Thanks. You’re right. There is a definite tightening going on. We’re working on some of our own coverage right now of how retail real estate is being affected by what’s going on.

One of the big manifestations we’ve noticed to date is that a spread is returning in pricing for class-A assets vs. class-B and class-C. Since class-A buyers tend to rely less on leverage they’re not being affected as much. But buyers on class-B and class-C tend to borrow more. So more expensive debt means they’ve gotten less aggressive.

It’s hard to track because the data providers tend not to break down cap rates by asset quality. But anecdotally, we’re hearing a lot of examples of this.

I agree that there has been little problem with deliquencies, but that tightening access to capital can put future projects or projects that are having over-runs into jeopardy.

Great comment.

Tom

Stories in National Real Estate Investor, Barron’s, Financial Week, and Reuters all have looked at the repricing of CMBS debt. And since the conduit lenders had been dictating pricing, I think other lenders on commercial real estate are adjusting to the new rates as well.

What’s missing still, I think, is that there so far has not been a real uptick in defaults or delinquencies on the commercial side.