WASHINGTON, DC-Twenty-four to 12 months ago, Cassidy Turley’s construction finance shop was all but idle, with only a few deals working their way through its pipeline. Despite the uneven progress of the recovery, both debt and equity have returned to the market, including for condo construction. About the only product type that financiers still shy away from, presuming there are even developers to take the risk, is spec office, David Webb tells GlobeSt.com. 

Three, four months ago lenders’ attitude and appetite for construction loans changed almost overnight, he says. "Now they are slowly taking on more risk."

For instance, while more lenders are starting to provide financing for condo construction, the majority still insist on having the deal pencil in as an apartment building as well. But there have been cases in which the lender was willing to finance a deal as a condo project because the units were large or otherwise unique and not well suited for an apartment. That there is debt and equity available for those transactions, he says, is very telling. 

The only product that has not come back is spec office, but Webb says that is as much a function of the vacancy rate than anything else. "I predict it will be back next year." The company’s finance pipeline for the DC area now includes between $300-$400 million in condo finance, the same for partially or fully leased office and $500 million for multifamily finance. "That is the best we have had in three years from a pipeline perspective," he says.