How low can it go? That is the question being asked this fall by developers as the economic recession rips through commercial markets with a vengeance, knocking out many projects and lenders and casting uncertainty on the future.
With construction investment down nearly 20% this fall and a host of banks failing due to defaulted construction loans, commercial construction has slowed to a crawl. Developers can do little more than wait for the situation “to finally hit bottom,” says Cami Hardee, marketing director at Woodbine Development Corp. The Dallas-based developer is weathering the downturn, with two major hotel projects currently under way. Despite the climate, Woodbine was able to finance the projects through “good, longstanding relationships” with lenders, Hardee says.