The new, under-construction Twins stadium has been touted as a catalyst for new development. But so far, new development has been slow to take off in North Loop.
The previous wave of residential condo development has largely ground to a halt. And amid the bumpy economy, there isn’t much fresh development in the current pipeline around the ballpark, slated to open in the spring of 2010.
From the perspective of a developer, this not only bad news, but a sign of the times. It is simply too costly, too risky, or both, to launch any new projects right now.
And after the onset of the credit crunch last summer, just as for individual homeowners, financing new projects got tough:
right after late August [or] Labor Day, it was literally like a switch had been flipped and that market evaporated,” Minn said.
lenders making loans backed by commercial mortgage-backed securities (CMBS) loans drove much of commercial real estate financing in recent years, until the credit crunch hit last fall.
For the individual homeowners – mostly condo dwellers – in North Loop, this can be taken as a positive sign. Though there is still some inventory overhang from completed projects with unsold units, and financing a condo has gotten markedly tougher, new supply will soon be limited to re-sales only, and should provide some pricing support and enhance their prospects for appreciation, even if a few years away.