This is the second of a four-part series on the market we find ourselves in as we wind down 2009. Here's the first part. The series originally appeared Tuesday on RealMoney. Click here for a free trial, and enjoy incisive commentary all day, every day.

Be sure to check back all day for the remaining installments.

Group 2: Commercial real estate plays

. If there were one particular Achilles' heel of the bulls (amid a centipede-like group of Achilles' heels), it's commercial real estate. This issue is the stuff of endless articles and discussions, from the preternaturally-given-to-thermonuclear-war-against-stocks Gretchen Morgenson to our own jeremiad sounders -- too numerous to mention -- on


. So I struggle with what to make of the action in the real estate investment trusts if things are going so awry in offices, malls and apartments, the troika of pain that is supposed to cause the next wave of collapsing banks.

The riptide should be carrying the following in its undertow:

Avalon Bay

(AVB) - Get Report


Equity Residential

(EQR) - Get Report



(UDR) - Get Report

in apartments;

Simon Properties

(SPG) - Get Report


Federal Reality

(FRT) - Get Report


Developers Diversified


in malls;

Boston Properties

(BXP) - Get Report



(VNO) - Get Report



(BDN) - Get Report

in office properties; as well as real estate broker

CB Richard Ellis


. A look at each of the companies' Web sites, though, paints a thoroughly



It is true that the real estate industry is pretty unrestrained when it comes to hype, but even the worst players in the worst markets -- like DDR and EQR with huge exposure to California -- seem to be very filled with tenants, and the best (Simon and Federal Realty) are doing quite well. Federal Realty, a serial dividend raiser led by Don Wood, just boosted its dividend.

If you participated in Brandywine or Boston Properties' secondaries you had some pretty good percentage hits. CB Richard Ellis recently gave an interview to

The New York Times

talking about how business has started to turn up -- I know, I know, hype factor, but let's give them their due, as they have been through the wars and presented plenty of evidence of winning.

Vornado's doing a second offering of a new company, arguably capping its upside, and there's talk now and then of trouble at the firm, but if there is so much trouble, what are they looking at new opportunities for?

I can see how someone might say, "But wait, these are the public companies with access to the public markets, how about the private guys who don't have access? What about the fact that the securitization market is still dead, dead, DEAD?" I don't disagree, but remember -- like the banks, as long as there are some public companies with some public currency, there will be ample opportunities to buy properties that were purchased at the top of the market, notably 2005 to 2007, at bargain-basement prices representing a new, relatively debt-free cycle, something positive for all involved. There are plenty of leases that are up in 2010 to 2012 that will detract from the lack of vacancies now, but again, we have buyers with stock and improved balance sheets that can buy, and we have an economy that might produce new enterprises looking for cut-rate rates, as is the case already in New York City.

Of course, the bears -- always handy with an arsenal of arguments -- bring out the howitzers when it comes to the coming crushing weight of commercial mortgage bonds. The biggest repositories of these bonds are the major insurers, like


(HIG) - Get Report



(MET) - Get Report



(GNW) - Get Report


Principal Financial

(PFG) - Get Report

. Here's a group of companies that were


on the ropes; check where they came from. In each case the public markets were totally forgiving over and over again, and I am sure they will be one more time if any of these huge holders of this so-called toxic paper stumbles.

The fact that these companies have survived is really no longer in doubt, or again, their stocks would never have had these moves. Their health shows you the negative state of the commercial real estate mortgage paper is vastly overblown.

Finally, consider all of the publicly traded hotel companies, like


(MAR) - Get Report




, as well as time-share king



. All had brushes with solvency, at least according to the bears out there, and they have all come through, maybe not with flying colors, but certainly with their balance sheets intact and equity markets wide open.

It's hard to see how the commercial mortgage tsunami we all expect to happen will be all that devastating with all of those healthy players. It just doesn't seem possible given the strength of the public companies and their voracious appetites for distressed properties, appetites that could be filled by bad loans but I bet don't even get their fair share of damaged loans but not structures.

Group 3: Regional banks

. Very few groups have been as hectored as this contingent. Despite repeated assertions from Timothy Geithner that the problem is pretty much solved, people still point out the "endless" series of regional bank failures. To which I say: We haven't even had 100 failures yet. We had 1,600 from 1989 to 1991, and they were a daily occurrence, not a Friday-night occurrence, as the FDIC has contained them to. Plus, unlike that period where every bank is hobbled, we have more than enough potential acquirers, something masked by the back-and-forth about allowing private-equity firms in the game.

The untold truth about their inability to get in the game is that the FDIC has so many players who are already in -- so many banks from


( STD) and


( BBV) to

First Niagara




( NAL), from




U.S. Bancorp

(USB) - Get Report

, not to mention every major Chinese bank and



-- that the acquirers' appetites dwarf the pickings. Why this story isn't told is beyond me.

Plus, if anyone thought that


(RF) - Get Report



(HBAN) - Get Report



(KEY) - Get Report



(CMA) - Get Report



(ZION) - Get Report


Fifth Third

(FITB) - Get Report

would have gotten this far and can go much further, well, congratulations, you are a better man than this onetime bank specialist.

All of these companies have issued secondaries that have made you money. All of them can do another. I would not be surprised if they have spectacular quarters because of the yield curve.

I am not addressing


(C) - Get Report


Bank of America

(BAC) - Get Report


Wells Fargo

(WFC) - Get Report



(JPM) - Get Report

here, as their solvency is obvious. I do wish WFC would do a secondary just to clear up the wait for the secondary, a wait that continues even after the CFO, John Stumpf, has sworn up and down that one is not necessary. I believe that Bank of America and Wells Fargo will be very big stocks going forward, and I remind you that the pattern of 1990 to 1992 was a sharp run-up, a big pullback and even a larger move up after -- in some cases, including Wells and


(PNC) - Get Report

, gigantic. Everyone knows it is the regionals that are allegedly in trouble and the commercial loans that have them by the jugular. My riposte -- plenty of buyers and plenty of equity to be raised.

At the time of publication, Cramer was long Wells Fargo, JPMorgan and Bank of America.

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