But the private equity doyens are imaginative when it comes to raising cash from investors, says Beth Di Santo, founder of the New York-based Di Santo & Associates law firm, which works on real estate portfolio sales.
For the next several months, private equity buyers might put down more cash and execute a "stock swap" for real estate assets, especially if REITs are selling cheap. Perhaps surprisingly, experts say private equity buyers, even big, leveraged ones, will come back by next year. "You see some nervousness in commercial real estate lending markets, but I am not sure that matters so much," says Stan Ross, chairman of the Lusk Center for Real Estate at USC and a Los Angeles deal veteran.
"Many institutional investors are interested in commercial debt, such as insurance companies," Ross says. "The fundamentals remain good for commercial real estate in most markets. There is not a lot of new supply coming on line."
In the longer run, the same capital reality that financed the private equity buyers and caused the real estate boom - a worldwide capital glut, and resultant grasping for higher yields - will rescue property and put cash behind private equity buyers again.
"Some call it a 'capital glut,' but I don't think there really is an excess. There is a lot of global capital there to do what we need to get done," says Ross. "It bodes well for real estate, very well for real estate."