Unemployment, reduced consumer spending, tightened credit standards, and limited available debt have negatively impacted operating income and market price for most commercial properties. Additionally, the reduced valuations have limited the amount of debt which may be refinanced. Core and value-add real estate investment strategies face the headwinds of increasing vacancy rates, declining rents and increasing lessee defaults. The recent cyclical downturn in the commercial real estate market has created a distinct multi-year opportunity for specialists in distressed real estate. However, as the real estate cycle continues to decline, near term performance in the current environment is more influenced by the market conditions (beta or general macroeconomic themes) and less so by the manager’s ability to impact property operations (or alpha).