Orlando's building boom should last for several years, say bankers who are helping to finance the multi-billion dollar development, and whose upbeat outlook suggests money should remain available for some time to come.
After hunkering down during the recession, bankers say they are back and lending as much as 75-80 percent of project costs. That is less than the rate of 85-90 percent financing common before the economic downturn. Also, borrowers may be required to contribute more equity these days. And there is more underwriting analysis and in-depth verification of cash flows this time around.
But overall, given the construction dry spell the area has been through, the outlook is upbeat.
"The commercial real estate market in Central Florida is very strong," said David Mann, group executive for regional commercial real estate lending at SunTrust Banks. "The demand for new building has increased and in large part the banking industry has returned."
In Florida last year SunTrust saw significant growth in commercial real estate loans and in Central Florida, Mann said, "We expect to grow further in 2015 and beyond." He declined to give figures, saying the bank does not report numbers on a state or regional basis.
To step out after a large percentage of bank failures during the recession were due, at least in part, to soured commercial real estate loans says something about Central Florida.
Mann said it is the mix of businesses this time around. "What we are seeing in this growth cycle are developers who are being very careful about what they are putting in the ground," he said. "They are being more strategic, making sure there is a demand for the product they are developing."
"Building in Central Florida is certainly back," said Ken Carl, senior vice president and Florida market manager for commercial real estate at PNC Bank. "We are lending to all of the traditional property types."
The tone is one of "optimism, but not forgetting where we were in the recent past," Carl said. "Generally speaking, we feel we have several good years ahead of us. Certainly there is no panic at PNC about any disruption in the near future."
While PNC has $345 billion of assets and SunTrust, $190 billion, the same optimistic sentiment is being felt at smaller banks.
Van Firios, vice president and commercial loan officer at Harbor Community Bank, which has $1.4 billion of assets, said from his Winter Park office, "There has been robust growth that started last year and is extending" into this year.
"People are feeling a little more comfort," Firios said. "When you look at the balance sheet you see the lift on the inventory and the employment rolls increasing. The cash flow of the projects has improved as the economy has improved, and we are definitely lending."
Like Mann, Firios says it's different this time around.
"We are not in a mature market, we're in a growth market," said Firios, who is taking a long-term outlook. "I think this can go out at least 30 more years. We don't have a soft economy; we have biotech, simulation, medical, and you are starting to see other theme park attractions. This is a great business climate and lifestyle climate, which is a tremendous combination."