"Some people have a strong appetite for urban apartments that are 40% vacant with a lot of preferred maintenance, in which case they can just send in their crews, stabilize the asset and really add some value 24 to 30 months from now. That's just what certain investors do; it's their business model. There are other very astute investors who see that same apartment not as a trophy, but as a dog and they have no interest in getting involved with an asset like that.

"I think some of the savvy investors are actually looking at acquiring notes on these assets. Banks are selling some of their notes for liquidity purposes and also because it means they don't have to take back the hard asset. If they sell off the note, somebody else is dealing with the problem and the bank has moved on. Some investors think that the acquisition of notes may contribute to a certain amount of distress in the marketplace in 2009.

"The bottom line, though, is that it really depends on the investor. For instance, you and I could look at a property and say, 'wow, that's a trophy asset, it's in Bergen county, it's an 80% office building, it has name-brand corporate tenants…gee if we can just get another 10% of the building leased up, then we'll have a homerun.' But others might say, 'I don't want to go near an office building. With all the negative job numbers coming out, the sky is falling and it can only get worse.' It's up to the investors as to how they define the trophy or the dog. But I do think one of the things we're going to see this cycle around that was a little different than the last cycle--in the late 1980s/early '90s--is that there's an appetite for investors who normally just acquire hard assets to really give a long look at buying and acquiring notes."