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New York's revitalized Times Square is still a land of opportunity for real estate-minded banks.
Over the next 18 months, several high-profile developers will seek financing for their projects in the once-blighted area. Douglas Durst, for example, is hoping to build new headquarters for Nasdaq and the American Stock Exchange, next to a 48-story office tower he has under construction.
Meanwhile, Tishman Realty & Construction Co. is looking for a loan to back a 45-story, 860-room Westin hotel at Eighth Avenue and 43d Street.
Construction lending is a risky business. U.S. money-center banks got burned on real estate-Manhattan property in particular-in the slump of the 1980s and early 1990s.
Boosters of the new Times Square say that the industry has since wised up. They say lenders today will not finance new construction unless the developers line up creditworthy tenants and put up sufficient equity or other credit enhancement.
To that end, Boston Properties, which plans to build office towers at two sites it controls below 42d street, is looking for tenants. Once it has them lined up, the real estate investment trust is expected to seek construction financing.
Lenders have become even more cautious since last year's global financial market panic,...