Chaos reigned on Wall Street at press time. Apartment experts struggled to grasp the impact on their businesses as the list of dead and wounded financial institutions grew and lawmakers and federal officials announced the outlines of a vast bailout plan.

“I don't think there's any clarity,” said Stephen Blank, real estate capital markets expert and senior research fellow for the Urban Land Institute.

Real estate experts clung to any signs of stability, like the continued strength of a few commercial banks and the continued lending activity of Fannie Mae and Freddie Mac after their own government takeover Sept. 7.

At press time, the most serious casualty for the apartment business was Lehman Brothers, which declared bankruptcy Sept. 15. Lehman had a long history of financing multifamily projects. In many South Florida submarkets, for example, it's difficult to find a block without a building funded in one way or another by Lehman, according to local experts. The firm provided conduit and mezzanine loans to multifamily projects, among its many investment activities.

Other cash-poor investment banks scrambled to turn themselves into more traditional bank holding companies, accepting government regulation from several agencies and the likelihood of lower profits in return for the promise of balance sheets strengthened by deposits and access to the lines of credit offered by the Federal Reserve to traditional banks.

Merrill Lynch agreed to sell itself outright to Bank of America (BofA) on Sept. 15. Almost a week later on Sept. 21, news broke of plans by Goldman Sachs and Morgan Stanley to transform themselves into bank holding companies.

Commercial banks provide much of the construction financing used by the multifamily industry. Although some like BofA are strong enough to buy troubled investment banks, others face problems. At press time, Washington Mutual stock traded at less than $3 a share, less than a tenth of its value a year ago. Citigroup also was reportedly considering making a bid for Washington Mutual.

At press time, it was unclear whether the planned federal bailout would become the turning point in the crisis, though the Dow Jones Industrial Average shot up 617 points Sept. 18 as rumors spread of the federal plan to buy illiquid assets from troubled financial companies.