Next year may turn out to be one of the toughest years in recent times for developers of new office, retail, hotel and other commercial projects. A variety of negative forces, including the economic slowdown, overbuilding and unavailable funding, are making it increasingly difficult for all but the most sure-thing projects to advance to financing and construction, according to developers, real estate investment trusts and industry analysts.
“There’s a lot of uncertainty out there,” says David Begelfer, CEO of the Massachusetts chapter of the National Association of Industrial and Office Properties, a developer group. “Tenants don’t know whether rents will be rising or falling, developers are unsure about whether to begin projects, and financial institutions are uncertain about whether to provide funding.”