CRE Lending at a Standstill

6.9.23 - CRE Lending at a Standstill

Gold last traded at $1,960 an ounce. Silver at $24.28 an ounce.

CEO: "I Talked To 48 Lenders About Debt For A New Apartment Project. Zero Came Back With A Bid" -Zero Hedge

Less than two months ago, we conveyed an anecdote from One River Asset Management CIO Eric Peters, which showed just how challenging it has become to obtain debt funding, to wit:

"Credit started tightening six to nine months ago," said the developer, a close friend, entrepreneur, with large residential projects across the nation. "It started with the money center banks," he continued. "This pushed us to regional banks for our latest projects, but then SVB happened." The market froze.

"The lender for our latest 30-story project in a tier-one city backed out, so we scrambled, and spoke with well over 100 banks. Not one will provide financing." His firm is a leader in their market niche. A strong track record.

Confirming just how tight credit has become, and the dire observations from the Senior Loan Officers Survey that took place not long after and which showed that it is now next to impossible for even quality borrowers to obtain new credit, today Bloomberg writes that even Howard Hughes Corp., a Texas-based real estate developer that counts hedge fund manager Bill Ackman as its chairman, is struggling to find viable financing for new apartment projects as lenders pull back.

Chief Executive Officer David O'Reilly said he reached out to dozens of lenders with a pitch for a new project in The Woodlands, a master-planned community in the Houston area.

"Zero showed up and gave me a bid," he said. "I talked to 48 of them."