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What, Me Worry? Building Grand Ave In A Downward Market

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"We think there will be a lot of projects that won't get started because they can't get financing," says Jeff Blau, president of Related, so in the WSJ's story on how big developers, in a handful of cities, including Los Angeles, are building very expensive projects--in a bleak financial market. If Goldman Sachs analysts downgraded Forest City Enterprises' stock earlier this month, the WSJ story takes a broader look at building, noting that most huge projects "typically get considered after years of solid real-estate markets. Ironically, this means developers begin shoveling dirt about the time the economic cycle turns downward." This time around, one worry is whether consumer spending and high-end housing can support the retail component of these projects, according to Nicolas Retsinas, director of Harvard's Joint Center for Housing Studies. Additionally, if real estate is a local business that depends on upbeat regional economies, real-estate finance isn't local and affected by the slowing economy. Foreign investors, anyone? Also mentioned: The political battle surrounding the Playa Vista development, which ultimately led to lenders foreclosing on the original developer.
· Cities Across the Globe Propose Large Real-Estate Projects [WSJ]