Significant Drop in Private Equity Fundraising for CRE

A recent article on REIT.com noted that private equity fundraising for real estate investment was only $4.9 billion in Q3 2009, the fourth consecutive quarter that showed a drop. This compares to $40 billion in funds raised during that period in 2008. The article suggested that the problem isn't a lack of available capital, but a reluctance on investors' part to risk funds in new real estate investment vehicles in light of declining values in current real estate portfolios. Question on many people's minds: What will it take to overcome that reluctance and get funds flowing again into commercial real estate?