(Read more on the debt and equity markets.)

NEW YORK CITY-Is a weak market really a crisis or does it mean people are just repricing risk? For pessimists, our economy is plunging into a recession, but for optimists, such as the panelists at yesterday's Real Estate Lenders Association event, there is hope in the near future.

"We will come back strong," exclaimed Paul Vanderslice, managing director of Citigroup Global Markets, at the event titled, "Capital Credit Crunch: What's Going on Here?" Vanderslice went on to explain that "this market has been good to borrowers, investors and mortgage for seven to eight years, and although the music has stopped, it will come back."

Thomas Lydon Jr., president of the City Investment Fund, said to moderator Michael Stoler, senior principal of Apollo Real Estate Advisors, that "people are just repricing risk at this time. We are readjusting to new times and new pricing, that's all this is," he said. "It will sort out over the next six months and as long as the fundamentals stay strong, we should get back on track."

As far as fundamentals go, Michael Tepedino, senior managing director at Holliday Fenoglio Fowler, said that real estate fundamentals remain pretty good. "Equity investors remain bullish on real estate and although less than before, the fact is, people are still spending money."

Tepedino and James Reichek, a managing director at UBS, agreed that they are seeing a lot of hotel activity in the market right now.

"Transactions are still taking place," Lydon said, when agreeing with Vanderslice's comment that you can still "price in this market."

After 9/11 and '98, there were around a six-to-eight month recovery for the credit market, Tepedino explained. "I think it should log around until the end of the year. We are advising our clients that if they can wait, they should. There is no reason to do business now 25% of the market is presently active and 75% are sitting on the sidelines for one reason or another."

Instant Insights /

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