What's Baffling Lenders?
Financing is one of the biggest challenges to mixed-use; the capital markets just don’t quite understand it yet. RED Development VP Jeff Moloznik says traditionally, different people (or even different branches or companies) have understood property types, so there often isn’t one person or group who gets the whole picture to underwrite mixed-use. Lending is catching up, though. When RED built the major mixed-use project CityScape in Phoenix a decade ago, it had to get different lenders for each use and seven different condo associations for the residential portions. The Union, underway in Dallas, has one lender and one equity partner for the entire project. Recapitalization at stabilization is still almost impossible though, he says.
Jeff’s far right here at Bisnow’s Future of Dallas Mixed-Use event last week with CallisonRTKL’s Dallas Branch, LB Byars, Jeff Gunning and Paul Wilmarth.