Lenders Push Retail to Mixed-Use Projects

Jeff Rinkov is the CEO of Lee & Associates.

LOS ANGELES—Lenders have become really conservative on retail projects this year, and while retail construction was already slow, it is now barely happening. Except, that is, in mixed-use developments that have a ground floor retail component. Lenders may be eschewing retail product, but mixed-use projects, especially multifamily mixed-use in urban cores, is still all the rage in the capital market worlds. While the propensity to lend on these projects may confine retail to mixed-use, it may also catalyze more retail construction.

“The lending environment is becoming really constrictive, and lenders are becoming really conservative,” Jeff Rinkov, CEO of Lee & Associates, tells GlobeSt.com. “The one thing that you can finance for sure is an urban core multifamily building where the retail makes up 10% of the rentable square footage and the net income.”