Don't tell Nick Pizzola there's a building bust.
Up around Temple University, it "looks like Las Vegas" back when Vegas was America's boomtown, the Langhorne-based builder says.
"There's a huge amount of student housing going up between Diamond and Master" in small, private projects, he said. "Everybody and his brother is building."
The Temple boom predates the 2008 collapse in the national credit and construction markets and has continued as the weak labor market drives job-seekers back to school.
But one thing that has changed, uptown, is who's fronting the money. "It used to be a piece of cake getting money from the banks," Pizzola said. Now that banks are under government pressure to conserve their capital, specialty real estate financiers like Llenrock Group L.L.C. have stepped in, often at higher rates.
On Monday, Philadelphia-based Llenrock said it had agreed to fund a 20-bed student-oriented housing development Pizzola is putting up in partnership with Insight Development, of Philadelphia, in the 1700 block of Fontain Street. Llenrock hopes to finance up to 400 more units in the neighborhood.
"They look like rowhomes," Llenrock managing partner Andy Benioff said. But this is prefabricated housing that's getting assembled quickly, in time for the fall semester. "There's no government money involved," he added.
Prefab housing provides less work for local tradesmen than traditional homes. Who's building these pieces? "The stuff I use comes from Excel Homes, in Liverpool, Pa., and Custom Building Systems," of Middleburg, Pa., as well as from other "low-cost" modular builders, Pizzola said. "The walls are stick-built, with 2-by-4's and 2-by-6's. You can't tell them" from traditional Philadelphia rowhouses.
"You can assemble them in 24 hours, put on the rubber roofs, they're impervious to weather. Finish them with brick or stucco or siding," Pizzola added. He imports the modular units down the Schuylkill Expressway.
"It's a great idea. It's better, and faster, and cheaper," said Philadelphia developer Bart Blatstein, who takes credit for helping to start the Temple-area housing boom in the mid-2000s and who said he was planning a lot more.
The Pennsylvania Turnpike Commission's $470 million bond sale has provoked warnings from Wall Street, notes Tom Kozlik, municipal-credit analyst at Janney Capital Markets, in Philadelphia.
"The growing debt burden will require the commission to increase toll rates significantly higher than previously forecasted and/or make large cuts in operating and capital expenditures" unless it wants to end up selling low-rated junk bonds and paying millions in extra interest, Moody's analyst Maria Matesanz wrote. She cut the pike's subordinate-debt credit rating to "A3" from "A2."
Standard & Poor's isn't cutting the pike's ratings, but S&P analyst Joseph J. Pezzimenti warned last week that boosting toll rates might not solve the turnpike's fiscal problem if drivers shift to the Commonwealth's many free highways or its railroads.
JPMorgan Chase & Co.'s Wilmington-based credit card division, which rivals Bank of America Corp.'s crosstown card shop as the nation's largest Visa and MasterCard issuer, made money, for a change, in the second quarter of 2010.
Chase Card Services earned $343 million in the three months ended June 30 vs. a loss of $303 million in the first quarter and a $672 million loss a year earlier.
That followed a reduction in the money the bank had to set aside to cover bad loans, to $2.2 billion from $3.5 billion in the first quarter and $4.6 billion a year earlier.
Chase cut its losses, in part, by shrinking the business. Card users owed the bank just $143 billion at June 30, down from $171 billion a year earlier, as Chase wrote off bad loans and cut back on making new ones.
But the loan charge-off rate has finally started dropping, to about 10 percent a year from nearly 12 percent at the end of the first quarter.
Chase has boosted its spending on the business. Noninterest expenses rose to $1.44 billion, from $1.4 billion in the first quarter and $1.33 billion a year earlier. The company employs about 6,000 in the Philadelphia region, mostly in its Wilmington-area credit card operations.