"Today's challenge will be for all of us to accept the fact we have to move from Easy Street to the Eisenhower Expressway at 5:30," says Gary Kachadurian of RREEF Funds. He adds many aspects of the real estate business, particularly property management and financing, have become more difficult. However, he adds, "There could be some real good opportunities out there." Those could include multifamily rental restorations, says Kachadurian, whose firm has closed $600 million worth of deals in that market segment.

Benjamin G. Gifford, managing director of JP Morgan Fleming Asset Management, notes supply and demand "are in pretty good shape," even in the office sector, where 12% vacancy rates are considered equilibrium. "We as investors have a phenomenal opportunity to buy properties at fantastic returns at interest rates that are unprecedented," Gifford adds.

The tricky part, however, is taking advantage of that buying opportunity. Gifford already sees one effect of Sept. 11 putting a crimp on deals. "Unfortunately, the bid-ask spread got wider," he notes. "The stock line is, it's too late to sell and too early to buy."