Renewed lending rejuvenates U.S. commercial real estate
An influx of fresh capital into U.S. commercial real estate is bringing some long-stalled development projects back to life and launching new construction of apartments, office buildings and shopping centers.
Some long-stalled construction projects in the U.S. have resumed with the help of loans from financial institutions. For instance, OliverMcMillan said it was able to raise $300 million in private-equity funding for its mixed-use development project in Atlanta, and J.P. Morgan Chase has lent as much to construction projects in six weeks this year as it did in all of last year. Still, Clark Davis, vice chairman of HOK, said the industry's recovery "will be slow and gradual, and not a dramatic bounce."
The moves show that the industry, in a deep slump just a year ago, has entered recovery mode—at least in the nation's largest and healthiest markets. Analysts say the improved economy is giving rise to pockets of demand for new commercial space, while low yields on other investments prompt investors to seek higher returns in real estate.
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