Arent Fox partner Jacqueline Weiss was interviewed, along with other industry leaders by Financier Worldwide magazine to discuss the distressed real estate market and ancillary issues.

Financier Worldwide: Broadly speaking, in what ways have you seen the real estate market change over the last few years?

Ms. Weiss: The real estate market has gone from irrationally overheated, say, through 2007, to being perceived as the cause of many of the ills of the national economy in 2008, to a net neutral in the overall economy for much of 2009, and beginning in the final quarter of 2009 and continuing more strongly in the opening weeks of 2011, to a net positive. Based on the, admittedly small, sample of transactions we are seeing and that have been reported over the last three or four months, investors’ appetite for real estate – and therefore the pricing of real estate assets – is starting to increase.

FW: How are lenders responding to problems in the real estate market? Are they pursuing foreclosure and bankruptcy proceedings or leaning towards workout solutions wherever possible?

Ms. Weiss: Most lenders have opted for a workout solution if possible. Many of us have variously referred to this as ‘extend and pretend,’ ‘forget and forbear,’ or even ‘kick the can down the road’. This trend is based, in part, on the fact that few lenders wish to take real estate on their books and to deal with the regulatory and economic consequences of doing so. Another part of the issue centers around the fact that there has been no resale market and therefore no independent basis on which to value the real estate assets in question, which in turn makes it hard to take the real estate on the books.

The full interview, “TalkingPoint: Dealing With Distressed Real Estate,” may be read by clicking here.