Leverage is like cocaine, theorizes Leo Wells, founder and president of Wells Real Estate Funds, which has invested more than $12 billion in real estate since its inception in 1984. “Everybody is going to start off as a social user, and debt is that way,” he observes. “Pretty soon they've snorted their whole life up their nose.”

A pioneer in the non-traded REIT market, Wells says debt is the biggest enemy to making money. The malaise the commercial real estate industry is mired in today is the result of a debt problem, not overbuilding, he insists. “If you think about it, if everyone in America had paid for everything — their house, their office buildings, would we have a real estate problem?”

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