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Real Estate Developers Prosper Despite Defaults

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January 02, 2011

Real Estate Developers Prosper Despite Defaults

Industry lore has it that New York is one of the toughest, most unforgiving real estate markets in the world. The costs are so high, the unions so ornery, the politicians so demanding and the rivalries so fierce, that one false move invites financial disaster.
But the truth is that there have been surprisingly few career fatalities among New York developers, even though they have lost billions of investor dollars on overpriced real estate and have littered the city with unfinished apartment buildings. While a homeowner who lost a house to foreclosure would find it difficult to borrow for years, developers who defaulted on enormous loans have still been able to attract money.
The reasons, experts say, are that there is still plenty of money floating around and that the market has a very short memory.
via http://www.nytimes.com/2011/01/02/realestate/02developers.html?_r=1&scp=1&sq=real%20estate%20developers%20prosper&st=cse
Here is a good article about New York developers survivng the commercial real estate downtown. It's not surprising that leverage is an important factor. Developers who used the most "other people's money," some with over 90% loan to value ratios, had the least to lose. Another important factor? When deals have gone sideways, developers who behaved like their mothers' raised them have fared better than others. If you are open and fair with your lenders and investors, you're more likely to live for another day and not be forever penalized by "market errors".
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Posted at 12:16 PM |
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Howard
I hope the same good news will happen to my Fort Collins real estate work, Colorado have a lot of potentials for real estate but not as lucky.
Posted by: Howard | April 14, 2011 at 12:44 PM
jass
hi sir,
The way you share the inormation with us regarding Real estate investment is so much valuable for common people.we are also providing services such as investment in real estate business, complete assistance in property dealing and business loan.Thanks for Sharing such Valuable information with us and Please Keep continue Posting like these in future.
Posted by: jass | August 23, 2011 at 02:19 PM

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