SEASONED DEVELOPERS are being forced to rethink their strategy because of the present slowdown and the fear that things will get worse before they get better. Quite a few of them have been hauled in by the banks and told that they can no longer roll up the interest payments until the properties are eventually sold.
This used to be the norm but, with an ever-worsening credit crisis, loads of players are having to account for the lack of sales and dwindling tenants. And some are finding it hard to stomach being bossed around by 30-year-old bankers who are quite unfamiliar with the dynamics of a downturn and the options left open to developers to survive and prosper.
These number crunchers have been single-mindedly trying to squeeze some money out of developers to cover themselves for a fairly dramatic fall off in values since the properties were first acquired.
By all accounts they are having little success, because in most cases, the developers have little cash but lots of equity tied up in foreign investments.
The banks no longer seem content to get one valuation and are calling in estate agents for a second opinion.
The whole ghastly experience has left lots of property people thoroughly unsettled but they will nevertheless try to ride out the storm. It rarely pays off to have fire sales, going by the experience of Anglo Irish Bank when it recently tried to off-load a high quality office suite in Capel Street, once occupied by solicitor Michael Lynn. To be sure there was interest in it but not at the asking price of €6 million. Like so many other properties it is still for sale.
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