Rang says that with the market entering the third year of the global economic dislocation stemming from the credit crisis, there are clear signs we are at last entering a period of stabilization. "The general expectation is that we're looking at a period of at least three to five years of slow to moderate economic growth that will be mirrored in the real estate sector, but is this really such a bad thing?" he asks. "Looking back at the peak of the market boom period in 2005 to 2007, it now seems to have been an aberration from the long-term trend - created by the availability of cheap money and the entry of new types of players into real estate."

These new entries approached investments from the perspective of financial structures, rather than from a deep understanding of underlying bricks and mortar. This profound correction is probably good for the long-term health of the sector, he adds. The increasing cost of debt, along with tougher bank capital requirements, will mean greater equity components for deals, resulting in much more moderate pricing.

In the early 1990s, the Latin American debt crisis was a 'lost decade' after the eruption of the crisis in 1982 when Mexico announced it could not honor its obligations, he says. "Several solutions were introduced to tackle the perceived problem of liquidity rather than solvency in these economies, but none succeeded as it became clear countries were not growing out of debt and, in fact, were becoming more indebted. It was only after the introduction of the Brady Plan in 1989 that Latin America found a road out of its debt crisis."

Rang continues, "The success of the Brady Plan hinged on its market-based solution to the problem; it allowed banks to swap their loans for discounted and par bonds provided they also supplied new money to the countries concerned. They thus avoided having to write the debt down to market value on books. Given the substantial overhang of real estate debt, in particular CMBS, a Brady Plan equivalent for property could be an interesting solution. If a way could be found with government backing to discount this debt to reflect long-term underlying property values and avoid potentially excessive impairment to market value, it could attract financially-driven investors back into the real estate market but on a more sound basis and with a better understanding of underlying risks. It's often that we find the solutions for tomorrow in the past. But that might be the case this time around if we don't want to end-up in the real estate investment market of the 1980s, or even the 1970s."