Daily News - Sunday, November 2, 2008 16:43 - 0 Comments

Lenders Change Tune

In what condo developers in the US now refer to as “the good ol days,” many condo towers were given the green light by lenders with as little as 40% of the units under contract.

That’s changing along with other factors such as the developers history of previously completed projects, how much of their own money they are putting up, and more stringent analysis on the actual market demand for any particular new condo building.

Many developers looking at starting new projects have reported a requirement for up to 70% of the units pre-sold before the release of funding. And a representative with First National Bank recently said his figure was 60%.

While there is no definite pre-sell magic number condo high-rise projects, especially larger ones who need to sell a lot of units are going to be very difficult deals to do and may be reserved for the very largest developers with a respected track record over a long period of time.