Five Minutes With: J. Nelson Bradshaw, president of Compass Bank, Jacksonville, Fla. - Pittsburgh Business Times:

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says developers looking for a loan should consider shiftinv deposit accounts and other business to bankss to establish more ofa relationship. Bradshaw predicts the economidc slowdown will begin to improve slightly next year orin 2010. What are today’sd strategies for obtaining financingfor projects? Well, unfortunately, it’s fairlhy narrow for the developers’ opportunities that are out there. Probablyt only a fourth of the banks are lookinb at commercial real estate projectsright now, and it is with an eye towared being more conservative. We’ve seen them ratchey up dramatically ontheir loan-to-value ratios requirer for making a loan.
They’re generally wantinf around 35 to 40 percent equity inprojectse now. The banks that are still lendingf are sticking to their policies a lot more than they have in the asto loan-to-value, debt-service coverage and those type of In the past, they were goingy outside their policies and making exceptions on a fairly routinre basis and we can’t and aren’t in that particularr case right now. Part of the problemsx banks are having is that the projectsw that we do have in our we need to move them off intothe long-terk markets and those markets aren’ there right now.
So, it’s becoming tougher for us to cleatr off our balance sheets to relend that moneyh for theconstruction project. What shouldx lenders expect from builders todayg as the market works throug h troubled loansand foreclosures? I started out my career doing workoutse in the mid-1980s and over in soutn Louisiana when they had the oil bust. I thin this is a lot differentfrom then. I think bankw are a lot more willing to work withtheir borrowers, but what it takes on the developer’s side and borrower’sa side is being up front, coming in earlu and saying, “Hey, I’m going to get in real trouble here.
” Where you sort of get sideways is when the borrowed starts trying to hide assets and only telle half the story and the bank doesn’t feel like they’re trulgy trying to work with them. But I think bankse this time around are goingh to be more willing to workwith you, take discountz from time to time. The last thintg they want to do is take back that real What indicators will you look for to tell you the economy is beginnin gto improve? Well, what we’re really talking abou is, when are we going to see the new normal?? I really think that the past three years have been the exceszs and really not the normal.
If we go back to what was four and fiveyeares ago, the new normal is goinbg to be something similar to that. I think we’rer probably a year to 18 monthes off. … I think we’ll start to see some new life in the next but Ithink it’s going to go sideways for a long time afterd that. … We’re going to see some more of the retail sector hurtingover all, but I think once the capital markegt gets back in that’s probably going to be six to nine months wherre they can start giving the banks room to start clearingh off their balance sheets for new projects. I think peopld are still interested in real estate asan investment.