A year ago, commercial real estate executives enjoyed one of the healthiest markets in history, symbolized by a record annual $102.8 billion in REIT mergers and acquisitions. Now the industry faces fallout from the residential subprime crisis — a skidding national economy and lenders' reluctance to take credit risks, despite the Federal Reserve's repeated efforts to get the country back on track by lowering interest rates.

These are trying times for developers and investors — particularly those with properties to sell in a stalled market — but today's economy also offers opportunities for the resourceful in the commercial real estate industry, as shown in NREI's fifth annual “Ten to Watch” profiles.

A number of featured executives use market conditions to position their firms for higher profits. Under Howard Michaels, chairman and CEO, New York-based Carlton Group is marketing problem condo and commercial real estate loans and has raised $1 billion to buy distressed commercial debt. Carlton also bought $300 million in mortgage and other loans for about 80 cents on the dollar, Michaels reveals.

David Henry, vice chairman and chief investment officer of New York-based Kimco Realty Corp., recorded $669.8 million in funds from operations in 2007, a 17.2% increase over 2006, while the company portfolio's average occupancy rose 60 basis points during the same period.

Scott Peters, former CEO of a firm specializing in tenant-in-common 1031 exchanges, emerged as the new CEO and president of brokerage Grubb & Ellis, now based in Santa Ana, Calif., after the companies merged. Peters intends to chart a Grubb & Ellis turnaround, and help it expand overseas.

Some executives exploited a market niche or expanded overseas. Sant Singh Chatwal, chairman and CEO of New York-based Hampshire Hotels & Resorts, guided expansion into his native India, where he is building Dream hotels. Veronica Hackett, managing partner of Clarett Group, championed the firm's mixed-use project in Hollywood, Calif., while David Freshwater, president of Tucson's Freshwater Group, is developing seniors residences with wellness programs.

Each industry leader is turning a company strength into a tool — not merely to survive in these difficult times, but to thrive — while the industry waits for the economy to recover.