Third quarter 2017 saw real estate investment funds continuing their slow decline. This is certainly not a crash — as a group, these funds are performing very well. They simply are not raising the amount of capital they did three years ago. Investors are not pulling back from real estate so much as they are taking a breather while they determine where the market is headed. In addition, as competition in the markets has heated up, some funds have had trouble deploying capital. This leaves investors with uncalled allocations and no incentive to make additional investments.

Funds reaching a final close in third quarter 2017 raised a total of $14.8 billion, compared with $19.2 billion raised during the same period in 2016. This increases the growing gap between capital raised in 2017 and that raised in previous years during the first three quarters. About $90.2 billion was raised by funds closing in the first three quarters of 2015, while 2016 saw $73.2 billion raised during th