THE FEDS' INVOLVEMENT IN THE FINANCIALSECTOR...

With final form of the Treasury Department's proposed$700-billion rescue plan still being hammered out in Congress, it'snot clear what impact it will make on liquidity in general orcommercial real estate's access to credit in particular. As thiswas written, some of the original provisions of the plan had beenomitted and others had been added—but nothing has been finalized.That doesn't prevent industry members from weighing in on thesubject, however, and 59% of you have said the plan is necessarywhile 41% think it reaches too far. Given the potential formisconceptions about what the plan would mean, CB Richard Ellis'Torto Wheaton Research division has prepared a special reportfocusing on its implications for CRE. The report's author, JonSouthard, principal and director of forecasting at TWR, makes thepoint that the possibility of short-term pain for CRE in theTreasury's plan hasn't received much comment. However, he says thatuntil the plan takes its final form and starts playing out, themost anyone can do is speculate—or in the case of the TWR report,outline possible scenarios rather than make definitivepredictions.

"We're talking speculation here, and our main point in thearticle is that the devil is in the details. With that said, itstarts with your view of what the problem is and what the plandoes. On the pro side, you can argue that if the problem is lack ofmarkets being made—i.e. no agreement on prices for mortgages andequity—then the goal of this proposal is certainly the right one:to get the liquidity flowing again. Those against the plan might bespeculating that this is a question of bailing out Wall Street byputting money into the problem, which is how it's often framed. Ifyou read the fine print, that really isn't the stated goal,although it has been portrayed as such. However, as the articleoutlined, it could play out that way. But so far, according to thestated goal, the plan is not to spend $700 billion; it's to use the$700 billion to get the markets moving again.