MIAMI-The playing field for investors and lenders has been redefined over the past 12 to 18 months, commercial real estate experts purport. The outcomes and outlooks for the changing market were discussed at this week's Commercial Mortgage Securities Association Investors Conference, concluding Wednesday at the Loews Miami Beach Hotel. Approximately 700 attendees gathered at the three-day event, which features speakers and panelists from banks and financial institutions in the business of buying, selling and lending.

This year will definitely be another rough one for the market, experts at the conference agreed, expressing the most concern over the expectation that fundamentals in every sector of commercial real estate will worsen. Investors and lenders are looking toward the new administration and what types of government intervention will be applied to try to rescue the suffering market.

That intervention, which panelists agreed is necessary at this point, is a catalyst that could spark confidence and action within the commercial investment community. However, experts warn that investing in an environment with government intervention may take longer to appreciate.

Looking toward an uptick in the market, the notion that investors are unwilling to borrow at today's rates is quickly fading as loans mature, according to one speaker from a leading global financial services firm. Eventually, owners will borrow at whatever level they need, as financial institutions are looking to put money into the market to take advantage of opportunities. However, representatives of companies that are focused on distressed assets indicated that they have yet to deploy large amounts of investments, affirming the speculation that billions of dollars are waiting on the sidelines. Many panelists referenced the bid/ask disparity that still hangs over the market as the key element preventing much movement and keeping the volume of transactions low.

The uncertain fate of the CMBS market also puts stress on investors. The topic was addressed by many of the speakers, all of whom indicated that they would be surprised to hear of any CMBS deals getting completed this year. If CMBS does make a comeback, the way it was previously structured may no longer be as attractive to investors, observed Mark Finerman, managing partner with Greenwhich, CT-based LoanCore Capital LLC. "Over time, investors will have to take lower returns. This is due to the fact that investors will need to own investments with much lower leverage," Finerman tells GlobeSt.com.

Despite the challenges, experts assure that deals will get done in 2009 and 2010. Because many deals will be based on cash flow, they will be mostly smaller or "vanilla" deals that will get completed with "investors who know what they're doing and who don't need leverage," said Daniel Walsh, executive VP with Cleveland-based KeyBank Real Estate Capital. For those companies not focusing on transactions, the importance of using these difficult times to manage and understand existing portfolios should be stressed, according to Dave Twardock, president of Prudential Mortgage Capital Co.

Overall, the tone of the day's panel's was cautiously optimistic. ABC News anchor Bob Woodruff, who was seriously injured while covering the war in Iraq three years ago, brought inspiration and hopeful spirit to CMSA attendees as the keynote speaker, sharing his harrowing near-death tale and those of similarly injured soldiers. "His story really puts our hardships in perspective," an audience member commented.