"The national office market was down 18.6%" in Q1 2009 compared to Q4 '08, Elkin tells GlobeSt.com. "That was well beyond what you'd expect in one quarter. Maybe we're insulated from that somewhat here in New York, but I personally underestimated how poorly the secondary and tertiary markets are doing, particularly in the office space."

He adds, "Comparing these national and top 10 office returns over the past quarter and the past year, that's shocking. If the top 10 markets are down 6.8% and nationally it's down 18.6%, that means the secondary and tertiary markets are down close to 30%. That's an enormous drop in price over one quarter."

Office, Elkin points out, "was one of the sectors over the past three years where we saw strong performance as investors were searching for deals and going farther and farther afield. That turned very quickly, much faster than we would have thought." Overall, office property prices have declined 30% from their peak in October 2007, according to REAL, which compiles the indices using data from Real Capital Analytics. Regionally, the largest falloff was in the West, where prices sagged by 16%.