Joe Clements is co-editor of Debt & Equity Journal, from which this article is excerpted.

Boston—For commercial real estate borrowers, it is the financial equivalent of being caught on an elevator during a blackout. Rapid deterioration in the debt arena has halted many deals mid-stream, and tales of sales in outright free fall are mounting throughout the CRE industry. After maintaining a calm demeanor when problems spilled over from the housing market's sub-prime woes earlier this year, lenders are now reportedly changing terms halfway through for commercial transactions--or walking away altogether.

When asked whether lenders are using the stubborn "material adverse change" (MAC) clause to sidestep commitments and render safety features like rate locks meaningless, one investor says simply, "Absolutely."

"It is becoming much more prevalent," adds the investor, who nonetheless denies reports that such a situation was responsible for delaying a national portfolio sale in which the source is a participant. The sheer heft of the deal, estimated at more than a half-billion dollars, has been the chief reason for an extended closing, the investor says, expressing confidence the venture will be completed in the near future. Even so, the source concurs that other CRE deals are being disrupted by the debt crisis.