Lyons: I do believe the flight-to-quality trend will continue into the foreseeable future for a few very specific reasons. For the most part, the availability of debt capital remains very constrained, and underwriting standards are still very restrictive. New CMBS issuance was about $30 billion in 2011 and banks aren’t really lending. Foreign banks aren’t, and life companies and insurance companies and other institutional lenders only placed approximately $40 billion last year. At its peak, you had issuance at $270 billion, but it’s only projected to be about $35 billion in 2012. We have a few factors together with the fact that we have a trillion dollars of CMBS debt maturing over the next three to four years. It’s fairly obvious to see that liquidity and deleveraging will remain at the forefront of the industry for the foreseeable future. When investors are focusing on current yield and improving in economic position, flight-to-quality is going to continue as buyers will scrutinize the strength of the tenants, creditworthiness and the property fundamentals. When you really look at flight-to-quality, it really looks more like a barbell. There’s a tremendous amount of interest and competition for class A assets. At the other end of the barbell, there’s distressed or opportunistic investments, but it is very soft for everything in-between. It’s actually fairly consistent with the way most investors and real estate owners look during difficult or challenging times.

GlobeSt.com: What’s the state of equity availability for new construction? Are certain sectors standing out above others?

Lyons: The good news is there is an abundance of equity available when it comes to multifamily construction, primarily in the nation’s primary and best performing secondary markets. Beyond that, equity for new construction remains somewhat limited to those projects that probably have substantial pre-leasing commitments or for mixed-use projects in the top metropolitan areas. In a different sector, office fundamentals outside the nation’s top-tier cities remains weak, and the retail sector is significantly overbuilt, which is likely to effect development activity into the foreseeable future. Debt is difficult to obtain for all types of development outside of the multifamily sector.

GlobeSt.com: On the multifamily front, what are your thoughts on the FHFA’s plan to scale back Fannie and Freddie? What do you see as the solution?

Lyons: Right now, frankly, when you take a look at the gridlock that we have in Washington and the degree of partisan politics. Washington remains so polarized that it seems highly unlikely that the government will get something done anytime soon. With all the implications and special interest groups involved, nothing most likely will materialize until after the fall election. Even then, it can still take years before the parties can reach any type of agreement. Any future agreement will definitely call for a very slow and gradual withdrawal by the government from the market and favor more privatization.

GlobeSt.com: Fears of a double-dip recession still lingers in the minds of many in the CRE industry. What is likelihood of that happening?

Lyons: It is very interesting because it is unlikely that there will be a double-dip recession, and it’s for the following reasons. Recent economic indicators show a strengthening of the economy, although the pace of the recovery is still slower than what many people would prefer or like. Corporate profits are strong, unemployment is inching downward and consumer sentiment is increasing. This year, it is most likely that it won’t be, especially when you also have an election year. However, despite the fact that the Eurozone appears to have given Greece another bailout, when you take a look at the economics affecting Greece, there is still a possibility that there will be an eventual default. Then you have Italy, Spain, Portugal, etc., and there’s a growing fear of an economic downturn not only in Europe, but a bit of a slowdown across China and other parts of Asia. When you add those two aspects, it’s possible that in 2013 that there could be a double-dip. We’re still cautiously optimistic that from a corporate earnings perspective that in the current political environment that many of the right things are being done and that we will have a prolonged period of slow growth. Hopefully the strength of the economies will be bolstered and we will bypass this difficult time.

GlobeSt.com: It is an election year. Will that positively or negatively affect commercial real estate?

Lyons: I’m going to take the middle road and say that it’s going to be fairly neutral. Typically in an election year, we have a bolstered economy and in a number of aspects, efforts to increase liquidity and strengthen the economy. There’s uncertainty and a lack of clarity going forward, not the least of which is through the tax law. All of this has a direct effect on commercial real estate and the ownership of it. It’ll be interesting to see how people will look at participating or not, or possibly selling certain assets to take advantage of lower rates this year than next if the laws are going to be changed. As it gets closer to the election, the politicians are going to need more clarity on their positions, and once we know who wins and what direction he seems to be taking, people need to make a more informed decision on how tax policy will effect ownership of commercial real estate.