In light of the panel's subtitle, "The Continuing Debt Crisis," the AFIRE panelists noted the progress the markets have made over the past year in moving past the crisis. The panel was held during AFIRE's 2010 Winter Conference at the Mandarin Oriental Hotel here on Wednesday and Thursday. Lee Neibart, global CEO of AREA Property Partners, moderated Thursday's capital markets panel.

Although SVP Patricia Mosser of the Federal Reserve Bank of New York said the risk of a double-dip recession couldn't be ruled out, panelist Peter Baccile said the most severe prospect facing the economy following the September 2008 Wall Street meltdown—outright collapse of the system—has been averted. "There's no longer a reason to fear systemic failure," said Baccile, vice chairman at J.P. Morgan Securities.

That modestly sanguine outlook is reflected in lenders' behavior, panelists said; they're more willing to consider providing loans, or extending them. "Unless it's a really hairy asset," the loan will most likely be extended, said Kohn, president and principal of Cushman & Wakefield Sonnenblick Goldman.

For his part, Baccile defended the so-called "extend and pretend" practice. He argued that rather than putting off a problem, the lender who extends rather than forecloses often does so because "the reality is that it's the best outcome" for the loan.

With credit conditions slowly improving, foreign buyers are casting an eager eye toward the US once again, panelists said. However, two factors need to be overcome. One is the dearth of seller motivation. "It's just not there," said Kohn. Bacille observed that two very different conditions that create that motivation—a sense that the market is at its peak, or a lender telling the borrower that the asset must be sold—don't really apply at the moment.

Another obstacle is the need for reforming, or repealing, the Foreign Investment in Real Property Tax Act of 1980, said C. MacLaine Kenan, executive director of Arcapita and former chairman of AFIRE. Getting Congressional support from individual lawmakers is an issue when, as Kenan put it, FIRPTA is a complex confluence of four types of taxes. "Once a Congressman hears those four phrases, you've lost them," Kenan said, adding that nonetheless "there's a golden opportunity to repeal an antiquated, 30-year-old law." He advocated supporting the FIRPTA reform bill introduced last month by Rep. Joseph Crowley (D-NY).

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Values Stay Flat, But Markets Continue Thaw

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