Distressed assets have become a common ingredient in many assetmanagers' portfolios. For Sansone Group, a St. Louis-basedcommercial real estate firm with approximately 20 million squarefeet of space under management, about half of new business over thepast few years has involved distressed properties, says TimothySansone, a company principal.

"We always focus on the tenants first," he says. "You have tostabilize the tenant base on distressed properties." Next in lineof importance is to clean up payables to vendors, landscapers,roofers and the other parties that previous owners may haveneglected to pay in the months before a default andforeclosure.

Few lenders have the skills or time to implement leasing orproperty improvement strategies, explains Pat Jackson, founder andCEO of Sabal Financial Group. "The banks aren't really organized totake a long-term investor view of real estate," he says. "It's justnot in their charter."