Net Lease forum

NLf: What's your latest reading of debt conditions nowthat we've started the fourth quarter?

Murphy: It's going to take a while for the CMBSmarkets to settle in. The good news is that rationality hasreturned to the underwriting process. We were really getting closeto being out of control in terms of the dollars we were offeringand the terms that were out there, especially given the interestrate cycle. All of this is good, even though it's temporary pain.Interestingly, the middle tranches in the CMBS pools aren'tselling. The A-rated tranches and the unrated tranches are sellingvery well, but those just-below-investment-grade are sitting. Theredoesn't seem to be any buyers for them. Some of the life companieshave actually stepped in--Principal and Mass Mutual via Babson andJohn Hancock have actually come in and started buying their owntranches in some of these securitizations. They think there's valuein the yield that's out there today.