However, by and large, many of the life insurance-led transactions that were completed before the turmoil began could probably still get done today, says Ted Hermes, VP of the local office of Walker & Dunlop. The company recently closed a $32-million permanent loan for Ryan Park Center, a mixed-use project, that Hermes believes could have been negotiated in the current environment, with perhaps a few tweaks to the leasing commitment. Located in Ashburn, VA, Ryan Park Center consists of two class A buildings of 61,532 sf each, four pad sites, three restaurants, and one bank, for a total of 137,739 sf of retail and office space.

The loan, which Hermes says encompassed most of the development costs, was structured with a 10-year term, three years of interest only payments, and 25-year amortization. The borrower was Ryan Park LLC, a joint venture between two local developers. The lender was Aegon and it agreed to increase loan amount from $29 million to $32 million and add three years of interest only payments after the application had already been signed and the interest rate had been locked.

This was a take-out construction loan based on a forward commitment made in fall 2005, he says. Because it was a life insurance company it did not have the fall back position of the material adverse conditions clause that so many lenders have been citing in recent weeks to pull out of CRE financial commitments. "Portfolio life insurance companies are still interested on these types of loans," he says. The difference between 2005 and today, he says, would be that the lender would most likely have required a 75% occupancy rate, compared to the 50% the Ryan Park Center had in 2005.