In this environment, not even Howard Hughes could get a loan.

Howard Hughes Corporation CEO David O’Reilly told Woodlands, the Houston suburb where the company is headquartered, that multifamily proposals are getting nowhere. Bloomberg.

“Zero showed up and gave me a bid,” O’Reilly told the outlet. “I’ve spoken to 48 of them.”

The real estate developer and manager is known for its range of master-planned communities to offices and retail space, including condominiums in Hawaii and buildings in Manhattan’s Seaport district. Hedge fund manager Bill Ackman’s investment firm, Pershing Square Capital Management, owns about a third of the company’s shares.

Real estate financing markets are tightening, raising concerns among developers and property owners. Commercial real estate has been affected by rising borrowing costs, leading to payment difficulties, defaults and negotiations with lenders. Texas billionaire developer Ross Perot Jr. has also noticed it’s getting harder to get construction loans for real estate projects.

Apartment landlords are now also being affected. While benefiting from rental growth during the pandemic, they are now grappling with high borrowing costs and increased expenses that are eating into profits. Apartment prices have dropped 21 percent over the past year, according to Green Street data.

Lenders are currently focused on resolving existing loans and are hesitant to extend new loans, posing challenges for developers such as Howard Hughes, despite strong demand from tenants. Howard Hughes has built apartments in The Woodlands with 96 per cent occupancy and double digit rental growth.

“Sounds good, but I’m frustrated because it means I’m not building the next building fast enough,” O’Reilly told the outlet.

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