By JAMES FINK
Business First

Alan Randaccio has heard all of the horror stories about banks tightening up lending practices - he just hasn't seen them.

"Business isn't quite as busy as it was a few years ago, but it remains steady," said Randaccio, president of Albert V. Randaccio Builder Inc. in Amherst. "Because we're a niche builder, we only do a couple of model homes a year, and that really hasn't changed."

Randaccio said the current financial crunch is not the first one he has weathered.

The Buffalo Niagara market is generally conservative, and builders have rarely overbuilt, he believes.

"Development is, by nature, a cyclical business, and you have to plan for periods like this," Randaccio said.

A combination of a weakened national economy and the continued fallout from the subprime-mortgage crisis has left the financing industry skittish when it comes to real estate projects, commercial or residential.

The Mortgage Brokers Association said residential foreclosures hit the 0.99 percent mark in the first quarter, the highest since the Washington-based organization began keeping records in 1979. The rate of delinquency - the number of lendees at least 30 days behind on mortgage payments and nearing possible foreclosure - is at 6.35 percent.

The culprit in many cases is adjustable-rate mortgages that seemed attractive a few years ago but have become financial albatrosses for lenders and their customers.

Established home builders and developers said they can still obtain the seed money required to move a project forward, although many say interest rates and the cost of borrowing money has risen.

Robert Bojdak, M&T Bank executive vice president and chief credit officer, said his bank has maintained the same standards while shying away from gimmicky loan practices.

"We have not changed very much," he said. "This is a capital market disruption period. But in most cases developers can still get financing, but they have to pay for it."

The Buffalo Niagara region has escaped much of the subprime fallout because in both residential and commercial markets, it has remained a "build-to-suit" market.

Richard Bergman, president of Heartland Homes in Amherst and a former president of the Buffalo Niagara Builders' Association, said his workload has remained pretty steady.

Bergman agrees with M&T's Bojdak that the conservative nature of the typical area resident may have been a deciding factor in why the subprime fallout has been minimal in the region. "Most people understand what a teaser rate is and was," Bergman said.

Build-to-suit has been a local mantra in both the residential and commercial markets for decades.

Even in the early 1980s when the nation saw a glut of spec buildings, that trend never truly hit the Buffalo Niagara market.

A recent office-needs survey from the Amherst Industrial Development Agency found that there were 55 companies looking at possible expansion projects in the town during the next two years, and those companies will need about 327,000-square-feet of new space.