A lot has changed since the spring of 2006, when Westport Property Management purchased the Bridgeport property where Remington shavers were once made with tentative plans to build a waterfront residential high-rise complex.
Then, a booming economy and easy credit conspired to support a spate of residential and commercial developments in Fairfield County.
Across the country, the fallout from the subprime mortgage crisis is jeopardizing some real estate development financing, but last week Westport Property indicated it is moving ahead with the Bridgeport project which could add 1,200 luxury condominiums overlooking Long Island Sound.
General Electric Co. is following through with its June proposal to invest $25 million in bonds to finance a yet-to-be-determined project in downtown Bridgeport, the first time a private company has underwritten bonds for such a purpose, according to the Connecticut Finance Housing Authority.
Officials in Stratford formally began soliciting bidders for the U.S. Army”™s former engine plant in Stratford, a redevelopment project that has sputtered over the years but which now has an energized team led by Cushman & Wakefield.
Shelton”™s planning and zoning commission is weighing a request by developer Richard Kral to expand a Shelton marina on the Housatonic River to 300 boat slips, a comparatively small project that includes two-dozen condominiums but which nevertheless could help revitalize the town”™s riverfront.
And across the Housatonic in Ansonia late last month, Bob Scinto obtained permission to begin construction of a new hilltop office park called Fountain Lake, which the Shelton developer has said will take time due to blasting needed to level ground for the new buildings.
On the historically tarnished end of Fairfield County”™s go-go Gold Coast, developers appear unshaken by a credit crunch feared for other parts of the country, as rapid-fire concussions from the subprime mortgage implosion threaten the stability of the overall lending market.
The commercial real estate market has been somewhat insulated by the fact that few local banks that undertake mortgage lending dealt in the risky, subprime mortgages in which brokers string together loans for people with problem credit.
But a contagion in the overall credit markets could dampen lender enthusiasm for new developments, at a time when Fairfield County is counting on a swath of new residential and commercial developments to provide additional space for businesses and workers ”“ and when the Bridgeport area appears to be getting several projects into gear.
The commercial real estate market throughout the tri-state region strengthened in the second quarter, according to the New York Federal Reserve”™s most recent analysis of the local economy in late July. In Manhattan, asking rents for office space are up a third from a year ago. The New York Fed reported vacancy rates in Fairfield County reached their lowest levels in at least five years, while Westchester County”™s rate dipped to its lowest level since early 2006.
The New York Fed reported decreased demand for commercial mortgages issued by small and midsized banks, which often lend for smaller local commercial projects.
A national Federal Reserve Bank survey of bank loan officers found that only a small percentage of banks had tightened credit through mid-July. Just one in five banks reported weakening demand for credit from large and midsized businesses, and just one in 10 did so from small companies.
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Those numbers support results of a survey by the National Federation of Independent Business (NFIB), with only 5 percent of small-business owners reporting it was more difficult to obtain a loan. NFIB did not break down the survey by geographic areas.
Will projects get fast-track backing in eastern Fairfield County, as appears the case with the soon-to-be-named deals backed by GE? Or will commercial-credit constrictions result in stalled real estate projects, in the manner of Bridgeport”™s long-elusive Steel Point peninsula now under development by Midtown Equities L.L.C.?
The answers to those questions could help determine the Bridgeport area”™s viability to attract employers during the next economic boom cycle.
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