Construction Market Sees Capital Abundance Amid Declining Housing Starts
What happened
U.S. residential housing starts declined in August, with overall starts down 2.6 percent and multifamily starts falling nearly 22 percent, according to First American Financial Corporation data. Housing completions also dropped nearly 12 percent. Despite this, commercial real estate debt funds held a record $56 billion in dry powder, and private credit funds have grown their CRE books by roughly $104 billion since 2019, according to.
Why it matters
Commercial real estate lenders currently possess more capital than ever before for funding projects, while the decline in housing starts means fewer projects qualify for that funding. Eric Cohen stated that the market is flush with capital from banks and private lenders, making projects from developers with solid reputations a hot commodity for lenders.
Who's involved
- Eric CohenDiscussed the availability of capital and project scarcity in the construction market.
- RosenfeldDiscussed the availability of capital and project scarcity in the construction market.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Bradford AllenSpeculative
Increased capital availability from lenders could benefit Bradford Allen's access to construction financing.
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The entities involved
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Eric Cohen
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Rosenfeld
in Germany
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