In an afternoon session entitled, "Private Equity Update: Is Too Much Money Chasing Too Few Assets?" a panel of top-tier investment managers addressed the question head on. "Yes," said ING Real Estate managing director Victoria W. Kahn. "There's a lot of capital out there. On the institutional side there's $2.5 trillion. But the question is whether or not there's value. "She says there can be, but the investor has to "be careful in underwriting."

Values naturally lead to a discussion of returns, and moderator Hugh F. Hall, COO of Gramercy Capital Corp., asked the panelists what returns investors are expecting these days. "For the four core food groups and in the major markets, they expect unlevered returns of around 7.5%, Kahn reported. Paul A, Curcio, a principal with Prudential Real Estate Investors, agreed.

On the opportunity side, Curcio said, you need to take more risk to get to the sweet spot of 20%. But fundamentals are still generally good, the panelists agreed, if you pick the right markets. "Condos in Miami would be worrisome for me," Kahn stated.

The focus for Stephen DeNardo of Riveroak Investment Corp. is value-add, and he said that he looks to increase NOI by 20% to 25% in a four year period.

The discussion turned to absolute returns, and Jeffrey M. Giller, managing partner and chief investment officer for Liquid Realty Partners, stated that he sees problems if absolute returns of 20% are the investor expectation. He said it's not enough to invest in office in India without taking into account risk adjustment. Not caring about the source or risk of that return is a trend he dubs "treacherous."