Earlier this month, Hines secured $182 million to refinanceIntersect, a four-building office campus in Orange County. The dealoffers some insight into how the debt markets are working. Lifecompanies and the agencies have been the most active in providingdebt during the pandemic, and this deal was no different. Hines,along with its joint-venture partner, placed the three-year,interest-only financing with MetLife Investment Management.JLL secured the funding on behalf of theborrower.

"Capital availability does not seem to be an issue, butvaluation, underwriting, pricing discovery, and human capacityconstraints have all been headwinds to lending the past severalmonths," Kevin MacKenzie, executive managingdirector at JLL Capital Markets, tells GlobeSt.com. "On the debtside, life companies and agencies have been the most activethroughout this time, and the appetite has continued to strengthenin recent weeks. Bank and debt fund activity has been moreselective but for the right opportunity there is interest, and wealso see that increasing."

Asset value is also playing a role in asset pricing. In somecases, pricing has declined during the pandemic. "On assets with acore profile the cost of fixed-rate debt is close to where it waspre-COVID, and, in some cases, lower—such as apartments—through theagencies. On more transitional asset profiles, spreads haveincreased but over a much lower LIBOR index, so typically floorshave been instituted," says MacKenzie. "This has generally placedall in borrowing rates into similar ranges they were approximatelyone year ago, which still should be an attractive cost of capitalfor many situations."