The Real Deal New York

From the July issue: Developers of flagging residential condo projects in the city may be faced with a new real estate Catch-22: the prospect of having to provide additional equity to lenders or take out more loans if they want to cut prices to attract buyers. The bind is a direct result of the weak housing market, which is forcing developers to reduce prices at the same time banks are reeling from the credit crunch and have become unwilling to compromise on their loans. The developers who do discount prices can get caught in the financial squeeze because of a little-discussed item from their mortgage known as a “release price.”