"Whether or not the credit freeze thaws sooner or later depends upon quite a few key variables that are not readily discernable as of yet. Billions of dollars of assets, mostly mortgage loans, are slated to be sold by TARP at prices that will be determined by auctions that will occur over an indeterminable period of time. The abundant volume of investment supply could create downward pressure on all real estate and mortgage asset values. A prolonged sale process or the fire sale purchase of TARP assets could serve to damage the prospects of a speedy recovery of the commercial real estate markets.

"The wild card for the recovery of Florida commercial real estate is the volume of commercial tenant lease defaults. Should retailers enjoy strong sales this holiday season, the lower-leveraged retail businesses will use cash flow to supplement borrowing as the general recession eases and credit becomes available. Poor holiday sales coupled with the lack of credit will exacerbate the plight of the higher leveraged retailers who are blocked from borrowing. This could result in higher vacancies in 2009 and lower asset values thereafter.

"The Florida office space users are primarily providers of commercial or consumer services to the real estate, insurance and financial services sector. Therefore, occupancy is inextricably linked to the economic vitality of these sectors. The underpinning to robust office occupancy is the vibrancy of residential real estate construction and sales. Office occupancy has historically lagged the general economy by six to 12 months.

"The recovery will commence in earnest when the supply of housing stabilizes. This will occur when the rate of foreclosures decline and lenders are able to discern the stabilized market value of the houses securing the loans.

"Florida commercial real estate has experienced three extended market disruptions over the past 20 years. Each time, the severity of the disruption was overstated and recovery occurred in a shorter period of time than was forecast.

"This disruption is much more severe and more complicated, therefore much more difficult to forecast the recovery time. In any case, forecasting the length of the recovery is an academic exercise and is always uncertain at best. What is certain is that recovery will occur.

"Those that are able to corral capital for investment and deploy that capital wisely will realize what has been historically true: Florida real estate is intrinsically valuable. In time, the investor with a long-term view will be richly rewarded."