Moelis: ‘Market-Rate Projects Are Almost Impossible’ to Finance



Despite all that discussion of “green shoots” last year, the real estate finance market remains intractable, according to developer Ron Moelis.

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In an interview with The New York Times, Mr. Moelis said that financing development of market-rate projects remains “almost impossible.” Financing for affordable housing projects, on the other hand, is somewhat easier to come by:

The banks have some federal requirements to lend for affordable housing. We have a 26-year track record—we have construction and management in-house and a good record with the commercial banks—so we’re finding the banks almost coming to us.

The financing is less risky in some ways, but it can also be very mind-numbing. Oftentimes you’re putting together four or five different sources of capital. And most low-income projects are done with a variety of subsidies, the biggest one of which is tax credits.

More here.