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.

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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.