When it is all said and done, 2012 willlikely be recorded in industry annals as the year deals finallyclosed—unlike in 2010 and '11, when buyers and sellers would findone reason or another to hit the brakes on transactions. "We are ina unique period right now when both parties are inspired to getdeals done," says Kevin White, director of business development forVirtus Real Estate Capital. And financing? That is a nobrainer, hesays, and indeed the Austin, TX-based real estate private equitysponsor is moving forward with its own transactions with an eye tolocking in as much debt as possible. "That way, if we hit the wrongend of the cycle, we have enough term left on the loan to ride itthrough," he says.

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.