The rising cost of capital has stalled most commercial real estate development in 2023. Unless projects were already underway or financing had been secured, there will be few projects started, according to John Chang, senior vice president of research services, Marcus & Millichap.
In the firm's 2023 Construction Trends Report video, Chang said that otherwise, "builders are being pushed to the sideline."
The cost of capital is rising due to the Federal Reserve's decisions to raise rates considerably, "making it difficult to get a construction loan, and if you do, it's rather expensive," Chang said.
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