Giving the opening remarks at Information Management Network'sBankers Forum on Distressed Properties today, Thompson said theindustry may be "finding the bottom in quicksand," but commercialreal estate is not the powder keg destined to destroy recenteconomic gains. The rebound of equity REITs and the existence ofprivate equity eager to snap up distressed deals, he noted, bodeswell for the market, and may mitigate some of its troubles.

Still, the trillions in debt slated to come due is a pressingconcern, especially for lenders who must determine the feasibilityof workouts versus resolutions. Thus far in the cycle, lenders havebeen more inclined toward workout propositions, encouraged byregulatory guidance.

"Banks are selling distressed assets, but not at any meaningfulvelocity that is going to substantially change the market,"observed John J. Cuticelli Jr., CEO of Racebrook Capital. Hepointed out that there are a number of loan officers who originateddebt that they are now charged with working it out, a position thatscreams conflict of interest. These originators, Cuticelli charged,often see a disposition as a failure.