"It's probably best to say we have been in an eight to nine yearexpansion of the economy," says John B. Levy, the study'sco-author. "The economy has been on the mend since last greatdepression for real estate [in the late 1980s]. Costs have beencoming down. We are at an incredibly new low level of nine basispoints, basically down 96% from the peak."

"We had [in the 1980s] an incredible expansion of newbuildings," Levy reports. "In fact, new buildings were builtwithout a lot of funds or tenants. When the economy slowed down, wehad all these buildings built on speculation. A lot went back tolenders because the developers couldn't pay them. We had defaultand delinquent loans. We've been kind of working off that since thepeak in 1993. Now we're in a level that is about as good as itgets."

Levy attributes some of the lows to conservative lendingpractices. Multifamily delinquencies remain pretty steady at threebasis points while offices and retail fluctuates a bit. AlthoughLevy says he's hesitant to predict the future.