It seems capital has learned nothing from past.

The one key lesson we are realizing from today's market is that capital has not learned anything. There is more money in the system, underwriting standards continue to become more lax and deals are getting done that, traditionally, lenders wouldn't touch with a 10-foot pole. We are seeing deals closed without investors even viewing the property - due diligence standards have dropped significantly.

While optimism abounds now, when the real estate boom goes bust, we are going to have a lot of product with a lot of problems. Owners will face tremendous debt problems on their existing real estate and will have no way to pay off the mortgage. Foreclosures are inevitable.

The big difference between this cycle and the '80s is that in the '80s, the government was willing to bail out the S&Ls. This time around, the government may not be as kind to the commercial lenders. The commercial lenders don't represent a constituent.

Simply put, the government protected the S&Ls because everyone had their money invested in the banks and it wouldn't have been a positive sign for the economy or a confidence-builder among the voting public if they were allowed to fail. The Wall Street lenders, REITs and other commercial lenders don't have the same influence on the economy, and therefore will not be protected in the same way.

What lenders need to do right now to prevent this downfall is to use more discretion. They need to insure that the individuals they lend to are experienced operators; that the rent being commanded on the property is feasible for the tenants in the long-term; and that the need for the properly type and location is predicted to remain strong for the foreseeable future.

We, like everyone else, are keeping our pencils sharp on pricing, and for qualified borrowers, will go the extra yard. Opportunities are abundant, but the focus should be on the right deal - it's the savvy lender and investor that wins in this real estate cycle.