Opportunistic buyers call me every day looking for “good deals” on “distressed assets”. I have not had much to send them recently. Thus far, we have not seen tremendous buying opportunities with enticing cap rates because of the distress in the market. Why are these opportunities not presenting themselves?In order to answer that question, let’s take a look at some history. In the early 1990′s, the S & L crisis created buying opportunities but only after banks had gone through a long foreclosure process. The Dow crashed in October of 1987 but the effects were not felt in the real estate market until 1990 when the number of sales started to shrink and prices finally started to drop, and drop they did. As an example, multifamily properties that we sold in 1988 for 14 times the rent for co-op conversion (condos were very rare in NYC at that time) were being sold for 4 times the rent in 1992 and 1993.  As prices started to fall in 1990 and 1991, defaults began and the foreclosure process was initiated by lenders.This foreclosure process took  12 to 18 months. While the wave started in 1990, properties did not start to hit the market until 1992. Most of these foreclosures came to market in 1993 and 1994.  There were  real opportunities available for cents on the dollar. The reason why these opportunities were so good was that few people had equity, of any substance, that they were willing to invest.We are once again in troubled times. Thus far, the properties in financial trouble are still working their way through the pipeline and have not found their way to market in substantial numbers. Lenders are still going through the process of determining whether they will sell their notes or go through the forclosure process. The insatiable need that lenders have for cash today is likely to lead them to sell notes to get cash today rather than go through a foreclosure process, which would delay the cash injection which is so desperately needed. So, where are we in this cycle of processing these troubled properties? I believe we are at the beginning of the process. We determine turnover, or volume of sales, as the number of properties sold out of the total stock of existing properties. In New York City, we track 125,000 multifamily and mixed-use properties which have had a turnover rate which has been averaging 2.5% annually, of that total stock, over the past 20 years. This volume had hit an all-time low of 1.6% in 1992 and again in 2003. We believed that this 1.6% level of turnover repressented a baseline of turnover consisting of only those sellers who had to sell without discretion. They sold for reasons including death, divorce, taxes, insolvency, partnership disputes, foreclosure, etc. Both of these years ended recessions and had experienced peaks in cyclical unemployment. In 2008, this volume of sales hit 1.9% which was down about 40% from the 3.0% experienced in 2007.We are projecting a turnover rate of 1.6%, or less, in 2009 as discretionary sellers are not yet capitulating to current market conditions and sellers who will be forced to sell, are still going through the process of determining how they will be going to market and what they will be going to market with, notes or real estate. We expect unemployment to hit its peak in 2009 or 2010 which is when we should see turnover hit its cyclical low point.We are currently faced with constrained supply and we do not expect this supply to increase, in any meaningful way, until later in 2009 which will result in sales in 2010.Opportunistic buys are in the marketplace now but only sporadically. Could we hit a volume of sales lower than the all-time low of 1.6% in 2009? Sure we could. We expect a trough in 2009 with volume picking up in 2010. A key difference today, as opposed to the early 1990′s, is that there is plenty of equity on the sidelines waiting for opportunities to present themselves. They are starting to appear and will continue to over the next few years as deleveraging progresses.