The long-term effects of the Great Recession on institutional investor interest in real estate have yet to be surmised. At this transition point in the recovery, what is happening is a consistent flow of capital to the asset class (indicating its growing durability among fund managers); slight changes of focus to value-added and global investing; consolidation of investments to a smaller number of managers; and pressure on managers to strengthen governance, increase transparency, and offer flexibility in their fee structures.

By some measures, U.S. real estate markets began to come down from the top of the mountain around 2006, but it took the subprime mortgage crisis of 2007 to push the investment sector over a cliff.

Real estate has deleveraged significantly over the past six years, and when that happens you get a freefall, observes Michael Torres, a principal and portfolio manager for Adelan