The search for higher returns than can be generated from core real estate, along with cap rate compression and full pricing of core property types, has led institutional investors to look under every stone and to allocate significantly more capital to value-add, opportunistic, specialized, and offshore real estate strategies. Further, increasingly global capabilities of investment managers, a proliferation of international and global fund offerings, and gradually declining regulatory and tax barriers to foreign ownership have made it more feasible for investors to search for best relative value on a global basis. As noted in our 2007 forecast report, real estate appears to be positioned to perform well in the long run, but as investment strategies branch out into less familar territory in a slowing economy, heightened investor risk awareness is warranted.