"However, lenders were obviously aware of the sudden spike and did adjust spreads to compensate," he says. "We are still seeing good rates in the marketplace, with multifamily projects receiving rates between 7.5% to 7.75%."

Recourse debt is "still attractive, with short-term rates staying at low levels, as well as the prime rate standing strong at 7%."

Barry Lazarus, president of Inland Retail Real Estate Trust Inc., one of Central Florida's most aggressive buyers in the past two years, tells GlobeSt.com he is having no problem financing Inland's acquisitions.

"We borrow for shopping centers, which are pretty safe," Lazarus says. "If you are going to finance 50% of value, the variable rate is anywhere from 140 basis points over the London Inter Bank Offering Rate to 175 basis points over LIBOR," he says. Fixed rates are "generally about 200 basis points over Treasuries. Both have some fees on top of that."

For new construction, Lazarus says lenders are asking borrowers to fund 10% to 20% of the project cost. "With existing property, you can generally borrow up to 75% of project value," he says.

Realvest's Neveleff says the three main lending sources these days are commercial banks such as SunTrust or First Union Corp.; life insurance companies such as Lincoln National or Midland; and conduit lenders such as GMAC or Credit Suisse First Boston.

"The cost of the debt is directly related to long-term interest rates and liquidity of the marketplace," Neveleff says. The most common benchmarks for commercial debt are the 10-year Treasury bond and LIBOR. The rates are quoted as spreads over the corresponding benchmark.

For example, he says, "lenders may be quoting 225 basis points over the 10-year (Treasury) for a good warehouse project and, at the same time, quote 200 (basis points) for a multifamily project. Therefore, if the current rate of the 10-year (bond) is 5.49%, then the quoted rate for the industrial project would be 7.69%."

On top of the base interest rate, "there are are always additional costs related to the loan process than can easily add up to an additional 2% to 4% of the amount borrowed," Neveleff points out. Those extra costs could comprise loan points, legal fees, third-party reports and surveys.

Ekovich of Marcus & Millichap sees no basic change in the amount of risk lenders are willing to take today compared to a year ago. "They will ask the borrower to come up with 25% down on most property types, excluding multifamily and hotels," which generally require 20% and 35% to 40% down, respectively.

Realvest's Neveleff notes commercial banks typically require the borrower to accept full recourse. The life insurance companies and conduits usually require recourse to the borrower only in the event of fraud or an environmental problem.

"From a more realistic and practical point of view, the real risk to the borrower is usually the top 20% to 30% of the transaction, which is normally the cash equity in the deal," says Neveleff.

He says lending requirements are "always changing with the economy and this last year was no exception." He notes "the most evident changes of late are that lenders are giving more scrutiny to the types of products, the borrowers and loan-to-value ratios."

Lazarus of Inland Retail Real Estate Trust also senses lenders "are definitely a little more cautious now than a year ago, particularly on speculative projects."

Ekovich of Marcus & Millichap feels "overall, the market is still moving with great strength and velocity." He says lenders "have seen much more product this year and excited about the months to come."