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Nonresidential Construction Downturn in 2009

January 22, 2009

Analysis of:Nonresidential Construction Seen Falling 11% in 2009 | www.cnbc.com

The American Institute of Architects have hit the nail on the head with regard to declining commercial construction. Many sources of capital having dried up due to the banking fiasco and large down payments required by banks will certainly slow new construction in 2009. A developer told me yesterday that his lender asked for thirty five (35) percent down on an approximate six (6) million dollar project even though he had commitments for sixty (60) percent of the project from Triple A rated tenants. Most developers faced with those paramaters will certainly slow and or stop new projects. Several areas of the U.S are faced with too much inventory of Type A high rise office and industrial warehouse space. This will contribute to the downturn as well. The poor economy leaving most Americans will less money in their pockets will slow down new casino and hotel construction. Most general contractors should set their sights on large school, hospital and municipal projects in 2009.

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