Bill Haley, vice president of Minneapolis-based NorthMarq Capital's Houston office, says the cutback is aimed more at single-tenant projects. "There's a perceived risk of single tenants," he says. Telecom, drug store retailers and retail projects sans a major anchor are getting hit the hardest. In some cases, it's not a question of rosy financial books, but rather sustainability in the long run that has lenders being more cautious in these categories.

Mezzanine debt or equity funding is taking up the slack in creative financing packages to get projects moving and offset the current conservative lending trend, says Haley. "Overall, there may be more restrictions, may be more reserves required and lower LTV provided," he tells GlobeSt.com. The lending slowdown had started about three years ago, but really grabbed hold of the Texas market just last year. But, he emphasizes, "it's across the board. It's not just a Texas issue."

Bernard P. Malone, president of Malone Mortgage Co. in Dallas, says "generally speaking, construction lending has evaporated." But, he explains, it's not all bad because Texas will be sure to avoid an overbuilt situation.

Lenders are "loathe to consider new construction" of practically any type, Malone tells GlobeSt.com. "We're not seeing a willingness of the construction lenders to make a new commitment." It has nothing to do with LTV or the strength of the borrower's financial picture, he concurs with Haley. "The feeling is the economy's down and no one knows for sure what the ultimate impact will be on labor and job growth."

There will not be a turnaround until the nation's economy turns around, predicts Malone. That means new plant production, new growth in production quotas and job growth keeping pace with the regional forecasts.

While all eyes are on commercial real estate, one of the telling factors about today's lending world lies in the single-family sector. Last year in Austin, Malone says would-be homeowners had to offer a percentage above the listing price just to be considered by the seller. And lenders went along with the practice because the market had been at an all-time high. "A year later," says Malone, "that's not the case at all.