Commercial real estate markets across the country are overleveraged. It is estimated that for the next several years, approximately $350 billion of commercial debt will mature annually, much of which will have difficulty finding replacement leverage given the reductions in value that we have seen coupled with today's more conservative loan-to-value ratios being used by lenders. The deleveraging process that our markets must go through will require massive amounts of fresh equity.

Demand drivers are excellent today and, if you are a frequent StreetWise reader, you know that I have illustrated numerous times the acute supply / demand imbalance that exists today with little available product meeting extraordinary demand. High-net-worth domestic investors and families which have driven the markets for the past couple of years have met a resurgence of institutional capital which has come back to the commercial real estate sales market with a vengeance. Additionally, foreign investment is very apparent in today's market and foreign high-net-worth investors are appearing in numbers not seen since the 1980s.

With this excessive demand, why would I be focused on a law that, if modified, would result in even greater foreign demand? There are several reasons we will discuss.