Shapiro: Yes, the people whom we represent have generally been through this before. They understand today that their best solution lies in a consensual, cooperative agreement with the borrowers. By contrast, the last time we saw any kind of sustained stress in the real estate market, the people who controlled the restructurings were generally not as experienced as the people we have today. There was a much more aggressive and inflexible approach to restructuring real estate debt in the early 1990s. We're approaching the world today with the benefit of what we learned the last time around.

Block: Also, the loans today are different than they were in the down cycle of the early '90s. The debt tends to be non-recourse or limited recourse. The borrowers tend to be single-purpose entities with certain bankruptcy remoteness features built into the loans. So the lenders are less aggressive, probably because the documents have already addressed much of what was not in place during the last down cycle. Therefore, there's likely to be less bankruptcy and more consensual deals.

RENY: So it would be fair to say that the current down cycle differs in some ways from the previous one, but primarily because the financial institutions are building on their experience from last time.

Shapiro: If you look all the way down into each of the situations that we're confronting today, what you will find in common is a much higher level of sophistication. The real estate is more sophisticated and more involved, and the financing, bankers, owners and lawyers and documents are all more sophisticated. So what we're seeing today is not just the benefit of the experience that we had 15 to 18 years ago, but also that we're reacting to a much more complex set of facts.

You've probably heard people say that during the last cycle it was possible to get all of your lenders in a room or on the phone. For the most part, that is no longer possible. The debt has been securitized and bonds have been sold to multiple groups. Sometimes we don't even know who holds these bonds at any given time. So it's harder to accomplish the same objective today because of the complexity and sophistication of the overall transaction.

RENY: What are some ways in which transactions are more complicated now?

Block: One thing that's different in '08 from 1990 or 1992 is that the bulk of the real estate financing these days comes from capital markets. In commercial real estate, there is much less financing provided by savings and loan institutions, or balance sheet lenders. So conversing with your lenders is more difficult these days because they're institutions that own a bond representing a very small piece of a portion of a pool of loans in which a particular loan may be one of 10 or 100.

In recent years, we had been seeing very large loans that were originated by a lender or a group of lenders, and immediately after closing, the loan was cut up by the lenders. The ownership of the paper evidencing the loan was so broadly diffused that it made the transactions very complicated and sophisticated simply because there was the loan itself and then there were the subsequent transactions in connection with the sale, transference and securitization of the paper after the fact.

Shapiro: The real estate capital markets can be viewed as a super-efficient capital highway. If you compare it to the Interstate highway system and how it moves an enormous number of people and cars simultaneously, you can easily understand the efficiency of the capital markets. By the same token, when there's an accident on these four- and five-lane superhighways, everybody crawls. As efficient as the system is when it works, it becomes grossly inefficient when it doesn't work. You're even less efficient with a four-lane highway when it doesn't work than you are with a single-lane highway with a stoplight. What we're seeing now in the capital markets is a multi-car pileup. We have to figure out how to clear the traffic jam.