Lenders are growing more cautious amidst slowing economic growth, putting pressure on landlords in need of fresh cash. “To the extent that the economic climate goes in the wrong direction, it’s going to have an impact on demand for commercial real estate,” says Mark Myers, head of Wells Fargo’s commercial real estate business.
The construction boom in NYC and Miami has led to a glut of luxury condos and hotels, making these types of properties the most at risk. In NYC alone, the value of construction projects begun last year hit $40.9B, a big jump from 2014's $26.7B, Bloomberg reports.
This glut, combined with rising rates, a strong dollar discouraging tourism, falling oil prices and declining stock values are causing more and more lenders to hold onto their cash. [Bloomberg]
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