Contractors, Owners Wait Out High Interest Rates

As long as the Fed doesn’t raise already elevated rates, a steady environment could jump-start stalled projects.

Jean Dimeo, Editorial Director, ConstructioNext, WOC360, IRE360

May 14, 2024

1 Min Read
Sean Pavone via Getty Images

With nearly 45 years of experience under his belt, Monte Thurmond may have seen this movie before.

The executive vice president for AECOM Hunt, an Indianapolis-based general contracting firm, understands the implications of higher interest rates on construction activity, and that strain is starting to play out now, Thurmond said.

“We’re certainly seeing a lot of pressure on almost all the commercial real estate projects because historically the majority of those types of projects are going to be taking some kind of debt instrument in order to back up any of the equity side of the equation,” said Thurmond. “[High rates] are impacting current attempts to bring projects to the market.”

For example, the city of Detroit and private developers Olympia Development of Michigan and the Related Cos. recently pushed back the construction timeline on its $1.5 billion District Detroit mixed-use project due to the current lending environment. Overall, work put on hold increased 10.1% over the past month, according to Cincinnati-based ConstructConnect’s Project Stress Index.

To rest of this story from Construction Dive, click here.

About the Author(s)

Jean Dimeo

Editorial Director, ConstructioNext, WOC360, IRE360, Informa Markets

Jean Dimeo is an award-winning editor, writer and publication manager who has worked in construction publishing for 30 years. Dimeo was managing editor of Construction Dive, our sister publication about commercial construction, and the editor in chief of Builder, EcoHome and Building Products, all about residential building and remodeling. She also worked as an editor for a Spanish-language construction publication and as a building products expert for consumer magazines including Better Homes & Gardens SIPs.
 

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