ORLANDO, FL — I don’t think any of us will forget the summer andfall of 2008. The financial markets were in free fall, Wall Streetstalwarts, such as Bear Stearns and Lehman Brothers vanished almostovernight, and the government was intervening in the financialmarkets more directly and forcefully than it had at any time since1929.

That wrenching, wholesale restructuring in the financial marketsand the Great Recession that followed are without a doubt the mostimportant events in commercial real estate (and the economy as awhole) in the last 10 years. They may be the most importanteconomic events, in fact, since the end of World War II. But tounderstand the true impact of those events you have to look back afew years earlier and consider the economic factors that producedthem.

In the years between 9/11 and the financial market freefall of2008, the U.S. economy experienced solid growth, with real GDPgrowing an average of 2.4 percent annually from 2001 to 2007.Prices in both the commercial and residential real estate marketssoared, development boomed, interest rates remained low andfinancing was easy to get. In hindsight, we now know that financingwas too easy to get and that prices, especially in theresidential markets, soared to irrational levels.