Call Us: (800) 419-4923
 Call Us: +44 (0)20 3865 7701
 Call Us: (787) 822-8377
 Call Us: (437) 855-4925
Partner Engineering and Science, Inc.
Partner Engineering and Science, Inc.
You are here: Home » Resources » Articles » Mitigating Construction Risks in Uncertain Times

February 26, 2021

Mitigating Construction Risks in Uncertain Times

By Bill Tryon

With an anticipated downturn in construction, now is the perfect time for construction investors to revisit policies and procedures. The increased yield from construction loans can contribute significantly to a bank’s bottom line, but with increased yield comes increased risk. After the Great Recession studies by FDIC and the Office of the Inspector General (OIG) showed that some lending institutions with high construction loan concentrations weathered the recession with no significant decline in overall financial condition. At the same time, though, almost all banks that failed during the recession had significant construction portfolios.

An increase in troubled loans is expected as a result of the pandemic. Lessons from the FDIC and OIG studies could provide useful tips to help mitigate risks. Aggressive growth, high construction loan concentrations, poor risk management practices, ineffective controls and risky decision making were identified as past contributors to the failure of most institutions.

To read more about this article, click here.

Other Resources You Might Like


Let us be your Partner

Learn how we can support your next project or share insights via our newsletter.
Partner is the leading provider of engineering, environmental, construction, energy, and valuation consulting for the commercial real estate industry. We help our clients manage risk, make smart investments, optimize asset performance, and win at their real estate investment strategies.
Our Family of Companies
Terms and Conditions  |  Privacy Policy   |  Website Terms of Use  |  © 2023 Partner ESI. All rights reserved.
crossmenuarrow-up linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram