Real estate fund managers raised record-breaking amounts of capital in 2015, and just a bit less in 2016. They have to allocate that capital, and so competition for the best assets is a foreseeable result. In fact, it is no secret that competition has driven values in major markets to their peak 2007 levels. But some of that pressure to allocate capital might be coming to an end, as the amount of capital being raised in 2017 is significantly less than in previous years. Unless a mega-fund or two or three reaches final closing in the fourth quarter, 2017 will cement the downward trend started in 2016.

A total of 32 private-equity real estate funds recorded final closings during third quarter 2017, raising an aggregate total of $17.6 billion, according to IREI’s FundTracker database. This represents about $1.6 billion less than capital raised in third quarter 2016, and $8.9 billion less than 2015.

When we compare year-to-date performances instead of just looking at the