A ton of money sits on the sidelines looking to invest in real estate—is it $50 billion, $70 billion, $100 billion—who really knows? But by all accounts there continues to be plenty of capital that seems priced out of the top markets, remains skittish about everywhere else, or both. The big institutional funds, which have raised the lion’s share of commitments from various pension funds, may be forced into putting dollars out against their better judgment—some are trading among themselves on large packages of the same old trophy or near-trophy assets that keep getting passed around to make fees. In the process some sellers try to pawn off commodity holdings with only mixed success. Smaller investment advisors gnash their teeth—why can’t we raise any capital for our funds? The big guys are hogs and will make bad deals, they claim. But the boutique managers’ problem is they are mostly thinly capitalized and struggle with the legacy of bad deals hurting their fund performance from the last go round. Who wants to take another chance with them when many could go down? But are the smaller guys right about the big guys making bad deals with all the money they have at their disposal?

Maybe, consider…

Janet Yellin takes over at the Federal Reserve and everyone wonders about whether she will dare to lead the charge to raise interest rates soon…. What else is new? Now Ben B. leaves town, leaving the dirty work behind. Here is a heady prediction—rates will go up during Janet’s term… Well, let’s take more of a chance—the bond buying binge will let up considerably next year absent some unexpected negative world event (count the many ways)… So when rates move up soon will tenant demand pick up enough to offset upward pressure on cap rates? The unemployment picture improves, but ever so haltingly and wages don’t tick up fast enough to make the average worker feel much more secure… The Volker rule could dampen bank profits and shrink trading floors… But when it comes to space per capita, shrinking is the game of the day anyway in the office markets… So Cyber Monday surpasses Black Friday—should this make owners of retail real estate feel better?… Hotels have had a nice run, but that always (and I mean always) leads to an abrupt fall when the economy slackens… Apartments definitely are cooling down—spiking rents are over and new supply comes on line… Industrial picks up in the hub markets, but not with the vim of past cycles.

It seems like the slog will continue—decent returns for quality, well-leased properties in the best markets and new projects swiping tenants from older buildings, which look increasingly obsolescent by comparison. Commodity moves sideways, fringe properties in the suburbs and tertiary markets suffer from total lack of interest either from tenants or investors.

At this point in the flattening marketplace, the big players shouldn’t lose money as they push money out, but their investors may be disappointed as returns compress and upside appreciation is harder to achieve.

There is a reason why all that money on the sidelines has nowhere to go.