It may be hard to believe, but lenders are now actually sending letters of intent to provide construction financing. Construction financing, perhaps the riskiest type of mortgage financing, is available in the tri-state region for rent-regulated and other multi-family buildings. It even exists for condominium projects (and yes, I did say “condominium”).

Gino Martocci, president of the New York City and Long Island region of M&T Bank, said: “We have and continue to provide construction financing for well-capitalized clients. We are in the process of providing construction financing for a brand new hotel in the Union Square neighborhood.” Another established developer who prefers to remain anonymous, who is in the process of building a rental building off Fifth Avenue on the Upper East Side, told me that 10 financial institutions have expressed interest in the development. [more]

When ailing banks were lining up for infusions of federal money last year, as part of the government’s $700 billion bailout package, the New York Community Bancorp politely said “no thanks.” The company, whose holdings include savings banks and larger commercial operations, was cleared to receive $596 million in preferred equity stock from the Treasury Department. But its earnings capacity was so solid, according to Joseph Ficalora, its chairman, president and chief executive, the funds weren’t needed. And this may be even more striking considering that a steep 80 percent of its business is real estate loans; among them, 71 percent are apartment building mortgages with another 21 percent to similar residences with stores in their ground floors. And all told, about a quarter of its loans underwrite Manhattan properties. But Ficalora,
who began working for the company in 1965, as a teller at a bank branch
in Corona, Queens, just a few blocks from his house, doesn’t invest in
splashy, high-risk mega-projects. On the contrary. Most of his buildings are comparatively small, old and rent regulated.
Though they may not generate huge multiples, they are dependable bets
over time, which is particularly beneficial when the market tanks, like
recently. And with an average size of $4 million, 60 percent loan-to-value ratio
and four-year payback rate, those loans offer minimal exposure,
Ficalora explained. As a result, the company, which is based in
Westbury, NY, posted a third-quarter profit, in its fifth consecutive
quarter of growth. It may also explain why New York Community Bancorp, with assets of $33
billion, is the country’s 24th largest bank-holding company and the
city’s largest thrift. Click here to see The Real Deal’s Q & A with Ficalora. [more]