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PORTLAND-Long-term debt is down, allowing developers to stabilize their properties and pay off short-term construction loans, but getting the construction loans for some product types has become more difficult of late.

Luther Barker, the client relationship manager at US Bank in Portland, tells GlobeSt.com the company will do construction financing for anything that makes sense, but right now assisted-living facilities and suburban office don’t really make sense due to overbuilding, the economy or the dot-com meltdown, depending on the product.

“We will still make quotes on both of those asset classes, but there will need to be significant preleasing or a very strong partnership,” says Luther, adding that hotel development is also in the same boat despite US Bank being a pretty big hospitality lender. “The lower the preleasing, the bigger the equity investment we will want you to make.”

Tim Fasel, first vice president at Bank One in Portland, agrees on all counts and says the construction lending environment is pretty consistent with the economic environment. “Our economy has slowed a bit, particularly in the Northwest, from manufacturing through to high tech, so there’s less development and fewer dollars being lent as well,” Fasel tells GlobeSt.com. “I think the market is pretty well connected.”

The developers are still trying, however, says Fasel. “I’m seeing a lot of hospitality,” he notes. “Because all the banks are pulling back from that product type, the deals continue to get shopped around over and over. Spec office tends to get shopped the same way.”

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