While it was agreed that current asset pricing is overblown, itwas also made clear that what an investor pays isn't as importantas what the outcome is. "Are investors overpaying if they're buyingat 6% or 9% IRR?" Mikulich asked. "Yes, but whether or not you losemoney is another question. And whether or not those investors gethurt depends on how long the recovery takes. Current values docarry some risk."

The pricing is indeed what Speyer termed "very weird, and 10years from now, people will look back at interest rates and say, 'Icould have made a lot more money.' But they are not looking at theother aspects of real estate value."

To skirt that sort of Monday-morning quarterbacking, Speyerrevealed to the SRO crowd that his firm approaches every potentialbuy with a firm "break" threshold in place, and that is strictlygoverned by the company's investment committee.

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John Salustri

John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.