But there is a sunny side to the second quarter. During the last quarter, Criimi Mae lowered future interest rate exposure via interest rate swaps and paid remaining deferred dividends on Series B, F, and G preferred stock. The company also saw significant progress compared to the same period in the previous year. The net interest margin went up by $2.4 million and shareholders' equity increased by 88 cents.

As for looking ahead, Criimi Mae's spokesman tells GlobeSt.com that the ends justify the means; or that a little loss could lead to bigger gains in the future. "During the last two quarters, since the company's re-capitalization and new management took over, there's been an intense focus on commercial real estate loans underlying Criimi Mae's more than $16-billion portfolio," he explains. "That review was comprehensive and the objective was to analyze every single loan so that the company has the best portfolio valuation that it can. As a result of that, the company took an impairment charge earlier this year and took a smaller impairment charge in this most recent quarter. These charges reflect the valuation analysis, and now they reflect a full analysis of the entire portfolio; the entire portfolio has now been reviewed."

That said, Criimi Mae is now in a position to move forward with full knowledge of where it stands, as well as what the coming quarters could likely bring. "The company has identified the losses it expects over the life of the assets," the spokesman adds. "And the company took a very conservative approach to the valuation analysis assuming today's difficult conditions in the real estate markets--particularly the hospital sector." By bracing itself for the worst, a lack of significant improvements in the real estate market will not lead to unanticipated losses.