That all changed with Lehman Bros.' bankruptcy, of course. Now,the real estate industry is facing both a long-standing creditsqueeze – which is likely to get even worse – as well as an economythat will no longer support the underlying fundamentals of manycities' office, multifamily and retail real estate investments.

To be sure, associations that represent the real estate industryare lobbying Congress for assistance. The Real Estate Roundtable,the National Assoc. of Realtors and the Commercial MortgageSecurities Assoc., among others, are promoting a plan for thegovernment to use some of the bailout funds to buttress credit andlending in real estate. While the details of these plans differ –and in some cases still remain behind-the-scenes – they are alllargely based on the premise of a $200 billion credit facility thatwould support healthy, new issue CRE loans.

Such a facility is essential as there are hundreds of billionsof loans rolling over next year from CMBS transactions underwrittenin better times. A new report by investment fund manager BlumbergCapital Partners, found that maturing debt obligations will comeunder even more stress in 2009 with leasing rates poised to drop anadditional 20%. Office vacancies could potentially rise to 25% bythe end of the year, and take until 2011 to stabilize.