In this issue:

*Deals Update:

..Southern California developer increases Sacramento holdings

..Lehman close to sale of two real estate funds

..Morgan Stanley to surrender five San Francisco towers

..FDIC Draws Brisk Bidding on Loans by Failed Banks

..Brokers pitch vacant buildings to end-users

..Unlisted REITs emerge as investor powerhouse

..Simon Property to Buy Outlet Mall Unit

*Special Features

..Who's in trouble: Loan defaults in Orange County

..Industry balances fear and hope in commercial real estate

..Street Wise looks at distressed asset pipeline for 2010

..Real estate investors planning on buying commercial properties like it's 2005: Survey