"This doesn't mean that the distress and challenges facing theindustry are gone or people are no longer paying attention to them,"DeBoer says. "What is means is that most in the industry don't feel asthough they are staring directly into the abyss as they did lastyear." Executives contacted for the survey cite declining fundamentalsand NOI deterioration as well as the potential for an increase ininterest rates as reasons for concern.

The Overall Sentiment Index is calculated based on averages of Futureand Current Indexes--all measured on a scale of 1 to 100. To reachan Overall Index of 100, all survey respondents would have to answerthat conditions are "much better" today comparedto one year ago, and will also be "much better" 12 months from now.

For Q1, the Current Conditions Index came in at 69, a 13 pointincrease from last quarter's sentiment reading. The Future ConditionsIndex, which measures market conditions today versus one year fromnow, was 77, an increase of seven points from Q4 2009.

The thaw in the capital markets has much to do with the improvingscores. Approximately two-thirds of respondents said capital for bothdebt and equity is more accessible now compared to one year ago. Ofall survey respondents, 83% believe there will be more debt capitalavailable in one year, while 75% said there will be an increase inavailable equity in one year.

Some respondents also said asset values may be close to bottoming out:45% expect real estate asset values to increase in the next year,while 35% expect them to remain flat, and 19% predict furtherdeclines.