Real estate functions as an income-generator, diversifier and hedge against inflation — lots of roles for one supporting actor. Those roles have not changed much because of the global financial crisis of 2008. But the crisis scared investors, causing many funds to turn to the perceived safety of core assets. The bandwagon is crowded, and long queues are waiting for core property funds.

Institutional investors have grown accustomed to building portfolios using modern portfolio theory and efficient frontiers with neatly organized asset classes that fit into clearly defined investment buckets. But that is changing. The effects of the financial crisis have affected investors’ overall approach to portfolio construction, and that shift, combined with the unprecedented variety in real estate investment choices, has improved the ability to diversify real estate portfolios.

The United States is nearly three years into the economic recovery that began in the summer of 2009, and only now is the U.S. commercial property sector beginning to show tangible signs of progress on the historical deleveraging that has weighed on the market and the broader economy since 2007. The inevitable need for fresh equity to facilitate the recapitalization of the nation’s property market is finally at hand