WHAT WILL LESSONS FROM THIS SLUMP ACCOMPLISH?

Last week's poll addressed the lessons to be learned from the current real estate slump. 75% of respondents said the downturn teaches us that cycles always rule, while 23% said it's still too early to tell what is to be learned. Only 2% of respondents said the downturn would make the industry bulletproof. Bill Moss, senior managing director of Florida for CB Richard Ellis, has been involved in commercial real estate for nearly 30 years, and has seen worse slumps in the past. He shares his views about the current market downturn below.

"This slump validates the cyclical nature of the real estate industry, which has been characteristic for the last 40 years, and probably longer. The reasons that we go into these slumps is usually some combination of liquidity challenges when the capital markets become unsettled as far as their appetite for commercial real estate; slowing economic conditions, which decrease the demand; and in some cases, overbuilding.

"We've had a real estate slump in the early part of each decade, from the 1970s to early 2000s, and this one is not quite fitting in to the early part of the decade. The worst slump was in the early 1990s, and this will be far less severe.