A crisis brewing in the Eurozone. Employment growth in the US that started out well in January only to peter out in the spring. Deadlock in Congress over tax and budget issues. A rating agency threatens to downgrade US credit unless said tax and budget issues are resolved. Rock-bottom interest rates that make any investment a better prospect than T-bills. If one didn’t know any better, this could easily be late summer of 2011.

It is, of course, the start of the summer of 2012 and while all of the ingredients are the same as last year, there is hope that the pause on Wall Street that occurred in August 2011 won’t be repeated. The money, in short, is likely to keep flowing, barring outright economic turmoil.

Ziad Hammodi, for one, hopes that’s the case. The New York City-based deputy Real Estate Practice Group leader at Reed Smith cites a CMBS deal he is currently reviewing. The lender, an active CMBS player, has inserted a floor to the floating rate, something that Hammodi is seeing more of.

That could be disconcerting, or at least discouraging, to those hoping to see the CMBS market regain its former robust lending flow. The deal is also based on assets in second-tier markets, which hikes the risk to the lender. Still, Hammodi says, all is good: low interest rates will help to protect the borrower, and the assets are spread across the country and provide a strong cash flow…

…For the rest of the story, please visit the June issue of Real Estate Forum.