Multifamily development is finally seeing traction after a long dry spell.

“The banks are open for business for the right borrower with the right project in the right submarket,” says Village Green Cos. CEO and chairman Jonathan Holtzman. In late October, the Farmington Hills, Mich.-based firm broke ground on Mill District City Apartments, a 175-unit, market-rate rental in Minneapolis targeted for completion and lease up in early 2011. “Of course, I would have liked to have gotten the terms that I got three years ago, but US Bank issued a construction loan that was no doubt favorable to Village Green.”

Likewise, Chicago-based RMK Management broke ground this fall on a 221-unit Windy City luxury apartment building and has two additional projects slated to break ground in the first half of 2011. Irvine, Calif.-based Western National Property Management recently broke ground on a 315-unit apartment community in the South Jordan, Utah, submarket outside of Salt Lake City.

Current multifamily starts by regional operators will likely hit the market just ahead of stock getting ready to be developed by some of the industry’s major REITs who are seeking similar opportunities in delivering product to supply-constrained markets on the upside of economic recovery.

“Development starts in the second half of 2010,” says Highlands Ranch, Colo.-based UDR chairman and CEO Tom Toomey. “We will look at our pipeline of opportunities and challenge ourselves to start them because they are three years out before they are leasing into supply-constrained markets.”

Houston-based REIT Camden Property Trust is also looking at the possibility of deploying some dry powder capital into development near the second half of 2010. “It will be very difficult for us to make the numbers work from a development perspective in the first half of 2010, but not necessarily in the second half,” says the REIT’s chairman and CEO Ric Campo.