LOS ANGELES—The capital markets are showing some pricingvolatility, according to Elliot Eichner, aprincipal at Sonnenblick-Eichner. Eichnerrecently secured $236.7 million in first mortgagefinancing for Provenance Hotels to acquire aseven-property hotel portfolio. While he saw competition for thedeal and plenty of liquidity, he also said that pricing in thecapital markets has become volatile.

In the debt market for commercial real estate, there isvolatility, and a lot of lenders don't know how to price becausethe pricing is moving. But there is still a lot of liquidity in themarket. No one has said to us that they aren't lending, whether itis a fixed-rate mortgage or bridge loan," Eichner tellsGlobeSt.com, adding that a lot of this is because of economicvolatility. "This market is volatile. We have huge swings in thestock market; oil is down to $30 a barrel. There is a lot ofuncertainty in the market, and that boils down to real estate andthe capital markets."

However, this volatility hasn't stopped deals, like this majorhotel deal, from getting done. "There is still a lot of liquidityin the market. We haven't had any lenders come and tell us thatthey are out of the market," adds Eichner. "Everyone is stilllending, but the parameters are different. We are seeing lendersthat give one spread, then adjust it and then adjust it again, andthat is because their cost of capital is changing."