As a result, he expects the market to recover fairly quickly once the inventory of distressed assets has been cleared. "Los Angeles is well positioned to climb out of this mess rather quickly, much faster than it has coming out of previous recessions," he states. "I think L.A. will be one of the leaders of recovery."

Fasulo does not, however, anticipate a recovery any time soon. "We need to work through this distressed cycle before we get to the other side," he says. "Until those properties get cleaned up from the marketplace, we're not going to get back to normalcy."

At the same time, the Real Capital exec believes Los Angeles will probably be able to clear its backlog earlier than the majority of markets because of its underlying fundamentals. "L.A. has a very attractive supply-demand matrix," he says. "Whenever there's uncertainty in the market, investors start to steer toward core markets. L.A. would certainly fit into the profile of places investors find attractive in a down economy."

Already, he continues, assets that are fairly priced have started to get multiple bids again. "That's new, just in the past three or four weeks," he remarks. "That gives me confidence there is a market out there. It's just a matter of buyers and sellers agreeing on a price. Sellers are going to have to capitulate for things to really break, but I see signs that's happening."

I've heard mortgage brokers are starting to hire again, just in the last few weeks.What's missing is the oversupply of commercial property. That's what makes this downturn different.We don't have oversupply this time. We certainly don't have it in central LA. That lends me to believe that when the market does start picking up, it has potential to pick up