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SAN FRANCISCO-The doom-and-gloom opening bell of the Association of Foreign Investors in Real Estate members meeting, being held here, has given way to a more practical approach to surviving the market meltdown. A panel of debt and equity types gathered in a second-day session entitled Chaos in Capital Markets to explain how they are navigating the choppy waters. Mark Gibson, executive managing director of Holliday Fenoglio Fowler, moderated the session.

“The tone of our investors varies by their circumstances,” stated Jeffrey A. Barclay, managing director and head of acquisitions for ING Clarion Partners and one of two speakers representing the equity side. “Some are sitting on the sidelines, and others are looking for specific investments to fill out their portfolios.”

Those are the pockets of opportunity in an otherwise wait-and-see environment, he said. “But there’s no doubt that investors want real estate. The question is not whether but when.”

Charles N. Hazen, senior vice president at Hines, agreed that investors see real estate with no more a jaundiced eye than other investment vehicles, and he expressed a concept that is gaining momentum in the capital crisis, that “If you have access to debt and can low-leverage your asset, you can close deals.” But, he cautioned, selectivity “is key.”

And it’s a strategy that’s working, apparently, since Hazen claimed his shop is raising some $30 million to $60 million in capital every month.On the debt side of the table, Mark Wilsmann, managing director of real estate commercial mortgage investments for MetLife, took a markedly positive spin that stood in stark contrast to the presentations of the day before. “The crazy money is gone,” he said, “and we see the market as opportunities yet to unfold.” And he put his money where his optimism was, predicting that MetLife would close out the year with as much as $7 billion in volume.

Underwriting hasn’t altered drastically from 18 months ago, said Wilsmann since “life companies never lend on deals without coverage.” Sixty to 65% leverage on a 30-year amortization still holds, he explained.

But while the consensus was that real estate suffers no more in investors’ outlook than other vehicles, neither will it gain momentum any faster. “It’s not the real estate, it’s the capital stack that is problematic,” stated Andrew Cooper, managing director of Westdeutsche Immobilienbank.

Hazen agreed, and he stated that for the market to pull out of its current woes, it will take a re-establishment of “confidence in the system. Financial services firms have to become stewards of our trust.”

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