... MHN: How is the credit crisis affecting financing in the apartment sector?
Dr. Conway: I recently attended the Apartment Outlook Conference in Los Angeles where everyone was talking about the credit crunch that is affecting the multifamily sector. It has become extremely difficult to get loans and even though Fannie Mae and Freddie Mac are continuing to provide a lot of financing, it remains a small portion of what is needed. There were CMBS loans, conduit financing, investment banks and other banks providing capital and it has all disappeared now. The banks are now busy shoring their own balance sheets. Until last year, they were willing to give loans of up to $1 billion and the number has now dropped to $300 million. As result lenders now need outside support and a lot more cash to get projects off the ground...