Observations

Finding Financing.

Paul Zeger
By Paul Zeger
04.06.17
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San Francisco Residential Investment & Development Forum
March 14th, 2017 / San Francisco

It’s no secret that construction costs and a labor shortage pose tremendous hurdles in the San Francisco residential market, but what’s more these days is the lack of viable financing options for developers. On March 14, a panel of industry experts sat down to discuss housing dynamics in the Bay Area. One expert pointed out that banks are starting to back away from the sector, and as this continues, lending will continue to be difficult and hard to obtain.

Polaris Pacific Partner Paul Zeger weighed in saying that the available financial capital has shaped the recent landscape of the residential market. Out of more than 8,000 units built recently, over half became rentals due to lenders preferred deal structure.

The Bay Area continues to be a major draw for buyers and it’s likely that demand will continue to outpace supply. Zeger points out that the market is bifurcated – there is a healthy interest and demand from buyers who want affordable entry-level homes as well as those who want the ultra-luxury product. That said, he also addresses the lack of options in between due to the high construction costs that result in skyrocketing home prices.

As financial resources become more limited, future developments might be trickier to get off the ground.

Available financial capital has shaped the recent landscape of the residential market.
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