"There's been an enormous shift in the past 12 months," the senior managing director of Beck Street Capital, Kevin Comer, said. While lenders in the past were anxious to finance condominiums, they now want to ensure that renting the units is a possibility if they don't sell. "Lenders only want to lend on cash flow projects. They want to be certain that they have a fallback as a rental that works," he said.
Credit Crunch Turns Condos Into Rentals
As a result, he said, condominium projects all over the city have begun to go rental, especially those in the areas of the city where the real estate market has been hit hardest, such as Harlem and areas of Brooklyn and the Bronx. "I think that trend is going to continue and move into Manhattan in the coming months," he said.