San Diego—Massive losses and deep layoff s in the fi nance industry didn't stop bankers and commercial real estate dealmakers from converging on San Diego for this year's Mortgage Bankers Association's (MBA) Commercial Real Estate Finance/Multifamily Housing Convention & Expo—but the crisis that started in 2008 did put a damper on the mood.

“To say [2008] was a turbulent year does a disservice to the word ”˜turbulent,'” said Mike May, Freddie Mac's senior vice president of multifamily, in one of the conference's many sessions. “Catastrophic. A living nightmare. Hell on Earth. Any of them might better describe the business environment.”

Government intervention was the theme this year, as Congress debated a $789 billion stimulus package and the U.S. Treasury announced its latest plan to bail out banks and buy troubled assets. With the exception of Fannie Mae, Freddie Mac, and Federal Housing Administration programs, lenders have closed their purses and horded what money they have on their own balance sheets.

The downturn and the lack of fi nancing sucked about 8 percent from the value of multifamily properties in 2008, and sales prices are likely to drop even more steeply in 2009, according to the consensus at the capital markets for multifamily session.

The mortgage bankers looked to government for help and celebrated the government's plan to buy troubled assets including under-valued commercial mortgage-backed securities (CMBS). “We are thrilled to have CMBS and RBS (residential mortgage-backed securities) included,” says Cheryl Malloy, senior vice president of multifamily and governance for MBA.

But evidence of the downturn was all around. The conference was held a few blocks from Petco Park, where developers still struggle to fi nance construction of a rapidly shrinking amount of planned condominiums, retail, and hotel space at Ballpark Village.