We're now observing increased levels of capitulation. Stakeholders are acknowledging that the real estate world has changed for the long term. Capital availability will remain tight for the foreseeable future. Rents are dropping. Vacancy is rising. Most expect fundementals to deteriorate further.

But this new paradigm is a difficult pill to swallow. Furthermore, the rules of the game are not yet fully defined. So each person's description of "reality" varies widely, and their perspective tends to be biased.

While the oft-predicted "tidal wave" of commercial foreclosures is still just a ripple, work-out activity is showing a marked up-tick. Herein we share observations about conditions that are influencing distressed real estate work-outs.

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