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Brownstone and other local loan workout specialists have their hands full these days. With condo sales stalled and commercial building values eroded across the region, antsy lenders have been quick to put projects on watch lists at the first sign of trouble. Those signs could be anything from insufficient sales or leases to slashed asking prices that could make a project unprofitable.
The least fortunate among the borrowers have even been declared in technical default on their loans, despite making the required payments.
Distressed projects are easy to spot, workout specialists say. Because construction loans are typically short-term loans giving a developer just one to three years to repay the loan, virtually any project that’s already under construction is facing a daunting decision: Further financing is hard to find and extremely expensive, but not finishing the project could wipe them out.
Read more from the Washington Business Journal
