Construction has shut down in New York City and unfortunately, there are still billions of dollars of loans that are unpaid, and cannot be settled until construction is complete.
According to Crain’s New York, there were more than 450 construction projects underway in New York. Banks like Wells Fargo and Deutsche Bank AG are just a couple of lenders who were already holding billions of dollars in debt obligations.
Some of the city’s top projects have come to a halt, such as Google in Hudson Square, luxury condos on Billionaire Row, and the transformation around Grand Central Terminal.
Crain’s predicts that there are certain contractors who may not be able to survive the storm, as non-essential workers are already ordered to stay home at least through the end of April. Lenders are wondering if they will ever see the money they are owed.
Bank of New York Mellon Corp., JPMorgan Chase & Co. and Bank OZK, along with Wells Fargo and Deutsche Bank, were the top five originators of construction loans in New York City in the two years that ended Dec. 31. Those loans, or parts of them, may have been “subsequently sold to investors,” according to Crain’s New York.
“For commercial, corporate and institutional customers, we are actively engaging to determine appropriate assistance,” Wells Fargo said in a statement. “We are consistent in our approach to commercial real estate lending, continuing to lend throughout many challenging market cycles.”
# # # To read the full story in Crain’s New York, click here: https://www.crainsnewyork.com/real-estate/construction-freeze-adding-industrys-debt-risk
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