The Real Deal writes slightly tongue in cheek about a recent Capital Markets conference at NYU’s Schack Institute of Real Estate where developers looking for lots and lots of cash are having a hard time. Well duh.
All the big names were represented including Silverstein, Brookfield, Related, and Kushner.
Hudson Yards for example has had to ‘scrape together’ the $20 billion they’ve needed – “Getting constructing financing has been very difficult,” Related Cos CEO Jeff Blau said. Despite debt markets that have eased considerably since the last credit crisis, the regulatory environment across the globe has forced banks to tighten their own lending standards and keep less loans on their books, lest they take a hit to their return on equity ratios. This means that financing for large-scale projects has to come creatively.
At Hudson Yards, Related Companies was able to scoop up $850 million from the Children’s Investment Fund, a hedge fund based out of the UK. That money will be earmarked for 15 Hudson Yards, the 458 unit, 70 story condo building scheduled to be completed in 2018. Hedge funds have been performing quite miserably the last few years, so it is no surprise that Children’s Investment Fund made a less risky bet on residential real estate.
Foreign investments via the EB-5 program have also provided much needed funding, although money coming from those sources is not without controversy. The Real Deal notes “Blau said he is “working hard” to keep it alive.”