At the beginning of a panel entitled “The View From 10,000 Feet,” part of the N.Y.U. Schack Institute of Real Estate’s 15th Annual REIT Symposium on Thursday afternoon, the always outspoken Steve Roth had a question for moderator Robin Panovka.

“Is there press in the room?” asked Mr. Roth, chairman of Vornado Realty Trust.

Perhaps Mr. Roth was wary because of a controversial talk a week earlier, after which he came under fire from the mayor of Boston for remarks about blight. Nonetheless, he spoke relatively openly about the state of the industry and of REITs, along with Sam Zell, chairman of Equity Group Investments and William L. Mack, chairman of AREA Property Partners, in the trio’s fifth annual gathering (it was dubbed “Round V”).

The setting was the swanky Pierre Hotel at 2 East 61th Street, replete with chandeliers, small bottles of Evian water and many, many business suits, with talks throughout the day on real estate investment trusts, or REITs, companies that are traded on the stock market and perceived by some as more resilient in the face of the real estate downturn.

Although the outlook was far less apocalyptic than when Messrs. Roth, Zell and Mack gathered last year, they still had much to be concerned about.

“This is a demand recession,” said Mr. Zell. “Nothing of any consequence has been built since July of ’07.” He said that he invests in distressed properties in the U.S., focusing on properties overseas. In January, he purchased three New York rental towers from Harry Macklowe and a vacant lot from Shaya Boymelgreen, the first deals in three years by his company, Equity Residential.

Some of Mr. Zell’s reluctance to invest in the U.S. comes from frustration with the Obama administration’s regulations of the industry. “In foreign countries you have growth and no rule of law. In the U.S., you have no growth and no rule of law,” he said.

Vornado focuses on “well-located assets with fair prices” in the Washington, D.C., and New York areas, said Mr. Roth, but it has seen a shortage in desirable properties on the market. The company is reportedly looking into the landmarked 510 Fifth Avenue.

The lack of desirable property was a major sticking point for the three landlords, but they also acknowledged that “human nature” could very well lead to another boom-and-bust cycle. Nonetheless, Mr. Zell encouraged the 100 or so N.Y.U. graduate students from Schack to keep their chins up and – and tried to dispel any notion that it was any easier when he was young.

Mr. Roth was less sympathetic. “Get out of my business,” he joked. “The old guys should get the spoils.”

rli@observer.com

In 2008, Ms. and Mr. Mack, who chairs AREA Property Partners and co-developed the Time Warner Center, bought two adjacent apartments at 560 Park Avenue for a combined price of $20 million with plans to combine the two into one unit. Looks like the combination has come! The couple put their 760 Park abode on the market last October for $10.9 million with Corcoran champ Leighton Candler (the Macks' daughter-in-law is president of Corcoran Sunshine Marketing Group).

SEE PHOTOS OF THE CO-OP HERE >

Six months later, the three-bedroom, 4.5-bathroom, "rarely available" gem was signed, sealed and ready to be lived in again. The master suite—once two bedrooms, now combined into one master master—boasts a wood-burning fireplace and matching his and hers dressing rooms and baths. The "gracious" open floor plan "allows guests to flow between the library, oversized living room, and dining room while enjoying eastern light from forty feet of frontage on Park Avenue."

Maybe Mr. Mack's Apollo partner, Leon Black, also a resident at 760 Park, will drop off a pie—after all, the listing ensures the apartment has "the perfect layout for entertaining."

cmalle@observer.com

More Manhattan Transfers:

Former French First Lady, Event-Planning Hubby Buy in Orson Welles' Old Building

Myster Buyer Goes Into Contract at 26 West 76th for $19.5 M.

Hedge Fund Honcho Steve Eisman Plays Hopscotch on Park

The gnomic Mr. Zell was referring to REITs, or real estate investment trusts, the publicly traded real estate companies that, according to the National Association of Real Estate Investment Trusts, number 170 on the major stock exchanges. Mr. Zell, in goatee and collarless shirt, was sitting on the dais in The Pierre Hotel's opulent second-floor banquet hall between Steve Roth, chairman and CEO of Vornado Realty Trust,  and William Mack, chairman of Mack-Cali. They were the star attraction at the NYU Schack Institute of Real Estate's 14^th Annual REIT Symposium, this one dubbed, appropriately enough, “Black Swans, Black Holes... And the Light at the End of the Tunnel.”

Before a packed house of mostly men in business suits, the three real estate titans touched on all manner of topics, their sometimes grumpy prognostications veering from the optimistic to the dreary.  The latter sentiment was not surprising. On March 31, The Wall Street Journal reported that REITS continue to get hammered by the credit crisis. As of this writing, Vornado stock was trading at $36.47, an improvement over its 52-week low of $27.01 on March 6, but a significant drop from Sep. 19, when it traded at $108.15. Mr. Zell's Capital Trust, one of a number of publicly traded companies under the umbrella of his Equity International, was trading today at $1.28, down from a 52-week high of $30.08 last April.  And Mack-Cali Realty Corp. was trading at $19.81, down from its August 52-week high of $43.

The thrust of their comments indicated a belief that the unwinding of the monstrous tangle of debt that got the industry into this mess will take some time, and it will be, for lack of a better descriptive, an interesting process.

"[We] have yet to experience the real values, or distress, on the commercial [real estate] side," Mr. Mack said.

According to Mr. Zell, "The limited velocity in trading we’ve seen today in the private markets will continue for two to three years." 

Financing is simply that anemic, and uncertainty abounds in asset valuations. And, while the industry waits for loans and mortgages on assets to mature, much of that debt will trade hands, further confounding the immediate investment future.

"A lot of these loans will be sold into aggressively hostile hands before they get to maturity," according to Mr. Roth. "And that’s when action will really start to happen."

On another note, Mr. Roth said that, "This is the kind of environment where the hedge fund industry thrives....We have seen multiple analysts from investment banks hired away by hedge funds because they want to know how to play in these markets, [including the real estate market]."

Will the government's economic stimulus plans, which include provisions to kick-start the commercial mortgage-backed securities market, do any good?

"We’re throwing a lot of crap at the wall, trillions of dollars, and some of it will stick," Mr. Mack said. "It’s going to cause some stability at the very least and at the very best, we will have a period of time when we will return to prosperity." Mr. Mack also said he thought the housing market would bottom in three to six months, and, if we're lucky, the economy will start improving in 2010.

Thanks to the near-total death of financing, Mr. Roth speculated that said recovery, when it happens, will be equity-driven: "Said another way, if you don’t have equity, you’re dead."