Early in the recession, commercial real estate investors eagerlyawaited the flood of distressed properties expected to hit themarket. They sat, they waited and they wondered when the tricklewould turn into a flood so that they could expand their marketshare, enter new regions and pursue strategic and financialobjectives through investments in this growing sector. But whilethe number of assets underwater is huge, very few have come tomarket.

Banks, the FDIC and CMBS servicers now hold more than $140billion in troubled loans. Instead of waiting around for propertyholders to sell those assets into a bad market, many investors areseeing that $ 140-billion problem as a real opportunity to buy thedefaulted loans at a deep discount in order to acquire theunderlying real estate.

Ideally, not only can they acquire those assets, but they alsoget them at