Naturally, everyone likes good news and positive outcomes. If you're one of those, I'd suggest you skip this article. While there's nothing more I'd like to do than to sit down and provide some insightful words that would predict a speedy economic turnaround or offer a lighted beacon of hope, I can't.

For those of us who work in the real estate boutiques serving customers of environmentally tainted landholdings, we are more prone than others in the public realm to be genetically predisposed to seeing things as "the glass is half full." Nobody in our industry really wants to dwell on the negative, dark side possibility that this could be a prolonged and painful economic and financial shakeout, especially in the area of environmentally distressed property.

After all, we are the eternal optimists who view troubled land assets as "opportunities," as dusty jewels with hidden facets, as blemished lands in need of economic facelifts. We want nothing more than to believe that the troubled and frozen debt markets will soon thaw and the warm seas of economic recovery will wash over us once again. The trouble with hope, of course, is that it is not a strategy, and empty optimism doesn't necessarily fill the cup of reality.

Over the past few years, traveling back and forth in the car to the office, I have listened to numerous commercial interviews with current and past presidents of the National Association of Realtors, (close cousins of our shallow and imperfect gene pool). What I've found interesting is that no matter whether home prices are high or low, according to NAR, it is always a good time for homeowners to talk to a licensed real estate agent to take advantage of excellent opportunities in the real estate market. Similar serene voices from policy makers in Washington and other financial market cheerleaders seem to be luring us to turn our heads towards the light of economic hope and away from the harsh reality of the marketplace.

How about a reality check here. 2008 proved to be a tumultuous year, with the crippling subprime and credit crisis. The great bursting of the housing bubble at a time when consumers were leveraged up to their eyeballs has led to a market meltdown that has shaken all areas of investment and confidence, with extraordinary blows to real estate. U.S. homebuilder confidence as a gauge on the health of the economy has dropped to a record lows based on the National Association of Home Builders/Wells Fargo index. Builder confidence dropped to 8 in January for example, with the perspective being that a reading below 50 means that most respondents view conditions as poor.

Don't bank on it
Similarly, the engine to commercial real estate markets is closely tied to job formation and inroads to the capital market primarily from debt, both of which are presently impaired. The Federal Reserve's quarterly survey of banks' Willingness to Lend reveals that 85% of banks are less willing to lend and 80% have cinched their debt to equity ratio belts. Falling commercial values (30-40%), lower occupancy rates and associated rents, are combining with a tightening of credit and increased cost of capital to brew up storm clouds for a rainy forecast. According to a review by Transwestern, virtually no commercial construction and development is envisioned for the next two years.

Given the situation outlined above and more focused lending reviews with an eye towards risk avoidance, brownfield debt financing is for all practical purposes non-existent.

OK, enough gloom and doom, this can't last forever, right? It seems to me that there are three possible scenarios that could play out going forward in the current economic crisis.

1. The Optimistic Path – the economic stimulus package works, the Feds manage to create inflation, and growth comes back to a beaten down economy.
2. The Middle Ground – a longer, more protracted retooling of the financial systems with slow growth and low inflation over the next few years.
3. The Great Depression Part II – economic and financial Armageddon (say no more).

The real truth is that none of us are smart enough to know which outcome will actually transpire going forward, but I hope and pray it's not the latter. During these challenging times, brownfield buyers and sellers need to be more diligent than ever on investment due diligence, partner selection, and searching for creative ways to finance transactions. We need to be ever mindful that given our DNA imprint of optimism, we can be lured like fluttering moths towards the light. Hopefully, we don't get too close.

Chris Olson is Manager of Real Estate Reuse for BP