When it is all said and done, 2012 will likely be recorded inindustry annals as the year deals finally closed—unlike in 2010 and’11, when buyers and sellers would find one reason or another tohit the brakes on transactions. “We are in a unique period rightnow when both parties are inspired to get deals done,” says KevinWhite, director of business development for Virtus Real EstateCapital. And financing? That is a no-brainer, he says, and indeedthe Austin, TX-based real estate private equity sponsor is movingforward with its own transactions with an eye to locking in as muchdebt as possible. “That way, if we hit the wrong end of the cycle,we have enough term left on the loan to ride it through,” hesays.

Fortunately for White, the securitization markets are happy tooblige. Earlier this year the company acquired a 264-unit,1,056-bed student housing community near East Carolina Universityin Greenville, NC. It secured 10-year debt from Freddie Mac with atwo-year IO term at a 4.16% interest rate.

“The attractive part about this deal is that in the future itcan be resized during that ten-year period,” White says. “One ofthe issues with locking in long-term debt is that a lot of the timeprepayment penalties make it very rigid and there is no flexibilityon the exit.” In that scenario, it becomes too expensive to defeasethe loan.