"The days of huge pools of capital are over," he told the crowd."Equilibrium will continue because capital availability will besignificantly more limited than in the old days."

Another "governor" on the market is the nearly instant access toinformation, and he raised 1999's REIT slowdown as an example. "The REITmarket was down because those involved in the market saw significantoversupply coming," he noted. "We've never had that sort of informationdissemination, and we never had a real estate market that could respondso readily. The existence of this information acts as a governor on theindustry."

He also placed his bet on the future of consolidations and acontinuation of the trend toward fewer, bigger real estate firms. Hecited the massive portfolios of Simon Properties and--notsurprisingly--both Equity Office and Equity Residential. "Thoseconcentrations will only grow as that sort of scale allows thesecompanies to operate better in their marketplaces and against theircompetition." He also hinted that more Equity-run acquisitions--such asthe highly publicized Cornerstone Properties buy--would be making newsin coming months.

Zell was optimistic, but other speakers tempered their optimism withcaution. The retail market has posted lackluster performance in a strongeconomy, said Marcus & Millichap SVP Hessam Nadji. "Consumer weakness isup and confidence is down," he stated. Nevertheless, he predicts areasof investment opportunity, specifically in B malls in A areas.

In terms of multifamily, Fannie Mae director Randall Berdine presented ashort list of concerns--Profitability: "Is there enough in the valuechain so we can provide adequate return relative to risk?" Creditstandards: "There has been an erosion over the past couple of years inthe standards for credit." The general economy: "We're certainly at aplateau."

What he worries about most might very well be a saving factor for theindustry, something he termed "healthy paranoia. I worry about whatothers are worried about, and what I might be missing."