Fried tells GlobeSt.com that the reasoning behind launching thisprogram is that AFC views the current market as a "deleveragingcycle." In other words, "in this cycle, the capital markets arelooking to provide less capital--less 'leverage'--as a primarymeans of lending 'defensively,' more conservatively and moresafely." He notes that references to "capital crunch" and "creditcrunch" for example, are "just a prominent part of the deleveragingof US real estate assets. In light of concerns of a slowingeconomy, this is understandable." Fried continues that "if aslowing economy means that real estate assets will experiencedeclining cash flows--or at least not the growth that was projectedduring the prior 'aggressive' growth cycle--one way to providecapital but defend against declining cash flows is to provide lesscapital, whether in the form of debt or equity."

He explains that in light of this trend among capital providers,AFC's clients and transaction partners are faced with having toprovide more capital--sponsor capital--for its transactions. "AFChas typically provided capital in such situations to get itsclients' and partners' transactions closed."

Fried tells GlobeSt.com that AFC's co-sponsor investment inthese transactions is usually the difference between thetransaction happening or dying. "In a recent transaction, aninstitutional group which was providing the joint venture equityfor AFC's client decided to provide less capital--the sponsor wasable to provide some of the balance, but was not going to be ableto provide the entire sponsor requirement in time to close thetransaction. AFC provided the balance to close the deal ontime."