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Stalled projects get second life

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Some long-stalled commercial real estate projects are springing back to life as large banks start to lend again.

 

The Wall Street Journal reported that the amount of construction lending financed by J.P. Morgan Chase Co. in the first six weeks of this year equaled what was funded by the nation’s second-largest bank in all of 2010.

 

Some investors are putting more money into the still-troubled industry, helping to revive a number of large construction projects. Though U.S. banks are still wading through billions of dollars worth of distressed loans, renewed confidence in the financial sector as the economy improves is giving hope to commercial property developers.

 

“We have certainly started making construction loans again,” said Todd Maclin, head of J.P. Morgan’s commercial bank. “In the third quarter and fourth quarter of last year, it started as a trickle, and now you’re starting to see much more activity.”

 

In Tempe, Ariz., a Cleveland-based developer plans to finish a 375-unit apartment complex that stalled more than two years ago. It was estimated that the high-rise housing project will cost $30 million. An unfinished eight-acre mixed-use development in Atlanta may get a fresh start. OliverMcMillan, a development company, said it has secured $300 million in private equity financing to complete the project.

 

The Census Bureau reported last week that apartment construction rose 80 percent in January to 171,000 units, the highest rate since February 2009. The American Institute of Architects’ billings index, which is an indicator of future construction, was up in both November and December.