sector.