Big banks don’t appear to be loosening the purse strings for construction loans. However, that conservative streak is creating opportunities for regional banks and bridge lenders to pick up the slack.
Some of the usual players in the construction loan market—the large, national banks—are less active due to exposure concerns. “They have made a lot of construction loans through the cycle and to add one more to the queue right now is probably not what they are looking to do,” says Jeff Erxleben, executive vice president and regional managing director at capital services provider NorthMarq Capital in Dallas.
There continues to be a steady flow of capital, although the big banks have tightened their hold on construction loans and are more keenly focused on serving existing clients. “Financing is available, you just have to fit the box of what a lender is looking for,” adds Erxleben.