For many years to come economists and historians will comb through the ashes of the financial crises that created the Great Recession and offer various explanations as to its cause. It is self-evident and also commonsensical that the real estate price bubble was really a debt bubble.

The chaos of the financial markets’ implosion and the ensuing Great Recession has subsided, although significant uncertainty remains. Now that many economies around the world are showing slow but sustainable growth and liquidity has returned to the commercial property markets, investment managers around the globe are moving to shore up their portfolios and also take advantage of favorable buying opportunities and low interest rates. These trends were evident throughout 2010 as well-positioned investment managers looked to grow their asset bases through M&A activity and property acquisitions, while those managers with troubled financial situations or portfolios sought to recapitalize and deleverage. This market activity has produced an ongoing reshuffling of the deck, as some investment firms have expanded while others have retrenched.

With the REIT market moving up in a slow and steady pace, it seems that 2011 is going to be very similar to 2010, when REITs advanced at a measured pace to produce a healthy 27.95 percent annual total return.

At this time last year, REITs had recorded an 11 percent total gain from January through the end of May, according to the FTSE NAREIT Equity REIT Index. This year, numbers are up slightly, to approximately 14 percent, which is a nice place to be according to industry professionals.

More than a year has passed since the start of the institutional real estate recovery, and market conditions have indeed turned a corner. A recovering economy with hardly a hint of imminent construction established a floor for fundamentals last year and spawned a surge in capital raising that breathed some life back into the transaction market. With property offerings limited and government bond yields marching downward for much of 2010, capital competed intensely for prime assets, creating positive momentum for values and driving down cap rates by more than 100 basis points in some segments of the market.