January 13, 2017
Though apartment construction is increasing in and around Milwaukee, WI, finding financing to launch projects has been more difficult. Commercial banks are enforcing stricter guidelines, in light of overbuilding concerns.
Developers such as Stewart Wangard with Wauwatosa, WI-based Wangard Partners, said the trend is to be expected. “We’ve benefitted from extremely low interest rates, and while, as a borrower, we appreciate that, we also realize it was temporary,” Wangard told the Milwaukee Business Times.
John Stibal with the city of West Allis, WI, pointed out that banks will begin requiring developers to have a 70%-75% loan-to-value ratio instead of the standard 80%. Because returns might not be as high for investors, there could be an increase in requests for municipal assistance through TIFs. But Stibal said municipalities will likely be more selective, as well.
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