Nostalgia is not just for the old guys down at the pub waxing poetic about their youth. If you listen closely, plenty of real estate practitioners can be heard pining for the days of yore when property investments generated positive returns, rents moved upward in an orderly fashion, and debt — remember that? — could be secured at reasonable levels and prices.

After ending one of the most difficult and dramatic years in recent memory, one can hardly blame investors for dreaming of the way things were. But as 2009 steams ahead, real estate investors face important decisions. Where is the sweet spot on the risk-reward curve? What constitutes fair value, both in existing portfolios and potential acquisitions? Which markets are poised to hold up in the current economic climate, and which ones will bounce back first?

These are difficult questions to answer, made all the more difficult by the utter lack of transaction activi