The largest auction of troubled assets in the commercial mortgage-backed securities market is showing the strength of investors' appetites for real estate as more distressed properties from the crash come up for sale.

Four months after CWCapital Asset Management LLC put properties with $2.57 billion of unpaid loan balances on the block, Blackstone Group LP, Starwood Capital Group LLC and CIM Group are completing deals for offices and malls in Southern California, a Dallas resort and a Los Angeles skyscraper. About 700 bidders registered interest in the auction, which includes foreclosed loans, according to Morgan Stanley.

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